I Got 99 Problems, But Eminent Domain Ain’t One: White Brooklynites Against Jay-Z @9:50 AM
Jay-Z has been dipping his toes in the political waters of late. First, he and Beyonce showed up at the White House (which was stellar). Then, he surfaced as entrenched in an imbroglio (not so stellar) with the New York Guv, a potential Queens "racino," and Rev. Floyd Flake, the borough’s behemoth ex-Congressman-cum-powerbroker. Then the governor, even while busy swimming in a flood of scandal, killed the deal. And yesterday, Jay-Z appeared standing shoulder-to-shoulder with dozens of New York politicos and dignitaries to take a big step towards building his dream: a stadium for the Brooklyn Nets. And lots of people are peeved about it. READ MORE 11
The Disaster of One Madison Park @10:40 AM
My obsession, "One Madison Park," the super-skinny building that went up at the foot of Madison Ave. and 23rd Street, looming over Shake Shack, mostly full of full-floor apartments that we thought had been all bought up by rich Irish people (not rich any more!) and Arabs (some rich still!), has turned out to be a total shit-show in the finest New York tradition. This is a very bad scene. Now the co-builders are suing each other, the debt-holding bank is suing the builders for foreclosure, and there are also a dozen other lawsuits floating around. Some of the most fascinating stuff: when the builders couldn't sell units back in the glory days of 2007, the builders brought on an ad guy. His fee? Two apartments and $800,000. Ladies, we are all in the wrong business. Annnnnd here comes the punchline: now, "about a dozen of the building’s 90 condos are occupied." Oof. 30
Real Estate Royalty Report All Is Well @11:09 AM
This odd profile today in the Times of the current state of New York office-building-owning real estate royalty indicates that they are all just fine and dandy! The Rudins, the Dursts, the Roses—they have weathered the storms (now all long past, apparently?) and there's not a single bit of data in this accounting about any upcoming lease expirations or negotiations or regarding any possible dropping of rental prices per square foot. The only bit of contrast to their apparent success offered is the disaster facing solely residential developers, like Shaya Boymelgreen, in deep trouble for having jumped wholeheartedly into providing a glut of luxury condos. Somehow still, the Speyers end up on the outs here, due to their recent loss of Stuyvesant Town—even as, just last June, they were the family dynasty to worship. Also: not a mention of the arriviste Trumps or the Kushners. 9
Everyone Owns Stuyvesant Town Now @9:40 AM
The single greatest real estate transaction failure came to pass overnight, with Tishman Speyer actually giving up crazy purchase Stuyvesant Town instead of filing for bankruptcy. Now, the property was entirely a lended and borrowed deal, though everyone talks "Speyer this" and "Speyer that." Of the $5.4 billion raised, Tishman Speyer only put up $112 million, and for some reason I don't understand, there was also $56 million as well from Mr. Jerry Speyer and his goodlookin' son. (Why bother? They clearly weren't good for much more.) Their pals in the real estate wing at BlackRock, the immense investment management services, scraped together $3 billion in secured debt and another $1.4 billion in mezzanine loans from everyone around the world pretty much. Everyone wanted in on this trough! Reading the Times, Reuters and the Post this morning, however, no one actually names pretty much any of the huge number of creditors who were defaulted on earlier this month and who, yes, now own Stuyvesant town. Hey, who's your landlord? The creditors include basically everyone everywhere: Winthrop Realty Trust, SL Green Realty Corp and/or Gramercy Capital Corp… and around the world it goes! Deutsche Genossenschafts-Hypothekenbank AG! Hartford Financial Services Group! Allied Irish Banks Plc! Oh right: you know, those suckers that are the state of Florida. 1
Trump SoHo: What Up, Closets? @1:31 PM
We have not been paying attention to the Trump SoHo hotel-condominium (WHICH IS BUILT ON A GRAVEYARD), unlike some people who are crazed about it, but I finally looked at the floorplans, because it opens in February? They're terrible! First of all, the non-penthouse condos top out at like 700 square feet, and most are like 450 square feet? But really: if you're going to buy a condo-ized hotel room (which you can only occupy for 120 days a year, max, and, um, no thanks), wouldn't you want an extra closet instead of 1.5 baths? One of the units has a "secure owner's closet," but the rest, not much. Thing is, you know, you'd want to keep some of your New York clothes at your own hotel room, obviously, when you wanted to swoop in high and hot from Bahrain or Burma! Good grief. 11
