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A blog for breaking sales and neighborhood real estate news.

February 3, 2016 | Commercial Observer | Bob Knakal

For the past two years, the investment sales market in New York City has performed better than during any other two-year period I have seen in my 32 years brokering here. Values have soared due in large part to enhanced fundamentals, plentiful financing and an extremely acute supply/demand dynamic that has been skewed heavily in favor of demand. While this demand has been broad-based, foreign capital has been a significant component of the tremendous demand we have witnessed. And this foreign demand could be ready to surge to even greater heights.

Until recently, foreign investors in U.S. real estate were disadvantaged by a law that should never have been put into the tax code to begin with. The Foreign Investment in Real Property Tax Act of 1980, referred to as FIRPTA, unfairly (relative to other non-real property investments in the U.S.) imposes excessive tax barriers on foreign capital investment in American real estate. FIRPTA has been the central obstacle to greater capital investment by non-U.S. investors...

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Agents: Robert Knakal

February 1, 2016 | Commercial Real Estate Direct | Josh Mrozinski

Gershon & Co. is offering for sale 55 Hope St., a 117-unit upscale apartment building with 6,200 square feet of retail space in the Williamsburg neighborhood of Brooklyn, N.Y.

The New York company has hired Cushman & Wakefield to market the four-year-old building, which could sell for $95 million, or about $805,085/unit.

The building's apartment units are 97 percent leased, while its retail space is fully leased by restaurant Momofuku Milk Bar. Units include...

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Neighborhoods: Williamsburg/ Agents: Brendan Maddigan, Robert Knakal, Stephen Palmese

February 1, 2016 | Wall Street Journal | Emily Nonko

A developer who converted a stalled condominium development in Brooklyn’s Greenpoint neighborhood into a rental building has sold it for a profit.

Ronny Ben-Dov sold the 38-unit, 53,124-square-foot building at 305 McGuinness Blvd. for $31 million, according to Brendan Maddigan, a director of Cushman & Wakefield. The buyer, according to public records, is Westchester-based investment firm GDC Properties.

Mr. Ben-Dov in 2010 bought the then-stalled condo project for $13.4 million, Mr. Maddigan said, and converted it into rentals. Mr. Ben-Dov declined to comment. The buyer has no immediate plans to change the building, Mr. Maddigan said.

Today, rents at the building average about $45 a square foot, according to Mr. Maddigan. “At that time, 305 McGuinness was a good example of a stalled condo project of the last downturn,” he said...

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Neighborhoods: Greenpoint/ Agents: Brendan Maddigan, Clint Olsen

Cushman & Wakefield is pleased to announce the sale of a landmarked building at 126-128 East 13th Street and a mixed-use building at 123 East 12th Street in a transaction valued at $21,500,000. Cushman & Wakefield’s James Nelson and Matthew Nickerson were engaged by Ultimate Realty to handle the transaction.

This is the second transaction for Ultimate Realty that Cushman & Wakefield handled within the last year. James Nelson sold 28 East 14th Street for $29,500,000 or $2,484 per square foot in 2015, which was one of the most notable sales ever completed in the neighborhood. Ultimate Realty also recently picked up a trio of Lower East Side buildings in partnership with Caspi Development for $24,500,000.

126-128 East 13th Street, located between Third and Fourth Avenues, is a NNN leased, three-story, Beaux-Arts style loft building that contains approximately 15,600 square feet and sits on a 49.67’ x 103.25’ lot. It is currently leased by Peridance, a dance studio, until March 2028 with a five year option. The lease is guaranteed by Capezio Ballet Makers Inc. The building is the former Van Tassell & Kearney auction house and studio of renowned painter and printmaker, Frank Stella. The building features 15’ ceiling heights on the ground floor, 12’ ceiling heights on the lower level and soaring 30’ cathedral ceilings on the second floor magnified by multiple skylights.

123 East 12th Street, also located between Third and Fourth Avenues, is a newly renovated, three-story mixed-use building that contains approximately 4,804 square feet and sits on a 19.75’ x 103.25’ lot. The property consists of a ground floor retail unit with a lower level and a three-bedroom duplex apartment featuring a private rooftop above. The retail unit is leased to a Jiu Jitsu instruction school until August 2023. The duplex unit was gut renovated in 2012 and features 14’ ceiling heights, an eat-in chef’s kitchen, stone counter tops, and a private patio.

Both properties are located within two blocks from Union Square and enjoy convenient access via the 4, 5, 6, N, Q, R and L train lines at the 14th Street – Union Square station.

