Are developers playing "chicken" with the market?

David Goldsmith

All Powerful Moderator
Staff member

Condo sales are booming in Brooklyn​

Marketproof data reveal March was a hot month across the city
March was a good month for brokers selling condos across the boroughs.
The spring season is starting off hot with 39 percent more deals closed in March versus February, according to data firm Marketproof.

Deals for newly built or newly converted apartments across the city were up by 25 percent compared to pre-pandemic averages for the month. March saw 350 contract signings this year. The average between 2015-2019 was 280.
“In February’s new dev market report we said ‘worry not, new devs did nicely.’ In March, as the Spring selling season begins, deal volume is surprisingly strong,” Marketproof CEO Kael Goodman wrote in his firm’s March report. “New dev buyers seized the opportunity to buy in prime Manhattan and Brooklyn projects.”

Marketproof's Kael Goodman (Linkedin)
Marketproof’s Kael Goodman (Linkedin)
The largest contract to close in March was a $66.5 million ($4,000 per square foot) sale for two penthouse apartments spanning four floors at the top of Naftali Group’s The Bellemont in the Upper East Side. The sale smashed records in the neighborhood.
Over in the Penn District, Aleksey Gavrilov and Joseph Grosso of Corcoran closed 22 contracts at 300 West 30 Street in March, the first development project by Queens-based Hiwin Group USA. Deals at the Mondrian-inspired residence ranged from $950,000 to $1.7 million.
As impressive as Manhattan’s numbers were last month, the sales activity pointed to a shifting tide, with Brooklyn competing for the bulk of the city’s business.
“The shift back to Brooklyn was very visible,” said Marketproof CEO Kael Goodman. “Manhattan’s deals are still bigger but not by much.”

The outer borough saw 145 new development contracts, which is a 61 percent growth over pre-pandemic levels.
Not only are there more sales in general, but also more inventory to sell in Brooklyn, according to Goodman.
In Boerum Hill, Sterling Town Equities’ Post House topped Brooklyn sales, closing eight contracts for one, two and three-bedroom units, with prices ranging between $1 million to just shy of $3.5 million.
The second tallest tower in the borough, Extell’s Brooklyn Point, placed second again, securing six contracts for one and two-bedroom apartments. The Downtown Brooklyn highrise saw prices ranging from $1.2 million to $2.6 million.

Growth dotted the entirety of Brooklyn, with dozens of contracts signed “deep into the borough,” according to Goodman.
That could be linked to a sharp decrease in the demand for luxury units across the city, which are down 31 percent compared to the 2015-2019 average for the month. While more units were sold in March versus February, closings were 12 percent cheaper, with a median price of $5.5 million.
“In Brooklyn there’s a lot more room and more land to build new stuff. The borough is filling the market for more affordable units,” Goodman said.

 

David Goldsmith

All Powerful Moderator
Staff member

Nir Meir: I’m penniless​

Former HFZ Capital exec says all he has left are the clothes on his back

Nir Meir is a material boy.
Since the spectacular collapse of his former firm, luxury condo developer HFZ Capital Group, Meir has spent the last few years defying his creditors by living the high life in South Florida.

Lawsuits filed in the wake of HFZ’s implosion accuse Meir of splurging on yacht and private jet charters, fine wines, a $135,000-per-month home rental, stays at the Four Seasons and $1.5 million worth of gold, among other extravagances.
But now Meir says he’s essentially penniless. He has $5,000 in his bank account, he stated in an affidavit late last month, and has been staying at a friend’s house.

“All I have left are articles of clothing that I need to survive,” Meir claimed.
Meir’s cry of poverty was submitted as part of a lawsuit brought by Israeli car importer Yoav Harlap, who lent millions to an HFZ project on Manhattan’s Upper East Side. HFZ defaulted on the loan, which Meir and HFZ founder Ziel Feldman had personally guaranteed. Harlap’s company, YH Lex Estates, won an $18.5 million judgment against Meir in 2021 and against Feldman a year later.
The judgment, it turns out, was the easy part.
Meir has stifled Harlap’s attempts to collect on the debt by arguing in court that his lavish lifestyle is entirely funded by his wife, Ranee Bartolacci, who has been described by her own attorney as a “trust fund baby.”
When the couple sold their Hamptons estate to New England Patriots owner Robert Kraft for $43 million in 2021, YH Lex Estates tried to collect on the proceeds. But Meir’s attorneys claimed that Bartolacci was the property’s true owner and that the proceeds were hers.

“Nir had a healthy lifestyle when he was at HFZ, nothing to apologize for,” Larry Hutcher of Davidoff Hutcher & Citron, Meir’s attorney at the time, told The Real Deal last year. “He was doing well, and his wife has elected to continue to live a lifestyle.”
Harlap’s company is now seeking for a second time to hold Meir in contempt of court. The creditor alleges Meir defied court orders by moving money out of a shell company called Ermitage One, which Meir had said was managed by Bartolacci.
As proof that Meir was in control of Ermitage, YH Lex Estate’s lawyers claim that Meir used the pseudonym “Nir Bartolacci” to purchase gold from an online metals retailer on Ermitage’s behalf. Meir made four calls to the retailer, JM Bullion, ordering hundreds of ounces of Credit Suisse gold bars in Ermitage’s name, according to court documents.
In an April court filing, Meir’s attorney Jonathan Marc Davidoff called the contempt motion “a desperate attempt to extort Meir” and said a trustee’s forensic evaluations showed that as of last July, Meir had liabilities of more than $41 million but just $19,000 in cash and a wine collection valued at $35,000 — his only other asset.
But a day after that filing, Davidoff filed a letter to the judge seeking to withdraw as Meir’s attorney, citing “issues that arose between Meir and the law firm.” Davidoff did not respond to a request for comment.

Photo included in exhibit in YH Lex Estates lawsuit against Nir Meir, showing wine at Meir's house
Photo included in exhibit in YH Lex Estates lawsuit against Nir Meir, showing wine at Meir’s house

Miami meltdown

As HFZ’s signature condo project languished, unfinished, above Manhattan’s High Line, Meir and Bartolacci weren’t exactly laying low in Miami Beach.
Bartolacci paid $135,000 a month to put the family up in a waterfront home. It may have been a rental, but she allegedly treated the house like her own, pouring $600,000 into improvements including a jet ski dock and a fish pond.

Bartolacci had been renting the seven-bedroom Sunset Islands house from spec home developer and restaurateur Mathieu Massa. That quickly turned into a legal battle of its own. In February, Massa attempted to evict Bartolacci, who was living there with Meir and their children, for alleged failure to pay rent.
Meir hired armed guards to defend the property. The police were called and Massa succeeded in evicting Meir and Bartolacci in March, but only briefly. Within days, Bartolacci’s attorneys got a judge to reverse the eviction, only for her to move out a month later.
Bartolacci’s lawyer is now seeking to claw back some of the rent paid because of a defect with the seawall that allegedly made the property unsafe. An inspector issued an unsafe structure violation at the property in March, Miami Beach city records show.
“It created dangerous conditions,” said Hutcher. “They had no choice but to vacate the house.”
Massa has been left bewildered.

