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Category ArchiveGrand Central Terminal

Wells Fargo Renews Flagship Branch Lease in Midtown East

Wells Fargo has renewed its lease for its long-time flagship location at 437 Madison Avenue, Commercial Observer can first report.

The bank signed a five-year renewal for its 7,206-square-foot space at the William Kaufman Organization building, which spans the blockfront between East 49th and East 50th Streets. The lease includes 4,328 square feet of retail space on the ground floor and 2,878 square feet for offices on the lower level. The asking rent was $500 per square foot for the ground-floor space, a WKO press release indicates.

Wells Fargo has been a tenant in the 40-story, 850,000-square-foot building since 2003.

Michael Lenchner of Sage Realty Corporation, the leasing and management division of WKO, represented the landlord in the deal. In a prepared statement, Lenchner touted the building’s “visibility, high foot traffic and the convenience of being in close proximity to Rockefeller Center and Grand Central Terminal.” CBRE’s Annette Healey represented Wells Fargo. A CBRE spokeswoman said the broker declined to comment.

In 2016, Sage Realty completed a $60 million building-wide redevelopment of the property, which includes a redesigned lobby and arcade area, a new plaza, renovated elevators, upgraded building systems and a 15th-floor “sky lounge” with outdoor conference rooms and sunrise yoga classes.

WKO owns the building with Travelers Companies (the former developed the property and Travelers has been a partner since 1994). Tenants include Mitchell Silberberg & Knupp, which signed a lease for more than 18,500 square feet last month, as well as Citizens Bank, Omnicom Group, Medallion Financial, Kekst and Company and Carnegie Corporation of New York.

Source: commercial

NYC-Based Restoration Architect Lee Harris Pomeroy Dies at 85

Architect Lee Harris Pomeroy, known for his restoration work on historic structures and designing the 36-story Swiss Bank Tower in Midtown to resemble surrounding landmarks, died recently. He was 85.

Pomeroy led his eponymous firm, which eventually became called LHP Architects, for more than half a century until he died on Feb. 18, according to information provided by a representative at the company. The firm declined to disclose the cause of death and burial information.  

“He saw public architecture as one of the profession’s greatest callings and his work reflected this devotion and commitment,” according to a statement from LHP Architects. “One of his proudest achievements was his work on historic preservation, where he helped redefine how we thought about restoring and using public-use spaces.”

Some other LHP Architects restoration projects include working on enclosed masonry warehouse spaces constructed below the Brooklyn Bridge, rehabilitation work on the roof and ornamental copper work at Grand Central Terminal, revitalizing the Bleecker Street subway station in Lower Manhattan and designed public spaces and multi-level hotel suites in The Plaza Hotel. The company offices are currently at 275 Seventh Avenue between West 25th and West 26th Streets.   

LHP Architects has worked on various projects around the globe, including the Bin Hai Convention Center in Tianjin, China along with a 60-story hotel on the site. And LHP Architects has designed six underground subway stations for a new transit line for the Kolkata Metro in India.

Pomeroy, a Brooklyn native, was a professor of architecture at City College of New York for two decades.

He received many awards over the course of his career, including numerous honors from the New York Landmarks Conservancy, the Preservation League of New York State, the Victorian Society New York and the Municipal Art Society of New York. He also received a fellowship from the American Institute of Architects New York and was a member of the Royal Institute of British Architects.

Pomeroy received a bachelor’s degree in architecture from Rensselaer Polytechnic Institute in 1955 and a master’s in architecture from Yale School of Architecture in 1961.

He is survived by his wife, two children, seven grandchildren and a sister, as The New York Times reported.

Source: commercial

Gilmartin, Lapidus and Levinson Explain How They Started Their New Company, L&L MAG

MaryAnne Gilmartin rocked the real estate world last week when she announced she was leaving her post as Forest City New York’s chief executive officer to found a new company, L&L MAG, with L&L Holding Company executives David Levinson and Robert Lapidus.

Since joining Forest City in 1994, Gilmartin and her team have built the New York Times Building on Eighth Avenue, the Frank Gehry-designed rental tower at 8 Spruce Street and the Tata Innovation Center at Cornell Tech’s Roosevelt Island campus. And most famously, she has spent the last decade shepherding through the byzantine city approvals and construction of the first phase of Pacific Park (formerly Atlantic Yards), the $5 billion, 22-acre complex rising around an active Long Island Railroad yard. (So far, five out of 15 buildings and 800 out of planned 6,400 apartments—2,250 of which are supposed to be affordable—have gone up with Forest City facing a looming deadline of 2025 to deliver the rest of the below-market units.)