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Neighborhoods: East Village/ Agents: James Nelson

January 27, 2016 | Commercial Observer | Bob Knakal

Mayor Bill de Blasio must be beside himself now that the 421a tax benefits program has expired. Labor’s unwillingness to agree to reasonable wages for construction workers has dealt a crushing blow to the mayor’s objective of creating/preserving 200,000 units of affordable housing over the next 10 years. “Preserving” is always a necessary hedge word when politicians employ it, as it is impossible to accurately determine how many units get preserved. This provides elected officials with wiggle room when examining actual results versus numerical projections. However, new construction is a critical component of any initiative to increase affordable housing in the city. Without the 421a program—or some kind of equivalent—even a fraction of this target is outlandishly optimistic.

There is no doubt that New York City is in dire need of more affordable housing for residents across a broad range of earning levels. Affordable housing is typically thought of as housing for the poorest among us; however, the working class is an equally important segment of society that requires housing within the city’s boundaries...

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Agents: Robert Knakal

The first Cushman & Wakefield Speaker Series event successfully launched last night. It was the first of the firm's new in-house speaker series designed to educate and empower employees with tools that can enhance their success and productivity.

Industry Cushman & Wakefield veterans, Ken McCarthy, Gus Field, Joanne Podell, Steve Kohn, and Bob Knakal, presented an overview of the New York City Market. It was a condensed version of our Year-End Press Conference held earlier this month.

Agents: Robert Knakal

A retail condominium at 95 Chambers Street (also known as 77 Reade Street), located between Broadway and Church Street in Manhattan’s TriBeCa neighborhood, was sold in an all-cash transaction valued at $17,750,000.

The property consists of a ground floor and basement space totaling approximately 12,638 square feet and features high 15’ ceilings. The unit sits within a newly renovated building that runs block through from Chambers Street to Reade Street. The building boasts 79’ and 49’ of frontage, respectively. The unit is currently occupied by European Wax Center and Reade Street Prep. The seller was Rob Kaliner in partnership with HP Investors of San Diego. The buyer was HUBB NYC.

The unit is located less than two blocks from the Chambers Street and City Hall subway stations, providing access to multiple subway lines.  It is also four blocks from the World Trade Center and WTC transportation hub.  Neighboring tenants include Dunkin’ Donuts, Starbucks, LePain Quotidien, GNC, Smyth Hotel, and Sophie’s.

“At the time we purchased the property, there was significant leasing risks due to the extensive construction along Chambers Street, but our long term vision paid off nicely,” said Kaliner.

“The in-place income along with the lease up value presented an excellent opportunity for the buyer. We’re glad we had the privilege to satisfy the needs of both the seller and buyer,” said Cushman & Wakefield’s James Nelson who exclusively handled this transaction with Will Suarez and David Shalom.

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Neighborhoods: TriBeCa/ Agents: Guillermo Suarez, James Nelson

Bob Knakal and Cushman & Wakefield were honored at The Greater New York Chapter of the Institute of Real Estate Management Annual Awards Dinner.

Nicholas Stolatis, CPM, presented Bob Knakal, Chairman, New York Investment Sales with the Real Estate Person of the Year award.

John Santora accepted the Accredited Management Organization of the Year award on behalf of Cushman & Wakefield.

Other honorees included Diana Bosnjak, Vice President – RY Management Co., Inc, who received the Certified Property Manager of the Year Award and Andrew Rosenwach from Rosenwach Tank Company, who received the Industry Partner of the Year Award.

The event was held on January 14, 2016 at 230 Fifth in Manhattan.

Agents: Robert Knakal

The Real Deal | January 13, 2016 | Rey Mashayeki

Cushman & Wakefield executives delivered a mixed outlook Tuesday on the city’s commercial real estate market in 2016, as continued macroeconomic strength is expected to drive market fundamentals but major questions persist over the fate of the current cycle.

The commercial brokerage giant noted positive market trends ranging from continued job growth – with 46,000 jobs added in the city in October and November alone, according to principal economist Ken McCarthy – to office asking rents that have hit all-time highs in the Downtown and Midtown South submarkets.

A resurgent financial services sector has helped drive that momentum, with the industry overtaking the TAMI sector to account for 29 percent of all new office leases in 2015, Cushman said...

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Agents: Robert Knakal

Yesterday morning, a panel of Cushman & Wakefield experts  presented on the state of the New York City real estate market. At the event, fourth quarter statistics were released for the Manhattan commercial real estate market that show year-end new leasing activity totaled 28.2 million square feet (msf), representing the third highest total in the past decade.