“If any of this was true, why would they have fought to get back in? Why would you continue to live there and pay rent?” said Massa’s attorney, Alan Perlman of Dickinson Wright.
Attorneys for Massa have questioned how Meir can pay his legal fees after facing multiple judgments. Meir stated in the affidavit last month that he has no active credit cards, owns no properties and that his friend charges him no rent and pays for his utilities.
“I pay no rent as I am currently living at a friend’s place temporarily,” Meir stated. “All of my legal bills which are vital to my defense and the protection of my rights are being paid by third parties.”

 

David Goldsmith

All Powerful Moderator
Staff member
https://therealdeal.com/

Union takes aim at LeFrak, Kushner developments​

Laborers file complaint against contractors at Jersey City site

A labor broker awaiting sentencing in a $1 million construction insurance fraud case in New York is at the center of a fight across the river.
The Laborers’ International Union of North America is taking aim at the LeFrak Organization and nonunion contractors it’s using in Jersey City, alleging that workers were exploited on a waterfront site.

The union plans to rally today outside Kushner Companies’ One Journal Square development, where it believes the contractors were going to be hired next.
The state recently shut down work on 30 Park Lane North in Jersey City, a 387-unit apartment building being developed by LeFrak on the Jersey City waterfront. The New Jersey Department of Labor cited failure to pay workers on time, as well as overtime, and improper classification of construction workers.

The stop-work orders were issued in late April against Signatura Laboris, a company registered to labor broker Salvador Almonte, and against the site’s concrete contractor, Concrete Rising. The order against Concrete Rising has since been lifted.
A representative for the Department of Labor declined to comment, citing an ongoing investigation.
“We take great pride in our job sites and the teams that work on them,” a spokesperson for LeFrak said in a statement. “We have no direct connection to the company in question, which was a subcontractor of a subcontractor, and is no longer involved with this project.”
Almonte was convicted in March for lying about the size of his companies to avoid paying $1 million in insurance premiums. At the time, Manhattan District Attorney Alvin Bragg said Almonte was “putting workers’ lives at risk all in the name of saving a buck.” He is slated to be sentenced this month.
Almonte has operated under a number of entities, providing construction workers to sites. He was released without bail after his 2019 arraignment, the New York Daily News reported at the time.

“He came across the river and started doing it again,” alleged Nicole Vecchione, a research director with an organizing fund for the union’s eastern region. “At some point that cycle needs to be broken.”
When Almonte was indicted in 2019 in the insurance fraud case, the Manhattan district attorney alleged that more than a dozen of Almonte’s workers had been injured on the job in the preceding four years. One, Juan Chonillo, died after falling from Fortis Property Group’s 161 Maiden Lane in 2017. SSC High Rise, which pleaded guilty to manslaughter in Chonillo’s death, had used Almonte’s labor services, according to authorities.

The union has targeted so-called “body shops” in New York, a term it uses to describe what it considers exploitative companies that provide construction labor to sites. The Mason Tenders District Council of Greater New York and Long Island, which is part of the Laborers’ International Union of North America, got a law passed that requires such companies to obtain licenses.
Opponents of the measure viewed it as another market-share grab by the union. They say some brokers of nonunion labor provide jobs to people living at the margins, such as new immigrants and recently incarcerated people unable to get union jobs.

But Vecchione said small unlicensed companies like Almonte’s assume the liability posed by unsafe work conditions. She and the union are pushing for that responsibility to trickle up the hierarchy to the general contractor and developer on a project. Labor brokers tend to use numerous LLCs, which can make them more difficult to track from job to job.
“It is a shell game,” said David Johnson, director of the organizing fund. “This is one company of several that we’ve come across, and it seems like it is just getting more and more prevalent.”
The Laborers Eastern Region Organizing Fund has also filed a complaint with the National Labor Relations Board against Almonte’s company and Concrete Rising. The union fund alleges that the companies interfered with workers’ attempts to unionize and retaliated against those workers by reneging on promises of future work.
An attorney for Concrete Rising said his client disputes the allegations in the NLRB complaint, and any other accusations of wrongdoing. Almonte could not be reached for comment.
One worker, who asked to be referred to as Garcia, described working long hours at 30 Park Lane with no breaks and finding that his paycheck was hundreds of dollars short. He described an incident earlier this year where another worker was injured on the 32nd floor. He said a crane was used to transport the worker from the project in a construction trash container.

“Many of the workers didn’t like how he was treated,” Garcia said in Spanish.
“Wage theft and safety issues go hand in hand,” Vecchione said. “When a worker was injured, they got him off the site in a garbage bin. That tells you everything you need to know about how they treat workers.”
 

David Goldsmith

All Powerful Moderator
Staff member

New condo sales slowed in April, especially in the luxury market​

Signed contracts still up 8% this year over pre-pandemic average

After a crackling March, the city’s new development market slowed to catch its breath again in April. Sales volume and median prices both declined, while the luxury segment logged its worst month since the start of the year.
Buyers signed contracts for 282 new development condos in April, down 19 percent compared to March, according to a Marketproof report. The slowdown was not enough to undo a relatively hot February and March: On a year-to-date basis, contracts are still up 8 percent compared to the pre-pandemic average.

Sales volume fell 21 percent to $600 million, compared to $763 million in March, while the median price for new condos slipped 7 percent to $1,581 per square foot.
“After a very active March, demand contracted in April,” Marketproof CEO Kael Goodman wrote in the report, “but that’s to be expected.” March is typically a peak month in the spring selling season, Goodman noted.

But even when accounting for the seasonal slowdown, brokers at the highest end of the market seemed to have a difficult time finding buyers last month. Signed contracts for luxury apartments priced at $4 million and above, which are heavily concentrated in Manhattan, tumbled 38 percent compared to March. The $4 million and up segment logged its slowest month since December, with 23 percent fewer deals than in a typical April.
Three luxury pads at Extell’s Central Park Tower, which recently took on a $500 million inventory loan, went into contract with a combined asking price of $38 million, and one closed for $5,300 per square foot. The Witkoff Group and Len Blavatnik’s One High Line — formerly HFZ Capital Group’s the XI — found buyers for two units in Chelsea asking a combined $35 million, including a penthouse that asked $4,900 per square foot.

Manhattan’s 118 new signed contracts last month were down 18 percent from April’s pre-pandemic average and 34 percent from March. At 300 West 30th Street in Chelsea, the 69-unit project by Queens-based Hiwin Group USA saw 16 units go into contract, and Extell’s One Manhattan Square, in Two Bridges, sold six units.
In Brooklyn, new contract signings fell by a third compared to March. But April’s 96 deals were still 20 percent more than an average April from 2015 to 2019. Extell’s Brooklyn Point in Downtown Brooklyn sold six apartments and CIM Group and LIVWRK’s 111 Montgomery Street in Crown Heights had five units go into contract.

