Landmark Purchasing vs. Maintaining January 26, 2010
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Source: NY Times
Author: Charles V. Bagli
URL: http://www.nytimes.com/2010/01/17/business/17tish.html
“Buying Landmarks? Easy. Keeping Them? Maybe Not.”
IT seemed a great idea at the time. In June 2007, Jerry I. Speyer and his son Rob bought six buildings in Chicago, making them one of the largest commercial landlords in the city.
The Speyers, who focus on prominent towers like Rockefeller Center and the Chrysler Building in Manhattan that are packed with blue-chip tenants, were elated. They had captured several buildings at the heart of Chicago’s business district, including the sprawling Chicago Mercantile Exchange and the stately Civic Opera House.
But within weeks, nearly everything went wrong. The Speyers, who are co-chief executives of Tishman Speyer Properties, had counted on selling three of the buildings to pay down $1.4 billion in loans used to finance the deal. But they could unload only one. Soon, the commercial vacancy rate in Chicago climbed to 15 percent, and property values plummeted.
Now the Speyers are in tough negotiations with a representative of the Federal Reserve Bank of New York to restructure the loans on the Chicago properties. If those talks fail, the ownership group led by Tishman Speyer could face foreclosure. The Fed inherited the debt in 2008 when JPMorgan Chase bought the original lender, Bear Stearns, and the government took on many of its troubled assets.
As it happens, Jerry Speyer was a director of the New York Fed from 2001 through 2007. The Federal Reserve, meanwhile, has hired the investment firm BlackRock to handle the negotiations on its behalf.
“We clearly bought the real estate at the top of the market,” Rob Speyer, 40, said in an interview at the company’s Rockefeller Center offices. “In retrospect, we overpaid.”
Much as they charged from deal to deal a few years ago, the Speyers are now shuttling from one troubled asset to the next. This month, a joint venture of Tishman Speyer and BlackRock defaulted on a $3 billion mortgage for Stuyvesant Town and Peter Cooper Village in Manhattan. The partners’ purchase of these huge apartment complexes in 2006 — for $5.4 billion — is now regarded as a high-water mark for an overheated, speculative market.
Tishman Speyer also has its hands full with two other sour deals: the $22.2 billion acquisition of Archstone Smith, a company that owned 70,000 apartments, and the $2.8 billion purchase of CarrAmerica, which owned 26 office buildings in Washington, a city where vacancy rates have hit a record level.
“Anybody who bought property in the last six years has their equity pretty well washed out,” said Ray Torto, chief economist at CB Richard Ellis, a real estate firm. “People are looking back on that period as the peak of the madness, the bubble. The expectation was that there was always someone who would pay a higher price after you.”
Instead of rents and values rising unchecked, the value of commercial office buildings in the United States has dropped 43 percent, on average, since November 2007, according to economists’ estimates. If unemployment continues to rise, an ugly situation could turn nightmarish.
Caught in the same riptide as many of their competitors, the Speyers now spend much of their time locked in rooms with bankers. Lenders are deciding whether to restructure the loans by extending the term and offering lower interest (in return for more capital from the Speyers and their partners), or to simply foreclose and hope the assets will be worth more in coming years.
THE travails of the Speyers are not that different from those of other investors who poured ever-larger sums into real estate during that delirious period when every day seemed to bring another gigantic deal at a record-breaking price. But the Speyers’ problems are unlikely to break the firm or mimic those of Harry Macklowe, whose debt-fueled, $7 billion acquisition of seven Manhattan office buildings ultimately sank much of his real estate empire.
The biggest risk the Speyers now face is to their reputation, not their bank accounts.
Tishman Speyer manages a $33.5 billion portfolio of 72 million square feet of commercial space — the rough equivalent of all the office space in Houston and Los Angeles combined — on four continents. (Those numbers do not include residential properties like the Stuyvesant Town and Archstone apartments.) Most of the property is purchased with other people’s money, be it the Crown family in Chicago, the government of Singapore, the Church of England or Calpers, the giant California pension fund.