L&L, for its part, has a well-established reputation for developing, acquiring, and operating commercial properties in New York City. The 18-year-old firm is in the midst of redeveloping 390 Madison Avenue near Grand Central Terminal, building the Norman Foster-designed 425 Park Avenue from the ground up and planning a 700-room hotel and retail project, TSX Broadway, in Times Square. Levinson and Lapidus also happen to be partners in the New York Yankees (and often describe their business ventures in baseball metaphors).

The partnership coalesced because Gilmartin, 53, has a reputation as a fierce dealmaker, Lapidus, 57, and Levinson, 69, told Commercial Observer. Much like the L&L founders, Gilmartin has taken on massive, difficult projects with complex financing and elaborate architecture and dragged them from the drawing board to reality, in the process making her one of the most powerful women in New York City real estate.

Levinson, whom Gilmartin had known for nearly 20 years, approached her in late 2016 about starting a new venture. She jumped at the chance.

Gilmartin is making the switch not a moment too soon: Forest City announced last week that the subsidiary of China’s Greenland Group would up its stake in Pacific Park to 95 percent from 70 percent, whittling down Forest City’s ownership to a sliver of the sprawling project. The company also axed 20 people from its Brooklyn office.

Last week, at the Real Estate Board of New York banquet, Gilmartin, the new CEO of L&L MAG, spoke to Commercial Observer about the new firm. The next day she sat down with us along with Lapidus and Levinson at L&L’s (and L&L MAG’s) offices on West 57th Street to talk about how they met doing a deal with Bear Stearns, Gilmartin’s encounter with a CEO who had a Matt Lauer button behind his desk and New York City’s cooling residential market.

Commercial Observer: Are you concerned about doing new residential construction in New York City given that we’re in the middle of a luxury residential glut?

MaryAnne Gilmartin: I don’t think this company is so keen on building a lot of $40 million condos. I think real long-term value creators are interested in multifamily, not in condos. Condos are really a great allocator of land cost, so if you pay too much for the land, you often have to build condos to make it pencil out. So the goal of the company is to build for value creation over the long-term, through market cycles and beyond. And the multifamily business, in the depths of the recession, the vacancy rate never pierced 3 percent. And [there’s] a housing emergency. So you’d have to work really hard to build too much multifamily in the city. The issue of course is price of the land, making the numbers work. And that’s our job: We have to figure out where to go and how to find the land.

David Levinson: I think that’s exactly right. And your point about the condo market being soft is actually to our advantage because the land prices now go down. So with that market stalled for the near term…land prices are going to come down, and the opportunity for multifamily would increase. Good locations, quality projects. That’s the best way to mitigate the risks.

What kind of projects do you guys really want to pursue, and in what New York City markets are you looking to build?

Robert Lapidus: Clearly, we’re not in the commodity real estate business. We try to create special products, and there’s a rationale for that. It’s not just that we like to build pretty things, but the better products are better financial investments. I think it’s a philosophy David, MaryAnne and I all share.

Levinson: The kind of buildings we’re going to build are environmentally sustainable, architecturally interesting, beautiful. They’ll have amenities that help people with their health, like fresh air, outside spaces, places for people to collaborate and meet. It’s really how people want to live and work in the 21st century.

If you’re thoughtful about these things, it’s really no additional cost or [it’s a] marginal cost. We’re not really talking about huge, significant costs to be thoughtful about how you’re going to design a building, how you’re going to underwrite the building.

Gilmartin: The underwriting is challenging. When we built the Gehry tower, we had six lenders. It was a $670 million loan. To sit and talk about what Frank Gehry was going to do for the skyline, every floor as you got higher up was in this beautifully proportioned tower—we had to underwrite it as if it were a forgettable luxury rental building [so lenders wouldn’t feel intimidated by the cost of the project]. And I said to the lenders, “Let’s just do that because I think it’s 10 cents a floor in rent as you go up to the top.” Nobody wanted to hear about it. To David’s point, if you can build it as a commoditized product and figure out how to do that and not pay more, it’s such a home run because the value is there and it’s going to stay. And it’s almost as elastic [against] fluctuations in the marketplace. There’s not only a flight to quality, but the quality holds up in a downturn or market correction.

