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Hudson Yards

Hudson Yards, the largest private development in the United States and comprised of more than 18 million square feet of mixed-use space, is now one year away from opening and set to transform life in New York City. A model for future development, Hudson Yards is poised to become a global destination, reimagining urbanization and how we live in cities.

Developed by Related Companies and Oxford Properties Group, Hudson Yards is the fulfillment of a shared vision of a remarkable collaboration of planners, architects, engineers, designers, business leaders, and luminaries, working in partnership with New York’s development and transportation authorities.

Hudson Yards is an entirely new neighborhood on Manhattan’s West Side with  more than 100 shops and restaurants, including New York City’s first Neiman Marcus and signature restaurants and food experiences by Chefs and restauranteurs Thomas Keller, José Andrés, David Chang, Michael Lomonaco, Costas Spiliadis, rhubarb and D&D London; approximately 4,000 residences; The Shed, New York’s first arts center to commission new work across the performing arts, visual arts, and popular culture; 14 acres of public open space, a 750-seat public school, and an Equinox® branded luxury hotel with more than 200 rooms, all offering unparalleled amenities for residents, employees, and guests. The development of Hudson Yards will create more than 23,000 construction jobs.

The Expanding Hudson Yards District

Following the initial Hudson Yards development plan, the City and State have initiated enormous public investment in infrastructure, mass transit, new parks, cultural, and recreational facilities. These improvements, with Hudson Yards at the epicenter, have transformed the surrounding area and catalyzed rapid development of the now expanding Hudson Yards District.

This unprecedented volume of investments includes the $2.4 billion No. 7 Subway Extension, the $267 million Moynihan Station Extension, the $465 million renovation of the Javits Center, the $440 million development of Hudson River Park and $30 million Hudson Park & Boulevard, and the $190 million investment in the High Line, all resulting in world-renowned companies competing to participate in the creation of Manhattan’s newest neighborhood.

Related Companies and Brookfield Property Partners are the two most active developers in the Hudson Yards District. Related, in addition to its 28-acre development with Oxford Properties Group, has more than half a dozen projects including 515 West 18th Street by Heatherwick Studio that will include a collection of 180 one-, two-, three- and four-bedroom residences in two towers that connect beneath the High Line. Brookfield Property Partners is developing the Manhattan West area of the Hudson Yards District, which is a 5.4 million-square-foot mixed-use development consisting of five buildings and a 1.5-acre public park. Silverstein Properties is developing 520 West 41st Street, a residential condominium consisting of 499 units and rising 57 floors. The Moinian Group has been extensively invested in Manhattan’s Far West Side, with the largest ongoing project at 3 Hudson Boulevard, a 53-story, 1.8 million-square-foot office tower. Tishman Speyer’s Bjarke Ingels-designed office building at 509 West 34th Street, “the Spiral,” is expected to span 2.2 million square feet, with Pfizer agreeing to take 800,000 square feet and become the building’s anchor tenant. Another Bjarke Ingels-designed building is among the largest currently under construction, HFZ’s 76 Eleventh Avenue, known as the Eleventh, which will feature two towers, 25 and 35 stories, that will span 764,332 square feet. The Chetrit Group is developing a 46-story, hotel and residential building planned for 545 West 37th Street.

the shops and restaurants looking east from the plaza courtesy of related oxford Hudson Yards
The Shops and Restaurants Looking East from the Plaza

Momentum is Building

Momentum has been building over the past year, with The Shops & Restaurants at Hudson Yards now 70 percent leased. Landscaping on the five-acre Public Square and Gardens is set to begin, and Thomas Heatherwick’s Vessel, the centerpiece of Hudson Yards’ future Public Square and Gardens, has topped out, with all scheduled to open March 2019.

“The excitement surrounding the Hudson Yards neighborhood has far exceeded everyone’s expectations,” said Jeff Blau, CEO of Related Companies. “With more than half of the 285 residences currently on the market selling in less than a year and a half, and 92 percent of our available commercial office space already spoken for, we have demonstrated that Hudson Yards is where New Yorkers want to live and work.”

10 Hudson Yards, home to the global headquarters of Tapestry (Coach Inc., Kate Spade, Stuart Weitzman), L’Oréal USA, SAP, and The Boston Consulting Group, is now open and welcomes 6,000 employees every day. Additional companies that call 10 Hudson Yards home include VaynerMedia, Intersection, Sidewalk Labs, Crescent Capital Group, Ardea Partners, Chain Bridge Asset Management, and Intercept Pharmaceuticals.

15 Hudson Yards, the site’s first residential building to launch sales, has topped out with first move-ins for residents slated for December 2018. Designed by Diller Scofidio + Renfro in collaboration with Rockwell Group, the 70-story tower will offer both condominium and rental units, and sales for the 285 one- to four-bedroom condominium units are underway.

55 Hudson Yards will open later this year, with design of the 51-story, 780-foot tower led by Kohn Pedersen Fox. 55 Hudson Yards is home to Arosa Capital Management; Boies, Schiller & Flexner; Cooley LLP; Engineers Gate; HealthCor Management; MarketAxess; Milbank, Tweed, Hadley & McCloy LLP; Point72; Third Point LLC; and Silver Lake.

Construction on the second phase of the Western Rail Yard platform, located between 30th and 33rd Streets, from 11th to 12th Avenue, is also scheduled to begin in 2018.

The Observation Deck at 30 Hudson Yards is set to begin construction. 30 Hudson Yards, which is home to DNB Bank, Kohlberg, Kravis & Roberts (KKR), Time Warner Inc., and Wells Fargo Securities, will open in early 2019, along with the site’s mixed-use tower, 35 Hudson Yards, which will follow in late 2019. 50 Hudson Yards, the future home of BlackRock, will open in 2022.

One-of-a-Kind Health Care Service

Related and Oxford also recently announced a partnership with Mount Sinai Health System, and the creation of an 18,000-square-foot, state-of-the-art health center on the second floor of 55 Hudson Yards that will provide comprehensive, convenient, and exclusive care to all employees, residents, and families living in their Hudson Yards district buildings.

Scheduled to begin operations in early 2019, the health care service portfolio created by Mount Sinai will be a great complement to the Hudson Yards community. The addition of Mount Sinai and the Hudson Yards Health Center to Manhattan’s West Side community was a crucial component for Related and Oxford in curating the 24/7 mixed-use neighborhood. Comprehensive health care services will be delivered by a world-class team of medical experts led by distinguished internist Tina Sindwani, M.D.