The Further Decline of Union Square: The W Hotel Foreclosure Auction @12:10 PM
Beyond the drama of the big numbers, here's a helpful explanation of what happened to the W Union Square Hotel, which had a fun and dramatic foreclosure auction yesterday. (Union Square! Such carnage, all around!) "Basically, Dubai World (or its investment arm, Istithmar) paid $282 million in total for the hotel, and took out a $115 million mortgage. Istithmar put down $50 million of its own money, and borrowed the rest in what's known as a 'mezzanine' transaction: $117 million of high-yielding debt which isn't secured against the property…. Lots of people are extremely worried about commercial real estate at the moment, saying that it's the next shoe to drop. But a $240 million valuation still works out at almost $800,000 per room, which is still a lot of money for a hotel which no one likes very much." Amen to that. 2
666 Fifth Avenue Really is the Devil @12:50 PM
Ivanka Trump has declared Twitter-war against Crain's—it's like a thumb war, but less lethal—over a profile of the Trump-Kushner business and romance union. She called the article "misinformed and pointless," which is just another sign of how smart she is: a dumb person would have called it "inaccurate," which would mean then that we would have to go through to show how all the facts were actually facts. (Although she has suggested that the Observer's real estate paper has "stolen" all of Crain's advertisers, which, *cringe*.) So, to the facts? They cover the $1.8 billion Kushner purchase of 666 Fifth Avenue. "The building's rents never covered debt service, according to Manus Clancy, senior managing director at Trepp, which tracks real estate debt. That situation has only worsened as office rents have collapsed over the past two years. A law firm that leases about 15% of 666 Fifth has announced that it is leaving, which will leave a huge gap at a time when big corporate renters are scarce." This is the nicest possible coverage of what is going on at 666. For instance, this summer, 666's consortium had to pay nearly $12 million to a bankrupt tenant. But even that's way less money than they're not making each month with their enormous and apparently permanent ground floor retail vacancy (which was sold off to the Carlyle Group). Basically the only way to make money off this investment is to call in Godzilla to step on the building. 7
Tishman Speyer: The Hits Keep Coming @10:35 AM
New York's highest court has ruled that the owners of Stuy Town and Peter Cooper improperly jacked up rents on tenants in those complexes. "The ruling by the state's highest court may mean that the current owner, a partnership of Tishman Speyer Properties and BlackRock Realty, and the former owner, Metropolitan Life, may have to pay an estimated $200 million in rent overcharges and damages to tenants of some 4,000 apartments….Tishman Speyer Properties and BlackRock, which purchased the properties in 2006 for a record-breaking $5.4 billion, are already under enormous financial pressure. The partnership is running out of cash to pay building loans and could default within the next several months." 0
Rich People From Rich Family Buy House @9:38 AM
What kind of world is this, when a Page Six item begins, "Some people still have money to buy real estate." Well of course they do! And now is a fantastic time to buy. Especially if you are James and Whitney Fairchild, who old folks among us will remember as having one of the most fantastic wedding announcements of all time. (His second, I believe.) Let's look back!
Both ride horses and play tennis in whites, collect walking sticks and silver cigarette cases and are the sort of people who would instinctively know how to dress for afternoon tea in the Antarctic. On their first date, he cooked a souffle for her in his apartment, which is full of orchids and English antiques.Whether they are walking down a sidewalk or into a charity ball, they are known for wearing clothes that "create a small explosion," as one friend of theirs put it. Ms. St. John has been seen at parties in everything from cat suits to headgear the size of lobster pots.