Levinson: It’s really the best way to mitigate the risk, to not build a commodity building.

Lapidus: Think of something as simple as LEED, which is commonplace these days. But if you’re planning a billion-dollar project, and you want to hit a certain level of LEED certification, it might cost you an extra $500,000 or a million dollars on a billion-dollar project to get that. Everything we do is about upfront planning and coordination. By the time you actually start doing the work, you’ve thought about everything. There’s always going to be things you can’t foresee, particularly in what Dave and I have done in the past with taking existing hundred-year-old buildings.

Like 390 Madison?

Lapidus: Everything: 200 Fifth, 390 [Madison], 195 [Broadway], 425 [Park Avenue]. But when you have the luxury of building ground-up, you have other issues to deal with, but you don’t have that uncertainty…It’s like a treasure hunt. Some of our buildings, like 150 Fifth, you’d peel things away and Dave’s like, “You got to come down here and look at this. It was the bishop’s vault.”

Gilmartin implied in an interview with us at the REBNY banquet that commercial was more the priority. Is that the case?

Lapidus: We’re opportunistic. L&L’s history is office buildings with ancillary retail. Obviously, the project we’re doing, TSX Broadway in Times Square, has no office, which is a departure. What attracted us to that was an iconic, once-in-a-lifetime location and the ability to create a 21st century product and a very, very complicated construction. It had all of those elements even though it wasn’t office. With MaryAnn’s pedigree and background, we think the world has opened up to us even more. We’ve looked at residential things at L&L but haven’t really done them. It’s a very different view now because MaryAnne and her team have executed those successfully many times.

Gilmartin: I think I had said [at REBNY] my first love was office because, when I first came into the business, I built office buildings at Forest City. That was my bread and butter. But then what Pacific Park did and Spruce Street did was open up a whole new avenue. That was the great thing about being at a company where, if you dared to dream it and defend it and it penciled out, they were game. I had a great run—built two hotels [former Embassy Suites at Battery Park and Hilton Times Square]. That’s the spirit around here, too [at L&L]. You have to be sensible and know what risks you’re taking, but there’s a lot of ambition and a lot of enthusiasm around the city. And inside of that anything is possible.

Can you talk about how this partnership came together?

Levinson: So Rob and I had really been talking about, from day one, creating a platform for the most talented people we could attract. And as our business grew and as the projects got more complex, there was more of an urgency in our minds to bring in the most talented people we could find. As the founders take a company from point A to point B, very often the platform needs to have new blood, new management, people that have their own vision and drive.

It had come to my attention that [Forest City] changed the nature of their business, and it made me think that potentially, knowing MaryAnne as a “hopeless developer,” as she says, that she could end up in a place where she could be constrained. She might not be able to reach her own aspirations as a professional developer.

We knew each other. We did a deal a zillion years ago, which was interesting and successful.

What deal?

Levinson: It was Bear Stearns. I was advising and representing them [as a broker with Insignia/ESG], and they did a [300,000-square-foot] deal at MetroTech in 2003. So we go back a very long way. We reached out to MaryAnne, and it was sort of like a “let’s catch up” social kind of thing, knowing in my mind where I really wanted to go with that conversation. Over a period of about a year and a half, it was sort of a courtship. I watched what was happening at Forest City, and it was unfolding the way I had anticipated. And it was getting a little clearer to MaryAnne what we had in mind, and we had this very fun enjoyable lunch at the 21 Club [in November 2016]. I think MaryAnne proposed something that was a little different than what I had contemplated. And she proposed her team potentially.

And that idea of her and her team was something Rob and I hadn’t even contemplated. But it was an awesome idea. Then we started thinking, “O.K., so how would this work? And what would be the structure of our deal?” MaryAnne was at the point in her career where she wasn’t going to just take a job working for somebody. She really was in a place in the world where she should be an owner of the business. And we were totally O.K. with that.

Gilmartin: I was on a career quest for sure. If I was going to leave, it was going to be different than it had been up until that point. The notion of being an owner in something versus being a well-paid CEO, that I was clear on. And I learned along the way that the definition of partnership is a very interesting conversation.

I can tell you how you can dance around that discussion to the point of being utterly exhausting because what you get to fundamentally is, “You’re a partner but…” Doesn’t mean you’re going to actually own anything. You’re just going to shill and then you’ll get a piece of the upside.

I can say from the onset, David said all the right stuff.