The strong leasing volume lowered the overall Manhattan vacancy rate to 8.5 percent, the lowest it has been since year-end 2008, when the vacancy rate was 8.1 percent.

“2015 was a very strong year, and we are optimistic that the combination of a healthy TAMI sector coupled with stronger growth in financial services will continue to drive the market forward in 2016,” said Ron Lo Russo, President, New York Tri-State Region.

“New York City has experienced extraordinary job growth over the past five years. We expect that the City will continue to act as a magnet to the young professional millennial worker that companies are seeking to hire,” said Ken McCarthy, Principal Economist, Applied Research Lead.

Manhattan’s three major markets closed the year with vacancy rates in the single digits. Midtown South, with a 6.2 percent vacancy rate, was surpassed as the tightest Central Business District in the nation by San Francisco, which had a vacancy rate of 5.9 percent. The Midtown market closed the year with a vacancy rate of 8.8 percent, a decrease of 1.0 percent year-over-year and the Downtown market closed at 9.4 percent, a decrease of 0.3 percent year-over-year.

At year-end, the overall average asking rent in Manhattan increased 5.7 percent year-over-year to $71.58 per square foot (psf), from $67.70 psf and the Manhattan class-A average asking rent increased 4.2 percent to $76.76 psf.

Overall absorption for the year was positive in all three major markets, totaling nearly 4.5 msf. The Midtown market represented 75.0 percent of Manhattan’s positive absorption, with 3.3 msf.

“Fundamentals and activity at the outset of 2016 are strong,” said Gus Field, Vice Chairman. “Due to pending variables, we see either moderate growth or a moderate slowdown this year.”

Mr. Field, who presented the Manhattan office market at the firm’s year-end press conference, pointed to changing interest rates and the upcoming election as some of the variables that will affect the growth of the market this year.

The TAMI (Technology, Advertising, Media & Information) sector has been the main reason for the growth in office leasing following the recession, but financial services has become an important factor in the continued growth in the market. From 2011 to 2014, the TAMI sector accounted for 28 percent of the market share of Manhattan new office leasing, with financial services accounting for 25 percent. This year there has been a shift. For year-end 2015, the financial services sector accounted for 29 percent of the market share and the TAMI sector accounted for 27 percent.

For the retail market, the evolution of technology is playing a larger role in retailers’ real estate decisions.

“Retailers who embrace the omni-channel experience – the integration of e-commerce, bricks-and-mortar, technology, and mobile and social apps – are likely to do so in urban flagship locations,” said Joanne Podell, Vice Chairman. “This seamless integration of cutting-edge technology makes them well-suited to promote in-store product, create memorable experiences, and pull big data to better understand their customer.”

Manhattan average retail ground floor asking rents increased in five of the 11 retail corridors, with Flatiron seeing an increase of 6.9 percent, Meatpacking an increase of 5.2 percent, SoHo an increase of 4.6 percent and Lower Manhattan an increase of 4.2 percent. The availability rate increased in eight of the corridors, with Herald Square/West 34th Street closing the year up 8.3 percent and Fifth Avenue (42nd to 49th Streets) up 6.2 percent.

In the equity and debt market, Steve Kohn, President, Equity, Debt & Structured Finance, noted that despite global economic noise creating volatility in fixed income markets, CMBS persevered in 2015.

Mr. Kohn stated that there has been significant volatility in the world affecting spreads in debt. Looking forward, he questioned if this is a period of “short term volatility or a longer term upward trend in capital costs?”

Robert Knakal, Chairman, New York Investment Sales, stated at the mid-year point that the sales market was surging toward an all-time dollar volume record. That, in fact, was the case. By year-end there was a total of $74.5 billion of completed transactions.

The total number of properties sold decreased year-over-year, with 5,089 properties sold in 2015 compared with 5,532 properties sold in 2014.

Agents: Robert Knakal

Cushman & Wakefield has been retained on an exclusive basis to sell the Mann Portfolio, consisting of five properties in Brooklyn’s Bedford-Stuyvesant neighborhood. The asking price is $21,500,000.

The properties are located at 257 Quincy Street, 570 Jefferson Avenue, 308 Stuyvesant Avenue, 788 Madison Street and 790 Madison Street. The five walk-up apartment buildings combine for approximately 45,462 square feet and 62 residential units. Of the 62, 31 are rent stabilized, 18 are free market, and 13 will be delivered vacant upon sale, allowing for immediate upside in gross income. The combined unit mix consists of eight studio, eight one-bedroom, 35 two-bedroom, eight three-bedroom, and three four-bedroom apartments.

