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January 13, 2011 
 
 
APPETITE TO OWN

We're already at 327 RSVPs for our Multifamily Summit. Have you signed up? Let's have so many that the NY Bar Association has to build another floor. (Good attendance for us; new business for one of you.) Jan. 28. Sign up today!

 
High-end residential sales are back on track, according to The Brodsky Org senior partner Dan Brodsky. His firm's Chelsea Enclave at 177 Ninth Ave has sold out at an average of $2.8M per unit, so we tapped Dan to discuss the high-end Manhattan residential market during Bisnow’s Multifamily Summit on Jan. 28 at The NY Bar Association.
 
The Brodsky Org's Dan Brodsky
Foreigners, empty nesters, and young couples have shown interest in owning homes in Manhattan, Dan tells us, attracted to NYC’s cultural scene and entertainment options. Foreigners also have exchange rates on their side, with some getting as much as 30% discounts on acquisitions. Rentals are making a comeback after a 15% rent decline; gone are the days of abundant a  free-month's rent and owners paying broker fees, as rents return to '07’s rates, he reports. Dan will join Jonathan Rose Cos’ Jonathan Rose, AvalonBay’s Fred Harris, Dermot’s Stephen Benjamin, Prudential Douglas Elliman’s Dottie Herman, and WeiserMazars’ Ron Lagnado for a discussion about the NYC multifamily sector. National and capital markets outlooks, too! Register here.

Bisnow
More Absorption Than A ShamWow!
 
Cushman & Wakefield's Maria Sicola
For the first time since 2007, overall absorption in US CBDs is trending positively, we learned from Cushman & Wakefield head of Americas research Maria Sicola, who says this is a promising sign for the US office market recovery. The overall absorption rate was a positive 2.2M SF at the end of the year—a 106.5% (you read that right) increase from the negative 33.5M SF posted at the end of ’09. Attribute it to increases in leasing activity and limited new construction. Overall leasing activity in the 31 CBDs Cushman & Wakefield tracks totaled 62.4M SF at the end of the year, up from 49.4M SF year-over-year. Nearly 17M SF of this activity was during Q4, making it the most active period since Q2 ’08.
Cushman & Wakefield's Joe Harbert and Ken McCarthy
Manhattan registered its strongest leasing quarter since ’06, with Q4 activity hitting 7.5M SF—the second-highest quarterly total and the highest since Q3 ’06. It’s an “incredible and heartening” uptick from the depths of the market 18 to 24 months ago, says C&W New York Metro region COO Joe Harbert, who presented the findings with senior economist Ken McCarthy at a breakfast at Michael’s on Tuesday. At the end of December, the average Manhattan office vacancy rate declined from 10.9% to 10.5%, the largest quarterly decline since Q2 ’07. All three submarkets saw significant declines, they report. Top deals included Société Générale’s 408k SF lease at 245 Park; Winston & Strawn’s 277k SF renewal at 200 Park; Meredith Corp’s 214k SF lease at 805 Third; and Natixis’ 185k SF lease at 1251 Avenue of the Americas.

Bisnow
Cost Control Connoisseur
 
Syska Hennessy Group managing director Mark Yakren
Construction today is driven by energy performance, and clients have tighter budgets than in the past. However, there are creative ways to do more with less, without cutting quality, says Syska Hennessy Group managing director Mark Yakren, whom we visited in the consulting/MEP/engineering firm’s Broadway office. Remind clients the recession is short, but their space will be long-term. Ways to save money include phasing construction, looking into alternative financing programs like NYSERDA, and considering sustainable energy solutions like co-gen or wind power. To accomplish these cost objectives, you need an integrated team that includes owner, architect, builder, and engineer.
Cooper Union, New York, NY
With this view, who'd want to drive when that light turns green? LEED certification, if properly approached, doesn’t cost a lot of money, Mark points out. One LEED project Syska Hennessy recently completed is a new academic center at Cooper Union, a 175k SF building on Third Avenue, just certified Platinum. (Features: radiant heating and cooling ceilings and floors, an operable façade with a skin that controls the level of daylight and glare, a green roof, and stormwater collection system.) From inception of the project, the client had an ambitious objective to achieve LEED Gold, at minimum. The institution had a budget, so performance of the building and cost to operate was of utmost importance, Mark says, noting that a LEED Platinum rating will go a long way in controlling institutions’ energy costs. Syska Hennessy’s own 65k SF office at 1515 Broadway was also recently certified Gold.
 
Syska Hennessy Group's  Mark Yakren and Michael Ortega
Where’s the opportunity? Mark (working on BIM with Michael Ortega) sees an uptick in CRE interior work, low- and mid-income housing and higher education, as local universities expand. (His firm was recently involved in an ambitious energy-use program for a well-known local university, which had specific construction and energy cost budgets. Syska Hennessy used energy modeling to review and predict the performance of proposed engineering systems and solutions.) Also on the radar: new activity from the updated energy codes, which means many owners will have to modernize buildings using retro-commissioning. Meantime, Syska Hennessy is investing money in technologies like BIM, which can be used to demonstrate a building’s life cycle, including the processes of construction and facility operations.
 
50 weeks of deal-making left in 2011. What are your goals?  E-mail amanda@bisnow.com
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