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A blog for breaking sales and neighborhood real estate news.

January 27, 2016 | Commercial Observer

Mayor Bill de Blasio must be beside himself now that the 421a tax benefits program has expired. Labor’s unwillingness to agree to reasonable wages for construction workers has dealt a crushing blow to the mayor’s objective of creating/preserving 200,000 units of affordable housing over the next 10 years. “Preserving” is always a necessary hedge word when politicians employ it, as it is impossible to accurately determine how many units get preserved. This provides elected officials with wiggle room when examining actual results versus numerical projections. However, new construction is a critical component of any initiative to increase affordable housing in the city. Without the 421a program—or some kind of equivalent—even a fraction of this target is outlandishly optimistic.

There is no doubt that New York City is in dire need of more affordable housing for residents across a broad range of earning levels. Affordable housing is typically thought of as housing for the poorest among us; however, the working class is an equally important segment of society that requires housing within the city’s boundaries...

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February 3, 2016 | Commercial Observer

For the past two years, the investment sales market in New York City has performed better than during any other two-year period I have seen in my 32 years brokering here. Values have soared due in large part to enhanced fundamentals, plentiful financing and an extremely acute supply/demand dynamic that has been skewed heavily in favor of demand. While this demand has been broad-based, foreign capital has been a significant component of the tremendous demand we have witnessed. And this foreign demand could be ready to surge to even greater heights.

Until recently, foreign investors in U.S. real estate were disadvantaged by a law that should never have been put into the tax code to begin with. The Foreign Investment in Real Property Tax Act of 1980, referred to as FIRPTA, unfairly (relative to other non-real property investments in the U.S.) imposes excessive tax barriers on foreign capital investment in American real estate. FIRPTA has been the central obstacle to greater capital investment by non-U.S. investors...

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February 24, 2016 | Commercial Observer

At the beginning of 2016, our forecast for the investment sales market in New York City was rather bearish. Coming off two years with all-time records, we felt that both sales volumes and values had to correct given how values had gotten so far ahead of fundamentals. We projected that the dollar volume of sales this year would fall by 10 percent to 20 percent, and the number of properties sold could be down as much as 30 percent to 40 percent from last year’s totals. In addition, we believed that property values would also decline this year relative to last year’s all-time record levels.

We are currently a bit more than halfway through the first quarter of the year, and it appears our forecast is on track...

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March 9, 2016 | Commercial Observer

Last week, I wrote about the current status of the multifamily sector in New York City and one sentence, toward the end of that column, produced more emails and calls than any other I have written in quite some time. That sentence was, “Notwithstanding the strong policy headwinds rent-regulated assets have faced, and will continue to face, the sector continues to progress in a positive way, at least for now.” Most of the questions were regarding the headwinds yet to come. But the tumult the market has already faced is substantive and should be reviewed as well. Let’s take a look...

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March 24, 2016 | Real Estate Weekly

New York City’s commercial brokers competed for the Real Estate Board of New York’s (REBNY) 2015 Most Promising Commercial Salesperson of the Year (Rookie Award), which culminated at the REBNY Members’ Luncheon at the New York Hilton Midtown on Tuesday, March 22nd.

REBNY’s Commercial Brokerage Board of Directors presented the award to Morris Betesh, a Managing Director in Cushman & Wakefield’s New York Capital Markets group. As the nineteenth winner of this award, Betesh receives a one-year seat on REBNY’s Board of Governors and will become a lifetime member of REBNY’s selective “Circle of Winners” group, which convenes four times a year for a private dinner with some of the real estate industry’s top leaders.

The Most Promising Commercial Salesperson of the Year Award was created by the directors of the Board’s Commercial Brokerage Division to recognize the achievements of commercial members who embody excellence, professionalism and unwavering ethical fortitude...

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March 18, 2016 | Commercial Observer | Liam LaGuerre

Dime Community Bancshares, the parent company of Dime Savings Bank of Williamsburgh, has completed the $80 million sale of its Williamsburg portfolio, Cushman & Wakefield announced in a release today.

Tavros Development Partners, Charney Construction & Development and 1 Oak Development purchased the properties, 263-277 South 5th Street, 262-272 South 4th Street and 205 Havemeyer Street. The site allows for 230,000 buildable square feet, according to C&W.

A C&W team of James Nelson, Brendan Maddigan and Matt Nickerson represented Dime in the transaction, while the buyers did not have a broker...

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Neighborhoods: Williamsburg/ Agents: Brendan Maddigan

March 9, 2016 | Commercial Observer | Liam LaGuerre

Two years ago, when Massey Knakal Realty Services Founders Robert Knakal and Paul Massey were looking for someone to manage their Brooklyn and Queens offices, the executives wanted a seasoned organizer with expert knowledge of how a sales floor operates…but someone who wasn’t a broker.

