COVER STORY: The best of NYC real estate 2010

ABOVE: Kelly Kennedy Mack, President, Corcoran Sunshine

 

 

The best of NYC real estate 2010

The Real Deal's picks for the year's top buildings, brokers, giveaways and more

By Candace Taylor

December 2010

 

 

The New York City residential real estate market has come a long way from the dark days of late 2008 and early 2009. But despite the moderate improvements in the market, succeeding in the current climate remains far from easy. Many brokers and developers left the industry when the economy soured, and those that remain have no choice but to be on their "A" game.

This month, The Real Deal is recognizing people and projects in the industry who managed to have stellar years despite the difficult economic conditions. To compile this list, we conducted an online survey, receiving more than 300 responses. We also got input from industry experts, gathered data from real estate listings aggregator StreetEasy, and relied on our judgment as 24/7 industry observers.

 

Best Manhattan New Construction For-Sale Building: Chelsea Enclave
When the General Theological Seminary first announced plans for a 17-story glass tower on its Chelsea campus, neighbors reacted with outrage. In response, the original plan was scrapped and instead, a seven-story, 53-unit redbrick building was constructed to appear indistinguishable from the surrounding seminary buildings. Despite all the initial ruckus, the result seems to be a win-win: The seminary got some $30 million to pay for the restoration of its historic Gothic Revival buildings, and condo buyers are getting something truly unique -- direct access to "The Close," the secluded interior garden that connects the buildings of the seminary. Chelsea Enclave residents can enter the Close -- a scenic manicured lawn dotted with sycamore trees and American elms -- from their lobby and are not required to check in at the main entrance of the Seminary, as the public is required to do.

The project's unique attributes appear to be attracting buyers. According to data from StreetEasy, 39 units at Chelsea Enclave have closed so far in 2010 for a total value of $109 million, making it one of this year's most successful projects in the city in terms of dollar volume of sales. The condop went on sale in 2008, just as Lehman Brothers was collapsing. That means the deals it's closing now aren't leftover contracts signed during the real estate boom. Instead, they are buyers the sales team persuaded to part with their money in the midst of a recession -- no small task. Of course, the Brodsky Organization, the developer, has had to cut prices in the building to get deals done. But the project is also one of only a few that appears free of lawsuits from buyers who are unhappy with the quality of the workmanship or trying to get out of their contracts.

 

Best New Luxury Rental Building: 2 Cooper
This Noho luxury building -- where units start at around $3,600 per month -- has oak hardwood floors, stainless steel Liebherr refrigerators, and Bertazzoni gas ranges, along with a rooftop pool so popular that residents are now required to make reservations for groups larger than five. The formula seems to be hitting a sweet spot: Ever since the leasing office opened in June, units have flown off the shelves, and at high prices. According to the Atlantic Development Group, which built the project, 114 of the 144 units (including 10 at neighboring Skidmore House, which just started leasing) have already been rented. And at a time when other developers are hoping for $80 to $90 per square foot, units at 2 Cooper have gone for over $100 per square foot. (One three-bedroom with a library was leased for a whopping $119 per square foot.)

Peter Fine, CEO of Atlantic Development, told The Real Deal last month that the building's strong performance surprised even him. He attributed it to a dearth of luxury housing in the neighborhood. Plus, the social scene at the rooftop pool likely helped things along. "Twilight" actress Ashley Greene reportedly lives in the building.

Another contender for best rental is the Corner at 200 West, located at West 72nd Street and Broadway and developed by a partnership between the Gotham Organization, Rhodes NY and Philips International. The building -- known for having a Trader Joe's downstairs and a 12-foot-long "misting wall" on the roof -- began leasing in March and has rented 189 apartments since then. At press time there were six units left, including three that are now occupied by the leasing office. The Corner was also awarded "Best Apartment" in CNBC's 2009 International Property Awards.

 

Best Manhattan Developer: Related Companies
Last month, Houston Rockets owner Leslie Alexander sold his unfinished penthouse at Superior Ink for $31.5 million -- a new record for a condo sale below 14th Street (see related story, "NYC's priciest pads").