What I find remarkable is not just that we figured it out on a deal front, but I was able to feel comfortable and they felt comfortable with me, and these guys have been partners for 17 years. For me it was a great validator that they’re not clones of each other and that they were able to be successful, enjoy each other, have fun and make money.

What was the most uncomfortable situation you’ve been in as a woman in real estate?

Gilmartin: [Years ago, Bruce Ratner] and I went to Midtown to meet with [the CEO of a now-defunct investment bank about a lease]. We were arguing over a buck a foot in rent [in MetroTech]. So we go in, and [the CEO] is like, “These people could be in Calcutta for all I care. What do I care about Brooklyn?” And I was like, “Oh, this is going to go really well.” He literally had like a button, and the door closed, and then he lit up a cigar, and it was like 9:30 in the morning. I thought, “Where are we? I just want to get the buck and get out.”

And he started with “Oh, I read the paper today. Turns out you’re in bed with The New York Times.”

And he looks at me, and he looks at Bruce. I’m like, “O.K. this is a little off topic, what are you saying?” And he’s like, “You’re stopping the Freedom Tower [from] getting built, according to [New York Post reporter] Steve Cuozzo, because you can’t fill your building in Midtown.”

[When he struggled to find tenants and financing for The New York Times building in 2003, Ratner applied for $400 million in tax-exempt federal bonds that were earmarked for rebuilding New York City after 9/11, the Times and The Village Voice reported at the time. However, the government ultimately rejected his application for the financing.]

I’m like, “That’s kind of deep. You’re giving us a lot of credit.” And he said to me, “I think I’m going to try and hire you.” And I’m sitting there with Bruce Ratner, and I’m like, “This is not about the buck. I just want to talk about the buck!”

[Afterward] Bruce says to me, “I’m so sorry, I should have just gotten up and left.” We got the 75 cents [a square foot].

Then we go downstairs and Bruce is beyond upset. I said, “Bruce, stuff like that, people get their comeuppance.” And as the future would have it, things didn’t end so well [for that CEO]. We go downstairs, and there are all these black cars lined up, and Bruce’s driver was off or something, and we had to go to another meeting. So there’s a car right outside the door of [the bank].

We get in the car, and the [driver asks if we’re the CEO we just left]. And Bruce is like, “Yeah, I’m him.” So we take the black car, and we’re driving up Madison Avenue, and the guy starts getting calls: “Where are you? Where are you?” And he’s like, “I got the guy in my car.” And they’re like, “No. you don’t. He’s looking for his car.” So Bruce takes out $500 and says to the guy, “Take us where we’re going. It’ll be worth your while. It’s worth it to me for you to not [kick us out]. And I could easily get another cab. Here’s 500 bucks.” So Bruce and I [won] in our little Brooklyn way…We got the 75 cents, and we left, and we took the car.

This is my story of like, “As a woman in real estate, have you ever had any crazy [moments?]”…and I’m like, “Well, there was this one time…”

Do you think the gender dynamics and balance of power in real estate will ever shift enough that we can just talk about you in terms of being a developer, instead of being a female developer?

Gilmartin: I don’t do panels with women talking about women in real estate. Because you know what? It’s not going to change anything. I’ll do a panel with some men, and if women come up, I’ll talk about it. But it’s not going to change if women get together and just keep talking about how it has to change. The change starts when fellas like this decide they picked the best person for the job, man or woman, and it happens to be a woman. And then we go change the world. And then I go inside of the C-suite, I do what I do, it opens pathways for women. Fifty percent of the people I brought [to L&L MAG] are women. Then I go into a boardroom at Jefferies [the investment bank], a bunch of guys, and I’m on the board there, and that’s when we start talking about a new board member, and you know we’re going to have a conversation about putting women in the mix.

The change really has to come two ways. Women have to get into the C-suite and the boardroom. And men have to sign onto the mission. And then we change the world. And then it’s not going to be such a big deal. I know I’m the beneficiary of this very shallow pool where women aren’t doing what I’m doing. I’m not proud of that. There’s a lot of fuss about it, and it’s all really exciting. But, it’s also quite pathetic. It shouldn’t be that big a deal.

Levinson: I’m not giving Rob and myself any special credit, but for us…we didn’t really see MaryAnne as we’re partnering with a woman. It’s really more of a coincidence. Our job is to create the best platform we can and either hire or partner with the best people we can. It wasn’t like, “Let’s go find a woman because the world needs a woman CEO.” They do, but that’s more of a coincidence. And at this moment in time, it’s a benefit because I think people really like this idea by itself. But that’s not what it was about. It was 100 percent about the best people. We know what it means to field a great team. This is our Giancarlo Stanton [who just got picked up by the Yankees] moment.

