Tom Acitelli

We learned that:

• There's unfinished condos haunting McCarren Park.
• Douglas Durst had to add another digit to the national debt clock.
• Advocates and critics continue to spar as the Willets Point vote nears.
• Mort Zuckerman's not too fond of the Wall Street bailout.
• Columbia bought a warehouse in its West Harlem expansion footprint.
• Manhattan's office vacancy rate's expected to climb into double digits.
• CB Richard Ellis is the new leasing agent for the Hearst Tower retail.
• Sex shops and dominatrix schools are weathering the recession.
• Brooklyn open houses are empty.
• The city picked General Growth to lead a team to build big on East 125th.
• REBNY pegged the average city home sales price at $783,000.
• CBRE wants everyone in commercial real estate to calm down.
• Sam Chang wants to build a 25-story hotel on West 36th.
• Lehman's ex-mortgage banking chief bought a 10-room condo.
• The city projects fewer tourists this year than last.
• The city's environmental commissioner joined Trinity Real Estate.
• Former Deputy Mayor Dan Doctoroff hired a former Spitzer deputy.
• NBC Universal keeps mulling its midtown office options.
• MTV promised contest winners a stay at "luxurious" Hotel Penn.
• A new Web site tracks New Yorkers' carbon footprints.
• Gentrification has started to roll back in some neighborhoods.
• Prices are jumping for four-bedroom Manhattan co-ops.
• New operators are making plays for Scores' buildings.
• A lawyer wants to flip an East 65th townhouse for $15 million.
• Two Lower East Side apartment buildings traded for $170.8 million.

The New York Post's Chuck Bennett and Rick Calder report today that Atlantic Yards developer Bruce Ratner and other project backers have "funneled" at least $680,000 to nonprofits set up and championed by Brooklyn Borough President Marty Markowitz. Mr. Markowitz, of course, remains one of the downtown Brooklyn project's biggest cheerleaders. (He last year purged a community board opposed to Atlantic Yards.)

Mr. Markowitz, who either wants to be borough president for another four years (should term limist be repealed) or mayor, told the Post he was "absolutely proud of everything" his nonprofits had done for Brooklyn. Two of the nonprofits organize concert series, and the other promotes tourism and cultural events.

From The Real Deal:

A flailing former Citi Habitats sales agent, Leif Lopez, was busted for allegedly scamming an apartment hunter out of $100,000 in a phony transaction negotiated at Starbucks.

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Well, that is that. We wrote in this week's print Observer that the reign of landlords atop the Manhattan office market has decisively ended. The credit crisis wounded it, and the financial meltdown of last month finished it off. Further proof above from Cushman & Wakefield.

Companies leased 15.7 million square feet of office space in the first nine months of 2008. Barring a year-end bump, the total number of square feet leased will likely not exceed that in 2003 and maybe--just maybe--2001, making 2008 the paltriest year this decade for office leasing.

Midtown south, that region of heavily commercial Manhattan from roughly Houston Street to 42nd Street, may be the crystal ball for New York's financial health. It has a lot of the island’s cheapest office space; and, yet, that same space is emptying slowly as companies trickle out sans successors.

Midtown south’s scruffier buildings—think old Silicon Alley hangouts hastily rewired 15 years ago, groaning under the weights of sporadic upkeep and old infrastructure—have considerably lower rents than midtown’s gleaming towers: In September, the average midtown south asking rent was $52.86 a square foot, according to CB Richard Ellis; in midtown, it was $84.  read more »

Forget Charles Dickens. For America's retailers, it's looking more like a Charles Darwin Christmas.

The Journal's Miguel Bustillo and Ann Zimmerman go on to detail the dismal sales that retailers nationwide expect this holiday shopping season. Such low expectations spring from September sales reports: Sales at stores open at least a year dropped 12 percent annually at J.C. Penney and Dillard's, and 9.6 percent at Nordstrom. The nation's largest retailer, Wal-Mart, saw annual sales growth in September of just 2.4 percent, below expectations.

Chilly.

Yale economist Robert Shiller, author of the recent The Subprime Solution: How Today's Global Financial Crisis Happened and What to Do About It and the now immortal Irrational Exuberance, praises Suze Orman in a Wall Street Journal op-ed this morning. The relentlessly sunny Ms. Orman, like only a few other financial gurus, warned people of the current calamity should they not be careful about their property investments.