3hb renderings 10 30 2017 hudson hero 3840x2160 Hudson Yards
3 Hudson Manhattan West

3 Hudson Boulevard

Developed by The Moinian Group, construction is underway at 3 Hudson Boulevard, a 53-story, 2 million-square-foot office tower designed by prominent architect Dan Kaplan of FXFOWLE and set to occupy the entire square block between 11th Avenue and Hudson Boulevard Park from West 34th Street to West 35th Street. Situated in the heart of the Hudson Yards District, directly across from the Javits Center, 3 Hudson Boulevard is adjacent to Hudson Boulevard Park, which includes a full complement of fountains, green space, public seating, and event space. The site also is intertwined underground with the 7 Subway Extension.

Committed to environmentally sustainable design for the 21st Century, 3 Hudson Boulevard will rise as a gently-turning tower of glass adorned with an array of solar panels on its southern and eastern facades, and a curtain wall comprised of spectrally selective glass with low-emissivity coatings for enhanced comfort, and environmental performance. This solar power generating tower will set a new standard for mixed-use development by uniting premium corporate offices and the most exclusive residences with the state of the art in modern green architecture. 3 Hudson Boulevard will provide corporate tenants with more than 1.8 million square feet of high performance, Class A office space, and the office lobby will offer a grand entry gracefully expressed in stone, sustainable wood and illuminated glass.

“The Hudson Yards District is transforming right before our very eyes,” said Joseph Moinian, Chief Executive Officer of The Moinian Group.” We are passionate about New York, and hope our Class A office tower, envisioned at the highest levels of excellence both for today and far into the future, will come to be synonymous with the City itself, and the pinnacle of modern design.”

“3 Hudson Boulevard is an elegant tower that brings a timeless presence to the skyline,” said Dan Kaplan, FAIA LEED AP, and Senior Partner of FXFOWLE, responsible for design of the tower. “State-of the-art office planning coupled with sustainable design practices creates the ideal workplace environment.”

the spiral cascading terraces Hudson Yards
The Spiral

The Spiral

Developed by Tishman Speyer, The Spiral is a 65-story, 1,005-foot-tall office tower consisting of 2.85 million square feet of sustainable Class A office space and 27,000 square feet of first-class retail. A cascading series of landscaped terraces and hanging gardens will define the signature building with readily accessible outdoor space catering to a dynamic, mixed-use urban community.

Designed by renowned architectural firm Bjarke Ingels Group, The Spiral tapers vertically with green spaces circling from base to top, with terraces that will provide each floor with outdoor space and multi-floor atria for dynamic work space flow or unique meeting areas. Center-core open floor plans will allow for flexible configurations, while soaring ceiling heights and virtually column-free floor plates will provide spectacular, unobstructed city and river views.

Located on Hudson Boulevard at the northern tip of the High Line elevated park, The Spiral will occupy an entire city block between 34th and 35th Streets. Directly facing The Spiral’s entrance is the newly extended 7 Train, providing an easy commute to Grand Central Terminal and the rest of Manhattan.

The tower’s 30-foot-tall lobby opens onto Hudson Boulevard Park, further extending access to urban green space and offering highly-desirable ground-floor retail. The Spiral’s focus on sustainability and green construction complements the adjacent acres of newly developed green space, including the final phase of the High Line and the 550-acre Hudson River Park, with its miles of bike and jogging paths. The Spiral is targeting LEED certification.

Residential Offerings

Related Companies also has two rental buildings, Abington House and One Hudson Yards, located on 30th Street and a boutique condo building on 28th Street by Zaha Hadid.

Both Related rental buildings are built along the High Line just south of its 28-acre Hudson Yards development and offer a suite of amenities that can’t be found in any other rental buildings throughout the Hudson Yards district. In addition to landscaped terraces and barbeque areas, Related residents living in these two buildings have access to a suite of swimming pools comprised of an 82-foot lap pool, plunge pool, salt pool and hot tub, a spa with a sauna and steam room, a fitness center curated by Equinox®, a half-court basketball court, bowling alley and game lounge with a pool table, foosball and shuffle board, as well as a Roto designed children’s playroom with a custom climbing gym.

The 11-story Zaha Hadid designed building at 520 West 28th Street features 39 distinctive residences of up to a 6,391 square feet and ceiling heights up to nearly 11 feet high. Strategically situated on the High Line, the property is also located just two blocks from Related and Oxford’s Hudson Yards development. Amenities include a 75-foot sky lit pool, a private IMAX theater, an entertainment suite with a High Line Terrace and a private reservable spa suite.

TF Cornerstone developed the first luxury residential building in Hudson Yards, and has long been committed to the West Side, beginning their foray into the area with 444 West 35th Street, completed in 1990. In 2002 they spearheaded the rezoning of two development sites, 505 and 455 West 37th Streets, which has acted as a catalyst for the rezoning of the Hudson Yards neighborhood. Both properties are completed and successfully leased with 99 percent occupancy. Kevin P. Singleton, executive vice president at TF Cornerstone, remains chairman of the Hudson Yards Hell’s Kitchen Alliance BID (HYHK Alliance).

Designed by award-winning Handel Architects, 455 West 37th Street is a 23-story, 394-unit residential rental property with 24-hour concierge, bicycle storage, fitness center, floor-to-ceiling windows, parking garage, and landscaped roof deck. Many residences also offer private balconies or terraces with city views. The property has approximately 20,000 square feet of retail.

505 West 37th Street is an 835-unit residential rental property, with two towers consisting of 34 and 43 floors. Designed by Handel Architects, the property offers two roof decks, 24-hour concierge, bicycle storage, fitness center, floor-to-ceiling windows, garden, landscaped rooftop terraces, infinity-edged pool.

manwest jpeg Hudson Yards
Manhattan West

Manhattan West

Brookfield Properties is developing Manhattan West, an eight-acre, six-building mixed-use development stretching from Ninth to Tenth Avenue, and 31st to 33rd Streets. Manhattan West will include more than five million square feet of custom designed state-of-the-art class-A office space, luxury apartments, a boutique hotel, curated retail amenities, chef-inspired culinary options, and two acres of open space, as well as Arts Brookfield, Brookfield’s award-winning arts and entertainment program.