Gilmartin: Recently someone was quoted in all these stories that were written about real estate and women and the “MeToo” moment and all that. Somebody said, “You know the reason it’s a boys club is because people want to be among people who are like them.” [That’s] as opposed to saying you want your business to reflect the people you serve. You look around at our city, and if the city is our clientele, what the hell? There better be some diversity. So I look at it more on the outside as, Who are we serving?

Source: commercial

Title Insurance Company Renews in Midtown East

Chicago Title Insurance Company recently hammered out a deal to stay in its longtime office space at SL Green Realty Corp.’s 711 Third Avenue, according to a release from CBRE.

The 160-year-old company renewed its 30,035 square feet on part of the fifth floor in the office building between East 44th and East 45th Streets, near Grand Central Terminal. The length of the lease and asking rent weren’t immediately available. The national firm first moved into the building in 1999.

Gary Rosen and Howard Tenenbaum handled the transaction in-house for SL Green. And CBRE’s Joseph Fabrizi and Arkady Smolyansky represented Chicago Title Insurance. Neither CBRE nor SL Green responded to requests for comment.

Other tenants in the 1956 office tower include information services firm Informa, consulting company McKinsey & Co., Ricoh USA, Ackman-Ziff Real Estate Group and Schlesinger Associates, as Commercial Observer has previously reported.

SL Green purchased the 19-story, half-million-square-foot commercial property for an undisclosed amount in 1998 and spent several million dollars renovating the 1956 building in 2010.

Source: commercial

Hoguet Newman Inks 13K-SF Deal to Relocate Within Midtown East

Women-owned law firm Hoguet Newman Regal & Kenney has signed a 12,700-square-foot deal at Empire Real Estate Trust’s One Grand Central Place, the landlord announced yesterday.

The firm will occupy the entire 48th floor of the 55-story building, which is located at 60 East 42nd Street between Park and Madison Avenues, across from Grand Central Terminal. The deal is for 10 years and the asking rent was $72 per square foot, as The New York Post first reported.

Hoguet, which has practices dedicated to commercial litigation, white collar defense, employment issues and the construction industry, is relocating from its current digs on the 35th floor of 10 East 40th Street between Madison and Fifth Avenues.

“Hoguet  was drawn to [the building’s] location, convenient in-building access to Grand Central Terminal and five subway lines, as well as the expansive views from their 48th floor offices,” Thomas Durels, an executive vice president at ESRT, said in a prepared statement. “Tenants enjoy in-building amenities including a new tenant-only conference center and dining options.”

Newmark Knight Frank’s Stephen Gordon brokered the deal for Hoguet, while NKF’s William Cohen, Brittany Silver and Jamie Jacobs represented the landlord along with ESRT’s Julie Christiano and Lindsay Godard. The NKF brokers did not immediately return a request for comment via a spokesman.

Existing tenants at the 1.3-million-square-foot building include 3i Debt Management, investment firm Pine Brook Partners and private grant foundation Robertson Foundation.

Source: commercial

Marijuana Dispensaries Are Here and Now—This Is How the Real Estate Is Playing Out

New York is slowly but surely getting into a California state of mind with ground-level retail marijuana dispensaries beginning to pop up across Manhattan. So far only a small handful of companies have been licensed by the New York State Health Department to sell medical marijuana in New York since Gov. Andrew Cuomo signed a 2014 bill legalizing medical cannabis (New York’s medical marijuana program launched in January 2016). And only three dispensaries have opened thus far, but experts say more are on their way.

“The addition of these registered organizations will make it easier for patients across the state to obtain medical marijuana, improve the affordability of medical marijuana products through the introduction of new competition and increase the variety of medical marijuana products available to patients,” New York Health Commissioner Dr. Howard Zucker said in a  press release this summer after the announcement that five more dispensaries would open in Manhattan and Brooklyn over the next year.

That means both landlords and real estate brokers are having to take a crash course on the logistics of hosting a tenant that deals in medical marijuana and the byzantine regulations surrounding a dispensary, including high levels of security and accessibility for extremely ill customers.

