ING Leases 144,000 SF at Iconic 230 Park Avenue

ING US, Inc. has signed an 11-year lease extension for 144,000 square feet at the historic 1.4-million-square-foot 230 Park Avenue, The Commercial Observer has learned.

230 Park AvenueThe leading provider of retirement, investment management and insurance services has been in the building since 1984, starting with a 55,000-square-foot lease and steadily expanding its footprint over the past three decades.

The firm will now occupy the entire 13th and 14th floors at the landmark building, which sits atop Grand Central Terminal, beginning April 2014.

“ING has always had a large footprint in the building and we are proud that the firm will continue to base its New York operations here,” said Brian Robin, president of Monday Properties, which owns the building with Invesco Real Estate.

The 34-story tower was built in 1929 as the headquarters of the New York Central Railroad and designed by Warren & Wetmore, the architects behind Grand Central.  It was the tallest building in what was then known as the “Terminal City” complex around Grand Central. The building was designated a New York City Landmark in 1987 under the ownership of Harry Helmsley.

“There’s great history here,” Mr. Robin said, whose company became property manager of the building in the late 1990′s and in partnership with Invesco has since overseen over $100 million in capital improvements, making it the first Pre-War office building to achieve LEED Gold Certification under the U. S. Green Building Council.

The ING lease reflects the benefit of the continuous capital improvements to the building, which includes new elevators, windows, roof and HVAC systems, to name a few, Mr. Robin said.

“It is possible to bring contemporary technology and sophistication to a building of this age, without losing the spirit of the building,” he said. “That’s a business practice we apply to all of our properties.”

ING was represented in the lease negotiations by Steve Ernst of Cassidy Turley’s Tampa, Forida office, together with co-brokers Moshe Sukenik and Neil Goldmacher of Newmark Grubb Knight Frank. Monday Properties was represented in-house by Jordan Berger and by Frank Doyle of Jones Lang LaSalle.

The ING renewal follows Clarion Partners’ 71,000-square-foot lease in April, when the real estate investment firm and former ING subsidiary took the 12th floor space it previously sub-leased from ING.

More recently, Little Rock, Arkansas-based Bank of the Ozarks leased 2,400 square feet on the landmark building’s ninth floor; Dallas, Texas-based Comerica expanded its presence with a 5,900-square-foot lease on the sixth floor; and The Leona M. and Harry B. Helmsley Charitable Trust signed a new 15-year lease for 5,400 square feet on the fifth floor.

“The building has earned the trust of the international banking community,” Mr. Robin said, pointing to additional banking tenants Deutsche Bank, Union Bank of California, Bank of Argentina and HSH Nordbank.

Remaining vacancies are sparse in the building, but half of 33rd floor remains, along with two high-end suites on the 4th floor and a 10,000 square foot ground floor restaurant space.

“The [low] vacancy that we have speaks to the general vitality that the market is enjoying right now,” Mr. Robin said. “Mid-2013 is feeling like a healthy year.”

 

Developer Pays $15 M. for McDonald’s Lot in Park Slope

No more $1 coffee (for a limited time only) and chicken nuggets on the corner of First and First in Park Slope.

(Credit: Google Maps)
(Credit: Google Maps)

A joint venture between Silverstone Property Group and Adam America Real Estate has purchased the lot at 275 Fourth Avenue, currently home to a McDonald’s, for $14.8 million, with plans to develop a high-end rental building with 75 units and 6,000 square feet of ground floor retail space.

The sale represents a record price for a development site on Fourth Avenue, according to TerraCRG, the sole broker on the deal.

“The property sold for almost $3 million above the asking price and was put it in contract in just under 30 days,” said Melissa DiBella, a partner at the firm, who hashed the deal out with President Ofer Cohen, Melissa DiBella, Adam Hess, Dan Marks, Peter Matheos and Mike Hernandez.

“Throughout the formal bid process, we’ve had 30 bids, all from very qualified developers.”

The property, on the Park Slope side of the Park Slope/Gowanus Border, along 4th Avenue, is surrounded by a mix of warehouses and car repair shops – a stark contrast to the interspersed high-end residential developments and trendy shops that have sprung up in recent years. Giorgio Realty Corp’s Elan, a luxury condo development next door on First Street that was built several years ago, is next door.

The property is just a couple blocks from the Gowanus Whole Foods, scheduled to rise at Third Avenue and Third Street and within reasonable proximity of the Barclay’s Center and Prospect Park.

The property is also just one avenue away from 5th Avenue, one of Brooklyn’s most popular retail corridors, which is lined with some of the boroughs best restaurants, boutique stores and cafes.

