Original Real Estate Stories This Week from Observer.com: 7.17.09

In late March, before a sort of fatalistic calm had settled on the real estate market – along with the tacit acknowledgement that low rents were here to stay, at least for a while—a joint venture called ZoCo Productions signed an 11,544-square-foot, two year, three-month sublease for prebuilt space at Tishman Speyer’s 30 Rockefeller Center. More here.


Late last month, the $51 million duplex penthouse at Trump Park Avenue quietly came off the market, a year after the Elliman broker Victoria Shtainer listed the 6,200-square-foot sprawl, and seven years since Mr. Trump bought the building. "We haven't sold it," Ms. Shtainer said this week. "The timing was not good, so I didn't get any offers."

That's the story with New York's most outstandingly lush real estate. Of the 10 properties that were asking over $45 million late last year, half are off the market without a sale, and only one has sold. But that listing, a Time Warner Center penthouse where the master bedroom suite has an office, his-and-her dressing rooms, his-and-her bathrooms, and a gym, sold for $37.5 million. Its original tag was $65 million. More here.

The 1948 Marshall Plan for Europe was approved with a four-year, $13 billion appropriation by Congress.

Lower Manhattan's four-year Marshall Plan, apparently, will need a refill.

In one of the few actions that both the State Assembly and the Senate managed to take in the last month, the length of a major subsidy package aimed at renewing Lower Manhattan's business climate was doubled, passing at a time of extreme budgetary strain for both the city and state. The measure, which went through with little objection or notice, is another hometown victory for Assembly Speaker Sheldon Silver, the powerful Lower Manhattan­-based legislator who was the subsidy package¹s main proponent. All told, the incentives are projected to cost the city and state more than $200 million over the next four years. More here.

Sheldon Silver courtesy of Getty.

What makes patrician investor Christopher H. Browne’s $32.5 million duplex at 515 Park Avenue so mind-bogglingly awesome isn’t the telephone closet in the dressing room, the two wet bars or the custom bronze doors that open to make a 75-foot-long entertaining space. It’s the fact that the 6,500-square-foot duplex is basically a one-bedroom apartment.

To be sure, the apartment comes with two bonus maid’s studios at the bottom of the building, and the duplex’s top floor has a guest bedroom—but it’s smaller than Mr. Browne’s walk-in closet. The all-encompassing master bedroom suite also has a bathroom; a gym/dressing room (which has its own bathroom and closet); two hallways; and a 23-foot-long sitting room, which leads to something called a bedroom gallery, which has one of the duplex’s wet bars, which has its own powder room. More here.


Hiscox, the British indemnity firm that insures everything from fancy jewels to offshore oil platforms, has signed a new, 23,411-square-foot lease at 520 Madison, and will move in just as soon as landlord Tishman Speyer finishes building out the space. The lease for the 32nd floor lasts a whopping 15 years. CB Richard Ellis’ Laurence Briody and George Comfort & Sons’ Giorgio Versea represented Hiscox in negotiations with Tishman Speyer reps Calvin Farley and Megan Sheehan. More here.

Cushman & Wakefield brokers didn’t exactly erupt into spontaneous dance at its second-quarter breakfast at Michael’s, but it’s fair to say the mood on Tuesday morning bordered on hopeful.

Which is something, when you consider that the mood of quarters past was enough to make some brokers want to abandon the brokerage business for the simplicity of a surf shop in the Bahamas. More here.

Angelo Biondo, proprietor of K-9 Powerhouse Kennel in Park Slope, consulted last month on providing guard dogs for 659 Bergen Street. Today, there’s a “Beware of Dog” sign but no dog. Another sign announces that construction will be completed in July 2009. The unfinished residential development is silent.

“I could probably show you six more of these,” Mr. Biondo said.

His business—guard-dog rental—occupies a tricky place in today’s economy. Unemployment breeds crime breeds a desire for security. Financial problems and stalled construction leave real estate projects half-finished and vacant for months, tantalizing would-be vandals. Customers want the protection that a couple of Great Danes or Rottweilers provide, and guard dogs can be a bargain: depending on the area, two dogs (including fencing, care and all certification) rent for $1,750 to $2,000 monthly, a figure that Mr. Biondo says breaks down to lower than a security guard’s hourly wages. More here.