“At the moment, it is very much a novelty; people are not quite sure what to expect,” said Timothy King, a managing partner at CPEX Real Estate. “So while it might not be fair to paint a medical marijuana dispensary with the same brush as say a methadone clinic, it is possible that is seen as a noxious use in the minds of many landlords. But I think you will start to see that change as the concept of medical marijuana is less new to the New York area and people see what it is all about and what the clientele looks like. Perception frequently trumps reality.”

The latest landlord to embrace the new face of pot is Telepro Realty—owned by Kent Charugundla, the founder and chief executive officer of Eagle Teleconferencing Services. Telepro Realty leased a roughly 2,200-square-foot ground-level retail space at 142 East 39th Street between Lexington and Third Avenues to Etain,a women-owned medical marijuana dispensary, in the second quarter of this year. Asking rent was $25,000 per month, but all of the parties involved declined to comment on the true value of the several-years-long lease. The dispensary began taking appointments in July, and a few so-so Yelp reviews, which complain of the high prices yet praise the convenience, are already in.

“It was an unconventional deal because of the use, but rentwise, it would be competitive to what any other tenant would have paid for the space,” said Jake Velazquez of Compass, who represented the tenant. Michael Azarian, the director of retail services at Cushman & Wakefield, represented the landlord.

Both brokers said that it was a unique and, at times, difficult deal to negotiate.

“I get blow back on restaurants, so you can only imagine the blow back I got from landlords on this,” Velazquez said of his experience hunting for space. “Usually, they would just say, ‘Ownership won’t take that use,’ and we’d have to move on. It’s a new industry with a lot of regulation, so everyone is sensitive about it. A lot of landlords don’t want to be early adopters of something like this. I got crazy questions about what kinds of smells it would produce.”

However, since the dispensary is not allowed to sell any marijuana flower and will only deal in oils intended mostly for pain management, smell isn’t a particular issue at the moment, according to Azarian. Generally speaking, landlords, he added, were more concerned about consumption on site, liability and security.

“It highly regulated and highly controlled. This isn’t going to be a place where people will be hanging out,” he said. 

Velazquez added that it was also a challenge to find a space in the city that met both state and federal regulations and was extremely accessible for patients. The East Side of Manhattan was selected because of its proximity to city hospitals. Also, like liquor stores, dispensaries are not allowed near schools and churches. Unlike liquor stores, multiple state agencies have to approve the location—a frustratingly tedious process.

High Times reported that the state’s program failed to receive even 1,000 patients in its first year. That is partially because the state only licensed five dispensaries and only allows them to sell expensive, pharmaceutical-like products. They have since approved chronic pain and PTSD as qualified conditions, but businesses say they have been unable to turn a profit since they opened nearly two years ago.

“I believe this to be a true statement, which is no registered organization has made even a penny in profits since day one,” Ari Hoffnung, CEO of Queens-based Vireo Health of New York, told USA Today.

Velazquez focused his search near transportation hubs like Union Square and Grand Central Terminal. He said that, while Etain wasn’t initially looking for ground-floor retail, it quickly became the best option.

“For one, a retail storefront comes with a certain level of signage,” he said. “It is sort of a first for a dispensary in New York to have pedestrians seeing a dispensary as they walk by.”

Azarian said that the deal was able to come together with relative ease because the landlord in this case is an independent owner with no partners and not an institution.

“He was able to make the sole decision as to whether he would accept the use or not,” Azarian said. “He is also in the tech world, so I think he has a very different outlook than your typical New York landlord. He has a futuristic and visionary perspective and thought that this could be a cool thing to be a part of, considering that [Etain] is a grassroots operation in New York.”

The nature of the deal, however, necessarily differed from your standard retail lease, according to Azarian. For one, the duration of lease had to be shortened to reflect the maximum licensing period and renewal process for a dispensary. The final lease came with “option periods,” he said.

“One thing we learned is patience,” Azarian said. “Once the tenant was able to commit to the space and the landlord was able to commit to the transaction, there are regulator procedures that have to play out and that takes time. It’s not a ‘one, two, three’ thing.”

“I think it takes some one who has an open mind and understands that this is going to become more common in our state and city,” he added. “There is still a stigma to overcome, but now that these tenants are highly funded and backed by venture capital, they are becoming more and more attractive to landlords.”

Source: commercial

Hunt Mortgage Group Lends $25M to Refinance Poughkeepsie Apartments

The Kamson Corporation has sealed a $25 million Freddie Mac loan to refinance an apartment complex in Poughkeepsie, N.Y., Commercial Observer can first report.