Rents on newly-constructed elevator buildings in Park Slope are fetching over $60 per square foot and luxury rental buildings are selling at record highs, according to TerraCRG, which noted in a statement that the Arias Park Slope, a 95-unit new construction rental building located blocks away, was purchased by Invesco in 2011 for $57.5 million.

“We are big believers in the Brooklyn market and are in the process of building 600 units in the area,” said Dvir Cohen-Hoshen, managing partner at Adam America, in a statement. “We see tremendous demand for luxury rental product and are excited to take part in the reshaping of the Fourth Avenue corridor.”

Clouding Our Judgment: Plenty to be Wary About in the Cloud

Last Thursday, Forbes released a story called “Why the Cloud Is Making BYOD Risk-Free.” However, there are indeed reasons to be wary of hopping on this “Bring Your Own Device” party train.

First of all, Microsoft and Amazon, two leading cloud services providers, experienced outages in the past year, and public attacks do happen.

Continue reading “Clouding Our Judgment: Plenty to be Wary About in the Cloud”

Regency East Co-op Scoops Ground Floor Retail Units for $5.5 M.

Regency East Apartment Corporation, the owner of the 18-story, 147-unit Regency East co-op apartment building at 301 East 64th Street on the Upper East Side, has purchased the 13-year master lease on its four ground floor retail units for $5.5 million, The Commercial Observer has learned.

301 East 64th StreetThe purchase of the 12,200 square feet of combined retail space is a potential opportunity to raise rents to market-rate once the leases come due in the coming three to five years.

“The most logical player for this deal was the co-op… because the corporation will retain the properties when the leases expire,” said Eastern Consolidated’s Martin Ezratty, who represented the seller, Onyx Corp, and procured the buyer.

The property, situated on the northeast corner of East 64th Street and Second Avenue, is home to an 8,000-square-foot Gourmet Garage marketplace; a 1,500-square-foot H&R Block; a 1,800-square-foot Furry Paws pet store; and a 900-square-foot nail salon.

“The co-op can now offer them a future,” Mr. Ezratty said. “They can increase cash flow and take control over who comes into the building.”

The retail portion of the Regency East, built in 1963 and converted in 1987, is situated on the ground floor of the luxury apartment tower, situated on a tree-lined Lenox Hill block, just a short walk to Central Park, shopping and dining on Fifth and Madison Avenues.

The Second Avenue Subway, though decades overdue, is also scheduled to cut through the area and will offer two alternative subway stops within walking distance of the co-op.

“The anticipation of the Second Avenue Subway is driving many investors to consider long-term, strategic retail investments close to the new stations,” Mr. Ezratty said. “It will eventually be another positive for the area.”

RKF’s Bowery Bustle, Mapped

1CO2100A0730Wine bars really began to supplant winos on the Bowery in 2007, when Whole Foods, the Bowery Hotel and the New Museum of Contemporary Art all opened on New York’s fabled broken boulevard. The 2008 market crash did little to slow skid row’s transformation into the Meatpacking District East (see: The Standard, East Village Hotel at 25 Cooper Square, just off Bowery).

Now the Downtown thoroughfare is poised to enter yet another phase of redevelopment. Intermix, the self-proclaimed “fashion boutique for trendsetters, A-Listers and glam fashionistas” opened in May at 332 Bowery, a former bodega. And last month, a portfolio of 11 mixed-use buildings sold to hip-hop clothier Joseph Betesh for $62 million.

The retail brokerage RKF is at the front of this gold rush. And Senior Director Brian Segall has become the firm’s Bowery guru. Last week, Mr. Segall and Robert Futterman, RKF chairman and chief executive, led The Commercial Observer on a tour of the company’s Bowery assignments, which (to the dismay of preservationists including Martin Scorsese) bolster RKF Executive Vice President Ariel Schuster’s prediction that the Bowery will soon be “one golden strip.”

Continue reading “RKF’s Bowery Bustle, Mapped”

Asphalt Green Launches Ad Blitz Attacking Trash Transfer Station

Upper East Side sports and recreation complex Asphalt Green is asking its neighbors a $64,000 question: have politics drowned out a necessary discussion about a trash transfer station’s impact on neighborhood children?