Manhattan West provides unparalleled transportation access. The site sits directly between the soon-to-be-redeveloped Penn Station – the busiest train station in North America – and the new 7-train station at Hudson Yards, New York City’s first subway extension in decades. It is also one block from the A, C, E, 1, 2, 3 and 7 subway lines, New Jersey Transit, the Long Island Railroad and Amtrak.

One Manhattan West is currently under construction, with the future 67-story building scheduled for completion in 2019. Ernst & Young plans to move its U.S. headquarters from 5 Times Square to One Manhattan West, where it has signed a lease to take 600,000 square feet on 17 floors. The law firm Skadden, Arps, Slate, Meagher & Flom LLP have also been confirmed as tenants. Other tenants include EY, McKool Smith, Accenture, as well as the new headquarters for the NHL. The property offers efficiencies afforded by virtually column-free floor plates, multiple on-site amenities, robust infrastructure, high ceilings, excellent light, and views in all directions. The project is scheduled for completion in the fourth quarter of 2019.

At Two Manhattan West, a second two-million-square-foot office tower will be constructed when an anchor tenant is secured. The adjacent amenities and green space provide an incomparable urban campus environment. Below-grade work has commenced.

Five Manhattan West, formerly known as 450 West 33rd Street, is the cornerstone of the new Manhattan West community. In 2017, Brookfield completed a comprehensive $350 million redevelopment program designed by celebrated architect Joshua Prince-Ramus of REX that fully modernized and integrated the building into the Manhattan West campus. Ideal for TAMI (technology, advertising, media and information) tenants, Five Manhattan West is one of a handful of buildings in New York City with floor plates larger than 100,000-square-feet. The building’s current tenant roster includes R/GA, Markit and JPMorgan Chase. In March 2017, it was announced Whole Foods Market signed a 60,000-square-foot retail lease at Five Manhattan West and in September 2017, Amazon inked a deal for 360,000-square-feet. Five Manhattan West also has a public plaza, called Magnolia Court.

The Lofts at Manhattan is a 202,000-square-foot, 13 story office property featuring 15,000-square-foot floor plates, and a 3,000-square-foot rooftop terrace. Fitting for a tenant seeking a “building within a building” opportunity, it has two separate lobby entrances and elevator banks, one for a tenant occupying a significant portion of the building with branding opportunities and the other for remaining tenants. In December 2017, international co-working operator Spaces signed a lease for 103,000-square-feet, bringing the building to nearly 100% leased.

The Eugene is an 844-unit, 62- story luxury residential tower which opened in March 2017. Residents experience more than 50,000 square feet of lifestyle and recreational amenities including La Palestra fitness classes, nutritionists and physical therapy, amenities and personalized care services provided by LIVunLtd, a playroom, regulation-sized indoor basketball court, rock climbing wall and more. The Eugene also features The Hudson Club, an exclusive, rooftop members-only club featuring a sunroom with cocktail bar, a private dining room with chef’s kitchen, a poker/game room, a piano lounge with a fireplace, and a 4,600-square-foot rooftop terrace, complete with barbeque areas and panoramic views. 20 percent of the building’s units are affordable housing.

The Manhattan West campus will be transected by a two-acre public park designed by High Line architects James Corner Field Operations, featuring year-round arts and events programming by Arts Brookfield which produces over 400 events globally. Over 200,000 square-feet of carefully curated food, retail and pop-up experiences will be available. Plans also call for a boutique hotel to be developed within Manhattan West

zaha exterior facade courtesy of tim schenck Hudson Yards
Zaha Hadid exterior

A Model of Energy Efficiency

Energy efficiency, sustainability and design are the most important trends for architects working with sophisticated glass architecture, and the demands are increasing continually, especially for large-area glass façades. AGC Interpane has responded to these trends with the widest and most comprehensive range of solar control glazing on the market.

The technical requirements for solar control glazing in sophisticated buildings include a low total energy transmittance, excellent thermal insulation, and the highest possible transparency. Visual qualities regarding color and reflectivity are also of great importance to designers. AGC Interpane is providing more than 2.2 million square feet of solar control glazing on five towers currently under construction, including 10, 15, 30, 35, and 55 Hudson Yards.

“Hudson Yards is the most prominent project we currently have,” said Marc Everling, Head of Marketing and Communications for AGC Interpane. “Our products ipasol neutral, ipasol platin and Stopray Vision were technically and aesthetically the perfect match for the project.“

AGC Interpane’s newest service for architects and investors, called “Coating on Demand,” allows architects to develop unique coated glass products for facades and windows tailored precisely to their needs. The result is a unique product that an architect and investor can use to create their own iconic building, as AGC will not use the same solution for any other project again.

Unparalleled Power Generation

H.O. Penn CAT Power Systems, a full-service power generation provider for New York, has installed approximately 36 megawatts of standby diesel generators at Related properties including 10, 15, 30, 35 and 55 Hudson Yards.

All generators are equipped with Tier 4 final emissions and are anticipated to be enrolled in a demand response program.  During times of peak electricity demand or an emergency, these generators will be utilized to reduce the strain on city’s electricity grid. Demand Response contributes to maintaining the reliability of New York’s power infrastructure, avoiding brownouts or blackouts caused by extreme weather or supply disruptions.  HO Penn, which has been involved with the Hudson Yards project for approximately three years provides a full project management team, support staff, as well as a full team of service specialists.

“With over 36 megawatts of standby power equipped for New York City’s demand response program this has been one of the most exciting projects that H.O Penn has had the honor of being a part of,” said Robert Muir, HO Penn Sales Engineer.

55 hudson yards looking west from 34th st courtesy of related oxford mitsui Hudson Yards
55 Hudson Yards, Looking West from 34th St.

High-End Building Management and IT Systems

TEC Systems is currently involved in the construction of 15 Hudson Yards, 35 Hudson Yards, and One Manhattan West. Projects range from the design and installation of building management systems to converged IT infrastructure.

The state of the art technology being installed supports BMS, DAS, Wi-Fi, telephony, electric sub-metering, video, access control and other systems vital to operations. TEC Systems holistic approach ensures that these building systems are securely and seamlessly working together from day one, and properly positioned to meet future needs.

“Converged IT infrastructure supports unified building technologies while simplifying commissioning, operation, maintenance, and complexity of equipment, cabling, labor and future modifications,” said Barry Fagan, Vice President, TEC Systems. “With lower CAPEX and OPEX costs, this provides a higher return on investment.”

