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November 24, 2008



The end of the world has been heavily reported in the media, but real estate lawyer Stuart Saft of Dewey & LeBoeuf wants to know where it is. “I haven’t seen much doom yet, and prices haven’t fallen,” he told us in his West 55th Street office. In fact, he has many European, Middle EasternAsian and American clients clamoring to put their money into U.S. real estate, but since there are no bargains yet to be had, everyone’s sitting on their hands. These investors represent billions of dollars of potential investment, he says.


The real question right now is not whether the market is doomed, but whether we’re in a recession closer to 1989 or 2001. Many people have compared it to 1929, but Stuart points out that the government didn’t jump in to help back then, the global economic superpowers didn’t work together, and the government really didn’t fully understand monetary policy. This time around, New York City also has a lack of supply in both the office and housing markets to weather the NYC Comptroller’s estimated 165k job losses. Brooklyn and Queens, which have become the immigrant and first-generation lifeblood of the city, are also expected to soften, but not collapse.


With his clients on the sidelines, Stuart put finishing touches on the third edition of his book Commercial Real Estate Workouts, a two-volume guide to real estate challenges. This edition, just published, contains sections on securitized and mezzanine debt that didn’t exist in 1996’s second edition, and will be supplemented should new surprises pop up. Fun fact: Stuart did the workout for Michael Jackson’s Neverland Ranch.


Last Wednesday, Stuart (here with colleague Renee Ilana Covitt) was given an award for his work as chairman of the City’s Workforce Investment Board, which oversees federally funded workforce programs. On the home front, his son recently became engaged, and they’re preparing for a March 2009 wedding. That’s another thing he can do with his time.


Congrats to Tahl Propp Equities chair Rodney Propp, second from right,  recently awarded the 2008 Joseph Papp Racial Harmony Award from the Foundation for Ethnic Understanding for his commitment to the expansion of affordable housing in Harlem (more than 85% of the firm’s Harlem portfolio is reserved for low and moderate-income families). With him at the Estee Lauder House:  Venturehouse Group CEO Mark Ein; FFEU president Rabbi Marc Schneier; FFEU chair and hip-hop impresario Russell Simmons; and EJE Travel Retail chair Janus Holder. Besides reclaiming vacant buildings in Harlem for new residences, Rodney’s also currently developing the first luxury hotel to be built on Fifth Avenue in over 100 years.


Construction & Development:

Mercedes-Benz USA will be replacing its existing flagship dealership with a new 333k-SF facility at 770 11th Ave. The new dealership, which is already under development by Two Trees Management Co., is expected to be operational by 2011 and will be one of the carmaker’s largest in the country. CB Richard Ellis’ Michael Laginestra, Michael Geoghegan and Joan Meixner arranged the transaction.Jonathan Rose Cos. and Lettire Construction broke ground on the 12-story, 185-unit mixed-income residential building Tapestry, which will be located at 245 East 124th St. in Harlem. The development will also feature 8,000 SF of ground-floor retail, with the possibility of additional retail space on the mezzanine level. It is being built for LEED Silver certification.

Exec Moves:

Studley has hired two new real estate advisors for its Midtown Manhattan office: financial analyst Anne Davidson, formerly of CB Richard Ellis, and associate Camille McGratty, who recently graduated from the College of the Holy Cross. Anne will work for the firm’s capital transaction group, led by Woody Heller, and Camille will work with senior managing director John Johnson Jr. on tenant rep for international banks, financial service companies and law firms.

CB Richard Ellis promoted Sacha Zarba, Doug Lehman, Andrew Sussman and Bill Mooney from first VPs to SVPs. Sacha’s recent transactions include WPP’s 100k-SF lease at 11 Madison Avenue; Estee Lauder’s 65k-SF lease at 130 Prince Street; and law firm Kobre & Kim’s 40k-SF renewal and expansion at 800 Third Avenue. Doug recently arranged Deutsche Bank’s $1.2B sale-leaseback of 60 Wall St. and the $2.6B disposition of Hudson Waterfront Associates’ offshore entities. Andrew recently brokered AIG’s assumption of Goldman Sachs’ 803k-SF lease at 180 Maiden Lane; Viacom’s 394k-SF lease at 345 Hudson St.; and Lehman Brothers’ 450k-SF lease at 1271 Avenue of the Americas. Bill leads CBRE’s Tri-State transaction management practice.

Richard Economou joined Grubb & Ellis as an EVP specializing in the finance, insurance and real estate sectors, with experience in real estate turnaround transactions. Prior to that, he was SVP of New York and national accounts for UGL Equis and also spent five years at CB Richard Ellis.


Holliday Fenoglio Fowler’s New York office arranged $33.5M in financing for the Hampton Inn 35th Street, a recently completed 147-room hotel at 57 West 35th St. in Herald Square. Jay Marshall placed the five-year, fixed-rate loan with Cigna Investments on behalf of the ownership. The hotels were pre-bought approximately a year ago, with the titles changing hands upon receipt of the C of O.

Lease Transactions:

The King’s College inked a 10-year, 11.8k-SF lease at 330 Fifth Ave., occupying the entire eighth floor. Jones Lang LaSalle’s Jim Wenk represented the tenant, while Marvin Shulsky represented owner Shulsky Properties in-house.

Smarter Toddler signed a 12.5-year, 7,200-SF ground-floor lease for its second New York facility at the Nicole luxury rental building at 400 West 55th St. George R. Gordon Real Estate’s George Gordon brokered the deal between the tenant and landlord Gotham Organization.

QD Healthcare signed a long-term lease for 9,106 SF at One Dock Street in Stamford Conn. Cushman & Wakefield’s Steve Baker represented the tenant, while Lori Baker represented owner Antares Real Estate internally.

WNET, the parent company of PBS channels Thirteen and WLIW 21, inked a 15-year lease at Avery Fisher Hall. The network plans to build a 4,500-SF street-side studio located within the building at Broadway and West 66th Street. The studio, which is slated for Spring 2009 completion, will be used for the production of global news show “Worldfocus.” Studley’s Ira Schuman and Davis Dusek represented the tenant, while CB Richard Ellis’ David LaPierre represented owner Lincoln Center. Butzel Long’s Anne Rabbino and Loeb & Loeb’s Raymond Sanseverino were the respective attorneys.
NY Services for the Handicapped signed a five-year, 1,245-SF lease at 1140 Broadway. The Kaufman Organization’s Daniel Lipton represented the tenant, while Williams Real Estate’s Michael Joseph represented the undisclosed landlord. The lease terms were not released, but the asking price was $45 PSF.

Sales Transactions:

The Convent of the Sacred Heart purchased the 35k-SF 406-416 East 91st Street to expand its facilities. Owner Verizon currently resides on the property, and may remain at the site until mid-2010. The school will then begin renovations once Verizon vacates the building. Jones Lang LaSalle’s Peter Hennessey, Janet Woods and Larry Lazerwitz represented the buyer, while Newmark Knight Frank’s David Noonan and Jennifer Schwartzman represented the seller.

Arent Fox
Leo A Daly
Reznick Group
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