The sale was a coup not only for Superior Ink, but for the developer, the Related Companies, which has managed to thrive this year despite tough conditions.

In 2010, Related closed 17 units at Superior Ink, grossing nearly $106 million. It also sold 35 units at the Brompton for a total value of $97 million, and 16 units at the Harrison for more than $43 million. As at other buildings around the city, there have been lawsuits invoking the Interstate Land Sales Full Disclosure Act (or ILSA) at the Brompton: In September, a federal judge ordered Related to return a $510,000 deposit to a buyer in an ILSA case. Overall, however, Related's buildings have emerged largely controversy-free in comparison to other top-selling buildings, like Extell's Rushmore and Lucida.

Related also had a big year in terms of its $1 billion Hudson Yards development deal. After a year-long delay, Related in May secured a lead investor -- Canada's Oxford Properties Group -- for the deal, which was approved in April by the Metropolitan Transportation Authority.

The company also topped off 450 West 42nd Street, a multiuse project that is one of the largest private developments underway in Manhattan. And it's one of three finalists being considered by the city to develop a major housing complex at Hunters Point South in Queens.

 

Best-Selling Developer: Extell Development Company
Gary Barnett's Extell is one of the most active and successful developers in the city right now, though also one of the most controversial. The company has been involved in a number of lawsuits involving its new residential condos.

At the Lucida, for example, an Extell affiliate sued brokerage Sloane Square NYC for breach of contract after the firm allegedly kept nearly $200,000 in advance commissions for deals that never closed. (In March, a New York State Supreme Court judge awarded a judgment in favor of Extell.)

The company has since sued several other brokerages to recover advance commissions, and The Real Deal reported that the Corcoran Group, Prudential Douglas Elliman and Sotheby's International Realty have either volunteered to return advance commissions or reached settlements with Extell.

Another high-profile fracas has occurred at the Rushmore, where a group of buyers claimed that they should be able to get out of their contracts because Extell failed to begin closings by a Sept. 1, 2008, deadline. Extell argued that the missed deadline was due to a "typo" and that closings were supposed to start a year later. In April, Attorney General (and now Governor-Elect) Andrew Cuomo ruled that Extell failed to back up the typo claim, and ordered the developer to release 41 buyers from disputed contracts.

Instead of conceding defeat, Extell fought back by filing a suit in New York State Supreme Court, arguing that Cuomo erred.

Amazingly, all this controversy doesn't appear to be keeping new buyers away. The Rushmore closed 68 units in 2010 -- more than any other Manhattan development south of 96th Street. Those sales totaled more than $160 million, making the Rushmore the top-grossing Manhattan development of the year, according to StreetEasy. Two Extell projects came in second and third: The Lucida closed 30 units for more than $148 million, and 535 West End Avenue closed 12 units for roughly $122 million, according to StreetEasy.

 

Best Firm or Division for Marketing New Development Condos: Corcoran Sunshine
One reason for Extell's success this year is Corcoran Sunshine, which is marketing its new developments and has managed to keep sales brisk despite all the litigation. But Corcoran Sunshine, headed by Kelly Kennedy Mack, doesn't just work with Extell. Of StreetEasy's 10 top-grossing Manhattan developments of 2010, Corcoran Sunshine handled sales for six of them -- the Rushmore, the Lucida, 535 West End Avenue, Chelsea Enclave, Georgica and the Laurel.

Viewed as a formidable competitor during the boom, Corcoran Sunshine has grabbed even more market share since the recession by taking over developments from other marketing firms. (Most recently, the company grabbed the Upper West Side's iconic Apthorp from Elliman.) Corcoran Sunshine is now actively selling 37 projects, the firm said, and has closed 583 units in 2010 so far, for a total value of $1.562 billion. The firm has also recently proven that it can successfully reposition a project. It took on 1 Rector Park, a project that went back to its lender, iStar Financial, during the downturn. Corcoran Sunshine put the Battery Park City project back on the market this summer with a specially designed iPad app and a snazzy new website, which lets consumers choose units based on price, size and river or park views. The project generated buzz, and an impressive 30 units were sold in the first 80 days.