The company’s services run the gamut of the industry, and include distinguished design/build support, as well as new construction plans and specifications. Utilizing product lines from Honeywell, Echelon, American Auto Matrix, and more, TEC Systems creates custom-made, state-of-the-art solutions for the most challenging building automation needs.

Source: commercial

The Year of the Deal: Drew Anderman’s Team at Meridian Closed $3 Billion in 2017

It’s hard to determine the exact highlights of a year like the one Drew Anderman and his team at Meridian Capital Group had in 2017, when a slew of impressive deals led them to over $3 billion in business. But with so many significant deals over a wide range of property types, several stand out not just as great achievements on their own, but as bellwethers for more of the same in 2018.

Reflecting on a complex $126 million deal in northern New Jersey in 2017 for a class-A multifamily high rise that, when it closed, didn’t have a certificate of occupancy, Anderman, a 20-year veteran of commercial real estate finance, sees it as a potential model for more to come.

“We were brought into the deal when it was probably 85 percent complete,” he said. “We were hired to replace the existing lender with a new lender so that the sponsor could complete a buyout of his partners and complete the project,” he said.

“It’s difficult to replace one construction lender with another mid-stream. We were able to structure a deal with a lender that wanted to start a relationship with the sponsor, knew the market, and was comfortable taking the risk that the certificate of occupancy would come in a timely fashion. It was a very challenging deal, it took a lot of work, but we knew we could get it done.”

The New Jersey transaction is also an example of Anderman’s work with transitional properties, another promising area for him and the Meridian team in 2018.

“These deals require a lot of structure, a lot of thought, and a lot of analysis. They’re very hard to complete. Deals that could use our expertise to be recapitalized will be a theme for us in 2018.”

Anderman is also excited about avenues to overseas capital he initiated in 2017, having just returned from Korea before the New Year.

“We met with 20 leading insurance companies, pension funds, and credit unions,” Anderman said. “One thing we’re working on for 2018 is matching up overseas capital sources that want to invest in or lend on high-quality U.S. assets in seven or eight major cities. One of my associates just did a high-profile deal on Fifth Avenue where a Korean company did an $80 million mezzanine loan on top of the senior. We’re making a lot of inroads there.”

Agency loans were also a focus for Anderman’s team in 2017, and will continue to be in the year ahead.

“We have, and will continue to have, a robust pipeline of agency business,” said Anderman, a 20-year veteran of commercial real estate finance.

“We’re currently working on a $220 million acquisition loan for a portfolio of 25 properties totaling about 4,000 units spread across five states in the Midwest and Mid-Atlantic, which is primarily affordable, Section 8 housing. We will likely finance all or a large part of that portfolio with the agencies. Our business plan for 2018 includes maximizing our agency origination as the agencies continue to expand their offerings.”

His team also saw great success with construction loans over the past year.

“We were involved in one of the larger construction loans in the country in 2017,” said Anderman, referring to a $1.25 billion construction loan he secured for a mixed-use property on Eleventh Avenue in Manhattan, which will feature condominiums, retail, and a five-star hotel. “It was a complex deal funded by an overseas lender.”

This, in addition to a $305 million construction loan for a condominium and retail complex in Lower Manhattan, and an $85 million loan for condominiums on the Upper East Side, made Meridian one of the premier firms for construction loans in 2017.  Anderman looks forward to a repeat performance in 2018.

Geographically, while Anderman’s team has closed loans from coast to coast, the South Florida market was particularly active in 2017 and he predicts it will remain so.

“We’re working on a $500 million construction loan for a 1,500-room hotel and convention center in downtown Miami. We have an exclusive,” Anderman said.

“It would be one of the largest construction loans in 2018, and one of the larger construction loans in South Florida, for sure. It’s a very complex deal, and we’re working on financing it as we speak.”

Anderman’s optimism for 2018 comes not just on the back of his 2017 success, but also thanks to a wealth of his own experience and a team that’s executed so many different types of challenging deals throughout their respective careers.

“My team has a diverse combination of backgrounds. We come from Wall Street to developers, and we understand different aspects of real estate,” he said.

“But also, our success comes from the time and effort we spend understanding what a deal is about before agreeing to take it on. When we put together a financing memorandum, it’s a detailed, thoughtful analysis. We have a meticulous way we approach lenders and what we say to get their attention.”

Source: commercial

Newark Connected & Cost Efficient: Why Your Company Should Move to Newark

Recently, Amazon named Newark as one of the top finalists in the company’s HQ2 location search. To those familiar with the Brick City, this came as no surprise; Newark has long enjoyed a host of infrastructural and geographical advantages — it’s just 20 minutes from New York City– that have made it a growing business hub.

Amazon isn’t the only business looking to make moves in Newark. Other established, multinational companies have also turned to the city as a viable option for their corporate headquarters, including Audible Inc., an Amazon-owned company which employs 1,000 workers to produce and sell audio entertainment. Mars Wrigley Confectionary, the chocolate company behind M&M’s, recently announced that one of its U.S. headquarters will open in Newark by July of 2020, bringing with it about 500 new jobs to the city.

In December, Broadridge Financial Solutions, a fintech company that provides technical services to financial institutions moved 1,000 employees in December from Jersey City to 2 Gateway, a building in the heart of Newark. Standard Chartered Bank, a London-based institution, which provides financial products and services to corporations, is another company at 2 Gateway that recently signed a lease extension for 72,319-square-foot office space. The 2 Gateway building has also signed leases with other businesses across multiple industries in 2017, including one with award-winning architectural and design planning firm Minno & Wasko back in December. The list goes on.

The leasing velocity in the Newark submarket has more than doubled year-over-year and that’s because companies are now looking to Newark as a locale that isn’t just practical, but attractive for its executives and employees alike. The city’s downtown is just one stop away from New York City with commercial rent cost at a third of the price of what a company would pay if they were to operate in Manhattan. It’s also less expensive than Jersey City and Hoboken, and effectively just as close to NYC. With a leasing velocity of nearly 700,000-square-feet in 2017, Newark is quickly becoming an attractive destination for businesses throughout the region and beyond.

But unlike other busy urban centers coveted by new businesses, Newark has the space available for interested companies. In fact, 2 Gateway has an unheard of 200,000-square-feet available in their Class A building, perfect for any company looking for a large amount of space, and just one stop away from Midtown, Manhattan.

