A Fresh Take on CRE

BisNow with CompStak Data: If Woody Heller Were Your Econ Teacher

Thanks to BisNow for using our data from multiple deals this week!

If Woody Heller Were Your Econ Teacher

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Everybody wants to be a buyer, says Studley capital transactions group head Woody Heller. Which means rents are having a minimal impact on sales pricing. There's just so much capital streaming into NYC that he's agnostic about any other price factors.
We snapped Woody in his office reflecting... while reflecting. NYC's investment sales market is so hot it's "running out of things that can go right," says Woody. Cap rates are low, prices are high, interest rates are low, and debt is plentiful. And buyers' expectations of market value have changed dramatically. So while retail rents are rising fast and office more modestly, the biggest price determinant by far is capital flow, which is so strong that pricing is acting independently of rents.
Woody also says the high tally of dual purchasers (whether JVs or condominium-interest acquisitions) reflects the soaring value of retail space (take Joe Chetrit and David Bistricer's $1.1B acquisition of the Sony Building). In fact, Woody's team has sold the 14k SF retail condo at 465 Broadway (in the 40 Mercer residential condo building), which we snapped this morning, three times in three years. (Regifting has reached new levels.) And it's doubled from $41M three years ago to $80M this year. He also tells us leasehold deals will become rarer and condoization more common. It's just cleaner and simpler, he says.  