Ni Hao Now, Proud White Christian Empire State Building? @9:40 AM
Literally twos and threes of people turned out last night to protest the coloring of the Empire State Building last night because it is China-colored, until sometime Friday morning! This is in honor of the 60th "anniversary" of China, which is a very young country apparently. How offensive! Here is a stunning report from Fox News' Shep Smith, who, oddly, refers to New York City as "Tiny Town," of which presumably he is the mayor and first lady both. Anyway, China is a really bad place, and we should pretend it doesn't exist and also never buy anything from there, including U.S. dollars, which they also own. 13
Through the Looking-Glass, and What Brooklyn Found There @12:30 PM
Hard times at Meier Tower: "FACED with anemic sales, the developers have slashed prices by as much as 40 percent. They combined units – there were originally 114 – to boost the percentage sold in order to ease the path to mortgages. But potential buyers have walked away from at least $20 million worth of contracts. And the handful of people who moved in have been left exposed not only to the perils of buying at the peak of the market but also to the stifled laughter of their neighbors following their every move." 4
The Market Crash Blowback Lag: Even Tishman Speyer Has Problems @9:30 AM
Not you too, Tishman Speyer! The WSJ says that the fabled and relatively squeaky-clean family real estate empire (Rockefeller Center! Chrysler building!) Tishman Speyer has defaulted on loans for a massive Washington real estate investment. (We already knew that their enormous purchase of Stuy Town was pretty much a debacle, of course—and which will become a full-on disaster next year when the fund paying the differential between its debt and its income runs out.) Here's what I don't quite get. If Speyer unloaded $12 billion in property at the top of the market, and also has $2 billion essentially in cash, why then is refinancing a $2.8 billion investment a problem? Are they just defaulting to default? Sure there's a lack of rental income on all properties— but it's not like they own Jared Kushner's troubled 666 Fifth Avenue or anything, which is becoming more and more vacant, with bigger and bigger ads put up by brokers on its empty ground floor retail. 3
7-Eleven's New York City Takeover @1:00 PM
First they came for Union Square, to build a T.G.I. Friday's, but I wore no flair so I said nothing. Now they are coming to build more than 100 7-Elevens in New York City… including at 14th and 6th. 37
MTV v. Landlord v. Media in Times Square @12:30 PM
It's hard to tell who's working whom in this tale of MTV and its Times Square lease. (This would be the problem with real estate writing in general and in the specific.) I am pretty sure it is the landlord working on the tenant, however, as the landlord is the one blabbing in the New York Post about how they are going to find a new tenant for MTV's first floor store and its famed second-floor glass-walled studio, which you know as the place where girls from Iowa used to gather to get a look at Carson Daly, and where now no one really sees anything. There's some weird omitted details here, such as how MTV reupped its lease in the building for a million square feet last year (for how long? Ten years?). But that was last year, and prices were different, and now they're either digging in to haggle with the landlord—or they realize it is a huge expense that doesn't really do anything for them, and the landlord is forced to splay itself naked and exposed in the press to find a new tenant by the end of this terrible real estate year. 4
New York City Real Estate: Uglier than Ever @9:20 AM
$1750 / 1br – COME SEE THIS GREAT LOFT IN THE TEA FACTORY!! CALL TODAY!! (E. Williamsburg/Bushwick). B/W: "Ari LeFauve, of the Real Estate Group of New York, said building owners are still asking for rent increases. He often advises landlords, especially individuals with few apartments, to have more modest expectations." 6
America Is One Vast Empty Storefront @2:25 PM
Things are tough in Florida, and they're not much better out in San Diego County. Soon we will all be living in these places. If we survive the swine flu. [Via] 6
Florida Is Closed @4:49 PM
From the Broward-Palm Beach New Times (and via Felix Salmon) comes this tour of Florida real estate. Which is, apparently, all empty! "The pictures start at the Fort Lauderdale beach on Sunrise Blvd. and go west to federal Highway (rte 1) north to Pompano Beach about 8 miles." 9
The Most Delightfully Catty Real Estate Item Of All Time, Concerning Laurel Touby @5:57 PM
Laurel Touby—founder of the Ponzi scheme called Mediabistro—now, by her own lifestyle calculus, "either has a car and a driver but not a whole new life, or a whole new life but no car and driver: According to city records, she just closed on a $3,905,000 penthouse loft at 43 East 19th Street." 6
Now Even The Real Estate Brokers Seem To Be Getting Evicted @9:17 AM