Not only is Newark emerging as an ideal location at the right price, but it is also uniquely positioned to handle all of the technological needs for companies, large and small, at an affordable cost. The city happens to sit directly above the fiber optic cable network that runs along the eastern seaboard, which allows companies to tap into the fastest internet speeds in the country at an extraordinarily competitive price point. The city took advantage of this network to create Newark Fiber, a program offering the highest-speed fiber for Newark buildings at the lowest cost in the region for comparable connections. 2 Gateway was the first building to tap into Newark Fiber, enabling C&K Properties to offer the connections a la carte to its tenants. This trendsetting nature isn’t foreign to 2 Gateway; in 2014, it became first building in New Jersey to become Wired Certified Platinum by WiredScore, indicating the highest rating for a building’s internet connectivity and technological infrastructure.

When it comes to location, cost and connectivity, Newark is in prime position to strengthen its standing as a regional business powerhouse, with or without Amazon.

Source: commercial

Rock On! This Isn’t Your Father’s Rockefeller

Standing tall at 33 stories high, 75 Rockefeller Plaza was originally built for the Standard Oil Company and known as the Esso Building; it was later renamed the Time Warner Building, serving as the media conglomerate’s headquarters until its lease expiration in 2014. The building’s iconic address and its newly blank canvas was too great an opportunity to pass up for RXR Realty, the owner with a dominant presence in midtown including Class A assets such as 1330 Avenue of the Americas, the Helmsley Building, 450 Lexington Avenue, and 1285 Avenue of the Americas.

When RXR acquired “75 Rock,” it embraced a vision to restore and fully reposition the building to meet the needs of tenants seeking a trophy address and the world-recognized Rockefeller name. Cushman and Wakefield’s Chairman of Global Brokerage, Bruce Mosler, comments on RXR’s completed vision, “This is a building for those seeking both exclusivity and a contemporary environment for their employees. The level of service from lobby experience to overall property maintenance is exceptional.”

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75 Rock was originally constructed with a structural steel frame, concrete slabs, and a limestone façade –  a New York City landmark of the mid-century era. The owner was quick to recognize existing challenges that could warrant typical market pushback – ceiling heights, T-shaped base floor plates, as well as some compromises in views for certain floors.

A holistic renovation plan, including both structural improvements and lifestyle innovations, was needed to attract tenants and produce a building worthy of 75 Rock’s stature and location. To address this, RXR created and deployed a $150 million redevelopment plan. The first step was restoring the building’s limestone façade, staying true to the building’s original design. The same limestone is found in the through-block lobby connecting entrances between 51st to 52nd Streets and also includes terrazzo floors, an elemental designed 24’ ceiling, a skylight, bronze concierge desk, and gallery space for public art.

RXR also set out to increase the efficiency of the building by reconfiguring its core, making it more efficient and spacious for tenants. 12 new passenger high-speed elevators with marble interiors have been equipped with a destination dispatch system to minimize wait-times, and new HVAC and electrical systems were installed to continue the building’s modernization.  RXR addressed the environmental impact of the asset during the renovation process, implementing new optimized windows. The property anticipates LEED Gold designation.

Additional features that continue to create leasing traffic at 75 Rock include extensive terrace opportunities on the tenth floor with a dramatic floor-to-ceiling solarium, as well as modernized mechanical systems that increase finished ceiling heights above 9 feet throughout the tower.  Building-wide fiber optics, an internet-based tenant work order and visitor processing system, bike storage, augmented loading dock, and messenger center all contribute to the functional modernization that satisfies today’s tenants. Tara Stacom, Executive Vice Chairman of Cushman & Wakefield, praised RXR’s work, “the impact of the significant renovation is immediate and apparent upon entering the lobby and carries throughout the entire building.”

The progressive ownership of RXR goes beyond making physical improvements, offering a service model far ahead of the competitive set – one that is tailored to the profile of its buildings and the tenant mix within them. At 75 Rock, RXR hosts a lively integrated art program, punctuated by the permanent 7ft by 90ft Markus Linnenbrink installation of poured resin, an invigorating use of color. The attention-grabbing Paparazzi Dogs, the four bronze sculptures by celebrated contemporary artists, Gillie and Marc, engage both tenants and the plethora of people walking through. Above the lobby, 75 Rock’s pre-built full floors and marketing spaces also include an array of contemporary art.

RXR’s ownership comprehensively addresses all of the signature elements of being in a world-recognized business and tourist destination at the crown of Rock Center, and tenants like Bank of America/Merrill Lynch have taken notice. The institution’s Wealth Management division occupies 185,000 square feet in the base with multiple terraces. Responding to the tremendous foot traffic, and more specifically, the family foot traffic from Rockefeller Center, RXR staged a major retail coup, bringing American Girl Doll off of Fifth Avenue, and into its rejuvenated 40,000 square foot retail experience.

rx006 01 c03 75 rockfeller plaza conference camera 01 2 copy Rock On! This Isnt Your Fathers Rockefeller
75 Rockfeller Plaza

The remaining retail space is experiencing a surge of traffic by “world-class dining and ‘foodie’ establishments,” states Michael O’Neill, Cushman and Wakefield’s Senior Director of Retail Services. “With popular bridge retail such as Warby Parker and Blue Mercury now on Avenue of the Americas, the success of the Baccarat and new boutique hotels like The Whitby, interesting, desirable retail and dining options are peppering midtown side streets. 75 Rock has a triple-threat advantage being amid prime shopping, business, and tourism, as well as luxury mixed-use and residential towers.” The strategic and fully segregated through-block entrances for office tenants also keeps dense shopping foot traffic away from the office occupants.

“Office activity has been extremely strong,” explains Mosler, “the full floors in the tower satisfy many of the boutique financial firms migrating from Fifth and Park Avenues. Ownership is committed to making deals happen and is efficient in the process.”

Contributing to the robust pick up in interest at 75 Rock is RXR’s own office expansion onto two full floors, signaling the management team’s support for the asset and its fully modernized, ultra-equipped office environment, and an address synonymous with status. It has been noted that other tenants in the area have vocalized the personable nature of the building staff when entering or passing through the building.  Mosler continues, “Today, ‘state-of the-art’ goes beyond the physical improvements. Tenants pay up for the amenities and service model, which – when done well – requires hands-on, dedicated ownership to see it through.”

