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October 1, 2008



The real estate crisis may be bad for others, but it's allowing not-for-profits, which make up 10% of Manhattan's tenant base, to get creative with landlords. That's what we learned the other day at the fifth annual Arent Fox, Jones Lang LaSalle, and Shattuck Hammond financial and real estate seminar for the likes of associations, charities, and educational institutions. Sure enough, office downsizing in Manhattan and a halt in rising rental rates made this year more popular among diverse attendees, from NYU to the New York Blood Center.


JLL's Janet Woods, above, noted that although the recent Wall Street collapse made her nervous for them at first, the not-for-profits have market power in these unbalanced times. Rental rates are still strong in some prime Manhattan submarkets, so she says they should consider the increasingly attractive northern Manhattan and outer boroughs. Numbers talk: In Downtown Class B space, tenant improvement allowances have increased from $30 PSF to $40 PSF, she noted, while free rent has jumped five to nine months, up from three to six months.


Arent Fox's Richard Newman, left, with colleague Rick Krainin and JLL's Ellen Herman, were just some of the experts on hand to talk on topics that made our head spin: tax exemptions, bonds, debt structure, Form 990. At least during the break we learned something we could understand: Rick recently returned from a cruise to Alaska with his family-coincidentally, the same day John McCain announced Tina Fey as his running mate. His favorite parts of the trip were the offshore excursions, which evidently did not include moose hunting in Wasilla.

New Capital Kid On The Block

Although financing is a hard game to jump into right now, thank goodness there's an eager new player: Reznick Capital Markets, a wholly owned subsidiary of 1500-employee strong accounting firm Reznick Group, headquartered outside Washington. With president Rob Sternthal based here, the group recently made its move into New York City to help clients with debt and equity needs for affordable housing, multi-family and commercial transactions. It can provide a comprehensive portfolio of services to non-attest clients and serve in an advisory capacity for attest clients. Even though the market is a bit temperamental, Rob tells us there are still pension funds and private parties with money to place, as well as smart investments to be had with lower asset prices-some with returns of 8% to 10% and relatively low risk.


We'd say that seems almost too good to be true, but Rob's experience does the talking, with seven years under his belt at Credit Suisse and stints at Milbank Tweed, Hadley & McCloy and the SEC. Next step for the firm? No definitive plans yet, but it hopes to pursue partnerships with third-party brokers both nationally and internationally. In the meantime, Rob hangs out with friends Rocky Balboa and Mr. T in RCG's new digs in the Chrysler Building. No, you're not going blind-Rob's an avid collector of keychain sound bite machines. So if you give him a ring, don't be surprised if Mr. Rogers or the Three Stooges pick up-and don't give him no jibba jabba on conference calls.

Leo A Daly
Arent Fox
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