The facility, which would be severed by the controversial projects, rolled out an expensive bus shelter, phone booth and mail campaign in opposition to the East 91st Street Marine Transfer Plant today. Continue reading “Asphalt Green Launches Ad Blitz Attacking Trash Transfer Station”

Google Fiber Fever to “Hit Your Neighborhood”—Maybe

On Friday, Google Fiber told everyone reading its blog to “keep an eye out,” because it just might be bringing “Fiber Space” to your neighborhood. The buzz about town is that Google will become the new broadband infrastructure provider, possibly even wiring the whole United States the same way it did Kansas City.

Fred Campbell, a former Federal Communications Commission official who now works for the Competitive Enterprise Institute, wrote the following:

Continue reading “Google Fiber Fever to “Hit Your Neighborhood”—Maybe”

Picturing the Office Stairwell of the Future

Instead of dark and drab, imagine the stairwell of a commercial building with windows looking out to the street and vibrant colors on the walls. These simple steps could be the first stages in promoting stair use in New York office buildings.

Earlier this month, Mayor Bloomberg announced that New York City would promote the use of stairs in buildings and public spaces through the Center for Active Design. In light of the announcement, Rick Bell, executive director at the American Institute of Architects New York chapter,  likened stair use to bicycling, a healthier, though not necessarily more popular, alternative to other transportation methods.

Continue reading “Picturing the Office Stairwell of the Future”

Rent Stabilization’s Fall Favors Manhattan’s Wealthiest: New York Times

Imagine a time in the near future when the city’s rent control/stabilization laws are lifted. Many have rallied, especially those in the business of real estate, for this change.

(Credit: empowernetwork.com)
(Credit: empowernetwork.com)

Many consider it a “win-win-lose” situation, according to an article by Adam Davidson, co-founder of NPR’s “Planet Money,” which appeared in The New York Times last week – great for the middle class and landlords but awful for those purposely trapped inside the system, that is.

“The landlords of those units would invest in upgrades and chart higher rents,” Mr. Davidson wrote. “At the same time, the subset of apartments that had been market rate would see their rents fall, because there would be, suddenly, twice as many apartments in the market.”

The argument is not a new one, and most – especially those who oppose what they believe is an antiquated system – believe these sentiments true. Many of those paying artificially and sometimes ridiculously low rents have even been shown to earn far above the poverty line. It’s no wonder they refuse to move.

“The benefits of subsidized rent levels create motivation for occupants of these units not to move,” wrote Bob Knakal, of Massey Knakal, in an op-ed that appeared in The Commercial Observer earlier this year. “Therefore, we have little old ladies living in three-bedroom apartments by themselves.”

But perhaps the most striking of the premises put forth in the Davidson article is the fact that rent regulation will “very likely” go away on its own, without any efforts to end it soon. He noted that 231,000 units have been deregulated over the last 30 years, as thousands more are forced from the system each year, with more high-end condos rising and an exponential increase in the number of market-rate apartments.

At this rate, “Manhattan will have fewer and fewer poor people each year and almost none whatsoever in a few decades,” Mr. Davidson speculates. “What happens if all the rich people are on one island and the poor but creative are somewhere else? It might just destroy the strange admixture that makes Manhattan so appealing in the first place.”

And, so, the greatest irony of a rent control system now purported to achieve the opposite of its original intentions is that, perhaps, after its natural dissolution, it will corrode the very eclectic mix that makes Manhattan what it is.

Seeing Past the Words “Side Street”

In New York City real estate, “side street” is often a dirty word. Retailers associate side streets with being off the beaten path and generally out of the way. While that perception may hold true for apparel and dry retail, the fact is that boutique dining restaurant concepts can find some real diamonds in the rough by moving their search off the main thoroughfares.

While quick-service and fast-casual concepts rely on the high-traffic models of main-street retail, full-service restaurants have no such restrictions. In fact, a “hidden” location can add more mystery and intimacy to eateries as consumers, especially Manhattan residents, enjoy the thrill of discovering restaurants that haven’t yet made it onto every dining blog in town.  Availabilities on side streets typically come at a lower price point—especially in neighborhoods like the West Village, Greenwich Village and Soho, where avenue prices are especially high. Side streets also offer a larger inventory to choose from without the same level of competition as the streets and avenues that carry more name recognition.

Restaurants like The Smile on Bond Street, The Lion on West 9th Street, and Alta on West 10th Street have done a number of things right to harness the power of the side street to create an exciting dining scene that spans all meals of the day. They have leveraged the value of their location—as well as the benefit of lower monthly expenses—to create eye-catching build-outs and successful PR campaigns. Beyond serving great food, these restaurants have used all of the benefits of their side-street locations to create true destination dining.

Of course not all side streets are created equal, and it is important for any restaurant concept to look closely at the neighborhood and co-tenancy before jumping on the first side-street availability that comes along. But at the end of the day, side street locations can offer great value for an array of food-driven concepts and should not be overlooked.