Investors typically put their money into an investment fund established by the Speyers and expect, say, a 20 percent annual return. The fund, in turn, buys a series of properties or projects, with or without partners. Each deal involves a single-purpose entity or corporation to invest the equity and take on debt. This means that if the deal goes bad, the lenders can take back the property, but they cannot seize other assets owned by the fund or demand that Tishman Speyer make up for any losses.
Tishman Speyer, which has no corporate debt, earns fees for developing and operating the buildings but usually puts little of its own money into a deal.
In the $5.4 billion Stuyvesant Town deal, for instance, BlackRock and Tishman Speyer invested only $112 million each of their own money, which they have written off. Jerry and Rob Speyer personally contributed $56 million of Tishman’s share. Real estate and bank executives say Tishman Speyer took $18 million a year in fees; company executives say they began waiving the fees in fall 2008.
Luxury & Comfort Takes Over Times Building December 24, 2009
Posted by admin1 in Real Estate.Tags: Commercial Real Estate, Condos, Hotel, Renovations, Times Building
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Source: NY Times
Author: Charles V. Bagli
URL: http://www.nytimes.com/2009/12/23/nyregion/23building.html
“Former Times Building to be a Hotel and Condos”
Lev Leviev, the Israeli billionaire, made many New Yorkers sit up and take notice when he bought the former New York Times Building on West 43rd Street in 2007 for $525 million, three times what the seller paid for it 30 months earlier.
It was a bold declaration that Mr. Leviev, who planned to spend an additional $170 million transforming the landmark building into a first-class office building, wanted to be a real estate player in New York. It was also a deal emblematic of an era when buyers and bankers imagined that rents and values would soar forever.
Then the market collapsed. Layoffs prevailed. The newly renovated building in Times Square sat mostly vacant, begging for tenants, as Mr. Leviev’s company, Africa-Israel Investments, stumbled under billions of dollars in debt on its worldwide holdings.
Now Mr. Leviev is back with a partner and a new plan to turn the 15-story building, where printing presses once churned out newspapers, into a glamorous three-decker sandwich, with a vertical mall that includes luxury shops on the lower floors, along with exhibition space and a stylish bowling alley and nightclub surrounded by seven restaurants. A high-end hotel with as many as 379 rooms would sit in the middle, and 26 penthouse condominiums on top.
“The strongest thing going for the property is its location and the continued vibrancy of Times Square as a tourist center and a magnet for visitors,” said Richard A. Marin, chief executive of Africa-Israel USA, Mr. Leviev’s American real estate company. The new plan, he said, “will allow us to create the most value and make the greatest contribution to the Times Square neighborhood.”
It is anyone’s guess whether this plan will work any better than the last one, given the soft condo market, competing bowling alleys in the Times Square area and falling hotel rates. But there is no better place for a radical reinvention than Times Square, where peep shows, T-shirt shops and prostitutes have given way to Bubba Gump, the Hard Rock Cafe, theaters, French cosmetics shops, bankers and millions of tourists.
“Times Square has a special kind of alchemy that’ll make your head spin,” said Tim Tompkins, president of the Times Square Alliance, a business group. “Sleazy becomes sexy, a bank becomes a theater, decaying landmarks become multiplexes or luxury condos, and a gritty newsroom and printing plant become a boutique hotel. The only thing you know is that you don’t know what’s next.”
Mr. Leviev, a diamond magnate who travels with a coterie of bodyguards, had been having trouble paying the $711 million in loans he had piled onto the former Times building, which the newspaper occupied for nearly a century before selling it to move to a new tower on Eighth Avenue in 2007. Mr. Leviev was so intrigued with New York real estate, brokers said, that he did not even tour the building before he bought it.