The trend-defying Bonnier Corporation, the Swedish publisher of enthusiast magazines that has been on a buying binge in what is arguably the most treacherous media market ever, has reaffirmed its allegiance to midtown south, signing a 99,000-square-foot lease in the Art Deco 2 Park Avenue, where it is now a subtenant. More here.


Virgin Entertainment Group sold its one-time Megastore space in Union Square to Union Square Development Associates for $4.81 million, according to a public deed filed on Monday.

The store, in a building owned by the Related Companies and located at 842 Broadway, has already had its clearance sale; and landlord Vornado Realty Trust has closed Virgin’s Times Square outpost. (Union Square Development Associates has the same corporate address, according to the deed, as Related.) More here.

Amy Sohn’s Prospect Park West, a gleefully bitchy take on Park Slope moms by a former New York columnist, won’t be released until September—but as of last week, Sarah Jessica Parker’s production company was already looking to turn the novel into an HBO series. The allure of the park is hard to resist. Whether that’s as true for real estate as for chick-lit remains to be seen, but Sunday saw two open houses on Montgomery Place, just steps away from Prospect Park West. More here.

36 Montgomery Place courtesy of Warren Lewis.


The delinquency rate on loans related to commercial mortgage-backed securities (CMBS) skyrocketed to 2.67 percent from 2.27 percent just last month and 0.46 percent a year ago: a 580.43 percent increase from 2008.

But the worst is still to come, according to Moody’s Investors Service’s July report on CMBS delinquencies: Expect the aggregate delinquency rate to rise to 5 or 6 percent by the end of 2009, as the Great Recession continues to finish off so many of the real estate loans made during the recently departed boom. More here.

So is 2011 going to be a big fight?

It’s possible that we may be fighting this issue at this time next year.

Do you think a major overhaul would happen in 2011?

Absolutely not. That requires some foresight, and planning. And so I believe that [legislators] go in terms of the direction that has the least pressure politically to them. So what will happen is that 2011, you’ll still have a Democratic governor, you may or may not have a Democratic Senate, but what will happen is that there will be some changes that have been advocated, but it’s the same cycle of ideas, instead of well-thought-out—how do you make these changes from a long-term perspective? More here.

JPMorgan is planning to sell its soaring aluminum and glass skyscraper called One Chase Manhattan Plaza, according to a report in the July 13 issue of trade magazine Real Estate Finance & Investment.

JPMorgan Chase wouldn't comment on the report—which is interesting, because when The Observer first asked the bank about the rumor on March 26, a spokesperson flat-out denied it. Same story on a couple other occasions in May. More here.

pietroizzo via flickr.


After two years and three near-sales, one of Park Avenue's most tortuously unfair real estate stories might finally be over. According to Stribling's Web site, the penthouse triplex at 895 Park Avenue, where the tag fell from $29.5 million in October 2007 to $15.5 million, is in contract.

But history hasn't been kind to the apartment, a place with 14 rooms, six bathrooms, four bedrooms, two bars and a petite internal elevator. Two years ago, a board-approved couple walked away from a contract because of a divorce, leaving their multimillion-dollar deposit behind. A second pair, the multibillion-dollar hedge fund manager Ricky Sandler and his wife, went to contract last year for just under $25 million, but were turned down by the building's co-op board. They ended up buying another Park Avenue place for $19 million. More here.


Eight of Manhattan’s top 20 distressed properties fall in downtown; and several are well known: the Apthorp apartment building; the condo conversion 20 Pine The Collection, where some of the interiors were designed by a branch of Giorgio Armani’s empire; Kent Swig's 25 Broad; the Riverton in Harlem; the Jean Nouvel–designed condo at 100 11th Avenue; the Philippe Starck–backed 95 Wall (where Gossip Girl's Chace Crawford reportedly has an apartment); all three downtown AIG buildings; and a few former Harry Macklowe holdings. More here.


This week's Observer checked in on last year's most lush listings: Of the 10 New York properties that were asking over $45 million in late 2008, only one has sold, and half have fallen off the market without a sale. "The timing was not good, so I didn't get any offers," said Victoria Shtainer, who listed the $51 million duplex penthouse at Trump Park Avenue until it was taken off the market late last month.

Friday the apartment went back on, but at a discount that would make even Julian Schnabel blush. What was most recently a $51 million tag (which comes out to $8,226 per square foot) is now $31 million (or $5,000). More here.

Modlin Group.


Let’s face it: The O’Toole Building may be a unique landmark—but many locals agree that the soon-to-be-demolished West Village hospital adjunct is not all that attractive, either from afar or within.