While Manhattan’s midtown trophy towers see the ebbs and flows of market interest, tenants at 75 Rock are meeting ownership’s pricing due to the quality of the physical asset and the level of service. Ira Schuman, Vice Chairman of Savills-Studley, explained, “our clients recognize that beyond the successful transformation and major redevelopment of the property, the building has so many practical advantages – proximity to east and west transportation lines, excellent management, and access to first-class amenities.”

Leading the way in employee well-being and professional success, RXR is currently working with Convene to launch a new concept at 75 Rock, which combines Convene’s existing conferencing amenities on one full tower floor, with a private member experience to drive business networking, wellness and education series, and one-of-a-kind dining experiences on the building’s entire top floor. Michael Burke, Convene’s VP of Real Estate and Development explains the collaboration, “today’s office tenants demand a more evolved workplace, and even the most iconic real estate must adapt. Convene is thrilled to expand on our partnership with RXR as a driving force for the re-imagined employee experience at Rockefeller Center.” This partnership will benefit both co-working entrepreneurs, and the usual suspects of Fifth Avenue financial institutions.

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Paparazzi Dogs by Gillie and Marc

“The building is an ideal fit for foreign banks, wealth management, and boutique financial users,” according to Schuman, who recently represented Austria’s leading bank, Erste, in leasing the entire 12th floor. “Tours are impressive to prospective tenants and RXR is terrific through the transaction process.” RXR’s commitment to customer service and meeting the expectations of future decision makers is apparent.

“Ownership is breathing a new spirit and energy into a Class A trophy building, making it approachable and desirable to the new shifting users and office cultures,” asserts Mosler. RXR’s adoption of forward-thinking leasing and marketing trends further demonstrates management’s foresight surrounding tenant psyche. Pronouncedly so, the current marketing campaign emphasizes the changing face of today’s female executive and speaks to the many female decision-makers touring space at the building. 75 Rock also features a newly completed pre-built collection ranging from 4,000 to 7,500 square feet utilizing a high-end and hospitality-inspired design palette. Management recognizes the demand for such space and anticipates building more of it. Tara Stacom affirms, “the economic value of this level of turnkey space outranks competitive availabilities in the market.”

On a final note, RXR recently completed a $300 million refinancing with TH Real Estate – another piece of the plan to adapt this marquee asset for today’s tenant. The modernization of 75 Rockefeller Plaza demonstrates the power of an owner and developer when it is committed, not only to leasing space today, but to investing in the holistic success of its tenants tomorrow.

Source: commercial

5 Reasons Why Outer-Borough Multifamily Properties Should Dominate Demand In 2018

The New York City investment sales market appears to be rebounding in the first quarter of 2018 in terms of volume and the number of transactions. Prime outer-borough locations will likely capture more demand from institutional and international investors in 2018 compared to previous years as an array of factors, both fundamental and technical, heighten their appeal.

During 2017, dollar volume in the multifamily market slowed considerably, falling 48% year-over-year, according to our company’s newly released report: “Multifamily Year In Review.” To view, click on: http://arielpa.com/report/report-MFYIR-2017

We believe the outer-boroughs will garner greater attention in 2018, driven by the following five key factors:

Strong Rent Fundamentals In Outer-Boroughs

Rent affordability and easy commutes to Manhattan have made neighborhoods in the outer-boroughs, such as Williamsburg, Long Island City, and the South Bronx, hotbeds for tenant migration and rental growth. To that end, the average monthly rent for an apartment in Manhattan was $4,158 as of December 2017, according to Douglas Elliman. That is substantially higher than the median rent in Brooklyn and Queens, where apartments fetched $3,001 and $2,831, respectively,

During 2017 rent concessions have been reported at 36.2% for Core Manhattan, while outer-borough neighborhoods, such as Flushing, experienced increases in rents, rising 2.9% in 2017. While we are not concerned about the long-term viability of Core Manhattan’s rents, investors are finding the short-term fundamentals challenging.

Scant Institutional Capital Opportunities 

Institutional investors’ appetite for Manhattan properties, has been voracious. For investors, Core Manhattan presents “gateway city” status, large-scale opportunities, and rental upside. However, rent concessions create uncertainty about rent growth, and increased competition from foreigners has left investors with fewer opportunities.

However, the outer-boroughs, specifically Brooklyn, present unique opportunities that were once exclusive to Core Manhattan. Invesco’s involvement with Kushner in DUMBO made plenty of headlines, but they are far from alone. Between 2016 and 2017, TIAA-CREF, World Wide Holdings and Bentall Kennedy (U.S.) LP have collectively invested more than $425 million in the borough.

Relative Price Per Foot Cost

The valuation metrics used for the multifamily asset class include: Capitalization Rate (Cap), Gross Rent Multiple (GRM), Price Per Unit (PPU) and Price Per Square Foot (PPSF). When comparing Cap and GRM for Core Manhattan versus outer-boroughs the difference is 27%, according to our “Multifamily Year In Review.” This means investors expect to receive a higher current yield in the outer-boroughs.

On a PPSF basis, the average difference is much wider. The average multifamily building in the outer-boroughs sells for $334 PSF, representing approximately 1/3 of the cost of the $945 PSF for the same assets in Core Manhattan. Lower price per square foot provides a big advantage when discussing replacement cost and suggests that this wide pricing gap could allow for significant room for growth in the outer-boroughs.

Uberization Of Outer-Boroughs & Local Economic Growth

Access to mass transportation has always been a factor when buying real estate, but two main factors have lowered this need. First, the ability to travel economically and second, that all of the boroughs have been experiencing local economic growth, with less reliance on Core Manhattan and commutes. Uber and Lyft, for example, have made inconveniently located areas, such as Industry City in Brooklyn and Cornell Tech in Queens, more desirable. Less reliance on subways and buses has also benefited Northern Manhattan, where Columbia University has attracted many new businesses.

Rezoning Poses Significant Upside

Mayor Bill de Blasio’s administration has rabidly rezoned large swaths of New York City, with their sights squarely set on outer-borough regions. East Harlem, East New York, and Far Rockaway have recently been approved for rezoning, while Inwood, The Bronx’s Jerome Avenue and Gowanus are in the pipeline. In Inwood, for example, proposed rezoning is expected to spur the creation of 4,348 new apartments by the year 2032. The building of thousands of apartments should lure a large inflow of tenants, landlords and developers, posing significant upside for owning a multifamily asset in these areas.