Mr. Leviev has brought in new managers, including Mr. Marin, and on Tuesday, his company announced that it had completed a restructuring deal, reducing the debt on the property to $267 million. His senior lender, Banco Inbursa, the Mexican bank led by Carlos Slim Helú, has agreed to provide a $75 million revolving loan for the new project. Another lender, Five Mile Capital Partners, emerged as a partner with a 50 percent stake in the building. But most of the other lenders, including Credit Suisse Group and a fund managed by BlackRock, lost most if not all of their money.
Mr. Marin said he had also signed a deal with Bowlmor Lanes, which operates an upscale bowling alley near Union Square, for the third and fourth floors.
The company hopes to open a 50-lane bowling alley in October that will feature an 18-foot bowling pin at the entrance and seven distinct sections, each with a different New York-related theme, including Chinatown and Central Park. Each section will have its own décor, restaurant and costumed waiters and waitresses.
“We plan to create an authentic New York experience on a grand scale that will really be ideal for residents of New York and the corporate event market,” said Thomas Shannon, the founder of Bowlmor Lanes. “It will be spectacular for visitors as well.”
The top three floors of the building would be set aside for condominiums.
Mr. Marin said he was talking to three investors about the purchase or lease of seven floors (5 through 11) for a hotel, whose sky lobby would be on the 11th floor, where there are double-height ceilings and arched windows. Although it is often difficult to turn older office buildings into hotels, Mr. Marin said the space could be divided into about 379 oversize rooms, with rights to put an illuminated hotel sign atop the building.
Fairway Markets Hitting Manhattan November 4, 2009
Posted by admin1 in Real Estate.Tags: 75 Stores, Fairway Markets, Manhattan, Real Estate
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Source: NY Times
Author: Sana Siwolop
URL: http://www.nytimes.com/2009/11/04/realestate/commercial/04fairway.html?_r=1
“Looking Beyond the City for Growth”
PELHAM MANOR, N.Y. — Among supermarkets, Fairway Market, the popular Manhattan-based food emporium, is a destination retailer.
Howard Glickberg, chief executive of Fairway, outside the company’s new store in Pelham Manor, N.Y.
What started in 1933 as a modest 3,500-square-foot fruit and vegetable market on the Upper West Side now includes five stores in operation and three more in the works. It already claims 10 million shoppers a year, who are said to drive an average of 17 miles to reach its stores.
It probably does not help that new Fairway stores have turned up in obscure sites. In 1995, the retailer opened a sprawling Harlem store in a former meatpacking plant that sits on 12th Avenue, partly under the West Side Highway. And in 2006, it opened a store in a large Civil War-era coffee warehouse located on what was then a desolate stretch of waterfront in Red Hook, Brooklyn.
Last week, Fairway’s chief executive, Howard Glickberg, a grandson of the company’s founder, Nathan Glickberg, happily led a visitor through the still-vacant interior of a new 75,000-square-foot store scheduled to open next spring in this village of 5,500 in Westchester County.
The store is part of Post Road Plaza, a freshly overhauled 280,000-square-foot shopping center. Along with the recently redeveloped Pelham Manor Shopping Plaza across the street, the plaza is expected to help to transform a still largely industrial corner of the county.
At Post Road Plaza, Fairway will take some of the space that once belonged to Kmart and before that to the discount retailers Caldor and Korvette. At 75,000 square feet, the new store will be twice as large as Fairway’s longstanding flagship store on Broadway, between 74th and 75th Streets. It will have access to some 1,300 parking spaces and will offer a 25-foot-wide main aisle and the company’s first in-house wine store.
Fairway was a retail pioneer in West Harlem and Red Hook, and its entry injected new vigor into both neighborhoods.
The company’s choice of store sites has long been shaped by a particular set of real estate needs. Unlike larger chains, Fairway does not rely on a large central distribution facility. Instead, in the interest of freshness, most products are shipped directly to its stores, which means the stores need access to major highways and sizable storage space.