The priciest unit to go into contract was a penthouse at Tishman Speyer’s 11 Hoyt Street in Downtown Brooklyn asking $6.1 million. It was the only unit in the borough that sold for north of $4 million.
In Queens, Chris Xu’s Skyline Tower notched four new contracts after investor Risland took on a $60 million inventory loan, and ZD Jasper’s 130-unit offering recorded 49 contracts for the month, most of which actually sold in prior months but were not reported.

 

David Goldsmith

All Powerful Moderator
Staff member

Perks rise for buyers, brokers to make deals​

Cars, gym memberships and Taylor Swift tickets among incentives on the table

New York City’s slowing residential market means more gifts are dangled in front of buyers and brokers to get deals over the line.
Perks tend to rise as the market falls, and gifts are mostly being distributed by developers of new properties trying to set themselves apart from the luxury glut, the New York Post reported. But Redfin’s lead economist Taylor Marr told the outlet what’s going on now is unique.

“We’re seeing an unprecedented number of these incentives out there,” Marr said.
In the U.S., 46 percent of sellers have recently offered a gift with a sale, according to an analysis by Redfin. That’s the highest mark in the past decade. In New York, one in every six sellers offered a gift, averaging between $5,000 and $10,000.

Serhant tried to raise buzz for sales at Quadrum Global’s 171-unit The Huron at Greenpoint by offering brokers the chance to score a set of Swift tour tickets. On top of a broker boat party, the raffle was part of an effort to inspire agents to score signed contracts before official sales even launched.
But most incentives are targeting buyers, who could score a wide variety of offers from mortgage buydowns to expensive gifts.

At CPPC Development’s Three99 in the East Village, a $2.8 million condominium comes with a $6,000 Vespa. One bid for the three-bedroom unit came directly as a result of the perk, according to co-listing agent Malessa Rambarran of Brown Harris Stevens.

The gift of $25,000 in flexible furniture from Bumblebee could be swaying some buyers at NOVA, a Long Island City condo project developed by SB Development. More than half of the units have been sold and many have praised the perk, according to principal Joe Stern.

Other gifts being offered include gym memberships and WeWork access to those at One Wall Street, 2 percent annual mortgage buydowns for three years at Extell Development’s Brooklyn Point and One Manhattan Square, and luxury gifts for homes at the high-end of the market, such as $25,000 Amex gift cards and in one off-market Hamptons sale, a Lamborghini.
 

David Goldsmith

All Powerful Moderator
Staff member

FiDi’s leaning tower fined as fire hazard​

Broken standpipe at stalled Fortis project went unfixed for year

Fortis Property Group’s luxury tower at 161 Maiden Lane has yet to welcome its first official resident, but one person couldn’t wait to move in.
The receiver managing the unfinished condominium told The City that sometime before June 2021, a possibly homeless intruder turned on the motor that powers the standpipe, a crucial piece of equipment that allows firefighters to quickly hose down blazes on the upper floors of skyscrapers.

The motor broke, disabling the standpipe, which remained out of service until late in the summer of 2022. One reason it took so long to fix is that a hoist needed to haul a replacement motor up into the tower was also broken, the receiver, Richard Cohn, told the outlet.
A spokesperson for Fortis told The City that the developer wasn’t aware of any problem with the standpipe before Cohn began managing the tower in June 2021. It had been found operable the month before.

In any event, the Department of Buildings levied a $25,000 fine for the standpipe snafu and a $2,500 penalty for a lack of fire-watch personnel at the building, the outlet reported.

Construction was halted several years ago when the tower was discovered to be leaning three inches to the north, perhaps because a less expensive foundation was laid to save time and money. It has been stuck in litigation since as Fortis, lenders and contractors fight and negotiate over who is to blame and what to do with the development.
The fear is that whatever caused the building to tilt north — possibly a stiff wind hitting the facade, or the ground shifting under it — could happen again if the project were completed.
 

David Goldsmith

All Powerful Moderator
Staff member

Developer kills plan for Harlem's 'One45' complex after local opposition​

The developer of a controversial Harlem complex that would have brought 915 new apartments to an underutilized stretch of 145th Street — half of which would have been income restricted — has scuttled the plan ahead of a subcommittee vote on the project Tuesday morning.
The City Council’s Subcommittee on Zoning and Franchises voted to remove One45 from the Tuesday's agenda because, “the developer submitted a letter saying they’re withdrawing it,” attorney Angelina Martinez-Rubio told subcommittee members at a public hearing.
Bruce Teitelbaum, with PointsFive developers, didn’t immediately return a request for comment.
From the get-go, the proposed 31-story residential towers slated for a stretch of West 145th Street and Lenox Avenue — which currently houses Rev. Al Sharpton’s National Action Network and several other businesses — had faced fierce political headwinds.
Teitelbaum had envisioned a combination of retail and residential space along the sprawling lot, with a rooftop events space and an “ECO-green Quad.” But the local community board and newly installed Councilmember Kristin Richardson Jordan vehemently opposed the project.
Amid the pushback, the developer made several rounds of last-minute concessions, first bumping up the percentage of subsidized units from 25 percent — required through the city’s Mandatory Inclusionary Housing program — to 40 percent ahead of the presentation to the City Council earlier this month. Finally, on Friday, developers agreed to increase the level of subsidized units again up to 50 percent of the development.
The final proposal included 457 market rate apartments, 91 apartments for two-family households earning around 125 percent of the Area Median Income or AMI, 255 apartments at up to 50 percent AMI, and 112 apartments for the city’s lowest income residents, who earn less than $32,040 for a family of two. Supporters of the project say its withdrawal will likely result in no affordable housing being built at the location.

But Councilmember Richardson Jordan insisted the affordability levels still weren’t in line with the needs of her district. She argued all of the apartments in the new complex should be rent regulated with 57 percent of them set aside for lowest income New Yorkers, in a Medium post. The plot of land would be a prime candidate for the city housing agency's Extremely Low & Low-Income Affordability subsidy program, or ELLA, where 80 percent of the units are for low income tenants and 20 percent are for moderate income households, she said.
“Doing a big project in that space with great affordability is not impossible when we take greed out of the equation,” she said. “If the developers are willing to work with me and the community on something that matches our needs better, I look forward on working with them in the future."

The project had received support from the unions 32BJ and Laborers Local 79. And not all city officials were happy about its demise. Manhattan Borough President Mark Levine, who’d initially opposed the development, lamented the project’s loss, given that Teitelbaum had agreed to increase the number of subsidized apartments up to half, the main thing he’d advocated for.
“The site will indefinitely remain as is — a vacant lot, an abandoned gas station, and a small amount of single story retail. If the owner of the property proceeds with development under as-of-right limits, it will likely become a self-storage facility,” Levine said in a statement. “The desperate need for additional affordable housing in Harlem, and citywide, is getting ever more acute.”
Council spokesperson Mandela Jones said city lawmakers remain committed to creating affordable housing.
“There is a baseline expectation for how applicants can work constructively with the Council, local communities, and the administration to advance projects through the land use process that requires active and meaningful engagement," he said in an emailed statement. "We hope the applicant’s withdrawal of the current proposal, given its challenges and lack of community support, opens an opportunity to chart a successful path forward for affordable housing.”