In conclusion, based on the five points stated above – whether it be relative affordability or the massive influx of institutional capital – we believe outer-borough multifamily assets are positioned to perform extremely well versus Core Manhattan in 2018, and investors are already taking heed.

Source: commercial

Meridian Sells Over 1,000 Parking Spaces and Lists Apthorp Garage Condo

Meridian Investment Sales, the commercial property sales division of Meridian Capital Group, is pleased to present the exclusive offering of The Apthorp condominium parking garage located in the Upper West Side neighborhood of New York, NY. Senior Executive Managing Director, David Schechtman, Managing Director, Lipa Lieberman, and Managing Director, Abie Kassin are representing the seller in this transaction.

Meridian’s Investment Sales team has proven expertise in selling similar properties, including three garage condominium units on the Upper West Side for $50 million, and a parking garage condominium at the Moxy Times Square Hotel for $21 million, which together total over 1,000 parking spaces.

Designed by architects Clinton & Russell for William Waldorf Astor, the Italian Renaissance Revival building was built in the early 1900s and occupies the full block between Broadway, West End Avenue, West 78th Street, and West 79th Street. The monumental building was designated as a New York City landmark in 1969 and was added to the National Register of Historic Places in 1978. The Apthorp was constructed around a large interior courtyard and features life-size limestone sculptures representing the Four Seasons above the building’s central barrel-vaulted entrance, where elaborate wrought-iron gates display a pair of gazelle heads. The property was named for Charles Ward Apthorp, who owned Apthorp Farm, which encompassed about 300 nearby acres of Manhattan in the late 18th century.

Known for its high concentration of cultural and architecturally significant buildings, the Upper West Side is one of New York City’s premier neighborhoods and covers one of the largest geographical boundaries of any Manhattan neighborhood. Operating as a shipping, transportation, and manufacturing corridor throughout much of its early history, the Upper West Side experienced heavy development in the late 19th Century. Today, it is known for its pre-war architecture, eclectic restaurants, and rich cultural life. The property is also just several blocks west of Central Park, two blocks east of the world-renowned Julliard School and the Fordham University Lincoln Center, and is in close proximity to the American Museum of Natural History.

David Schechtman, Senior Executive Managing Director, can be reached at (212) 468-5907 or DSchechtman@meridiancapital.com and the listing for 33-35 West 14th Street may be viewed here.

Source: commercial

Meridian Exclusively Lists West 14th Street Development Site

Meridian Investment Sales, the commercial property sales division of Meridian Capital Group, is pleased to present exclusively for sale 33-35 West 14th Street, a development site with a clear path to vacancy, steps away from Union Square in New York, NY. Senior Executive Managing Director, David Schechtman, Managing Directors, Lipa Lieberman and Abie Kassin, and Senior Associate, Harrison Hochman are representing the seller in this transaction.

Situated at the convergence of New York University and Greenwich Village, 33-35 West 14th Street is a development site boasting 50 feet of frontage on one of the most important East-West thoroughfares in Manhattan. Zoned C6-2M, the two contiguous buildings present a blank canvas for investors; the as-of-right development site offers the immediate opportunity to capitalize on strong demand and exceptional neighborhood fundamentals. Development options include a mixed-use residential building with ground floor retail, a class-A office building, a hotel, and an inclusionary housing development.

A well-traversed destination for residents and visitors alike, the 14th Street Union Square corridor is one of the most trafficked locations in the city and a defining live-work-play neighborhood with unrivaled entertainment, retail, and restaurant selections. Union Square is also one of New York City’s premier cultural hubs, consisting of many architectural and social landmarks. The property is located less than two blocks from the R, W, and N subway lines and the 4, 5, and 6 subway lines at Union Square, and the L, F, M, and PATH trains on 14th Street and Sixth Avenue.

David Schechtman, Senior Executive Managing Director, can be reached at (212) 468-5907 or DSchechtman@meridiancapital.com and the listing for 33-35 West 14th Street may be viewed here.

Source: commercial

Tax Reform Dilemma: Uncertainty Surrounds Business Interest Deduction

There’s an old adage: “Don’t ask how laws and sausages are made.” Seldom has this been more relevant than with the recently enacted Tax Cuts and Jobs Act (“TCJA”). Due to incomplete drafting, the TCJA raises as many—if not more—questions as it answers.

One example of this uncertainty that is of particular relevance to the real estate industry is the new business interest deduction provision. Broadly speaking, the TCJA limits a taxpayer’s business interest expense deduction to 30 percent of its “adjusted taxable income.” A real property trade or business may elect out of this limitation but at a cost. And here is where it gets interesting.

“Electing” real property trades or businesses will be required to depreciate any residential rental property, nonresidential rental property and qualified improvement property under the Alternative Depreciation System (ADS), rather than the “regular,” or Modified Cost Recovery System (MACRS). At first glance, one could assume that the decision to elect out would be based on weighing the additional interest expense against the less accelerated depreciation under ADS. (ADS provides for depreciable lives of 30 years for residential rental property and 40 years for nonresidential rental property, compared to 27-and-a-half years and 39 years respectively under MACRS.)

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Alan Blecher

A wrinkle in the analysis is that “bonus depreciation” (i.e., immediate expensing of certain assets) is not available to taxpayers under ADS. Although residential rental property and nonresidential rental property is not eligible for immediate expensing, it was intended that qualified improvement property would be. However, there is a glitch in the law as it was drafted, regarding the depreciable life of such property. This glitch must be corrected (via what is known as a “technical correction”) in order for qualified improvement property to be eligible for immediate expensing.

Another issue to consider when deciding whether to elect out of the interest expense limitation and thereby become subject to the ADS is, What do I do with assets that are already being depreciated under MACRS? Generally, a change to ADS depreciation involves assets “placed in service” after Dec. 31, 2017. However, for electing real property trades or businesses, the change is effective for “tax years” after Dec. 31, 2017, thereby creating uncertainty as to how ADS depreciation will be calculated.

For example, how does a taxpayer that is 25 years into the 39-year MACRS depreciable life period switch suddenly to the 40-year ADS life? Does one take the remaining unadjusted basis over the former remaining ADS life, or start the clock over? Will taxpayers be required to file for a change in accounting method? None of these answers are clear, and IRS guidance is needed. You can expect your business tax returns to be even more complex.