 

Best All-Around Brokers: Deborah Grubman and John Burger
Each spring, The Real Deal compiles a list of top city agents by number and dollar amount of listings. But that's only one measure of success. This time, we looked at the brokers who've had an especially good 2010, closing big deals in a tough climate, while earning rave reviews from colleagues and clients. Deborah Grubman falls squarely into that category. This summer, she and partner Carol Cohen had two huge closings: They sold movie producer Joe Roth's penthouse at One Beacon Court for $17.75 million. Then, they sold Steven and Sherri Schnalls' $24.07 million mansion in Tribeca, which had been on the market since before the Lehman Brothers collapse. The deal ended up being one of the top 10 priciest residential closings of the year and just barely missed setting a new record for a townhouse Downtown.

Not only did Grubman have a good year financially, but fellow brokers actually seem to like her -- no small feat in the cutthroat world of New York City real estate. Brokers from other firms refer to Grubman as "very honest" and a "consummate professional," and perhaps most important, "totally accessible" when it comes to showing properties.

Grubman is married to well-known entertainment lawyer Allen Grubman, making her Lizzie Grubman's stepmother. These connections give her access to a glittering roster of celebrity clients, like Rupert Murdoch and Vera Wang, but colleagues say she is never heard gossiping about them. And unlike some well-heeled brokers, Grubman isn't limited to Park Avenue.

"I can [advise clients to] use her in different places, from the Upper East Side down to Tribeca," said Paul Purcell, cofounder of real estate consultancy Braddock + Purcell and the website TopAgentGuide. "She has a broader perspective than most brokers."

Another well-respected broker who had an amazingly good year was Brown Harris Stevens' John Burger. In one of the priciest and most high-profile deals of 2010, he represented Conan O'Brien in the $25 million sale of his 17th-floor apartment at the Majestic on Central Park West. Meanwhile, Burger also sold an 11-room spread for $12 million, and an eight-room apartment for $6.9 million, both at 775 Park Avenue, as well as a townhouse at 50 East 73rd Street for $8.9 million. While Burger has more of an Uptown focus than Grubman, he is listing former Marvel Enterprises CEO Eric Ellenbogen's townhouse at 22 Gramercy Park South.

Grubman and Burger weren't the only two top brokers who did well this year, of course. Stribling's Alexa Lambert and the rest of the on-site sales team at the Plaza did some of the year's priciest deals. BHS's Elizabeth Sample and Brenda Powers sold a $15.5 million apartment at 80 Columbus Circle in October, and a 32nd-floor home at One Beacon Court for $12.3 million in March. Elliman's Herve Senequier and Leonard Steinberg closed a number of units at new condo 200 11th Avenue. Sotheby's Serena Boardman sold Bernie Madoff's home at 133 East 64th Street for $8 million, just in time to give birth to a baby girl in August.

 

Best Rental Broker: Caroline Bass, Citi Habitats
In 2008, Citi Habitats' Caroline Bass won REBNY's Residential Deal of the Year award in the residential rental category. At age 25, she was one of the younger agents ever to receive such an honor. Two years later, Bass is one of Citi Habitats' stars, especially when it comes to customer service, said Gary Malin, the firm's president.

"Caroline clearly understands that this business is all about long-term client relationships," said Malin, adding that she's received "myriad referrals and repeat business."

The company said it couldn't release her earnings, but said she is in the top 1 percent of producers at Citi Habitats, the city's largest rental firm.

Bass is known for renting units in her own apartment building -- 50 West 72nd Street -- to friends, and for her lavish "customer appreciation parties." At these events, Bass rents out a venue and provides cocktails and appetizers for her guests. Bass has won Citi Habitats' Outstanding Customer Service Award each year since 2007 and for the first two quarters of 2010.

