Lenox Hill Hospital/North Shore-Long Island Jewish Health System has signed a 15-year renewal for 70,434 square feet at 110 East 59th Street. Asking rents were in the $70s.
“They had a lease that had a little bit of term left to go, but they want to do some work in the space, so they just wanted to put a little bit more term on the lease,” Dennis Brady, executive managing director at Jack Resnick & Sons, the landlord, told The Commercial Observer.
Hines has selected buyers for its properties at 499 Park Avenue and 425 Lexington Avenue, it was announced today. The properties, part of the Hines U.S. Core Office Fund, are set to be acquired by American Realty Advisors and institutional investors advised by J.P. Morgan Asset Management, respectively, for a combined total of over $1 billion.
“New York has demonstrated a capacity for large scale capital transactions,” Tommy Craig, senior managing director at Hines, told The Commercial Observer. “That has been validated [in these transactions.]”
In one of the biggest real estate stories to break this year, the commercial real estate company Grubb & Ellis filed for bankruptcy in February, listing $150 million in assets and $167 million in debts. The company agreed to sell nearly all of those debts to BGC Partners, the financial brokerage firm headed by Howard Lutnick that entered the real estate fray in 2011 with its acquisition of Newmark Knight Frank.
The melding of Grubb & Ellis’s broad array of corporate clients and financial services with Newmark’s strength in the New York market would create a formidable national powerhouse. But the merger was held up for longer than expected in U.S. Bankruptcy Court as Grubb & Ellis brokers fought against terms that they alleged used commissions owed as incentives to remain with the unified company.
BGC cleared these hurdles and closed on the acquisition in April, leading to the creation of Newmark Grubb Knight Frank. The Commercial Observer spoke to Mr. Lutnick—the chief executive of Cantor Fitzgerald before BGC broke away from it—about NGKF’s big first year, his love for and tussles with brokers, and his company’s future designs on commercial real estate.
Alexander Chudnoff, a commercial leasing broker who takes pride in strengthening relationships with clients through “impeccable service,” was especially busy in the aftermath of Hurricane Sandy.
The Jones Lang LaSalle executive managing director was dividing his time last week between volunteer efforts in the Rockaways, where he provided hot pizza and coffee to storm victims, and getting on the phone to make sure his Downtown Manhattan clients could stay open. Though it was a difficult time, the activity of making connections was just what attracted Mr. Chudnoff to the business in the first place.
“I love to make calls. I love to canvass,” he said. “I like to develop the relationship.”
In some cases, the storm required short-term arrangements, such as lining up space with other clients or in Jones Lang’s own offices, he said. In others, clients were able to proceed with minimal disruption, as when Dentsu Holdings USA returned to work at 32 Avenue of the Americas when Rudin Management opened the building the Monday after the storm.
Commercial real estate lenders are growing more confident, or at least more inclined to resume risk-taking. Bucking headwinds from the weaker economy and job market, underwriting standards for loans on well-positioned assets eased in the second quarter and through the summer. Competition to fund high quality borrowers showed increasing spillovers from the febrile apartment sector, with a small but growing number of development projects and cash-out refinancings registering alongside new office, retail and hotel mortgages.
Casino Gambling in the Empire State
Newmark Grubb Knight Frank has added two gaming industry veterans to its National Gaming practice, the firm announced last week.
John Knott III and Michael Parks, both founders of CBRE’s Global Gaming Group, have been responsible for closing more than $3 billion in gaming property and land sales, including the sales of the Trump Marina in Atlantic City, Caesars Tahoe, Flamingo Laughlin, and Boomtown in Reno, Nevada.
During a ski trip to Colorado several months ago, Michael May, an executive at Cantor Fitzgerald, remembers his eagerness to hit the slopes. He rose at the crack of dawn and found his friend Marty Burger, who had organized the trip, waiting in the lodge with the same idea in mind.
Traveling with a large group of executives, they skied all day. Mr. May remembers being exhausted, but Mr. Burger convinced him to join him and few others for some indoor tennis back at the hotel. A couple of games, at Mr. Burger’s urging, turned into a couple of sets.
Michael Lehrman thinks the commercial real estate services business is completely staid, calcified, old-fashioned.
He doesn’t use those words specifically. He’s a little more eloquent. He’s a Wall Street man now, and to him it’s practically laughable when major real estate services firms claim to be cutting edge when the heart of their analytical capacity is still rooted in the decades-old practice of collecting troves of market data and organizing them into endless charts in order to divine tomorrow’s market conditions.
Newmark Knight Frank brokers are being asked to contribute as much as ten percent of their commissions into stock in BGC Partners, the publically owned financial company that in recent weeks acquired the real estate services firm.