With the exception of customers of the Upper West Side store, most customers come by car, so Fairway also looks for sites with parking for at least 400 vehicles.
Leasing costs are important too. Although the company continues to introduce amenities like in-house cafes (the Upper West Side store turns into an informal steakhouse at night), deal-conscious shoppers are its bedrock.
“We create our own neighborhoods — it’s hard to go into the toniest towns and find 75,000-square-foot spaces with big parking lots,” said Aaron J. Fleishaker, the vice president of real estate operations.
Lately, Fairway’s expansion’s plans have quickened because of a major new investor and because of a desire to take advantage of the softer rents that prevail in the New York area.
In 2007, Sterling Investment Partners, a private equity company based in Westport, Conn., took a controlling interest in Fairway from the founding family, first investing $150 million, and then at least $30 million more to help finance expansion, said Charles W. Santoro, a managing partner and co-founder of Sterling.
Before this infusion, Fairway used to open a new store roughly every three years, but now its goal is to open three stores every two years. Mr. Santoro said the company’s sales, now more than $500 million annually, were growing “very rapidly.”
Mr. Glickberg added, “Eventually, we want to have about 15 stores within a 75- to 100-mile radius of Manhattan.” Rather than owning its own stores, he said, the company now prefers signing long-term leases.
In the suburbs around New York, new Fairway stores have turned into important focal points for retail developments that are remaking themselves completely or that sit in areas where the shopping waters are still uncharted.
Last March, the company opened a 52,000-square-foot store in Paramus, N.J., at the Fashion Center, a once-struggling enclosed mall that was recently redeveloped to house a number of big-box tenants, all with their own outside entrances.
To build a large square-shaped store at the Fashion Center, Fairway had to convert the mall’s little-used common areas and help two smaller tenants move. But Fairway also needed at least 500 parking spaces, so it took a spot that did not face Route 17, a major shopping artery. “We’re actually on the wrong side of the shopping center,” Mr. Glickberg said. “The landlord there owes me a big favor.”
East of Manhattan, the company has a 52,000-square-foot store in Plainview on Long Island, and it is working to open its first Queens store in what is still, for now, a Waldbaum’s supermarket in Douglaston.
Fairway’s largest store to date is to appear in Stamford, Conn., in the once heavily industrial South End, a peninsula that sits south of both Interstate 95 and the city’s downtown. There, Fairway is building an 80,000-square-foot store from the ground up at the 80-acre Harbor Point mixed-use development, which changed hands last year, passing from Antares Investment Partners, based in Greenwich, to Building and Land Technology, which is based in Norwalk.
At Harbor Point, Fairway is both the anchor store and the only retailer that has so far committed to space. Penny P. Wickey, a principal at Saugatuck Commercial Real Estate of Westport, Conn., the retail leasing agent for Harbor Point, said the development would eventually have some 350,000 square feet of retail space.
In addition to looking for store sites, Fairway is seeking space for a large central bakery, because the bakery at its Harlem store, which supplies other stores, will most likely be too small to serve its needs when it has eight markets or more.
Mr. Glickberg, meanwhile, would like the company to begin lining up new sites to follow the Douglaston store. “If the right space comes along, we’d grab it,” he said. “I don’t have a problem taking space, paying rent on it for a year and keeping it dark.”
Now Is The Time To Buy! September 10, 2009
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In the last couple of years, the United States economy has suffered tremendously. Companies have shut down, workers have been laid off, individual and family income has reached record lows and spending has therefore decreased significantly.
With the shape that the U.S. economy has been in lately, one would not imagine forking over 100k to purchase a new home. In realty, individuals are cutting back expenses just to stay afloat. Food costs were up, energy costs were high and healthcare costs were soaring if not unaffordable. We find ourselves pinching pennies in order to meet the higher costs of everyday necessities. Credit agencies were offering less credit when we needed it most. On top of that, we saw them raise interest rates even on customers with outstanding track records. In the end, one could say that all signs point away from making any big purchases in the near future.