She was not the first to warn of the housing crisis. In fact, in her 2005 book, published at the height of the housing boom, she says "a home is flat-out the best big-ticket purchase you will ever make" and she gives no warning of the housing debacle we have since observed. But to give credit where it is due, she did warn in that book that adjustable rate mortgages "can become a nightmare soon after" when rates reset upwards. She warned readers not to accept lenders' judgments about how much is OK to borrow. Moreover, she provided detailed advice about the total cost of owning a home with advice to "set your own budget."

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"I hope he chokes on the payments and winds up on the street!" ["Congrats! Lehman's Ex-Mortgage Banking Chief Nabs 10-Room Condo for $5.25 M."]

Manhattan's luxury apartment boom ending amid a glut of pricey homes.

The director of Superbad buys a Tribeca condo.

Urban expert Joel Kotkin sees New York's post-boom future in San Francisco.

A third Bloomberg term will spell trouble for Mike's big building projects.

How the financial crisis will spawn a roommate renaissance in Manhattan.

Meet the '08 commercial power brokers!

A London bond firm gets a New York footprint at 444 Madison Avenue.

Parks Department horse stables return to Central Park.

Landlords' grip on the office market ends decisively in the summer.

Manhattan Community College scores a big lease at 25 Broadway.

Communist bookstore Revolution toasts Wall Street's collapse.

From The Real Deal:

The number of incoming Brooklyn home hunters from outside of New York State increased over previous quarters, according to a third-quarter Downtown Brooklyn report looking at prospective renters.

More would-be renters were looking to move to Brooklyn from out of state in the third quarter than in previous quarters. ... Twenty-six percent of Brooklyn apartment hunters in the third quarter were from out of state, compared to 20 percent in the second quarter.

That was the average New York City home sales price in the third quarter, according to a new report from the Real Estate Board of New York. That's down from the last two quarters but up slightly from the same period in 2007.  read more »

Just north of the Financial District, ironically enough. According to a Forbes magazine analysis, the zip code 10013, which covers most of Tribeca (as well as some of Soho, Little Italy and Nolita) is the most expensive within New York City and the 14th most expensive nationwide.

It is holy writ at this point that foreign money props up Manhattan's investment sales market. With $7.4 billion spent, foreign investors accounted for over 40 percent of all Manhattan building and property portfolio sales in the first nine months of 2008, according to numbers out today from Cushman & Wakefield covering deals of at least $10 million. That's a jump from the $5 billion during the same time in 2007.

But foreign economies, particularly in Europe, are starting to crumble. Iceland's just about bankrupt. Germany and Belgium have had to do their own bank bailouts. Spain's housing bubble burst this year. And has anybody else noticed that $1 now equals 1.  read more »

Location: Where is New York headed now that its main economic engine, financial services, is on the rocks? Do cities normally survive when the main employer, job generator, income generator, goes belly up?

Mr. Kotkin: Well, in the case of financial services, it’s less a job generator than an income generator just because the jobs are such huge providers of income. Basically, New York has been on what you could call the ‘plutonomy wagon.’ Plutonomy is a term used to describe the intersection of plutocracy and economy. So New York has been the ultimate trickle-down economy—it’s been a relatively small group of people driving the economy.  read more »

The investigations of at least three U.S. Attorneys into whether Lehman Brothers misled investors before its fall could include parsing the former investment bank's vast commercial real estate investing operation. From the Wall Street Journal this morning:

The U.S. attorney's office for New York's Southern District, in Manhattan, is investigating whether Lehman valued its assets at artificially high levels, say two people familiar with the matter. That office has issued subpoenas to individuals that focus on what the firm told investors and other parties about its valuations for approximately $32.6 billion in commercial-real-estate holdings, according to a person familiar with the matter.

Lehman's commercial real-estate portfolio came under review by a number of firms, including

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The Miller Samuel-Prudential Douglas Elliman third-quarter Manhattan housing report's now online (PDF).

To read about the sagging Manhattan condo market click here; to read about the troubled luxury market click here.

CB Richard Ellis has gotten the nod to be the exclusive leasing agent for the Hearst Tower's last two bits of retail space. The bits cover 14,720 square feet at Eighth Avenue and 57th Street.