The Deal Sheet

LEASING Jones Day (repped by Studley's Mitch SteirMatt Barlow, and David Goldstein) leased 330k SF for 20 years in Brookfield Office's 250 Vesey St in Brookfield Place. Bank of America/Merrill Lynch's lease on the space expired in October. *** Virginia Dare is going for an even 100 years. After 90 years in Sunset Park's Industry City, It just extended its 150k SF there for another 10 years. And Williams-Sonoma expanded its photography and catalogue production facility there from 24k SF to 36k. *** Bain & Co is relocating from 3 Times Square to 96k SF in Brookfield's Grace Building at 1114 Ave of the Americas, according to CompStak, which reports that the rent will start in the mid-$90s/SF and increase to more than $100/SF over the 15-year term. *** Infor (repped by C&W's Bruce MoslerMark MandellDoron Etzioni, andEthan Silverstein) expanded by 49k SF to 92k in SL Green's 635-641 Ave of the Americas. JLL's Paul GlickmanDiana BiasottiBenjamin Bass, and Jonathan Fanuzzi repped SL Green. *** In New Jersey, Mack-Cali's Toni Casiano renewed AT&T (repped by C&W's Marc Rosenberg) for 275k SF in Piscataway's 30 Knightsbridge Rd and DSV Air & Sea for 38k SF at Clark's 100 Walnut Ave and signed SS&C Technologies (repped by Colliers' John Cunningham) to 19k SF at Cranford's 11 Commerce Dr. Richard Travaglini leased 28k SF in Basking Ridge's 233 Mount Airy Rd to New Jersey Property-Liability Insurance Guaranty Association, repped by Studley's Jack FeeneyThomas Savoca leased 28k SF to Cervalis (repped by Garibaldi Group's Jim Garibaldi andMike Witko and Howard Properties' Howard Greenberg) at 29 Commerce Way in Totowa. Richard Eyre leased 25k SF to United Water Management & Services repped by NAI James E. Hanson's Andrew Somple.Christopher De Lorenzo signed S2 (repped by C&W's David Sherman, Marc TrevisanMark Zazinski, and Slava Vaynberg) to 24k SF at Upper Saddle River's 10 Mountainview Rd. And Perrigo Co, repped by Studley's Tom Carragher and Chris Koeck, took 14k SF at Parsippany's 8 Campus Dr. *** Continental Grain Co, repped by NGKF's Moshe Sukenik and Eric Zemachson, will sublease 38k SF in the GM Building from General Motors and then enter a long-term lease with owner Boston Properties, repped internally by Andrew Levin. JLL's Peter RiguardiLloyd Desatnick, and Michael Shenot repped GM. Continental Grain will relocate in Q4 '14. *** Axinn Veltrop & Harkrider (repped by NGKF's Gary LinderMark Weiss, and Rob Eisenberg) renewed 36k SF in Durst's 114 W 47th St between Sixth and Seventh. Tom Bow and Rocco Romeo repped Durst internally. *** Cirker's Brooklyn leased 35k SF in the former Winchester Fine Arts Building at 106 Bayard St. Kalmon Dolgin Affiliates' Fred Rufrano repped both sides. *** BBB Industries committed to 34k SF at Rechler Equity Partners' 1101 Lakeland Ave in Bohemia, NY, relocating from 42 Windsor Ave in Central Islip on Dec. 1, 2013. Ted Trias repped the landlord internally. *** Leerink Swan will sublease 29k SF space from UBS at 99 Park for four years for $60/SF, according to CompStak. *** Federated Investors, repped by Avison Young's Greg Kraut and Brad Totten, leased 26k SF in H.J. Kalikow & Co's 101 Park Ave. C&W's John Cefaly and Clark Finney repped the landlord. Avison Young's Edward Walsh and Kirsten Beck will oversee design and construction, to deliver December 2014. *** Ross Dress for Less has signed for 23k SF at Advance Realty's Windsor Center at 440 Route 130 S in East Windsor, NJ, and will take occupancy in the second half of 2014. CBRE's Jay Miller and