NB How easy it is for YIMBY journalists to make fools of themselves:

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David Goldsmith

All Powerful Moderator
Staff member

Omnia expands Lower East Side plans​

David Paz’s firm files for 57-unit mixed-use development

Omnia Properties upped its plans on the Lower East Side.
The developer filed for a 17-story, 75,000-square-foot mixed-use development at 183 Chrystie Street, Crain’s reported. The 175-foot-tall building will feature 57 residential units and ground-floor retail space. GF55 Architects is designing the development.

The firm’s president, David Paz, previously had sights set on a much smaller project. Plans originally called for a 9-story, 49,000-square-foot property with a mere 26 residential units.
Towards the end of 2021, an affiliate of the firm purchased the 9,600-square-foot adult care center at the site from Joel Fishkind for $19.5 million. Paz filed demolition plans for the existing two-story structure last February.

Omnia could not immediately be reached for comment.
The firm touts more than 20 completed projects in Manhattan in the past 17 years, totaling more than 475,000 square feet. One of Omnia’s more prominent properties, however, is one Paz has been fighting to salvage.

The Northwind Group — an equity partner at Paz’s shuttered Ace Hotel at 225 Bowery — last month bought a $68 million loan on the property from Bank Hapoalim, which sold debt after spending months trying to foreclose on the hotel. It appears Northwind is positioning itself to take over the property, either through foreclosure or a bankruptcy sale.
It’s unclear if Omnia is planning condos or rentals at 183 Chrystie Street, but it may want to take note of another Lower East Side project of a similar scope that ran into plenty of trouble.

Optimum Asset Management’s 222 East Broadway only opened luxury sales in the fall, after six years of development and a scaleback of the project. The development includes 70 units across two towers. The average price for an apartment there is $2,100 per square foot, with the cheapest units going for $975,000.
Optimum’s offering plan has a projected sellout of $157 million.
 

David Goldsmith

All Powerful Moderator
Staff member
At 520 West 28th Street, Related's Zaha Hadid starchitect vanity project, the most recent closing took 7 1/2 years to sell and closed almost 50% off the original price.

Related takes another discount at Zaha Hadid-designed Chelsea condo​

Unknown buyer pays $13.2M for sponsor unit, down from $16.5M ask

Related Companies locked down another sale at 520 West 28th Street, its Zaha Hadid-designed luxury condo building along the High Line, though getting there required yet another price cut.
An unknown buyer paid $13.2 million for unit #32 at the West Chelsea development, records show — about a 20 percent discount from its last asking price of $16.5 million.

The price is an even further cry from Related’s initial expectations for the unit, which it planned to list for $25 million, according to the project’s original offering plan.
The four-bedroom, four-bathroom unit comes with a wrap-around terrace that offers views of the Empire State Building and the High Line below. It also features a direct elevator entrance, 10-foot-wide motorized windows and a primary suite with a windowed bathroom and free-standing tub.

Corcoran Sunshine heads sales at the building, known for its glossy metal and glass facade. The listing brokers did not immediately respond to a request for comment.

Though the 11-story building boasts a suite of luxury amenities including an off-street entrance through a private garage, an IMAX theater, a 75-foot saltwater pool and a spa, sales of its 39 residences have been slow since Related launched them eight years ago.
In 2017 — with the majority of its units still unsold — the developer took out a $162 million loan from KKR Real Estate Finance Trust. Related has since begun accepting steep discounts, including a 60 percent markdown on its 6,900-square-foot penthouse, which Fortress Investment Group chairman Wesley Edens bought for $20.2 million in 2020 — less than half of its original $50 million asking price.
Other buyers at the 11-story building include Credit Suisse-executive Matias Einaudi, who paid $9.4 million for a five-bedroom unit last month, down from $13.5 million in the building’s offering plan. Vice chair of eXP World Holdings Randall Miles and his wife, Karen, purchased a condo for $12.1 million in 2021, and in 2017, Equinox CEO Harvey Spevak bought a unit for $15.3 million.

 

David Goldsmith

All Powerful Moderator
Staff member

Sedesco files demo plans for Billionaires’ Row supertall​

Developer’s recent assemblage addition at 37 West 57th Street on chopping block
Sedesco’s supertall is coming into focus as the developer filed plans for the demolition of a recent addition to its Billionaires’ Row assemblage.
The New York-based developer filed plans to demolish the 13-story building at 37 West 57th Street, Crain’s reported. The building at the site stands 150 feet tall and spans 70,000 square feet.

The Class B office property has been in Sedesco’s portfolio for mere weeks after it purchased the property in April for $77.5 million, but never seemed intent on keeping it an office. Instead, it served as a way to add space to the supertall Sedesco is planning, adding 58 feet of frontage on West 57th Street.
Demir Sabanci’s firm has spent a decade trying to pull its assemblage together. In 2012, Sedesco acquired 50 West 58th Street for $71.5 million. In 2018, it bought 41 West 57th Street for $80 million.

The end goal is a 63-story supertall at 41-47 West 57th Street. Designed by OMA’s Rem Koolhaas, the property is slated to include a mix of hotel, retail and residential space. The skyscraper is expected to rise 1,100 feet with 119 residences, 158 hotel rooms, 237,000 square feet of residential space and 206,000 square feet of commercial space. There will also be roughly 10,000 square feet for a restaurant.

In 2021, Sedesco received approval for its 57th Street zoning through the city’s Zoning for Accessibility program. The developer is building two ADA-accessible elevators at the southwest corner of West 56th Street and Sixth Avenue, which will provide access to the 57th Street station serviced by the F line.
The deal allowed Sedesco to add 52,000 square feet to its project.
The subway improvements are already underway and expected to be completed next year. As a whole, the supertall is expected to be completed in 2026 and construction is already underway.
 

David Goldsmith

All Powerful Moderator
Staff member

Related’s Tribeca Green declared effective as new dev pipeline narrows​

Corcoran Sunshine touts stream of sales for conversion at 210 Warren Street

Buyers are scooping up units at Related Companies’ Tribeca Green, a conversion in Battery Park capitalizing on existing tenants and accessible prices for a steady stream of sales.

The 265-unit building was declared effective last week, according to a spokesperson for the development. Around four months after sales launched, Tribeca Green has secured 73 signed contracts with asking prices totaling $100 million — about a quarter of its $375 million projected sellout.
Despite 210 Warren Street’s sales progress, the conversion isn’t an “apples-to-apples comparison” to other new construction projects, due to discounted asking prices available to current tenants in the building, Marketproof CEO and co-founder Kael Goodman said.

“We don’t know where the buyers are coming from, inside or outside,” Goodman said, though he added “that in no way diminishes their success.”
Corcoran Sunshine, which heads sales at the building, said about a dozen existing tenants have signed contracts to purchase their units. Tenants were offered a 20 percent discount on the asking prices offered to other buyers, according to the building’s offering plan.
Closings are expected to begin in June.
More than half of the building’s units have been converted, with an initial wave of buyers coming from the neighborhood, according to Yejin Berman, Corcoran Sunshine’s managing director at Tribeca Green.
“There’s a lot of neighborhood loyalists,” Berman said.