257 Quincy Street, located between Nostrand and Marcy Avenues, contains approximately 17,650 square feet on a 50’ x 100’ lot and consists of 21 units. 570 Jefferson Avenue, located between Lewis and Stuyvesant Avenues, contains approximately 7,364 square feet on a 25' x 80' lot and consists of nine units. 308 Stuyvesant Avenue, located between Hancock and Halsey Streets, contains approximately 8,320 square feet on a 26’ x 100’ lot and consists of 16 units. 788 Madison Street and 790 Madison Street, located between Ralph and Patchen Avenues, are two neighboring buildings that each consist of 8 units, contain approximately 6,064 square feet and sit on 27.5’ x 100’ lots. One of the two buildings will be delivered entirely vacant.

In an area with both established and up-and-coming attractions, featuring global cuisine, Off-Broadway shows, and a considerable number of nightlife options, this portfolio presents a rare opportunity to make an overnight footprint one of Brooklyn’s most dynamic and evolving neighborhoods. The properties are conveniently situated in and around Stuyvesant Heights Historic District which provides access to Manhattan via the A, C, G, J and Z subway lines.

“This is one of the best located portfolios we have seen come to market in Central Brooklyn. This opportunity offers a unique balance of scale, architectural significance, strong in-place income and legitimate upside,” said Cushman & Wakefield’s Michael Amirkhanian who is exclusively marketing this portfolio. 

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Neighborhoods: Bedford Stuyvesant/ Agents: Michael Amirkhanian

Commercial Observer | January 7, 2015 | Bob Knakal

As 2016 begins, trying to figure out how the investment sales market will perform is no easy task. Within the next week or so, we will be making our forecast for the year and we will look at several metrics to craft our projections.

An important component of the data for review will be the 2015 year-end sales statistics. While the figures are not yet compiled, it is a safe bet that last year will set a new all-time record for dollar volume of investment sales. The previous peak was $62.2 billion in 2007 and last year will end up significantly above that threshold. The number of properties sold will likely not eclipse 2014’s all-time record but will be extremely strong, likely recording a second-strongest-year-ever total...

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Agents: Robert Knakal

December 31, 2015 | Real Estate Weekly | Dan Orlando

Cushman & Wakefield has been retained on an exclusive basis to sell an apartment building at 10 West 65th Street, located between Columbus Avenue and Central Park West, on Manhattan’s Upper West Side. The asking price for the property, which has “tremendous upside,” is $115,000,000.

John Ciraulo Vice Chairman in the capital markets group of Cushman & Wakefield told Real Estate Weekly that the considerable price point is a result of both the property’s location and “the potential of converting this building to a condo now or in the future.”

The six story pre-war elevator building also comes with more than 50,000 s/f of air rights which gives the future buyer options to expand...

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Neighborhoods: Upper West Side/ Agents: John Ciraulo, Paul Smadbeck

December 29, 2015 | The Real Deal | Ariel Stulburg

Dreams of Manhattan condominiums dominated 2015’s top 10 development site deals. While Gary Barnett’s Extell Development – which is known for this sort of thing – appears on the list as both a buyer and a seller, the crop of developers overall is best characterized by its diversity. Three Chinese firms appear, including locally-based Kuafu Properties. Global firms like GID Development Group and the Carlyle Group showed up next to local fixtures like Ziel Feldman’s HFZ Capital and Joseph Sitt’s Thor Equities. And while the outer boroughs failed to place, Manhattan – at least the expensive parts – was fully covered, from the far West Side, through Midtown, to the Upper East Side, and all the way Downtown...

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Neighborhoods: Upper East Side/ Agents: Clint Olsen, Robert Knakal

December 29, 2015 | New York Post | Lois Weiss

Time to celebrate the best of 2015’s real estate deals and deal makers with our annual Golden Bricks.

Golden Brick: To Related Cos. and Oxford Properties for persuading some of the city’s highest-profile tenants to buy their spaces and finance the construction of the office tower at 30 Hudson Yards, which will include Time Warner, Wells Fargo (which paid $175,441,416) and Kohlberg, Kravis & Roberts ($119,275,069). Oh, and the developers also secured a $5 billion mortgage.

Eastern Star: To financiers who made 2015 the Year of Chinese Investment as groups poured billions of dollars into local projects along with individuals who made EB-5 investments...