John Krause repped Advance, and CBRE's Jonathan Rome repped the tenant. *** Prada renewed 21k SF (16k SF of retail and 5,000 SF of office) in SL Green Realty and Jeff Sutton's 724 Fifth Ave through 2028. The lease was scheduled to expire in 2017. *** Univision Communications, repped by CBRE's Carl Eriksen, expanded by 19k SF to 195k through 2028 in Fisher Brothers' 605 Third Ave. Marc Packman repped the landlord internally. *** Kynikos Associates extended and expanded to 20k SF in Skyline Developers' 20 W 55th St for 10 years. NGKF's Billy CohenRyan Kass, and Andrew Weisz repped both landlord and tenant. *** Fresenius Medical Care North America leased 17k SF in Simone Healthcare Development Group's Metro Center Atrium at the Hutchinson Metro Center campus in the Bronx's Pelham Bay. *** Tourneau (repped by Studley's Jeffrey PeckDaniel Horowitz, and Brad Wolk) leased 16k SF at 663 Fifth Ave at 52nd Street and will relocate its HQ from 3 E 54th St. C&W's Barry Zeller repped the landlord, Sator Realty. *** TechSpace is expanding to 16k SF in 18 W 18th St, paying in the high-$50s/SF, according to CompStak. *** Mack Cali's Carol McGuire renewed JPMorgan Chase, repped by C&W'sGerald Lees, for 16k SF at White Plains' 11 Martine Ave. Ivan Abry put Micromold Products (repped by Howard Properties' Howard Greenberg) in 13k SF at 7 Odell Plaza in Yonkers and renewed ADT (repped by CBRE's Paul Jacobs) for 11k SF renewal in Elmsford's 125 Clearbrook Rd. *** Mundi Westport Group, repped by Cassidy Turley's Joe Grottto Jr., renewed 16k SF in 183 Madison Ave for 10 years. The landlord, also owner of the Lipstick Building, was repped by C&W's Harry BlairSean Kearns, and Myles Fennon and Herald Square Properties. *** Loyalkaspar signed 15k SF in Savanna's 80 Broad St for 10 years. NGKF'sHal SteinAdam Leshowitz, and Todd Stracci repped the landlord, Savanna, and C&W's Owen Hanes and Marc Nevins repped the tenant in this transaction. *** Levin Management signed Retro Fitness to 14k SF in West Orange Plaza in New Jersey. Levin's Michael Cohen worked on the deal, and Katz & Associates' Hugh Scullin repped the gym. *** William F. Connors Agency arranged Samson Moving and Storage's lease of 15k SF of warehouse space at Elizabeth, NJ's 1111 Jefferson St. *** Grace's Marketplace signed for 13k SF in Rudin's 215 E 68th St for 15 years and will relocate from 7,000 SF in 1237 Third Ave next summer. Rudin's Michael Rudin and Winick's Michael Gleicher repped Rudin, and Manhattes Group's David Kevelson repped the tenant. *** FreshPlanet, repped by Savitt Partners' Hector Rodriguez and Elliot Zelinger, leased 13k SF of office at 19 W 34th, relocating from 311 W 43rd. PRD Realty's Scott Domansky repped the landlord. *** Crossix Solutions, repped by Savitt Partners' Marc Schoen and Brian Neugeboren, expanded from 7,000 SF to 12k SF in 1001 Ave of the Americas. ABS Partners' Jay Casely and Doug Regal repped the landlord. *** HookLogic will sublease 12k SF in 99 Hudson St from BGB New York for four years in the low-$50s/SF, according to CompStak. BGB is paying in the mid $40s. *** Animated Storyboards, repped by C&W's Melissa Bazar and Jodi Roberts, leased 10k SF in ABS Partners' 1001 Ave of the Americas between 37th and 38th streets, relocating from 1995 Broadway. *** World of Beer (500 craft beers from 47 countries) is coming to NY with 4,500 SF in Artimus Development's Chelsea Park residential building at Eighth & 26th. Winick Realty Group's Diana Boutross repped the tenant. Her colleague Alexander Hill repped Artimus.