CBRE snagged the assignment from archrival Cushman & Wakefield.

Release follows:  read more »

The above chart from Colliers ABR says it all about the Manhattan office market as it enters 2008's final stretch. Vacancy rates, including for top-flight Class A space, continue to rise as asking rents remain flat. The Wall Street crisis, damaging as it is to one of Manhattan's prime office leasers, financial services, won't help matters in 2009.

The projected 80,000 to 90,000 in office-based job losses between now and the end of 2009 could be enough to drive the Manhattan office vacancy rate well into double-digit percentages. A new report from Colliers ABR predicts the rate could rise to somewhere between 12 and 13 percent, well above the September rate of 7.4 percent, as companies shed space after shedding employees.

But there's two things working in the market's favor (and the favor of landlords and landlord brokers):  read more »

From the Journal's breakdown of what a green roof is and how to get one: "The amount of green roofing in New York more than doubled to 123,074 square feet from 2004 to 2007, according to surveys by Green Roofs for Healthy Cities-North America Inc. That is an area roughly equal to about 10 Olympic-size swimming pools."

Michael Immerso, author of Coney Island: The People's Playground, wrote in the Wall Street Journal this weekend a conditional endorsement of the Bloomberg administration's Coney Island plans:

New York's goal of making Coney a year-round tourist destination is worthy of support -- but not in a way that leaves insufficient space for seasonal attractions and amusements that have become synonymous with Coney Island. The city hasn't yet struck a proper balance. Under the current plan, too little land is allotted for the outdoor amusements, arcades and game stands that have long been Coney Island summer staples. The redevelopment zone comprises some 47 acres, and with the right zoning there can be ample space for year-round attractions without confining classic Coney Island amusements to a fraction of that area.

Then there's this beautiful historical context:  read more »

We learned that:

• The Prospect Park Y's chief sees possibilities in the financial crisis.
• A new hedge fund signs a pricey lease in 1095 Avenue of the Americas.
• Luxury condos will replace two West 23rd Street buildings.
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"Hugo Chavez loves his job too. The Mayor is making a mockery of our system. He should be ashamed of himself and so should any sycophants kissing up to him to grab the crumbs off his table." ["Speyer, Zuckerman Back Bloomberg Bid"]

From Douglaston Development, developer of the Edge condo in Williamsburg:

 
Aware that Sarah Palin loves being able to see Russia from her home in Alaska, the developer of The Edge, the largest new condominium development rising in Brooklyn, is wondering whether the Republican Vice Presidential nominee might like to check out some dramatic views closer to the mainland.

Just hours before the start of the Biden/Palin debate on October 2, 2008, The Edge hoisted a giant 100-foot by 28-foot banner at its construction site in Williamsburg.
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Mega-landlords Jerry Speyer and Mort Zuckerman told The Times' Michael Barbaro they'd love to see a third Bloomberg term. It would help the local economy in troubling times, their reasoning goes--besides, what else would their friend Mike do with his time?

According to Mr. Zuckerman, chairman of Boston Properties, controlling owner of the GM Building, among other trophies:  read more »

New York Times: Concern for 2009 as Manhattan Real Estate Market Slows

Associated Press: Manhattan Apartment Sales Drop Further

Bloomberg: Manhattan Apartment Sales Drop as Prices Extend Five-Year Gain  read more »

By this time Friday morning, the blogosphere and the dailies will be rat-a-tat-tat-tat abuzz with what's happening or not in the Manhattan housing market. The Corcoran Group and PropertyShark.com, Prudential Douglas Elliman and Miller Samuel, StreetEasy.com, Halstead Property and Brown Harris Stevens all plan to spill their third-quarter findings into the public sphere.

What to watch for:  read more »

"The trend of young families did not occur because real estate was affordable in the city, rather it occurred because the city had become a desirable place to live. With the pending economic crisis, the state of the city is less clear. As tax dollars rapidly disappear, the question should not be on the cost of living, rather it should be on the quality of urban life as this is what truly matters to upper class, young families." ["No Rest for the Expecting Marrieds"]

Tucked into Charles Bagli's gong-rattling New York Times pronouncement on the end of the local real estate boom were three gems to illustrate the point.