The property’s effective status comes as the new development pipeline in the city continues to dry. Only two projects with more than 140 units have submitted offering plans to the attorney general, while just 51 developments of that size are in the sponsorship phase, according to data from Marketproof.
“The pipeline is very, very small on the large end,” Goodman said. “The market is really skewed right now toward smaller projects of less than 30 units.”
Apartments in the converted Tribeca building range from studios to four bedrooms, with the priciest unit listed for under $4 million.
The pricing for units on the water in Tribeca places the property in “a real sweet spot,” Corcoran CEO Pam Liebman said.

Related purchased 210 Warren Street in 2004 and developed it as a rental property, Related’s vice president, Andrew Orchulli, said. The developer started planning the conversion to a co-op in 2018, as demand rose for for-sale product in the neighborhood.
The renovation included an enhanced amenities package and some updates to the exterior, Orchulli said. The added amenities are largely family-related features, like a teen room with a gaming and lounge space, children’s playroom and terrace with barbecue stations and lounge areas under a pergola.
Corcoran Sunshine also heads sales at another conversion in the neighborhood, The Solaire at 20 River Terrace. Developed by Albanese Organization and Northwestern Mutual, the 290-unit conversion notched the highest number of contracts signed last year.

 

David Goldsmith

All Powerful Moderator
Staff member

NYC’s new development shakes off seasonality​

Sale launches emerge from uncertainty to strong activity
, The Despite anxiety over higher interest rates, New York City’s new development got a new wind in May.
The spring month is typically a seasonal peak, but activity exceeded some brokers’ expectations — especially following the high mortgage rates and bank failures that plagued sales in April.

“April was one of those months that was very, very muddied by multiple factors that could have swayed things,” said Compass’ Leonard Steinberg, adding that holidays, spring breaks and the First Republic bank failure contributed to the slowdown. “Thankfully, in May, I saw an uptick.”
Though the market peaked in May — in line with previous years — some brokers say the pandemic disrupted historic patterns and has eroded some of the seasonality.

Since the pandemic, “people are just sort of living their best life, and they’re moving around,” said Douglas Elliman’s John Gomes. “It’s messing with the seasonality that we’ve become accustomed to.”
Activity largely spiked in one area: new development.
Demand for new developments has counterintuitively been boosted by higher interest rates, said Douglas Elliman’s Jessica Peters, because would-be sellers in the resale market are hesitant to list and lose their lower rates. Developers have no such issue.
New product is popping up all over the city, according to brokers, who say the backlog of new buildings caused by the lockdown part of the pandemic and a labor and material shortage is finally over.
“The ideal time to be on the market is launching sometime in March and April,” Peters said. “A lot of projects that should have been on the market 12-18 months ago are coming on the market now.”

The shift in seasonality and concerns over the state of the market in the second half of the year is a vote of confidence in projects in prime areas of Brooklyn, the Upper West Side and Upper Manhattan launching after the peak of the spring market.
“This has been the busiest Memorial Day I’ve seen in my entire career,” said NestSeekers’ Bianca D’Alessio, who launched a building in May and has two more slated for June. “We’ve expedited a lot of our launch dates so as not to lose out on the market.”
From January to May, some 26 percent more contracts were signed than during the same period from 2015 to 2019, according to data firm Marketproof.

In May, new development sales took market share from resales to rise to a post-pandemic high. New development remained a higher portion of overall sales than before the pandemic, according to Marketproof, with some would-be sellers locked in the golden handcuffs of low mortgage rates.

In Manhattan, Steve Witkoff’s One High Line put nine units into contract and 200 Amsterdam notched six. Brooklyn’s 110 North First rose to the borough’s top seller, with Nest Seekers’ Tamir Shemesh, Bianca D’Alessio and Christian Haag as head listing agents, and there was a sellout in Queens at 37-28 30th Street, dubbed “Novo LIC.”

But some brokers said waiting too long to launch could harm the pace of sales if the market falters in the second half of the year. In this camp is Elliman’s Frances Katzen, who recently launched a townhouse conversion on West 108th Street.
“I’m not convinced it’s the end of the world, [but] I do think it’s going to be a harder market,” she said. “This is now the real reaction to what should have happened after Covid.”
Brokers unanimously agreed the increase in supply won’t be enough to cool prices. Peters said negotiations at some developments can only go so low because of costs added by last year’s labor and material shortage.
But the overall lack of inventory could be a promising sign for the fall market, according to D’Alessio.
“It’s keeping absorption healthy and, until there’s a seismic shift, we’re not going to feel that pullback people are expecting,” she said. “I think we’re going to have a very healthy second half of the year.”

The May momentum could propel the overall market through the summer and early months of fall.
Gomes said he expects activity to remain high heading into the summer months, driven particularly by international buyers traveling to New York ready to buy after years of travel restrictions and other pressures preventing them from entering the market in the city.
As buyers continue to snap up new listings, Gomes said he also anticipates an increase in home prices.
“I predict summer will be strong,” Gomes said. “I firmly believe that, moving forward in this market that has been going up, down, up, down — and at times felt like it was going sideways — I believe that there’s going to be an upward trajectory.”

 

David Goldsmith

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Staff member
And each other.

Fracas at 432: Macklowe, CIM quarrel at Billionaires’ Row tower​

Harry Macklowe claims partner swindled him out of millions; CIM aims to foreclose on developer’s condos

New York real estate hath no fury like a partner scorned.
Harry Macklowe and his 432 Park Avenue co-developer, CIM Group, are locked in a partners’ quarrel over the Billionaires’ Row condo tower — and are lobbing some catty accusations at each other.

Macklowe has accused Los Angeles-based CIM of “decid[ing] to swindle” him out of $110 million in distributions he says he’s owed for developing the uber-luxury building, where units routinely sell for tens of millions of dollars.
CIM, on the other hand, has called out the 86-year-old Macklowe’s “lavish lifestyle” and “grandiose behavior” as it looks to foreclose on more than $46 million in loans it provided the developer to buy three units in the building.

The dispute hinges on a purchase price agreement both sides worked out in 2011.
Macklowe bought the development site that would become 432 Park Avenue — the former Drake Hotel — for $413 million in 2006. But the developer ran into trouble during the financial crisis, and in 2010 CIM Group bailed him out and paid off his debts at the project.
In return, Macklowe sold his interests to CIM, which agreed to pay the developer a promote from future condo sales.
Under the terms of their amended agreement a year later, Macklowe was entitled to 20 percent of the profits once CIM got its initial investment back plus a 15 percent return. After CIM hit a 20 percent return, Macklowe’s compensation would jump to 50 percent of the profits.
Fast forward a decade to May of last year, and Macklowe bought three apartments in the building, which he claims he planned to pay for using the proceeds owed to him by CIM. But he says he received no payments. Instead, CIM agreed to lend him more than $46 million to buy the units.