Those Were Just The Leases

DEVELOPMENT Pontiac Land Group of Singapore bought into Hines and Goldman Sachs Real Estate Principal Investment Area's planned 53W53rd condos next to MoMA and brought with it$860M in construction financing from Asian banks. The 750k SF building will house 145 condos and 36k SF of MoMaexhibition space. *** New York City Council approved plans for Staten Island's 630-foot New York Wheel (36 cars, 40 people each) andEmpire Outlets. BFC Partners will start the $260M outlets (340k SF of retail and a 200-room hotel) on an underutilizedmunicipal parking lot in winter 2014. *** XSS Hotels and Colwen Management will develop a 226-room Renaissance by Marriott and 154-room Residence Inn by Marriott at Mack-Cali subsidiary Roseland's Port Imperial in Weehawken. They'll deliver in fall '15. *** Korman Communities, Shorewood Real Estate Group, and Prodigy Network acquired 84 William St and will invest $40M over 15 months to convert it to AKA Wall Street, 140 luxury extended-stay suites. The entire project is $110M, including $25M in crowdfunding from investors from six countries. *** NYCEDC put out an RFP to transform the vacant, 138k SFBedford Union Armory in Crown Heights into a neighborhood anchor. It was in continuous use from its delivery in 1903 through 2011, and the State relinquished it to the City in August. One or multiple developers are expected to be chosen by spring '14. Proposals are due Jan. 23. *** MRY Associates and Normandy Real Estate Partners acquired a quarter-acre site in Summit, NJ, and will build466 Springfield Ave (28k SF of office, 4,500 SF of ground-floor retail, and 2,500 SF of below-ground storage). The existing property has sat vacant for five years. It'll go vertical in January and deliver Q1 '15. FINANCING SL Green (repped by C&W's Steve KohnDave Karson,Alex HernandezChristopher Moyer, and John Spreitzer) arranged a $275M, seven-year senior mortgage for the 1.2M SF News Building, 220 E 42nd St, from Wells Fargo.Sridhar Vankayala joined Steve, Dave, and Alex to negotiate another seven-year loan from Wells Fargo: $85M for Silverstein Properties and Loeb Partners Realty for the 283k SF 529 Fifth Ave. *** Mattone Group and Gartenstein Properties, repped by HFF'sRobert Delitsky, obtained an $85M loan from New York Community Bank for the 428k SF Roosevelt Raceway Center power center in Westbury on Long Island. PGA Tour Superstore will open a 44k SF store there this winter. *** LCOR obtained $49M in construction financing from Wells Fargo for its 304k SF mixed-use project at 638 Bloomfield Ave in Montclair, NJ, for which 259 residential units, 23k SF of office, 22k SF of retail, and 571 parking spaces broke ground Nov. 12. They'll deliver in 2015. *** GCP Capital Group's Paul Greenbaum arranged $46.9M for 19 two-story buildings totaling 591 apartments in Spring Valley. Adam Brostovski put together $22.6M for 11 buildings totaling 208 apartments and 21 commercial units in Manhattan and the Bronx. And Alan Perlmutter arranged a $12.3M construction loan to build a 24-story, 57k SF residential tower on two SoHo properties. *** Commercial Mortgage Capital closed a $26.5M loan forWhiton Hills at Branchburg, a 10-building, 276-unit multifamily complex in Neshanic Station, NJ. *** Meridian Capital Group's Abe Hirsch and Daniel Jacobarranged $17.7M on 90 condo units on Yonkers' Ridge Hill Road, and colleagues David Hayum and Moe Rosenblumnegotiated a $12.5M mortgage for a 132-unit apartment building on Brooklyn's East 92nd Street. *** JS Management, repped by Feinstein Raiss Kelin and Booker's Richard Kelin, secured $11.3M from ConnectOne Bank, repped internally by Michael Strauss, to refi a nine-building Rahway, NJ, multi-family portfolio owned by Feld Properties, Nests Properties, and Dunk Properties. The properties are on Bond, Hamilton, West Grand, and West Main streets and East Grand and New Brunswick avenues.
SALES AvalonBay Communities (repped by HFF's Jose Cruz,Andrew ScandaliosKevin O'HearnJeffrey Julien, andRob Hinckley) sold the 588-unit Avalon on the Sound Eastin New Rochelle to The DSF Group for $210M, Westchester County's largest recorded multifamily sale. *** American Realty Capital New York Recovery REIT closed on its acquisition of a 48.9% equity interest in the 1.8M SFWorldwide Plaza from George Comfort & Sons, RCG Longview, and DRA Advisors LLC for $220.1M. *** Vornado has agreed to sell the 260k SF 866 United Nations Plaza office building for $200M. The tax gain will be $166M, deferred in a like-kind exchange as part of its acquisition of 655 Fifth Ave. The sale is expected to close in Q4. *** Staten Island Marine Development bought 676 industrial-zoned acres on Staten Island's western shore for $80M from International Speedway Corp, repped by C&W's Stan DanzigJules Nissim, and Stephen Elman. *** TJM Properties agreed to purchase the 500-room Claridge Hotel Tower at Bally's Atlantic City in a deal expected to close by January. It was the tallest building in New Jersey until 1989. *** SL Green and Jeff Sutton acquired a 49-year leasehold interest in the retail at 650 Fifth Ave in a deal with formerUS Magistrate Judge Kathleen Roberts, the court-appointed federal monitor and interim trustee of the landlord, 650 Fifth Avenue Co. C&W repped the owner. *** Lehm Holdings, repped by JLL's Aaron Ellison and Corcoran's Carrie Chiang, sold the 20k SF commercial townhouse at 7 W 54th for $40M. The six-story Philip Lehman mansion became a landmark in '81. Corcoran'sShari Scharfer-Rollins repped the buyer. *** The Oved Group bought Chinatown's 24k SF 40-42 Elizabeth St (16 offices and two stores) and 5,000 SF 159-165 Canal St (six-ground-floor stores plus office) for $33.6M. Massey Knakal's Paul MasseyRobert Burton, and Nick Petkoff arranged the deal. Their colleagues James Nelsonand Matt Nickerson arranged the $10.2M sale of the 6,100 SF 146 Waverly Place. Plans have been filed to convert the six apartments to a single-family townhouse. *** Friedman-Roth Realty Services' Jim Thorp repped the seller and his colleague George Niblock the buyer in the $32.4M trade of Washington Heights' Vauxhall at 780 Riverside Dr. It's the first time the 91-unit building has sold since 1948. *** The MTA intends to sell a City-owned, 550k SF site at East Gun Hill Road and the New England Thruway in the Bronxfor $30.5M to Gun Hill Square, a JV of Grid Properties and Gotham Org, which will build a 260k SF of pedestrian-oriented retail space. The developer was chosen from 10 proposals. *** Heights Equities sold 95 Washington Heights apartmentsin two corner buildings, 4240 Broadway and 4300 Broadway, for $23.7M to Crest Realties. Cignature Realty Associates repped both sides. *** RHS Hope LLC, repped by Kalmon Dolgin Affiliates' Berel Nagel, sold Williamsburg's 20k SF 118-138 Hope St between Keap and Rodney streets to Heatherwood Communities, repped by KDA's Robert Klein, for $13M. The buyer plans to develop luxury residential using the site's 54k buildable SF within three years, once World Trade Copiers', 4th State Metal's, and Converse Rubber Tracks' leases expire. *** Stellar Management bought a partially vacant office building at 123-127 Lafayette St between Canal and Howard streets for $10.9M. Marcus & Millichap's Barbara Dansker repped the buyer and seller.