Double-Digit Job Growth Fueled by Non-Office Sectors

Yes, ladies and gentlemen, New York City hit yet another new high in private sector jobs in June (according to NYC’s Office of the Comptroller), topping out at the nice round figure of 3,413,000. Furthermore, job growth has made it into double digits in four out of the first six months of this year. February was the only downer month thus far in 2013, and that was likely a fluke, as a bus strike put a dent in the education figure. For the month of June, the private sector increased by a very healthy 14,700 positions.

On the non-office side, the winners were … leisure and hospitality, which remained red hot and jumped 5,000 positions during the month (tourists as far as the eye can see); education, which was up by 4,800 positions (could be some seasonal adjustment issues at play here); and construction, which increased by 4,600 positions (if you don’t believe me, just check out the scaffolding everywhere).

But on the office side, the loser was … professional services, encompassing a large swath of jobs, including accounting, legal and much of tech/new media. This sector was down by 3,200 positions, only the second monthly loss this year and the sharpest drop since October 2012. In fact, there only have been six monthly losses since the beginning of 2010, which makes the drop in June stand out even more. One month does not a trend make, however, and we could see an adjustment in July or a rebound (monthly estimates can be frustratingly fickle). Information (non-Internet publishing) continued to trend lower in June and has now fallen in nine out of the last 12 months. The bright spot on the office side was financial activities, jumping by 2,000 positions and up in six out of the last seven months—thanks for saving the month, banking and securities (shocker, eh?).

So now that I’ve given you the blow-by-blow on the monthly jobs data, I should mention that longer-term (at least annual) trends are always better for this type of information. And in these, New York City is performing quite well. The best takeaway, in my mind at least, is that office jobs are up by 86,900 positions since the recession officially ended exactly four years ago in June. I love closing on a happy note!

Nordstrom Rack to Open in Downtown Brooklyn Next Year

A 41,000-square-foot Nordstrom Rack is slated to open at United American Land’s 505 Fulton Street in spring 2014.

“We want to be in the top locations across the country, so this spot at the heart of downtown Brooklyn is big for us,” said Geevy Thomas, president of Nordstrom Rack, in a prepared statement. “We are thrilled to become back of this exciting community at a historic location, and we intend to make the most of the opportunity to serve customers and give them a reason to shop the Rack.”

Continue reading “Nordstrom Rack to Open in Downtown Brooklyn Next Year”

Sprint to Provide All 277 Subway Stations With Wireless Coverage

Sprint and Transit Wireless announced Wednesday that they have finalized a deal that will bring wireless voice and data service to all 277 underground New York City subways.

“As we build out our new network, adding the vast underground New York City subway system brings a whole new level of connectivity to our customers, whether they’re consumers, public safety representatives, first responders or city workers,” said Greg O’Connor, vice president of engineering at Sprint.

Continue reading “Sprint to Provide All 277 Subway Stations With Wireless Coverage”

Rise of the Machines: Robot Garage Will Be North America’s Largest

WEBPerryFinkelman_Credit-AmandaCohen2616
(Credit: Amanda Cohen)

Perry Finkelman at times sounds like he’s describing something from a science-fiction movie. The CEO of Automotion Parking Systems talks of designing machines, manipulating machines—even machines that send text messages. It’s not Rise of the Machines he speaks of … not exactly. But the technology that will control the 697-car underground parking garage that Automation plans to build beneath Willoughby Square Park in Downtown Brooklyn very much relies on them. A human driver parks the car on a pallet, and then computer-operated machines take over: an automated touch screen provides a simple set of directions, and lasers make sure the vehicle is positioned correctly, running a series of safety checks, before computer-programmed robotics swirl the vehicle to a snug underground resting place.

The city tapped Automotion and its partners to build the $35 million garage following a grueling three-year RFP process. American Development Group, Mr. Finkelman’s other company, will serve as project manager of the parking lot and the roughly $5 million dollar park above it, which is slated to become the epicenter of a $2.5 billion mixed-use cultural center. Mr. Finkelman shared details with The Commercial Observer on what he claims will be the largest automated parking garage of its kind in North America, the technology behind it, his push to make it even greener and the park that will sit above it.   

The Commercial Observer: What gave you the edge on the RFP? 