Small New York city real estate brokerage Citi-Spaces told the real estate trade press recently that they were closing one of their four locations. (This office was at the corner of Second Avenue and 11th Street.) Except, you know, when most businesses close down a location, the landlord doesn't have to take them to court to come seize the property. And the premises aren't littered with abandoned garbage and undelivered mail. Hey, but that real estate recovery is happening now, right? 0
Jared Kushner A Much Better Son Than You Are @9:00 AM
Here is one thing I did not know about New York Observer owner and Ivanka Trump-dater Jared Kushner, from today's New York mag feature: "Every Sunday, Jared flew to Alabama and visited his father in prison." Man. Most of us, when our parents are in prison, are like "Um, I guess we'll talk when you get out…." Also the forthcoming default on the $1.2 billion in debt for 666 Fifth Avenue, which does not by any stretch pay for itself—nor, for that matter, can they even find a tenant for the ground floor retail, leaving a massive empty stretch of prime Fifth Avenue glass plastered with ads from Kushner's brokers—well, that should be interesting! 2
The Wall Street Journal's New Rent @11:52 AM
The Wall Street Journal is moving into five floors at 1211 Sixth Ave., home of Fox News and the New York Post. That building's floors are about 40,000 square feet, so, if they were paying a full $80 a square foot, the rent comes to a nice $1.3 million a month! Now, being a big tenant of the building, Rupert Murdoch is probably paying less. However, they're also renting out additional space (WHY?) at 1185 Sixth Ave., because apparently 200,000 square feet isn't enough, so perhaps they are paying more. Also, random math indicates that electric and the like for five floors should be something like $600,000 for the year. 5
The NYC Real Estate Market Is Just Fine, Says LYING FREAK @4:10 PM
This from a 22-year-old senior vice president at Prudential Douglas Elliman, in New York City, regarding the residential sales market: "We are now seeing a definite turnaround as well as some major market activity and are eagerly anticipating a great 2009." Haha, LIAR! Yes: him again. 7
Nearly 1 in 10 U.S. Mortgages Are Delinquent @11:42 AM
9.12% of U.S. mortgages are delinquent—excluding houses already in foreclosure. (Last December: 7.17%. Last September: 6.41%.) An additional 3.85% of U.S. homes with mortgages are already in foreclosure. 2
In that underwater houses are common to both, I guess. @2:35 PM
"'This isn't like your typical Nor'easter where a tree falls and your lights flicker,' said Michael Daly, founder of the buyers' brokerage True North Realty Associates in North Haven, New York, and a Hamptons real estate blogger. 'This is more like a Katrina,' he said, alluding to the historic 2005 Category 5 Hurricane. 'It's going to be a number of years before the market recovers.'" Yes, he is talking about the decline in Hamptons real estate values. Ugh. 6
Bad real estate ads. @2:39 PM
Ad Age's Ken Wheaton directs us to this rather amusing collection of bad local realtor ads. Worth a click if you're bored. 3
How To Get A Cheaper Rent In Stuyvesant Town @10:57 AM
Signs of the Recession:
So a guy walks into the Stuyvesant Town leasing offices and asks about a specific line of apartments. (Stuy Town, for those who might not know, is a massive apartment complex just north of the East Village in Manhattan; it is 80 acres and has 35 enormous brick buildings and lots of squirrels. For many years, it was affordable middle-class housing, with a years-long waiting list to get in; then it was sold a couple years ago for almost $6 billion, and rents got raised, perhaps illegally.) So! The leasing office quotes this guy a price. And the guy says, that's funny, I already live in an identical apartment here and now not only am I definitely not paying the rent increase you just gave me on my new lease here (although, by the way, the gang at Curbed hears new leases aren't getting price increases), I'm going to pay 12% less in rent, because that's how much less of a price you just quoted me as a new tenant. Do try this at home! Because that is awesome. And yes this was just overheard at my local coffeeshop. 8
Deep discounts on distressed properties @8:02 AM
The late Leona Helmsley's Greenwich estate can be yours for a mere $75 million. That's a 40% discount from the original asking price! What are you waiting for? Oh, right. 2
The Real Trends Of Manhattan's Residential Real Estate Sales @2:52 PM
Today, the Times officially declares the Manhattan housing sales slump. They note, quite correctly, that the just-released numbers on the first three months of 2009 are really just the beginning of some serious bad times. Yup! Residential real estate will get hammered in the second and third quarters. Then the Times gets odd: "The stress is most severe at the high end of the market," they say. "There are 350 apartments and town houses for sale in Manhattan with asking prices of more than $10 million." This is true and also really irrelevant, for a few reasons! TO THE NUMBERS! READ MORE 2