New York City-based Hunt Mortgage Group provided the 30-year loan—with a seven-year fixed rate—on the development, Mountain Brook Apartments. Shloime Goldstein, of Brooklyn’s Skyline Capital, brokered the deal.

Mountain Brook, located at 134-154 Innis Avenue, is about two mile northwest of downtown Poughkeepsie. Its 17 buildings, built in 1965, comprise 288 one-, two- and three-bedroom  rental apartments, totaling 242,000 square feet. The site also features a playground and a small swimming pool.

Since purchasing the complex in early 2016, Kamson has “implemented a capital-improvement program that includes roof replacements, apartment renovations and installation of a security system which has helped successfully improve overall operations,” Steven Cox, a managing director at Hunt Mortgage Group, said in a statement. “The refinance will enable the borrower to implement additional capital improvements and possibly acquire more multifamily assets in and around the New York City metropolitan market.”

Mountain Brook is nearly fully occupied, according to the lender.

Median residential rents in Poughkeepsie have risen slightly this year, up about 8 percent from last September to $1,800, according to Trulia. Sixty-eight percent of residents are homeowners, and the median household income is just under $64,000.

The city marks the northern terminal of Metro-North Railroad’s Hudson line. A rush-hour one-way trip to Grand Central Terminal takes about 100 minutes.

Representatives from Hunt Mortgage, Kamson and Skyline Capital did not respond to requests for comment.

Source: commercial

Midtown East Rezoning Clears Final Hurdle

The City Council today finalized new zoning for Midtown East that will allow private developers to build new office towers and require them to contribute funding for public improvements.

The new land use framework will boost the potential density and height of new commercial buildings along 78 blocks of Midtown, from East 39th to East 57th Streets and from the east side of Third Avenue to the west side of Madison Avenue. The city predicts that the zoning will pave the way for 6.8 million square feet of new office space and encourage the renovation of 6.6 million square feet of older offices into newer, Class A space.

The proposal has evolved several times since it was first introduced by the Bloomberg administration in April 2012 and subsequently killed by the City Council in November 2013.

City Councilman Dan Garodnick, who helped shoot down the Bloomberg-era rezoning, worked with Manhattan Borough President Gale Brewer to draft a new set of recommendations for East Midtown in November 2015. Their updated plan focused on ensuring that developers kicked in funding for key transit and street improvements.

“With this vote, we are breathing new life into New York’s most important business district,” Garodnick said in prepared remarks following the final vote this afternoon. “Not only will we see sensible growth, but the public will benefit from extraordinary new investments in above-ground public spaces and in below-ground subway infrastructure. Better transit, new jobs, top-of-the-line office space: East Midtown is back, full of optimism and open for business.”

The latest version of the zoning entered public review in January, but some new details were hashed out when the City Council’s Land Use Committee greenlighted the plan last month.

The city approved $50 million in capital funds for public spaces, including widening sidewalks and restricting car access on East 43rd Street between Lexington and Third Avenues, a revamp of Pershing Plaza by Grand Central Terminal, and street improvements along East 53rd Street and Lexington Avenue.

The new Midtown East zoning will allow developers to use extra floor area in new buildings via one of three avenues: tapping into a pool of 3.5 million square feet of unused air rights for landmarked buildings, funding transit or streetscape improvements, or redeveloping an office building that’s built larger than current zoning allows. The rules are based on the rezoning that city crafted for One Vanderbilt. Developer SL Green must perform $220 million worth of transit improvements around the Grand Central Terminal subway station before it can get a certificate of occupancy from the city.

Under the Midtown East plan, developers can only use landmark air rights if they pay 20 percent of the value of the sale of the air rights to the city. After the Real Estate Board of New York and owners of landmark buildings fought the city’s proposed air rights floor of $78 a square foot, the city agreed to lower the minimum contribution to $61.49 a square foot.

“East Midtown’s growth is now directly linked to real-time improvements in its public transit and public realm,” Mayor Bill de Blasio said in prepared comments. “In the years ahead, this neighborhood will see major upgrades to subway stations, more expansive space for pedestrians, investments in its iconic landmarks and a new generation of office buildings that will spur good jobs for New Yorkers.”

Source: commercial

Grand Central Sleeper No More

Source: commercial

Schlesinger Takes Full Floor at SL Green’s 711 Third Avenue

Source: commercial