Financing

Paramount to Acquire Stake in 900 Third Avenue

900 Third Avenue. (Courtesy Property Shark)

Paramount Group is the buyer set to acquire a 49 percent stake in 900 Third Avenue from Investa Office Fund, sources told The Commercial Observer. That stake was IOF’s final US property. The sale is set to close in late March 2012 and was announced in mid-February with a sale agreement of $172.7 million, though IOF didn’t disclose the buyer at that time.

“The sale of IOF’s interest in the New York asset will complete the fund’s exit from the US market in line with our stated strategy, at an overall premium of 9.4 percent to June book value,” IOF Fund Manager Toby Phelps said in a prepared statement. Read More

Lease Beat

C. Wonder Deal Inked at Time Warner Center

Time Warner Center. (Courtesy Property Shark)

C. Wonder, the preppy apparel and accessories retailer launched last year by designer Tory Burch’s ex husband, Christopher Burch, has signed on for a space at Time Warner Center, according to sources familiar with the deal.

The store, which opened another Manhattan store last October in Soho, will take about half of the roughly 15,000 square feet formerly occupied by the now-defunct bookstore chain Borders on the retail complex’s second floor. Read More

the lead indicator

Pushing Past City’s Core Investments

Sam Chandan.

In spite of a slowdown over the third and fourth quarters, transaction activity in Manhattan nearly doubled the prior year’s tally during 2011. Surpassing $20 billion in new equity and debt, investment in support of property trades was still only a fraction of the market’s pre-recession peak. But recast in terms of sustainable activity, volume is quickly approaching the nominal level of sales from the prior decade. With a finite set of assets available to esurient investors, prices have necessarily recovered the lion’s share of their losses. As confidence in the underlying economic recovery firms, should well-heeled investors make more concerted efforts to invest beyond the core properties that have dominated activity thus far? Read More

Woody Heller on Investment Sales and New Demand for Lower Manhattan

Woody Heller. (Illustration by Joao Maio Pinto)

The investment sales market, most brokers agree, has been heating up over the past 12 months. Approximately $25.8 billion in commercial properties changed hands last year, a turnaround that represented an 88 percent increase over 2010. But while the positive uptick is easily verifiable, what happens next for Manhattan’s investment sales market is still up in the air.

Accordingly, The Commercial Observer set out to speak with the real estate industry’s most accomplished capital markets and sales practitioners to learn what’s in store for 2012. Over the next several days, we’ll post interviews with heavy hitters like Richard Baxter of Jones Lang LaSalle, J.D. Parker of Marcus & Millichap, Darcy Stacom and William Shanahan of CBRE and Peter Hausperg of Eastern Consolidated. But, first, after the jump, none other than Woody Heller of Studley. Read More

Investment Sales

Medium Cool: Investment Sales Volume Spiked in 2011, but Future’s Still Cloudy

Illustration by Peter Lettre.

A self-described car guy, Woody Heller, executive managing director and head of the Capital Transactions Group at Studley, sees parallels between automobiles as hard assets and commercial real estate investment sales velocity in New York. Apart from the obvious luxury to be found in cars and Class A buildings alike—his 33-million-square-foot transaction volume likely doesn’t include a jalopy—both markets have also lately been bolstered by similar factors.

“With debt available and with interest rates so incredibly low, it encourages one to buy because money is so cheap,” he said. “If the asset class is in favor compared with what much of the alternatives are—if borrowing costs are incredibly low—it continues to steer people to want to invest in hard assets like real estate.” Read More

Investment Sales 2012

Darcy Stacom & William Shanahan on 10 East 53rd Street Chinese Investors

Darcy Stacom. (Illustration by Joao Maio Pinto)

The investment sales market, most brokers agree, has been heating up over the past 12 months. Approximately $25.8 billion in commercial properties changed hands last year, a turnaround that represented an 88 percent increase over 2010. But while the positive uptick is easily verifiable, what happens next for Manhattan’s investment sales market is still up in the air.