They didn’t want a “player-coach,” someone who’d be influenced by their personal compensation. They wanted someone who would be focused solely on the team. 

So they turned to Betty Castro, who wasn’t a broker. In fact, she wasn’t even in the real estate business at the time.

As a vice president of sales and marketing at brokerage First Empire Securities, which sells bonds to banks and other investors, Ms. Castro handled recruiting, helped First Empire grow into new markets and spearheaded the development of the company’s website.

She was perfect...

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Corporates/Agents: Betty Castro, Brendan Maddigan, Paul Massey Jr., Stephen Palmese

March 4, 2016 | Wall Street Journal | Derek Kravitz

Brownsville, the Brooklyn neighborhood that has battled crime and poverty for a long time, is in need of a few wins—and a nascent network of community groups and investors is working to provide just that.

Once home to poor Jewish immigrants and offering refuge to a ragtag collection of radicals and socialists at the turn of the 20th century, Brownsville has the largest concentration of public housing in New York City and the U.S. Some 60% of its housing stock is owned by the city.

Parts of Brownsville are slated for rezoning under Mayor Bill de Blasio’s affordable-housing plan for the broader East New York area, approved by the city Planning Commission.

But change won’t come easy...

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Neighborhoods: Brownsville

February 29, 2016 | New York Post | Lois Weiss

An unidentified investor has forked over $10 million to buy the small building housing the iconic Rao’s Italian restaurant, The Post has learned — and didn’t even get a reservation for one of its closely guarded tables.

The sale of the 22-unit rental property and leaseback of its 1,200-square-foot space by the extended Rao’s family will ensure the beloved restaurant remains at 455 E. 114 St. on the northeast corner of Pleasant Avenue in East Harlem for decades to come.

Most folks will never get to savor the fare of the always fully reserved eatery, where an exclusive group of mostly New Yorkers have “table rights” for each of the 10 tables for every day of the week...

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Neighborhoods: Harlem

February 25, 2015 | Real Estate Weekly | Linda Barr O'Flanagan

Fisher Brothers has bagged $11 million for a retail condo at 37 Warren just a few months after partner Winston Fisherʼs gym there shut up shop.

HUBB NYC, the firm previously known as Trevi Retail, bought the Tribeca retail condo – its second buy since the beginning of the year.

Neighborhoods: TriBeCa/ Agents: Guillermo Suarez

Cushman & Wakefield is pleased to announce the release of its exclusive fourth quarter 2015 Property Sales Reports. These unique, industry-leading reports provide a comprehensive study of the investment sales market by product type in the New York City area (Manhattan, Northern Manhattan/Bronx, Brooklyn, and Queens).

After a record-breaking year in 2014, which saw an all-time high for properties sold, the New York City investment sales market hit yet another benchmark in 2015. In the past year, the aggregate sales consideration totaled $74.5 billion, exceeding 2007’s previous record of $62.0 billion. The year’s unprecedented dollar volume was anchored by several mega-deals, including the sale of Stuyvesant Town for $5.4 billion and a $3.8 billion investment into the Brookfield development project near Hudson Yards. Four of the city’s top six quarterly dollar volume totals of all-time have now occurred in 2015, a trend supported in large part by an increased prevalence of larger transactions. The average price per property hit an all-time high of $14.7 million in 2015, exceeding 2011’s previous high by 17.6 percent.

“2014 and 2015 were probably the two best years ever for the sales brokerage industry. Supply was strong, demand was excessive and market indicators were moving in the right direction,” said Bob Knakal, Chairman, New York Investment Sales.

Click here for press release.

Crain's | February 18, 2016 | Joe Anuta

The long-vacant RKO Keith's Theatre in Flushing, Queens, is up for sale—again.

The 1920s-era cinema at 135-35 Northern Blvd. has been gathering dust for 30 years as a series of developers have bought and sold the property without completing plans to convert it to apartments or hotel rooms. On Feb. 17, the latest firm to take a crack at redeveloping the property, JK Equities, announced that it is putting the former movie house up for sale. RKO Keith's Theatre is being marketed by Cushman & Wakefield.

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Neighborhoods: Flushing/ Agents: Stephen Preuss

Cushman & Wakefield has arranged a total of $6,622,500 in financing for two transactions exclusively arranged by Directors George Gnad and Jonathan Kristofich along with Associate Michael Winters.