HSBC pulled out of a major lease at Larry Silverstein's downtown gem:  read more »

"And the Bush administration and Hank Paulson are asking for taxpayers' money to keep these very same guys filthy rich? I vote NO! for the bailout plan. Have Buffett and the billionaires of the world inlcuding the Arab sheiks invest in America, but please please do not use taxpayers' money! If America falls apart, then ask these guys to return the millions of money they did not deserve!" ["Park Places! Lehman COO Sells His for $4.4 M., Ex-Bear Asking $12 M. Farther Up"]

Dana Rubinstein has the backstory on Mark Walsh, the star Lehman executive who orchestrated the bank's myriad commercial real estate investments. To some, Mr. Walsh is the hidden wizard behind Wall Street's demise. To others, the 48-year-old Fordham Law graduate just had really bad timing.

"Who are they kidding? If the problems would only stop with $1.7 billion, it would be OK. The Freedom Tower isn't practical, and the memorial also. And what about security costs on the site because of the so called streets? What's the Calatrava about anyway? What garbage the public is buying." ["$1.7 B. in Overruns at World Trade Center Site"]

An AIG executive vice president pays $3.45 million in cash for Central Park pad.

Democratic fundraising giants sell on Park Avenue for around $37 million.

Lehman's ex-president sells his Park Avenue co-op for $4.4 million.

Inside the World Trade Center redevelopment timeline.

Young couples expecting become New York's newest most desperate buyers.

Speaking of buyers: It's their kind of market in the outer-boroughs.

What will replace bank branches as our ubiquitous city retail?

A Chelsea developer gets financing right before the bottom drops out.

Calvin Klein to debut his first furniture line at the Soho Mews.

The Sun's leaving 105 Chambers. Who gets the newspaper's office space?

Neil Rubler on the Wal-Mart approach to New York's affordable housing.

Saucy Aussies Danae and Dustin Cappelletto take over embattled 19 Kenmare.

New York City had more first-time foreclosure auctions in August than in any month since at least the spring of 2005, according to a new report from research site PropertyShark (PDF). Yes, the city notched 383 first-time residential foreclosures last month, a 53.2 percent annual increase (thanks largely to Queens). But, comparatively, that's not all that much.

The report also dishes on other cities, notably the nation's second largest. Los Angeles had 4,907 first-time foreclosures in August, a 158.7 percent jump from August 2007 and enough to create a foreclosure rate per household of 0.16 percent, 12 times higher than that of New York City.

Queens, once again in August, spurred a citywide spike in foreclosures.

The number of first-time residential foreclosure auctions in Queens jumped nearly 43 percent from July to August to 254, according to a new report from research site PropertyShark (PDF). That amount accounted for over two-thirds of the city's 383 first-time foreclosure auctions last month, a jump from 338 in July.

Queens, with its homeownership rate of 47 percent (according to 2006 numbers from N.Y.U.) higher than the city's 34.4 percent rate, seems fertile ground for its unenviable leadership role in residential foreclosures. The higher number of owner-occupied homes may only be exacerbating the problem.  read more »

From the Sunday Washington Post:

Renowned defense lawyer Edward W. Hayes, a self-described night owl, long ago developed two measurements for gauging the ups and downs of Wall Street: the HEGI and the HESI, which stand for High End Girlfriend Index and High End Stripper Index. When the financial sector's business is good, he said, the traders and bankers spend huge sums on high-end girlfriends and in the VIP rooms of Manhattan's pricey strip joints.

Now, said Hayes, who represents many of the woman [sic] in the business, he is seeing evidence of the downturn.

"The strippers are getting killed -- it's terrible," he said. "It really started in the last month. What they really need are the guys who go in and spend $500."

New York's political leaders and private sector executives have fretted for years that the city might lose its reputation as the world's financial capital to London. Now, it looks like the city should've been worrying about Washington instead.

The Wall Street meltdown and its litany of fallen titans has shifted the nation's financial muscle a bit down I-95, according to The Washington Post this weekend: "[W]ith the Street now looking to the U.S. Treasury for an unprecedented bailout, it's suddenly Washington that has become the center of financial action--creating, at least for this instant, an unlikely shift of power and influence."

The $700 billion bailout is apparently headed toward defeat in the House of Representatives. More here from The Politicker.