Adding to this complexity are some additional issues to consider with respect to the business interest expense limitation, such as the following:

  • Certain “small” taxpayers are exempt from the business interest expense limitation and do not need to elect out. Such taxpayers must have annual average gross receipts of less than $25 million (certain related taxpayers are combined in calculating this limitation).
  • “Tax shelters” are not eligible for the small taxpayer exception. This definition includes, among others, limited partnerships or LLCs with losses—if more than 35 percent of the losses are allocated to partners who are not actively involved in management.
  • If a taxpayer is subject to the limitation, the disallowed interest expense is carried forward indefinitely. In the case of a partnership, the carry forward is at the partner level. Any remaining disallowed interest expense is freed up when an activity is disposed of.

While the TCJA appears to offer the real estate industry a clear advantage in its ability to elect out of the business interest deduction limitation, the value of this benefit is far from clear. Tread carefully and consult your tax adviser to understand the potential positive and negative implications of this new provision on your individual and corporate tax returns.

Alan M. Blecher is a Principal specializing in Real Estate tax services at Marks Paneth LLP. He can be reached at (212) 201-3197 or ablecher@markspaneth.com.

Source: commercial

How a New Way of Working Is Ushering in Short-Term Rental Offerings

Over the past few years, the offsite has been gaining traction among lean startups and large enterprises alike. The thinking behind it is simple: Whether brainstorming

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Credit: Breather

a product launch strategy, planning out the quarter or year ahead or strengthening the bonds between teammates, getting out of the office and into a new physical context (hence offsite) can inspire new thinking and break down the barriers that keep workers from collaborating effectively.

 

 

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Credit: Breather
Successful offsites leave participants feeling optimistic, engaged and motivated to tackle new challenges—critical outcomes in a world where roughly one in four employees report feeling completely disengaged from their work. But a successful offsite doesn’t just happen: It takes careful planning, a clear idea of what you want to accomplish and a comfortable space that encourages communication.

 

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Credit: Breather
However, finding the right space to meet outside the office isn’t always easy. Shared office and coworking companies like Regus and WeWork and peer-to-peer marketplaces like LiquidSpace do offer private meeting rooms. But they’re accessed through bustling office environments and often completely visible to outside passersby. One of the major reasons to host an offsite is to escape the everyday distractions of the office, which can sap motivation and eat up half the typical office worker’s day; this makes a distraction-free environment a must-have for a successful offsite.
 
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Credit: Breather

Hotel meeting rooms are a common option, but they too come with caveats. There are often sizable minimum spends, mediocre-yet-mandatory catering, limited equipment for presentations and conference calls, and stuffy decor that does little to inspire creative thinking. It can be hard to think outside the box while you’re trapped inside of one, after all.

 

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Credit: Breather
As the world’s leading provider of private, temporary workspace, Breather understands what types of spaces empower teams to do their best work. Founded four years ago by Canadian entrepreneurs Julien Smith and Caterina Rizzi, Breather’s network of on-demand workspace has expanded to 10 cities worldwide, including New York City, San Francisco, Los Angeles, London, Montreal, Toronto and more.
 
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Credit: Breather

With Breather, there are no long-term agreements or commitments; clients can instantly reserve any tech-enabled space for a few hours, a day or even many months. This flexibility allows Breather to serve a wide variety of workspace needs, from team and client meetings to small events, individual work, product sprints and spillover space.

 
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Credit: Breather

More crucially, Breather can ensure an experience that’s quiet, tidy and productive because there are no middlemen and no user-to-user marketplace; every space is leased, designed and operated in-house. And because the spaces are private suites accessed through a common corridor (like a typical office), there’s no need to pass through another company’s office or communal space to get to it. Just show up, type in your access code on the door’s keypad and get to work.


Source: commercial

Selling a Problematic Property? Ten-X Has the Answer

Jay Lucas, a senior director at Cushman & Wakefield in Dallas, was tasked with selling a 60,000-square-foot office building that his client had on the market for more than five years.

“The property became tired,” he says. “The ownership either didn’t have the capital or didn’t want to do renovations and update the property. So, trying to position the property to achieve its potential value, was difficult to do.”

To meet the challenge, Lucas turned to Ten-X Commercial, the nation’s leading online real estate marketplace, which has facilitated the sale of over $50 billion in real estate.

Ten-X, which has transacted over 300,000 properties in the U.S., allows brokers to supercharge the sales process with deals that close twice as quickly as the average commercial real estate transaction.

By leveraging Ten-X Commercial, Lucas was able to sell the property for his client in less than four months, for over $4 million. “It was like I’d called Santa Claus,” he says. “It was perfect.”

With its vast reach in the real estate market, Ten-X exposed the property to a global set of buyers. Lucas’ client suddenly had interest from a variety of markets and, in a sign of Ten-X’s value to sellers, sold the building to an unknown buyer in its own market.

“We had never met. We knew nothing about them,” he says. “The property had a financing contingency, or it probably would have sold in 90 days. It worked out great.”

After closing this transaction, Lucas was a believer in the Ten-X platform. He used the marketplace to sell three buildings in Dallas, totaling approximately 250,000 square-feet. He began working on the deal this past March and, using Ten-X Commercial’s Offer Select transaction solution, closed the deal six month later for more than $12 million.

This time, Ten-X was part of his marketing strategy from the get-go.

“I told my client, this is the way to go—here’s what we’ll do, and here’s why it works,” he says. “They were thrilled with it. We had a lot of buyers come through, and my seller was thrilled with the whole process.”

Currently, Lucas has another deal in the works on Ten-X Commercial, and another he’s just getting off the ground.

After selling real estate for 38 years, Lucas knows the potential buyers in his market well. But Ten-X is now a key aspect of his sales process for its ability to help him identify buyers even he hadn’t come across before.

“With all my experience, there’s lots of people I know. But we don’t know everybody,” he says. “Ten-X’s online marketplace brings in so many potential buyers from around the world. Once a buyer shows an interest in a specific property or property type, Ten-X curates and matches similar properties a buyer might be interested in. That’s a major advantage to us. Plus, when somebody goes into the Ten-X platform and registers interest in a property, I know who they are, and I know how to contact them immediately.”

The most exciting part of using Ten-X Commercial for Lucas, though, comes in real time, during the bidding process with the Live Bid transaction solution.

“When you’re on the phone with the Ten-X team and potential buyers are bidding live—and the seller can see it—it’s an exciting and intense moment,” he says.

“When you hit the reserve and you start getting incremental bids above that, your seller is just grinning so big. They’re just like, ‘This worked.’ ”


Source: commercial