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Corporates/Agents: Paul Massey Jr., Robert Knakal

December 24, 2015 | The Real Deal

The global economy saw over $3.8 trillion in mergers and acquisitions in 2015, surpassing the activity seen in 2007. The New York property market, too, had a bumper M&A year, with some of the biggest commercial firms joining forces. But are all these big deals a sign of economic health, or another indication that the market is due for a slowdown?

Major real estate mergers recently include the $100 million deal between commercial brokerages Massey Knakal Realty Services and Cushman & Wakefield, followed by DTZ’s $2 billion acquisition of Cushman; Marriott International’s $12.2 billion purchase of Starwood Hotels & Resorts Worldwide; the Blackstone Group’s $8 billion acquisition of BioMed Realty Trust, and its $6 billion purchase of Strategic Hotels & Resorts.

Another major acquisition in the works, with SL Green Realty planning to buy New York REIT for an as-yet-undisclosed price.

The numbers in these deals are impressive, but...

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There are over 13,000 commercial brokers in New York City and that number seems to grow every year.

In the latest KNN, Bob Knakal and Jon Hageman discuss some of the characteristics that separate the top brokers from the rest.

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Agents: Jonathan Hageman, Robert Knakal

Cushman & Wakefield has been retained on an exclusive basis to sell a building at 371-373 East 10th Street. The property is located between Avenues B and C in Manhattan’s East Village neighborhood. The asking price is $15,000,000.

The walk-up building contains approximately 20,688 square feet and sits on a 40’ x 94.79’ lot. It consists of six floors, featuring excellent ceiling heights, multiple air shafts, and a large open stairwell.
Additionally, it contains a 40’ x 80’ usable garden level space and a 15’ rear yard. The building is situated within an R8B zoning district, allowing for residential use, and will be delivered vacant upon sale.

The property is conveniently located steps away from Tompkins Square Park and a vibrant array of dining, shopping, and nightlife options. Delivered vacant, it presents a rare opportunity for a value-add redevelopment project in one of New York City’s most sought-after neighborhoods.

“This property offers a developer the possibility of building free market apartment rentals or condominiums a half block from Tompkins Square Park,” said Cushman & Wakefield’s Michael DeCheser who is exclusively marketing this property with Darragh Clarke.

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Neighborhoods: East Village/ Agents: Michael DeCheser

Featured Listing: 23-35 29th Avenue, Queens, NY, 11102

12/21/2015 1:38:13 PM/ Cushman & Wakefield/ Listings

Cushman & Wakefield has been retained on an exclusive basis to sell a mixed-use building at 23-35 29th Avenue, located on the corner of 29th Avenue and Crescent Street in the Astoria neighborhood of Queens. The asking price is $8,000,000.

The four-story building contains approximately 11,250 square feet and sits on a 50’ x 100’ lot. It consists of 19 residential units, of which three are free market and 16 are rent stabilized, and one commercial ground unit. The residential unit mix consists of eight one-bedroom, four two-bedroom, and seven three-bedroom units.

The property is located near Mount-Sinai Hospital and is conveniently accessible via the 30th Avenue N and Q train lines. Situated in the heart of Astoria, the building presents a great opportunity for investors looking to capitalize on one of Queens’ most attractive and growing neighborhoods.

“This property presents a very unique owner/investor opportunity in a prime part of Astoria. This type of asset will draw tremendous activity from both local and national investors,” said Cushman and Wakefield’s David Chkheidze, who is exclusively marketing this property with Conrad Martin.

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Neighborhoods: Astoria/ Agents: David Chkheidze

A conversion opportunity at 136 North 8th Street, located between Berry Street and Bedford Avenue in Brooklyn’s Williamsburg neighborhood, was sold in an all-cash transaction valued at $3,525,000.

The property currently consists of a four-story, approximately 4,000 square foot building on a 20’ x 50’ lot. Overlooking neighboring backyards, this semi-detached building is provided with tremendous amounts of natural light allowing for unique and varied layouts. The sale price equates to approximately $881 per square foot.

The property is in close proximity to Williamsburg’s premier commercial strips and is just steps from the L train at the Bedford Avenue station, offering easy access to Manhattan. Delivered vacant, this site offers a prime opportunity for buyers looking to create unique layouts.

“We were pleased to see many developers, in spite of the uncertainty in the market, who are still bullish on condo sellouts in great locations of Williamsburg. 136 North 8th Street highlights that fact clearly,” said Cushman & Wakefield’s Brendan Maddigan, who exclusively handled this transaction.

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Neighborhoods: Williamsburg/ Agents: Brendan Maddigan