Lately, under the new Obama administration, we have seen a different trend. We’ve seen government bailouts help companies meet expenses in order to maintain their workforce. We’ve seen credit agencies get backed by the government in order to increase the amount of credit they offer. We’ve seen new tax breaks distributed to individuals and families that needed a few hundred extra dollars in their pockets. Generally speaking, we’ve seen a positive change to the economic status in the United States. Things are slowly starting to bounce back. In terms of the real estate industry there is only one thing to know, now is the time to buy!
The housing market was suffering greatly for the last couple years. Property owners have been forced to lower their prices and sell at all time lows. Government incentives have made new real estate purchases less intimidating, as well as cheaper. Tax rebates for 1st time buyers sweeten the deal. Government backed creditors are giving real estate buyers the limits they need to purchase the property they want. Real estate investments made now will definitely maintain their worth in upcoming years as the economy continues to improve. This is the time to buy because you will not find a cheaper price on the real estate you are looking to buy, or the amount of incentives that are currently being offered since they are unique to the situation we are in.
If you are considering a new real estate purchase, be confident that you are making a good decision. Your purchase will be made at a great price, your property value will increase over the next few years, the incentives you receive for making your purchase will be unprecedented, and you will be helping to stimulate the economy, thus enforcing the upward trend that the U.S. economy has experienced in the latest short term and is needed for the long term.
First Time Buyers July 22, 2009
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Flipping houses is becoming a full-time job for a lot of hard-working U.S. citizens. Since the steady collapse of the economy has left houses selling at an all-time low, now is the perfect time to buy. The catch 22 is that you might wind up getting stuck with it. The toughest part is determining whether or not you will be able to sell the house once you’ve fixed it up and what the resale value will be.
First time buyers are usually out to purchase a house that they plan on living in for at least a few years. First time flippers are looking for a house that can be bought for dirt cheap (relative to the price of houses in the surrounding area) and sold again at a price higher than what they paid for it (but reasonable for the neighborhood). They have to find a house that has a good balance between purchase price and the cost of repairs that will be going into it. The final product should be a house with an assessed value that does not exceed some of the higher priced houses in the neighborhood.
Given the circumstances surrounding a successful flip, rookie investors may be hesitant to take on their first property flip. Whether their intentions are to sell it or rent it out, the condition of the economy makes a lot of people nervous and scared that they are throwing their money away. One general rule of thumb that I’ve heard multiple times is that investing in real estate is never a bad idea. You just have to make sure you crunch the numbers and that you aren’t getting in over your head.
That being said, first time flippers should be sure that they don’t take on a property that needs a 100% overhaul. A wise decision for a first flip would be investing in a property where the property owner and some friends/family might be able to do the bulk of the work themselves without most of it getting contracted out. Therefore, steer clear of houses with foundation problems, major electrical and plumbing problems and stick to the houses that need some cosmetic fixes, new appliances, and some minor repair work. These houses might not give you the most return on your investment, but sure will have a lot less risk involved. In the end you will guarantee yourself that you’ll get at least the amount of money that you paid for the house back when you rent or sell it. In addition, once your first flip is done, you’ll have more experience with renovating a home and will know what to look for when taking on a second property. The new knowledge you gain with each flip will give you a better understanding of what kind of work will be involved, how much the repairs will cost, how much risk is involved, and therefore, how much of a return you will ultimately make on your investment.
Happy House Hunting!
P.S. Be sure to check out the government incentives that are offered in your area and on specific houses. The government has a lot of program available that actually give you money to do many of the repairs on the house. At the very least, you might be able to get an extended tax break for helping to rejuvenate the housing market and cleaning up the face of homes throughout a neighborhood.