A $4.5 million LP equity position was arranged on behalf of Arena Shoppes LLC for a retail building at 7300 West McNab Road, in North Lauderdale, Florida. The equity provider was an undisclosed U.K. equity source. The retail center, a former Walmart, contains approximately 92,596 square feet. The Sponsor is re-tentating the building, which will include a new tenant, Ross Dress For Less as anchor.

"I am truly proud to have been part of such a creative and professionally executed deal. Both sponsor and equity provider are perfect compliments for each other and I am confident that with their extensive experience and knowledge of the market, they will exceed expectations throughout the life of the project," said Gnad.

A $2.12 million loan was arranged to refinance a 28,600 square foot warehouse building at 59-71 Oak Street, Hackensack, New Jersey. The new loan features a cash out, reduction in interest rate and extended term for seven years.  The lender was Atlantic Stewardship Bank. The borrower was 59-71 Oak Street LLC.

"The refinance and cash out of 59-71 Oak Street, Hackensack reflects the strength of well-located buildings within the Bergen County warehouse & distribution market," said Kristofich.

"Through our extensive marketing approach, we solicited significant interest from many local lenders and negotiated a very competitive mixture of rate and term for our client," added Gnad.

Gnad and Kristofich are Directors at the New Jersey office of the Cushman & Wakefield Capital Services team. Over a 25 year career, Gnad has originated and structured in excess of $5 billion of capital on all major assets types and loan structures including bridge, value add, construction and term debt. Kristofich has evaluated and underwrote over 100 buildings from all asset classes with an aggregate value in excess of $250,000,000.

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February 1, 2016 | Commercial Real Estate Direct | Josh Mrozinski

Gershon & Co. is offering for sale 55 Hope St., a 117-unit upscale apartment building with 6,200 square feet of retail space in the Williamsburg neighborhood of Brooklyn, N.Y.

The New York company has hired Cushman & Wakefield to market the four-year-old building, which could sell for $95 million, or about $805,085/unit.

The building's apartment units are 97 percent leased, while its retail space is fully leased by restaurant Momofuku Milk Bar. Units include...

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Neighborhoods: Williamsburg/ Agents: Brendan Maddigan, Stephen Palmese

The first Cushman & Wakefield Speaker Series event successfully launched last night. It was the first of the firm's new in-house speaker series designed to educate and empower employees with tools that can enhance their success and productivity.

Industry Cushman & Wakefield veterans, Ken McCarthy, Gus Field, Joanne Podell, Steve Kohn, and Bob Knakal, presented an overview of the New York City Market. It was a condensed version of our Year-End Press Conference held earlier this month.

Bob Knakal and Cushman & Wakefield were honored at The Greater New York Chapter of the Institute of Real Estate Management Annual Awards Dinner.

Nicholas Stolatis, CPM, presented Bob Knakal, Chairman, New York Investment Sales with the Real Estate Person of the Year award.

John Santora accepted the Accredited Management Organization of the Year award on behalf of Cushman & Wakefield.

Other honorees included Diana Bosnjak, Vice President – RY Management Co., Inc, who received the Certified Property Manager of the Year Award and Andrew Rosenwach from Rosenwach Tank Company, who received the Industry Partner of the Year Award.

The event was held on January 14, 2016 at 230 Fifth in Manhattan.

The Real Deal | January 13, 2016 | Rey Mashayeki

Cushman & Wakefield executives delivered a mixed outlook Tuesday on the city’s commercial real estate market in 2016, as continued macroeconomic strength is expected to drive market fundamentals but major questions persist over the fate of the current cycle.

The commercial brokerage giant noted positive market trends ranging from continued job growth – with 46,000 jobs added in the city in October and November alone, according to principal economist Ken McCarthy – to office asking rents that have hit all-time highs in the Downtown and Midtown South submarkets.

A resurgent financial services sector has helped drive that momentum, with the industry overtaking the TAMI sector to account for 29 percent of all new office leases in 2015, Cushman said...

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Yesterday morning, a panel of Cushman & Wakefield experts  presented on the state of the New York City real estate market. At the event, fourth quarter statistics were released for the Manhattan commercial real estate market that show year-end new leasing activity totaled 28.2 million square feet (msf), representing the third highest total in the past decade.

The strong leasing volume lowered the overall Manhattan vacancy rate to 8.5 percent, the lowest it has been since year-end 2008, when the vacancy rate was 8.1 percent.

“2015 was a very strong year, and we are optimistic that the combination of a healthy TAMI sector coupled with stronger growth in financial services will continue to drive the market forward in 2016,” said Ron Lo Russo, President, New York Tri-State Region.

“New York City has experienced extraordinary job growth over the past five years. We expect that the City will continue to act as a magnet to the young professional millennial worker that companies are seeking to hire,” said Ken McCarthy, Principal Economist, Applied Research Lead.