CIM claims Macklowe defaulted on the loans a few months later.

That’s when Macklowe sent his partner a notice of arbitration — arguing that the 2011 amended agreement required them to settle out of court. CIM disagreed, saying that the arbitration provision doesn’t apply to the loans.
On Thursday, CIM filed a lawsuit in Manhattan Supreme Court asking a judge to stay the arbitration.
Representatives for Macklowe and CIM Group did not immediately respond to requests for comment.

In its legal filings, CIM depicts Macklowe as a deep-pocketed, flashy swashbuckler who simply chose not to repay his debts.
“Despite Macklowe’s great resources — and his recent high-profile expenditures on such things as a 24-by-42 foot photo installation of himself and his new wife on the side of 432 Park Avenue and his reported plan to purchase waterfront property in Miami that could total more than $58 million — he and his related entities have refused to pay the outstanding obligations on their loans, resulting in an event of default,” CIM’s lawyers wrote.
Macklowe claims CIM has turned an approximately $900 million profit at the project.
“The development is a success, and yet in over 13 years, Macklowe has not received any participation under the amended [agreement],” his attorneys wrote. They claim CIM is trying to get $107 million from Macklowe, including $47 million in interest on a $15 million advance.

“CIM had previously told Macklowe not to worry about the interest on the advance, and now they demand repayment of an outrageous sum,” Macklowe’s lawyers wrote.

It’s the latest example of drama at the condo tower, where residents in 2021 filed a $250 million lawsuit against the developers over claims of flooding, broken elevators and noise from the 96-story building swaying back and forth.

 

David Goldsmith

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Staff member

One High Line penthouse asking $52M snags contract​

Witkoff, Len Blavatnik’s Access Industries rebranded XI

The rebranded One High Line in West Chelsea could soon see one of its biggest success stories yet.
A penthouse apartment at 76 11th Street asking $52 million has entered contract, the Wall Street Journal reported. If the sale closes at that price, it would be one of the most expensive in the history of downtown Manhattan, where $50 million sales are rare in comparison to luxury enclaves uptown.

Some of the few $50 million residential real estate sales in downtown Manhattan include a penthouse at 70 Vestry Street in Tribeca that sold for $56 million and another Chelsea unit at the Getty, which sold for $59 million — both sales were in 2018.
The six-bedroom condo spans 7,000 square feet, providing 360-degree views of the Hudson River and Manhattan skyline, as well as a 5,000-square-foot terrace. The price per square foot would be more than $7,400 if the deal closes at $52 million.

Amenities at the building include a 75-foot lap pool and hot tub, a spa, a golf simulator and virtual gaming facilities.
The property was home to the most expensive contract signed in the borough in the last week of April, for a 5,700-square-foot penthouse that asked $28 million, down from $34 million when it first hit the market last summer.

The recent deals are votes of confidence for Steve Witkoff’s Witkoff Group and Len Blavatnik’s Access Industries, who purchased the troubled development, then known as The XI, for $900 million in December 2021. The partners acquired the property it in a foreclosure sale triggered by the troubles at HFZ Capital Group, which led to a pause in work in 2019.
The two-tower condo project will have 240 units, as well as 137 hotel rooms, 85,000 square feet of retail space and a public plaza. Construction is expected to wrap up in the winter of 2024.

Nine units at the new development went into contract last month.
 

David Goldsmith

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Extell adds $107M loan for its controversial Lincoln Square condo project
Funding is the latest installment on nearly $1B in financing for two projects

Extell Development is hoping that more money won’t mean more problems for its Lincoln Center condo development.
On Friday, the Gary Barnett-led firm received a $107 million building loan from Bank OZK for the 160-unit development at 36 West 66th Street, public records show.

It’s the latest in an ongoing series of installments from a $967 million construction financing loan the developer landed in February 2022. That loan covers work at the planned 25-story condo tower at 36-44 West 66th Street, as well as what will become the Upper West Side’s tallest tower — a 69-story residential skyscraper directly next door at 50 West 66th Street.
Extell acquired the parcels for a combined $130 million through two transactions. In 2014, the firm landed 44 West 66th Street for $45 million, then partnered with Megalith, which acquired the three adjacent buildings at 36-40 West 66th Street from Disney for $85 million.
Since the condo project’s filing in November 2015, the 37,000-square-foot site has been the center of several local dramas, mostly stemming from the proposed building’s height.
In 2019, Extell was hit with a lawsuit by the nonprofit City Club of New York after the developer scooped up $202 million worth of air rights at 15 West 65th Street from the Jewish Guild for the Blind and Disney.
The City Club claimed Barnett’s firm had violated zoning codes by planning four, mostly empty mechanical floors underneath the tower section of the building, artificially increasing the project’s height by roughly 200 feet.

It was also sued over claims that the developers were abusing the site’s address, which straddled two different zoning lots, by selectively picking and choosing which zoning codes to obey.

After a political maelstrom over the issue, the Department of Buildings wrote a letter to Extell threatening to revoke permits for the project, writing to the developers that the 160-foot mechanical spaces did not “meet the definition of ‘accessory use.’”
The lawsuits came to a head in 2020, when New York Supreme Court Justice Arthur F. Engoron ruled against Extell, vacating the existing permits and noting that under current zoning restrictions the DOB should have never issued a permit for the project to begin with.

However, in July 2021 that decision was overturned on appeal, allowing Extell to resume construction.
Last year, the project made headlines again after a sizable oil spill at the construction site was misreported by the fire department, which missed a zero when sending out a media report. It was 70 gallons of diesel — not 700 — that spilled out of the Extell construction site. No injuries were reported.

 

David Goldsmith

All Powerful Moderator
Staff member

Lender sues HFZ, Monroe over XI lifeline​

Creditor alleges scheme to shield Ziel Feldman’s assets

Ziel Feldman secured a lifeline from his lender Monroe Capital in late 2020, just as his development firm was on the verge of collapse.
The deal was costly. Feldman’s HFZ Capital Group, which was in default on $113 million in loans to Monroe, would hand over two of its most prized, albeit unfinished, projects: The XI, a twisting ultra-luxury condo development on the High Line, and the Shore Club Residences in Miami Beach.

In exchange, HFZ had a chance to make money once its debts to Monroe had been paid off.
Its Monroe loans were secured by a number of properties, including a penthouse where Feldman and his wife Helene lived. The couple also personally guaranteed the loan.

But more than two years after the deal with Monroe, another HFZ creditor is crying foul.
An entity tied to Israeli auto magnate Yoav Harlap is alleging the deal was fraudulent and was part of a scheme to shield HFZ and Feldman’s assets from creditors. Harlap’s attorney claims to have only recently found out about the agreement through discovery.
The lawsuit is the latest chapter in Harlap’s multi-year quest to collect on a $20 million loan that his YH Lex Estates provided to an HFZ project on the Upper East Side that was never built.
In early 2021, a judge ruled that YH Lex could go after Feldman’s former partner Nir Meir, whom Feldman blames for the firm’s collapse. A year later, an appellate court ruled YH could collect from Feldman as well.
But Harlap has had little luck collecting.