Real Estate Tip June 24, 2009
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We’ve showcased some of the featured properties that Friedland Realty offers. It is important to note that Friedland Realty has real estate expertise in Metropolotian, NY. When searching for real estate, it is important to locate a real estate agency that has a good reputation in the area. A lot of times big name real estate agencies get business just because of their name. Sometimes you might be better off seeking out the real estate agency that has been around the longest in the particular area you are looking in.
Some of the best building blocks for a good reputation are the number of years that an agency has operated in the industry. However, reputation might not be passed as easily from one branch to another. A new branch of a parent company might have talented agents that transferred over but may lack the knowledge of the area that is required to find you the property you are looking for. Agencies that have been operating in an area for a long period of time understand that particular market and have a large network of resources that they use to find even the most hidden real estate gems around.
On another note, many agencies that have been around for a long time possess the ability to adapt to change. Some of the oldest agencies are even responsible for bringing about the development and change that was needed for an area to thrive and become what it is today. In general, don’t just settle for an agency who’s name has a good reputation. The branch operating in your area might have just opened up and might just be pulling in business because of the reputation that an older branch earned for them. It helps to do your homework. Talk to people and research a little bit of the history in the area to find out some big real estate changes that have taken place over the years. Then, find out which agency was responsible for those deals. If that company is still around, chances are they will probably have a large network of resources, and be able to offer you the best service.
Friedland Featured Properties May 19, 2009
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Some of Friedland Realty’s prime market spotlights include the following:
707 Westchester Avenue office building for lease, White Plains, New York. 126,146 SF. $19.75/sf. Plug & Go Sub-Lease on-site cafeteria, fitness center, conferencing facility & banking, furnished move in condition, off 1-287 at Exit 8, within close proximity to the Hutchinson River Parkway & I-684. Listing ID# 1981.
211 Fields Lane, Brewster, New York, industrial for sale. 2.37 acres (listed at 100,000 sf), price $400,000, translates to under $4/sf Some excavation necessary. Near exit 8 off I-684 and close to I-84. Zoned – OP-1. Listing ID# 73252.
872 E 227th Street, Bronx, New York, retail for lease. 7,400 SF. Corner of Bronxwood Ave and 227th St. High vehicular and pedestrian traffic. New construction in Wakefield. Listing ID# 73275.
801 S Fulton Avenue, Mount Vernon, New York, industrial for lease. 55,000 SF, $3.82/SF. Easy Access to I-95, large parking area. 3 Drive-ins, 2 Loading Docks, Listing ID# 73270.
1061 N. Broadway, Yonkers, New York office for lease. 52,000 SF. $14/sf. Campus setting, Hudson river views. Full floors up to 15,000 SF, entire building up to 52,000 SF. Fully cabled for phone and data. Listing ID# 73311.
Metropolitan, NY April 24, 2009
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Our first post includes one of the most prominent commercial real estate agencies in the upper northeast. Their commonly known as Friedland Realty, and can be located out of the following two offices:
Yonkers Headquarters
NAI Friedland Realty, Inc
656 Central Park Ave.
Yonkers, NY 10704
Phone: 
(914) 968-8500
/ (718) 231-5700
Fax: (914) 968-1810
Email: info@friedlandrealty.com
Manhattan Office
Friedland Realty, Inc
767 Third Avenue
New York, NY 10017
Phone: (212) 813-9860
Fax: (212) 813-9863
Email: gmeer@friedlandrealty.com
Friedland Realty has become a dominant force in the sale and leasing of commercial property in Metropolitan New York. If you are a business looking to buy or lease property, our brokers can identify appropriate properties and advise you from start to finish. If you are a property owner looking to sell or lease space, our brokers can help to market your property and position it appropriately to help achieve its maximum potential. Click below to learn more about our services:
Welcome! April 21, 2009
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Welcome to Latest Real Estate Chat. This blog will help readers better identify some of the best commercial real estate providers in the upper northeast and provide general real estate tips. Feel free to leave suggestions in the comments section.
Real Estate Chat 