Mr. Finkelman: When this RFP came up, everyone was looking at conventional parking to go underground. There’s just no way that it could be properly designed and handle what their target number was, of almost 700 vehicles. We were able to get the exact amount they were looking for in less space—almost three times the amount of parking in the space that was proposed by other vendors—so there was a significant advantage to how we looked at it. I don’t know the exact numbers, but the whispered number of the next successful bidder was somewhere between $20 million and $30 million more.

Who designed this, and where did the concept come from? 

The designer is Solomon Rosenzweig with SRPE, and they are the structural engineers for the project. I was out to dinner with our structural engineers, and we were talking about how to go about designing this, and what I wanted to do was create some sort of trapezoid design so we could deal with the construction costs—not underpinning as much and using the natural contours of the soil to hold back the soil pressures, as a tool to be competitive. That genesis of those drawings, which were actually on the back of a napkin, is what we ended up designing.

This is a technology and construction methodology that has not been used in the U.S. but has been used in Europe—a whole concept of making something extremely environmentally friendly. We figured out that we would be saving 17,000 gallons of gas a year just from [not] driving around the ramps in a conventional garage. That’s a staggering amount of money and fuel—and a waste that we won’t have.

Why aren’t other parking companies catching on? 

Quite frankly, I don’t know why. It’s available to them—Automotion sells to everybody. So it’s available. Automotion would be selling to American Development or anyone else, even on multiple bidders—but no one did approach Automotion.

Do other firms have this technology? 

We’re the only ones with a track record and a history of reliability, especially in transient parking systems. That’s not to say there aren’t other companies, but they are not operating to any type of degree that can show reliability or longevity of the machine. Some of them are in conceptual stages. There are a few other firms that purport to have systems but they don’t have any operating history. Why would you spend money on technology that is not proven? You have developers looking at price and not dealing with safety issues or reliability, thinking that all automated parking systems are the same. They’re not.

The Trophy Agent: RFR’s Steve Morrows

Steve-Morrows_Fernando-Pereira-Gomes-1
Credit: Fernando Pereira Gomes.

Ten months ago, Clayton, Dubilier & Rice, one of the world’s oldest private equity firms, was looking to expand its space at the Seagram Building. Having spent a number of years occupying the entire 18th floor of the iconic building and a portion of the floor above, the firm was on the prowl to take the entire 19th floor.

With four additional tenants sharing space on the floor, complicated negotiations were imminent. Steve Morrows, executive vice president and director of leasing at owner RFR Realty, began devising a solution with his leasing team. The answer involved two lease terminations and two relocations within the building—all at the same time.

Continue reading “The Trophy Agent: RFR’s Steve Morrows”

A Tangled Web of Infrastructure, Literally

When telecommunications was deregulated in 1996, new companies entered the playing field. At the time, landlords’ understanding of IT infrastructure was minimal.

“Landlords were ambivalent about the process,” said Glen Carolo, executive vice president of Montgomery Technologies. “They did not provision anything on the tenants’ behalf regarding IT.”

tangled in wire A Tangled Web of Infrastructure, LiterallyThere has been a mounting movement toward streamlining data and Internet capability instead of focusing exclusively on traditional voice services. As devices become smarter and more capable, newer infrastructure becomes necessary.

To facilitate advances, infrastructure must be updated. However, in the past, when companies updated buildings’ wires, ISPs were not careful to extricate the older outdated infrastructures.

“There is legacy system on top of legacy system from the phone company, which has created a cluster of outdated infrastructures,” said Mr. Carolo explained. “There are decades of unutilized and abandoned wires in many buildings in New York City.”

Updating a building’s connectivity is arduous. It entails navigating around, and wading through, old wiring. ISPs prefer to avoid the issue and simply add on more wires, which adds to the congestion.

The physical act of removing the wires is not expensive, but the added cost of due diligence, making sure that only the proper wires are removed, can be prohibitive.

The city has attempted to enact laws requiring the owners of the old cables (Verizon owns a majority) to remove “abandoned wires,” but the ambiguity of the terminology has allowed Verizon and landlords to avoid investing money to rectify the situation.

Brown Harris Stevens Sells Pre-war ‘Gem’ for $18.5 M.

56 West 11th Street Realty LLC has purchased a 31,000-square-foot building at 56-58 West 11th Street in Greenwich Village for just under $18.5 million, The Commercial Observer has learned.

(Credit: Cary Horowitz)
(Credit: Cary Horowitz)

The nine-story building, built in 1912, features 36 residential units, with what broker Howard Morrel, who arranged the off-market sale, said is “virtually guaranteed upside” in one of Manhattan’s most sought-after neighborhoods. Continue reading “Brown Harris Stevens Sells Pre-war ‘Gem’ for $18.5 M.”