YH has aggressively pursued Meir, alleging the former HFZ executive and his wife were essentially playing “catch me if you can” by flocking to Miami Beach and splurging on fine wines, stays at the Four Seasons and over $1.5 million in gold. As part of the litigation, Meir was recently held in contempt of court for transferring money out of a restricted account.
But YH is now looking at deals Feldman cut with Monroe. The lender alleges HFZ transferred assets to Monroe for far less than they were worth, which left HFZ insolvent. YH alleged in the suit that the deals benefited the Feldmans, who continued to live in the $30 million penthouse because Monroe failed to take possession of it.

An attorney for HFZ, Y. David Scharf of Morrison Cohen, called YH’s allegations “scurrilous, irresponsible, false, frivolous and incapable of being supported by the facts.”
YH is trying to move ahead of the other HFZ creditors and investors who are part of a creditor’s trust, Scharf said.


Monroe also denies the allegations by YH and claims it has invested tens of millions of dollars to cure defaults and stabilize the assets.
“YH is a junior, unsecured creditor making an apparent attempt to jump to the front of the line ahead of other unsecured creditors,” said a spokesperson for Monroe Capital.
By YH’s account, Feldman and Helene could secretly retain certain assets, and they and HFZ will also get back-end payments when HFZ’s properties sell and Monroe’s debts have been paid, according to the lawsuit.
The lawsuit also draws attention to a second deal struck by HFZ and Monroe, in late 2021. YH alleges the deal gave Monroe control of the XI through “deed-in-a-box” foreclosure strategy. It also alleges HFZ set up sham entities to move assets beyond YH’s reach.
Monroe denied the allegations. In a court filing, it claims it purchased the defaulted senior and mezzanine debt on the XI project for about $900 million. It was the successful bidder at an auction and partnered with Witkoff and Len Blavatnik’s Access Industries to take control of the Chelsea project.

Monroe said the notion that the Feldmans are living for free in the penthouse and diverting assets is false. The lender is planning to force a sale of the penthouse, which will pay off its $20 million mortgage, and said any money paid to HFZ will be used to benefit its creditors, including YH.
YH’s attorney declined to comment on the litigation.

HFZ was once one of New York’s most active condo developers. It owned the Astor, the Belnord, the Chatsworth on the Upper West Side and the XI in Chelsea. Feldman has blamed Meir for the company’s collapse. Meir has said he’s not to blame.

 

David Goldsmith

All Powerful Moderator
Staff member

Auction set for 21 units at troubled Oosten condo
Chinese developer defaulted on loan at $372M Williamsburg project

A block of 21 unsold units in the beleaguered Oosten condominium is up for grabs, with some strings attached.
The ownership stake controlling the luxury apartments is set to be auctioned off July 25 in a UCC foreclosure after the Williamsburg project’s Chinese developer defaulted on a $45 million loan. But a beef with the condominium board might divert some proceeds of the sale.

Sale proceeds from the 21 units would be enough to cover the $36 million that XIN Development Management East’s ownership entity owed on the loan as of June 5, according to court documents filed by its attorney, Richard Shore of Nixon Peabody. Shore did not return requests for comment.
The loan was made by an Israeli lender and sold in November 2022 to First Realty Capital Holdings, which is pursuing the UCC foreclosure. Its attorney, Avery Mehlman at Herrick Feinstein, declined to comment. Greg Corbin of North Point is handling the auction.

The 216-unit Oosten was the first U.S. building designed by acclaimed Dutch architect Piet Boon and was developed on the Williamsburg waterfront in 2015 by XIN, the U.S. arm of Xinyuan Real Estate.
Its projected sellout of $372 million made it among the most expensive Brooklyn condominiums of the era. A full-block project at 429 Kent Avenue, it features an interior garden, roof deck and spa.
Missteps have long plagued the project, although it now appears to be 90 percent sold.
Xinyuan bought the site for $54 million in 2012 and tapped Halstead Property Development Marketing the following year to handle sales. Two years later, in 2015, Xinyuan filed a $10 million claim against the project’s designer, Wank Adams Slavin Associates.
A former general contractor, Wonder Works Construction, sued Xinyuan in 2017 for $20 million, alleging it was improperly terminated. One dissatisfied buyer also sued the Chinese firm.

Concerned about what was going on in New York, in December 2017, Xinyuan handed management of its local projects to Xin Fu Development, a joint venture with Kuafu Properties.
After Kuafu affiliate Silk Realty Group took over sales and marketing, Halstead sued in 2018, alleging the developer owed it nearly $1.3 million. That case was settled in 2020 and the Wonder Works suit was settled last year.

The Oosten’s legal troubles have continued, however, with the condo board accusing the board of construction defects and not paying common charges, among other failings.
The board’s attorney, Jeffrey Metz, a partner at Adam Leitman Bailey’s firm, has now asked the Appellate Division for a temporary restraining order to ensure proceeds of any sale are put into escrow to satisfy claims by the condo board, which has sued to collect on a previous settlement.

Claims of shoddy construction and numerous leaks were settled with the developer in June 2022, when XIN agreed to transfer to the board a unit worth $944,000 by the end of last month to house an on-site resident manager. The board was also to receive five handicapped parking spaces worth $325,000.
The board did receive $3.4 million in the settlement but when the apartment was not transferred as required, sources said, the board took over the parking spots. It now wants funds from the UCC foreclosure to buy the manager’s unit and pay $40,000 in attorney’s fees.
Complicating matters, several of the 21 units that are collateral for the $45 million mortgage are in contract to buyers, according to StreetEasy. The apartments, which could fetch about $58 million in those deals, are also subject to liens that total nearly $100,000 in unpaid common charges.
The board has also suggested the court could appoint a receiver and allow units in contract to be sold with the proceeds being placed in escrow until its lawsuit is resolved.
Three units were scheduled to be sold to others on June 16, 2023, but the board obtained a temporary stay on June 15. The stay was lifted on June 29, but the board is asking for a new restraining order and those sales have yet to take place.

An affidavit by XIN’s Jane Weng opposing the stay of those sales stated that $8 million in expected proceeds were to be paid to the lender, KM 429 Kent Avenue US Financing.
The board is worried that whoever buys the 21 units in the foreclosure sale will not honor the remaining terms of the settlement with the original developer.

 

David Goldsmith

All Powerful Moderator
Staff member

When music stopped at J&R site, “colossal failures” began: lawsuit
Project to replace famed retailer at 1 Park Row plagued by problems

The developer of 1 Park Row is suing its construction manager, alleging a subcontractor’s mistakes led to “colossal” issues and delays with the project.
1 Park Row Development claims construction manager MJM Associates Construction “utterly failed” to supervise JNR Flooring, which defied the project contract, triggered millions of dollars in damages and forced the owner to redesign the project to fit JNR’s “subpar” capabilities, according to a lawsuit filed in New York Supreme Court.