“I’m not going to miss that building—the maintenance is so bad,” said Maki Yoshi, the owner of the nearby Miyagi Japanese Restaurant, who said that St. Vincent’s has poorly maintained O’Toole for the past decade. “Architecturally, I don’t think it’s beautiful. … The homeless people throw garbage there, they never pick it up, it’s disgusting. It’s so bad for this neighborhood. … It’s already broken.”

But on the inside, O’Toole actually is “too clean,” said one local who asked not to be named. “It’s very sterile. … All the people receiving aid there seem to be relieved when they come out,” he said. “It would make a good reformatory or prison.” More here.

The debate over the Bloomberg administration’s plans to remake Coney Island is dashing toward a close, as the City Council is just days away from an expected vote (a subcommittee is tentatively scheduled to vote Monday, though these things often change at the last minute). And, with potentially just days left, city officials are still juggling a panoply of issues and demands raised by the long roster of groups that have come knocking at the administration’s door: landlords in the amusement area, developers who want to build residential, unions, low-income housing groups, amusement enthusiasts. More here.


Even though Michael Jaharis moved up 276 spots on this year's list of the world's billionaires, Forbes complained in March that the 81-year-old's $1.9 billion fortune had merely stayed flat. Maybe Mr. Jaharis took the magazine's mercilessness to heart, because city records show that the pharmaceuticals mogul just spent a mere $6.7 million on an apartment and maid's room at 1049 Fifth Avenue, a relative pittance for the block. More here.


Last week, n+1 posted an essay on the world of online dating. Describing the mentality of various venues, Katherine Sharpe wrote, “Reading Craigslist, I feel as though I am dipping my cup straight into the swift-flowing stream of human need.”

The site’s personals, she found, were bracingly specific—honest and unashamed.

The real estate listings are not.

They’re fueled by the same level of ravenous desire—people really, really want you to give them money—but in place of unembarrassed honesty, there’s a tendency toward magical thinking. Wishful euphemism. You know, lies.

In that spirit, we present the recurring “Craigslist Lies People Tell.” More here.

Despite seeing the sharpest price declines in the borough, brownstone Brooklyn remained markedly more expensive than even the trendy neighborhoods to the north, according to a second-quarter sales report released Thursday by Prudential Douglas Elliman and Miller Samuel (PDF).

In fact, that area of the borough retains a striking similarity to Manhattan’s housing prices. In northwest Brooklyn, including Park Slope, Carroll Gardens, and Downtown, the average home sold for $674,063, a 17.9 percent annual decline. In north Brooklyn, including Williamsburg and Greenpoint, the average sales price was $561,596—a 0.4 percent quarterly increase, though down nearly 16 percent from the year before. More here.

You tired yet of the J. C. Penney ad blitz? Just you wait. Thrifty is taking Manhattan.

Sources tell us that T. J. Maxx is actively looking to plant a second store in Manhattan and has recently homed in on Wien & Malkin’s storefront retail at 250 West 57th Street, between Broadway and Eighth Avenue. The discount retailer has another outlet at 620 Avenue of the Americas, according to its Web site. More here.



Almost gone are the days when you will find Deborah Buck shlepping 1960s-era Italian ceramic lamps and Japanese bronze cachepots from Buck House, her antique shop at Madison and 91st Street, three blocks north to her salon, the Gallery at Buck House.

Ms. Buck—artist, antique purveyor, Dalton mother, Carnegie Hill resident and wife of philanthropist Christopher Buck—has just leased the ground floor, basement and garden at 1318 Madison, where she plans to combine both of her spaces into one big Buck House. More here.

On the south side of 97th Street, between Second and Third avenues, sits a four-story red brick building with a compromised foundation that could be yours, for a mere $1.275 million. Tear it down – you will have no choice, thanks to those foundation issues – and you could build an 8,679-square-foot residential building. Include a community facility and you could build much taller

Massey Knakal broker Shimon Shkury is marketing the site, and in his recent Northern Manhattan Sales Report, he used it as a prime example of how values on development sites in Manhattan, north of 96th Street all the way to the Harlem River, have (a) become murky, and (b) deteriorated.

“It is very difficult to factually comment on development site prices because few development sites have sold in Q4 2008 or Q1 2009,” Mr. Shkury writes. His best guess for the 97th Street site is $148 a buildable square foot, 31 percent off the peak. More here.


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