That's what Brownstoner's reporting. Evidently, according to a source within the state Department of Environmental Conservation, which must sign off on development on the Gowanus site at Third Street and Third Avenue, the store's a no-go. Besides:

[E]vidently the trend in the supermarket biz has swung away from superstores, our source notes; in addition, in the wake of poor earnings this summer, Whole Foods announced that it would be cutting back on the number of new stores next year. The likely upshot? Even if Whole Foods decided to open a smaller store in Brooklyn, says our source, it's unlikely it would want to use this site.

From the Wall Street Journal's Ruth Simon:

As many as 40% of homeowners, or about 20 million households, will owe more than their home is worth by the time the housing market stabilizes, Deutsche Bank estimates.

Meanwhile, the House is expected to vote this afternoon on the bailout.

"i can't imagine why anyone, even italians, would want to live in there. isn't the whole point of living in soho to live in unique, stylized apartments and building. it's buildings like this that are making tribeca feel like 94 and 1st avenue, i hope soho avoids this." ["Inside the Gwathmey Seigel-Designed Soho Mews"]

Proving that hedge funds may indeed be the new investment banks (as Tom Wolfe told The Observer earlier this month), new hedge fund Dabroes Management has signed for 12,202 square feet on the 24th floor of 1095 Avenue of the Americas, the former Equity Office Properties tower that's undergone $275 million in recent renovations, including a green curtainwall.

The rent's $135 a square foot, according to Dabroes' agent on the deal, CB Richard Ellis. That's the sort of rent expected for Class A space in Manhattan.

One of the many question marks spawned by the financial crisis, of course, was whether commercial landlords will be able to continue to command such high rents.  read more »

With JP Morgan Chase's announcement that it will shutter dozens of Washington Mutual bank branches around the city, we mourn the passing of a perennial trend piece: the story about all those bank branches around the city. (The Observer wasn't immune.)

The bank-branch-explosion trend piece was as reliable as a Yankees post-season the last few years, and that's stopped, too. Why was the piece a perennial? Well, because the explosion was real.

But, more importantly, because it encapsulated so well two realities about New York since 2001.

First, the cost of real estate has gone way up. Apartment rents, office rents, retail rents, building prices--all increased significantly over the past seven years, and ordinary New Yorkers felt it every day.  read more »

Former Viacom chief executive Tom Freston has apparently taken his townhouse at 57 East 66th Street off the market, according to the Wall Street Journal. He had listed the former Andy Warhol home in the spring for $38.5 million, only to chop that asking price to $35 million.

Mr. Freston, according to a 2000 Observer article, bought the neoclassical townhouse for $6.5 million, moving there from a Tribeca penthouse after about $100,000 worth of renovations.

Warhol lived in the townhouse from 1974 (after paying $310,000 for it!) until his death in 1987.

We learned that:

• Northern Brooklyn awaits its first new movie theater of the century.
• Harrison LeFrak loves McCain; Edward Linde loves Obama.
• The Beatrice Inn's neighbors haven't yet begun to fight!
• An ex-EDC official was fined for accepting honeymoon money from a contractor.
• A powerful Minnesota congressman pledges big transit bucks for New York.
• Edgar Bronfman Jr. sells his 1040 Fifth duplex for $21 million.
• Brooklynites have their own views on the Wall Street crisis.
• Harlem's evicted Record Shack owner is selling on the street.
• The credit crunch has driven some city property prices downward.
• The Bloomberg administration has a low foreclosure rate in its housing plan.
• Manhattan office leasing has slowed; it will keep slowing.
• The Planning Commission OK'd Willets Point and Hunter's Point South.
• Alex Rodriguez officially put his Trump Park condo on sale for $14 million.
• The Willets Point fight has spawned another blog.
• New York hotel room and occupancy rates jumped in August.
• Wall Street may unintentionally be undergoing a major rebranding.
• Commercial real estate pros face a tougher future in tougher times.
• Home sales are sluggish and prices down in the New York area.
• There's a deal at hand on simplifying the Calatrava transit hub.
• Plus, the Port Authority says the September 11 memorial will open by 2011.
• The mayor wants the Port Authority to absorb any memorial overruns.
• The city plans to memorialize Brooklyn's abolitionist activities.
• Extell has nixed its Costco plans at Riverside South.