Manhattan’s three major markets closed the year with vacancy rates in the single digits. Midtown South, with a 6.2 percent vacancy rate, was surpassed as the tightest Central Business District in the nation by San Francisco, which had a vacancy rate of 5.9 percent. The Midtown market closed the year with a vacancy rate of 8.8 percent, a decrease of 1.0 percent year-over-year and the Downtown market closed at 9.4 percent, a decrease of 0.3 percent year-over-year.

At year-end, the overall average asking rent in Manhattan increased 5.7 percent year-over-year to $71.58 per square foot (psf), from $67.70 psf and the Manhattan class-A average asking rent increased 4.2 percent to $76.76 psf.

Overall absorption for the year was positive in all three major markets, totaling nearly 4.5 msf. The Midtown market represented 75.0 percent of Manhattan’s positive absorption, with 3.3 msf.

“Fundamentals and activity at the outset of 2016 are strong,” said Gus Field, Vice Chairman. “Due to pending variables, we see either moderate growth or a moderate slowdown this year.”

Mr. Field, who presented the Manhattan office market at the firm’s year-end press conference, pointed to changing interest rates and the upcoming election as some of the variables that will affect the growth of the market this year.

The TAMI (Technology, Advertising, Media & Information) sector has been the main reason for the growth in office leasing following the recession, but financial services has become an important factor in the continued growth in the market. From 2011 to 2014, the TAMI sector accounted for 28 percent of the market share of Manhattan new office leasing, with financial services accounting for 25 percent. This year there has been a shift. For year-end 2015, the financial services sector accounted for 29 percent of the market share and the TAMI sector accounted for 27 percent.

For the retail market, the evolution of technology is playing a larger role in retailers’ real estate decisions.

“Retailers who embrace the omni-channel experience – the integration of e-commerce, bricks-and-mortar, technology, and mobile and social apps – are likely to do so in urban flagship locations,” said Joanne Podell, Vice Chairman. “This seamless integration of cutting-edge technology makes them well-suited to promote in-store product, create memorable experiences, and pull big data to better understand their customer.”

Manhattan average retail ground floor asking rents increased in five of the 11 retail corridors, with Flatiron seeing an increase of 6.9 percent, Meatpacking an increase of 5.2 percent, SoHo an increase of 4.6 percent and Lower Manhattan an increase of 4.2 percent. The availability rate increased in eight of the corridors, with Herald Square/West 34th Street closing the year up 8.3 percent and Fifth Avenue (42nd to 49th Streets) up 6.2 percent.

In the equity and debt market, Steve Kohn, President, Equity, Debt & Structured Finance, noted that despite global economic noise creating volatility in fixed income markets, CMBS persevered in 2015.

Mr. Kohn stated that there has been significant volatility in the world affecting spreads in debt. Looking forward, he questioned if this is a period of “short term volatility or a longer term upward trend in capital costs?”

Robert Knakal, Chairman, New York Investment Sales, stated at the mid-year point that the sales market was surging toward an all-time dollar volume record. That, in fact, was the case. By year-end there was a total of $74.5 billion of completed transactions.

The total number of properties sold decreased year-over-year, with 5,089 properties sold in 2015 compared with 5,532 properties sold in 2014.

Commercial Observer | January 7, 2015 | Bob Knakal

As 2016 begins, trying to figure out how the investment sales market will perform is no easy task. Within the next week or so, we will be making our forecast for the year and we will look at several metrics to craft our projections.

An important component of the data for review will be the 2015 year-end sales statistics. While the figures are not yet compiled, it is a safe bet that last year will set a new all-time record for dollar volume of investment sales. The previous peak was $62.2 billion in 2007 and last year will end up significantly above that threshold. The number of properties sold will likely not eclipse 2014’s all-time record but will be extremely strong, likely recording a second-strongest-year-ever total...

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December 31, 2015 | Real Estate Weekly | Dan Orlando

Cushman & Wakefield has been retained on an exclusive basis to sell an apartment building at 10 West 65th Street, located between Columbus Avenue and Central Park West, on Manhattan’s Upper West Side. The asking price for the property, which has “tremendous upside,” is $115,000,000.

John Ciraulo Vice Chairman in the capital markets group of Cushman & Wakefield told Real Estate Weekly that the considerable price point is a result of both the property’s location and “the potential of converting this building to a condo now or in the future.”

The six story pre-war elevator building also comes with more than 50,000 s/f of air rights which gives the future buyer options to expand...

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Neighborhoods: Upper West Side/ Agents: John Ciraulo

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