 

Best Rookie Broker: Soly Halabi
Last year, few in New York City real estate had heard of 27-year-old Soly Halabi. But that's changed since he represented Mexican billionaire Carlos Slim in 2010's priciest residential deal, the $44 million purchase of the Duke Semans mansion, as well as the $140 million purchase of an office building at 417 Fifth Avenue.
Halabi, who works at the small firm Venture Capital Properties, had done only a few retail deals before he began working with Slim, who he met through mutual friends in the Syrian-Mexican business community, Halabi has said. But now that Halabi has two high-profile deals under his belt, he's reportedly received inquiries from other wealthy clients.

However, it seems that Halabi may have made a rookie mistake by cutting high-powered broker Paula Del Nunzio out of the Duke Semans deal. Halabi and his firm are now being sued by Brown Harris Stevens, who claim that Halabi and Slim had conducted secret negotiations with the mansion's owner and purposefully waited until Del Nunzio's exclusive expired before signing contracts. In an industry dependent on relationships with other brokers, the incident may come back to haunt Halabi.

 

Best Broker Giveaway: Vespa
This fall, when Lifesaver Lofts at 120 11th Avenue unveiled newly discounted units, it also offered brokers the chance to win a Vespa if they brought in a signed contract by Nov. 15. The offer proved popular.

"The Vespa promotion did spike interest from the brokers," said Noel Berk, a principal at Mercedes/Berk, the firm marketing Lifesaver Lofts. She said the firm is currently negotiating a number of contracts at the building, and the Vespa offer has been extended until Dec. 15.
Another notable giveaway is at new rental 55 Thompson, a former parking garage. The developers are offering a one-year lease on a Porsche Boxster to the agent who rents the most units in the first year (though some agents have suggested the firm should also pay for the cost of a garage). Leasing started in August, so there's a ways to go.

 

Best Back-from-the-Dead Residential Project: The Sheffield
The Sheffield, previously known as Sheffield 57, has been making headlines for several years now -- and not in a good way. During one of the most contentious condo conversions in recent memory, the epic battle between developer Kent Swig and the Sheffield's tenants became a media circus. During one tenant protest in 2007, Swig reportedly hired a marching band to drown out renters' protests. Later, one of Swig's partners, Yair Levy, pled guilty to harassment after allegedly clocking Swig with an ice bucket. Amid slow sales, the project was eventually sold to Fortress Investment Group in an August 2009 foreclosure auction (see related story, "Swig: I was the fall guy").

So when the Marketing Directors was hired early this year to restart sales, it had its work cut out for it. Along with Rose Associates, the building's property manager and original developer, the team changed the name of the building (dropping the "57"), slashed prices and revamped the marketing materials. The strategy is working surprisingly well. According to StreetEasy, the Sheffield is one of the top 10 bestselling condo projects in Manhattan, with 47 units closed in 2010 so far for a total of $63.05 million.

 

Best Building for Celebrities: Superior Ink
When 15 Central Park West first hit the market, it quickly became the new condo of choice for celebrities in New York City. Now that the building is sold out, another Robert A.M. Stern-designed project has emerged to fill that role: Superior Ink. The Related Companies project is now almost sold out, and in the process, it's become known as "the 15 Central Park West of Downtown," said Elliman's Melanie Lazenby, who represented the buyer of Alexander's apartment.

Celebrity buyers in the West Village building have included Hilary Swank, designer Marc Jacobs, and NASCAR star Jimmie Johnson. When LeBron James was rumored to be looking at New York pads, Superior Ink was viewed as a likely choice. One reason celebrities like the super-luxury building, Lazenby said, is because it has a garage that can be accessed through an underground tunnel, allowing stars to drive directly into the building without being spotted by paparazzi.

Another new condo currently drawing celebrities is architect Annabelle Selldorf's 200 11th Avenue, also called the Sky Garage, where celebrities can drive their cars directly up to their apartments. Nicole Kidman purchased a home there for $10 million in August.

 

Best website/marketing materials
Developer F&T Group recruited fashion designer Zac Posen to create the interiors at their new boutique condo, 16W21, in hopes of luring a "creative class" of high-end buyers. To help spread the word, they tapped the advertising agency Imagination to create an elaborate ad campaign that goes far beyond the normal new condo website.