JNR also issued several subcontracts that 1 Park Row Development was unaware of, resulting in tens of thousands of dollars in liens against the property after JNR abandoned the project, the suit alleges. The owner is seeking at least $15 million in damages from MJM and JNR.
New Yorkers remember the project site as the former home of electronics store J&R Music and Computer World, which shut down in 2014. Owners Joe and Rachelle Friedman said then that the plan was to rebuild the storefront into an “unprecedented retailing concept and social mecca.”

Plans were eventually filed for a building with 63 apartments, three floors of office space and ground-floor retail. The deed was transferred in 2019 to 1 Park Row Development from 1 Park Row LLC, with Rachelle signing for both entities. Circle F Capital emerged as the developer and Parkview Financial provided a $90 million construction loan in 2021.
The lawsuit lays out small-potatoes billing disputes that foreshadowed larger problems. The site owner alleges MJM never reimbursed it for several payouts in the project’s early stages, including $40,000 in exchange for a lien release from a supplier and $45,000 for subcontractor services. MJM subcontractor JNR also “frequently” left the owner to foot bills, including a $37,000 fee to remove a drilling rig for an excavation pit in 2022.
MJM also racked up city violations and did not reimburse the owner. The 1 Park Row site has had more than 50 building violations since 2019 ranging from unsafe site conditions to failure to file energy-use benchmarking reports. The property also has 21 Environmental Control Board violations listed, 10 of which were issued to MJM, involving construction safety issues.
The relationship with MJM soured further when JNR was hired as a subcontractor for $9.5M last year to perform excavation, foundation, waterproofing and concrete superstructure work. During the first phase of construction, JNR pulled several “bait and switch” maneuvers in which approved machinery was not actually used on-site, according to the complaint.
In one instance, JNR brought a “massive, antiquated drill that clearly would not be able to reach certain pile locations or the required depth of the piles given its inability to maneuver around the site.”

In another, JNR brought a hydraulic crawler drill that was too big for the site and then requested design changes to accommodate it, the lawsuit said. The redesigns were not minor, the owner said, and included more beams.

“The additional transfer beams diminished the usable space in the office units, which negatively impacted the value of those units,” the lawsuit reads. “Neither MJM nor JNR ever reimbursed [the owner] for the additional structural work, either.”
The problems resulted in five months of delays, the lawsuit alleges.
JNR stayed on the project in December for the second phase and insisted that MJM stay on as construction manager and that 1 Park Row Development kick in another $1 million for completed work.

The owner said it reluctantly handed over the money to keep the troubled project moving.
During the second phase of construction work in February 2023, the owner’s architect inspected JNR’s work and found it was “plagued” by defects. In April, “every single item” on an inspector’s list failed to meet the building code, according to the lawsuit.
Errors found included JNR pouring concrete for the ground floor without approval from the design team; incorrectly placing slab edges and mechanical, electrical and fire protection items; and pouring columns to incorrect elevations and inconsistent with project plans.
“In another imprudent attempt to cut costs, JNR decided to chop the foundation wall—rather than saw cut it as specified in the project plans,” the complaint reads. “In so doing, JNR chopped into an existing Con Edison vault.”
Remediation efforts were performed between February and April, but JNR abandoned the effort by April 11, the lawsuit said.
 

David Goldsmith

All Powerful Moderator
Staff member

Reuben Brothers in on Extell’s $500M debt deal at Central Park Tower​

Supertall snagged support from British billionaires on real estate expansion tear


Gary Barnett is turning to big names in real estate and banking to refinance debt at Manhattan’s Central Park Tower.
Extell Development landed a $500 million loan at 217 West 57th Street provided by JPMorgan Chase and the British private equity firm Reuben brothers, a person familiar with the matter told Bloomberg. The loan will replenish and supplement another $500 million loan already paid down through condo sales.

The Real Deal previously reported Extell recently landed a $500 million condo inventory loan from JPMorgan Chase secured by 87 unsold apartments — about half of the inventory at the Billionaires’ Row tower — which had escaped initial attention after being erroneously reported as a mere $5 million loan.
None of the three parties involved have commented on the latest financing.

When the 179-unit building came to market, it was feted as the tallest residential building in the world, standing at 1,550 feet. Sales launched in 2018 and closings began three years later at the property, which boasts amenities such as a 60-foot pool, fitness center, sun deck and private dining room on the 100th floor.
It’s been home to notable transactions as recently as this month, when a trust tied to the France family of NASCAR purchased a sponsor unit for $16.8 million. That was $5 million off the asking price.

Discounts have been aplenty at Central Park Tower. Barnett originally forecasted a $4 billion sellout for the property, but a TRD Pro analysis in 2021 pegged the estimated sellout closer to $3 billion. Barnett acknowledged last year that the building was likely going to fall short of that mark.
The involvement of Reuben Brothers, led by British billionaires David and Simon Reuben, adds to the more than a half-dozen real estate investments they’ve made in New York in the past few years. Other deals have included the purchase of the Surrey Hotel and financing for the Time Hotel in Times Square.

In April, Reuben Brothers paid $1 billion for Michael Rosenfeld’s Century Plaza development in Los Angeles.
 

David Goldsmith

All Powerful Moderator
Staff member

Development slows decisively in Manhattan, and 30% citywide​

Filings for new housing plunge, REBNY report finds

Warnings of a Manhattan construction crisis are being born out by the numbers.
In the first half of the year, only 13 multifamily building permits were filed in the borough, the Daily News reported, citing a Real Estate Board of New York report. Just 21 building permits were filed overall.

Not since 2010 have so few first-half filings been recorded in Manhattan. The 10 filings in the second quarter represented a mere 3 percent of the city’s total.
Citywide, filings in the second quarter were a tad higher than in the first quarter, but were down year-over-year in every borough and 30 percent overall.

The 374 projects filed in the second quarter will not make much of a dent in the city’s housing shortage. Only 55 were for multifamily projects, totaling roughly 3,100 apartments, down 60 percent from a year ago.
The declines were expected, given the expiration of the 421a tax incentive in June 2022 and the 2026 completion deadline for pre-qualified projects to actually receive the tax break, without which rental projects typically cannot get financing.
“The lack of an incentive tells almost the whole story,” REBNY executive Zach Steinberg told the News.

Gov. Kathy Hochul last month announced a 421a alternative for Brooklyn’s Gowanus neighborhood. It’s not clear how many developers will seek it or if it will be expanded to other areas.

Queens had the most building permit filings in the second quarter with 131 — still a 26 percent drop year-over-year. The starkest decline came in the Bronx, where the drop was 3 percentage points worse than in Manhattan.
Politicians have set lofty goals for home construction. Gov. Kathy Hochul proposed a plan that she said would add 800,000 in 10 years, but legislators rejected it. Mayor Eric Adams set a “moonshot” goal of 500,000 new units by 2032, but did not lay out a plan to add that many, noting that achieving it would require action by the state.
While aspirations are lofty, results have not been.
“As the data shows over a long period of time, we’re just at low numbers and we’re not building nearly enough housing,” Open New York policy director Andrew Fine told the News.
 
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