Accordingly, The Commercial Observer set out to speak with the real estate industry’s most accomplished capital markets and sales practitioners to learn what’s in store for 2012. Over the next several days, we’ll post interviews with heavy hitters like Richard Baxter of Jones Lang LaSalle, J.D. Parker of Marcus & Millichap, Woody Heller of Studley and Peter Hausperg of Eastern Consolidated. But, first, after the jump, none other than Darcy Stacom and William Shanahan of CBRE. Read More

Law and Order

DOB Wanted to Cuff Crane Owner James Lomma for Shoddy Crane Upkeep

Wreckage from the May 2008 Crane Collapse on E. 91st St.

The former head of the Department of Building’s cranes and derricks division said that crane owner James Lomma should have been arrested for poorly maintaining two tower cranes in 2007.

During her testimony at Mr. Lomma’s manslaughter trial in a Manhattan courtroom yesterday, former DOB official Bethany Klein said that the head of New York Crane & Equipment Corp. had failed to make two crucial repairs to the two cranes, one of which eventually collapse and kill two men at the E. 91st street accident in 2008.  Read More

Lease Beat

Knewton Signs Lease on Fifth Avenue

100 fifth

The wave of tech tenant leasing deals in Midtown South continues.

Knewton Inc., a provider of sophisticated online-based learning and education programs for students and test takers, has signed a 16,000-square-foot lease at 100-104 Fifth Avenue, an office building owned by the Kaufman Organization. The term of the deal, which is for the 20-story building’s entire eighth floor, stretches ten years. Asking rents for the space were $55 per square foot. Read More

meter reader cheater

Elected Officials Blast Automated Water Meters [Video]

David Greenfield speaking at the press conference.

It's not the most exciting issue in the world, but for the elected officials who gathered on the steps of City Hall this afternoon, the accuracy of the city's new water meter readers is a big deal. The City Council Members said they are fielding many complaints from constituents who are struggling to pay suddenly surging water bills since the new meter readers were installed.

"Obviously this is a huge issue for us in Queens County and throughout the city. We've had an enormous amount of complaints from people who had the automated meters put in," Councilman Mark Weprin said. "We kept getting complaints from people who said they had nothing changed in their lives, they used the exact same amount of water over the years. Somehow the new meters were charging them double and sometimes triple ... Something's wrong here."

Read More

Walmart Wars

Hate Mail: Anti-Walmart Group Sends Postcards Slamming Steve Ross to All 7,200 Related Residents [Updated]

Picture 5

While Walmart refuses to say if, when or where it might finally open a store within the five boroughs, one of its favored sites is the Related Company’s Gateway Center Mall in the far reaches of Brooklyn. The area is economically depressed, meaning the cheap jobs and cheap merchandise are (theoretically) desirable. The Retail, Wholesale and Department Store Union sees Walmart jobs as junk, and they have been campaigning against the store since it resurfaced a two years ago.

Today, they made things personal, not just with Steve Ross, Related’s founder and CEO, but also his more than 7,200 tenants in the New York area. Read More

Accidents

Elevator That Killed Young & Rubicam Executive Had Dodgy Safety Protocols, City Confirms

Elevator victim Suzanne Hart (courtesy of Facebook)

The city Department of Buildings and the Department of Investigation announced the findings today from their investigation into the deadly 2011 elevator accident at 285 Madison Avenue that killed Young & Rubicam executive Suzanne Hart in rather horrific fashion, and both agencies confirmed that maintenance workers failed to repair the elevator up to city safety standards days prior to the incident. Read More

Financing

Starwood, Blackstone Partner to Save Office Complex

dreamworks

Greenwich, Connecticut-based Starwood Capital has brought in Blackstone as a partner to save its investment in the 1.7-million-square-foot Pacific Shores Center office complex in Redwood City, Calif. The partners are now looking for a $275 million mortgage to get rid of the property’s overdue debt. Read More

Leasing Woes

A Whole Lotta Space Up for the Takin’ in 2013, WSJ Sez

Mr. Minskoff not pictured.

While leasing activity for much of New York City in the past few months has been more lackluster than blockbuster, a sizable chunk of available space –sizable in the, say, 6 million square foot range– is on the cusp of hitting the market, The Wall Street Journal reports.

New developments like 1 World Trade Center, 4 World Trade Center, and Edward Minskoff’s 51 Astor Place, are all slated to hit the market in 2013. The last time NYC had this much new space becoming available was in 1989, said Cassidy Turley’s Robert Sammons. Read More