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Real Estate Bisnow
   
January 9, 2013 
 
 
CASH FLOCKS TO NYC

 
While last year’s worldwide investment volume plunged 6%, NYC’s grew 15%. We're replacing mattresses and piggy banks as the go-to place for skittish investors.
 
Cushman & Wakefield's Ken McCarthy and Glenn Rufrano
Expect at least 15% growth again this year, says Cushman & Wakefield chief Glenn Rufrano, right, whom we snapped with C&W economic guru Ken McCarthy at Michael’s Restaurant. Ken says slow growth will remain the norm both nationally and locally, but NY remains one of the best performers for jobs recovered at 139%, just behind DC's 145% and Houston's whopping 178%. (To be fair, that number includes the Jets firing then hiring a new coaching staff.)
 
US Rail (Summit) MNYRE
Cushman & Wakefield's Suzy Reingold, Steve Kohn, Joanne Podell, Glenn Rufrano, Andy Sachs, and Bob Constable
Glenn and the Dealmakers: Suzy Reingold, Steve Kohn, Joanne Podell, Andy Sachs, and Bob Constable. The story for 2013, Andy says, is the number of tenants looking at efficient, green space. 21M SF of new office digs are coming online by 2016, and we’ve already seen significant commitments: The 3.5M SF signed so far includes Coach at Hudson Yards; Condé Nast at One WTC; the Port Authority and NYC Department of Human Resources at Four WTC; and Morrison & Foerster and Kaye Scholer at 250 W 55th.
 
Bisnow (PropManage)

52M VISITORS CAN'T BE WRONG
 
CNY Builders prez Ken Colao
As long as the economy is steady and tourism keeps growing, expect NYC hotel construction to continue its upward climb, reports CNY Builders prez Ken Colao. Above, we snapped him nicely coordinated with the rendering of the new Central Park Marriott— part Courtyard and part Residence Inn—at 1717 Broadway, where CNY is construction manager. The drivers: foreign capital wanting to establish and own hotels (and residences) here, which is pushing existing hotels to renovate and retrofit to compete. 1717 Broadway is two weeks ahead of schedule and below budget, he says; the tower floors are 90% enclosed and the podium 25% enclosed. The target: open for this year’s New Year’s Eve celebrations.
Union workers at 1717 Broadway
Other sectors picking up are residential and eds and meds. Construction prices aren’t forecast to rise significantly, but Ken predicts an increase in non-union labor for mid-sized and even large-scale projects—including owners who’ve historically used union labor. (Above, workers celebrate the topping off of 1717 Broadway, a 100%-union project.) While unions maintain an edge with speed, skilled labor, and bench strength, he says, rising land and development prices add tremendous pressure for owners to reduce hard costs and seek alternatives to keep projects feasible, secure financing, and compete in more difficult economic times.

BEHIND GREYSTAR AND EQR'S $1.5B DEAL
 
Greystar CEO Bob Faith
Yesterday, Greystar CEO Bob Faith told us his firm and Goldman Sachs' acquisition of 8,010 apartments across 27 properties from Equity Residential will close in two tranches by the end of March. It’s free to exclude as much as 8% of the portfolio after due diligence, but Bob tells us his intention is to take them all. The parties know each other well: Goldman Sachs owns 20% of Greystar, and as co-founder of Starwood Capital, Bob sold a large portfolio to Equity Residential in 1993. The portfolio is 95.5% occupied, yet value can be harvested via improvements, leading to higher rents.
 
The Townes at Herndon Center
Billy Joel asked, “Who needs a house out in Hackensack?” Answer: Greystar, which purchased the 360-unit Prospect Tower as part of the deal. Bob has other Northern NJ deals in the works—he's about to close one in Hoboken and is property manager on a large project in Jersey City. The best part about buying from a public company, Bob says, is all the property info is “available"; Greystar was able to shop Equity Residential’s portfolio and propose a geographically diverse portfolio that also spans DC (like The Townes at Herndon Center, above), South Florida, Orlando, San Francisco, Los Angeles, Denver, and Phoenix.

ONE WEEK LEFT!
 
Lower Manhattan
Haven't signed up for Bisnow’s Future of Downtown event next Wednesday at One World Financial Center? Don’t miss out. Over 250 attendees will hear from Lower Manhattan's top players, including Brookfield Office Properties, which last week signed Transatlantic Reinsurance Co to a 15-year, 134k SF lease at One Liberty Plaza. REBNY prez Steve Spinola will keynote, followed by a hotel spotlight with LW Hospitality CEO Dan Lesser. Register here!
 

I wondered why the hockey puck was getting bigger, then it hit me. Email ibuprofen and story ideas to amanda@bisnow.com and amanda.metcalf@bisnow.com.

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