Manhattan office leasing activity (credit: Colliers International)

Average asking rents in the Manhattan office market jumped 6.3 percent year-over-year to $67.62 per square foot, while the availability rate fell to 10.7 percent, according to new research from commercial brokerage Colliers International.

It was the eighth consecutive quarter of an increase in asking rents, but leasing activity was down significantly year-over-year. About 8.3 million square feet of lease deals were signed in the quarter, a 30 percent drop from the 11.9 million square feet of deals during the same period last year.

In Midtown South, the availability rate fell to 7.7 percent– the lowest since 2008 — and average asking rents hit a record $62 per square foot, according to Colliers. In terms of activity, however, the area saw a drop of nearly 48 percent from the same period last year, with only 2.6 million square feet of deals.

“It is possible that we are experiencing a flywheel effect from a robust fourth quarter of 2014,” said Colliers Eastern Region President Joseph Harbert, “but there is potential for a strong year ahead.”

In Downtown, average asking rents hit a record $55 per square foot, largely due to large chunks of pricey space hitting the market, according to Colliers. Just under 807,000 square feet were leased in the first quarter, down nearly 66 percent year-over-year from 2.4 million square feet.

Midtown, in contrast, saw an uptick in leasing activity, with 4.9 million square feet of space leased, up 7.8 percent year-over-year from 4.6 million square feet. Average asking rents rose 3.6 percent year-over-year to $76.15 per square foot.

Pearl River Mart at 477 Broadway (credit: Pearl River Mart)

Popular Soho retailer Pearl River Mart will close by the end of the year, the department store announced. 

The 44-year-old business will shutter its location at 477 Broadway, its home since 2003, when its lease expires at the end of December, Crain’s reported. Pearl River Mart currently pays more than $100,000 a month in rent – a figure that would increase fivefold if the company opted to renew its lease, president Ching Yeh Chen said.

“When we moved here 12 years ago, there was nobody around,” Chen told Crain’s. But with the arrival of big retail chains like Topshop, Muji and CB2 to the area, the store’s location “is one of the hottest spots in New York,” Chen added.

Pearl River occupies 30,000 square feet across the ground, second and basement levels of 477 Broadway, between Grand Street and Broome Street. The store started in Chinatown, on Elizabeth Street, in 1971 and has moved twice before – first to the corner of Canal and Broadway and then to its current Soho space.

The retail space’s owner, Nathan Baden, told Crain’s that he is still negotiating with the store and that it may “end up staying on another floor.” Chen said she is scouting smaller locations further south on Canal Street.

Crain’s noted that rents on the northern end of Broadway in Soho hover around $830 per square foot – up 9 percent from the fall of 2013, according to the Real Estate Board of New York. Businesses have relocated to adjacent areas like West Broadway or south of Broome Street as a result, which has caused rents to rise there as well.

The cost of doing business in the area has led some retailers to look at Williamsburg or the Bowery as an alternative, according to Lansco Corp. vice president Robin Abrams.

“Those tenants are not only looking for a less expensive location, but also an area that is more interesting,” Abrams told Crain’s.

Chen said she hopes to continue operating Pearl River’s online store after the Broadway location closes. [Crain’s] — Rey Mashayekhi 

Green Street Commercial Property Price Indices (credit: Green Street Advisors)

Midtown office property values are now about 10 percent higher than at their pre-crisis peak in 2007, despite fears of a strengthening dollar and a still-shaky global economy, according to new research from Green Street Advisors.

Green Street’s Manhattan Office Price Index shows Midtown property values grew by 1 percent in the month of March, and by about 20 percent over the past year. The index calculates property values based in part on conversations with brokers and real estate executives, which the firm claims allows for a more immediate reflection of property values than closed sales, which tend to reflect prices from several months ago.

“Midtown office values seem poised to continue their upward trend amid strengthening market fundamentals and robust capital flows,” the report states. With bond yields at historic lows, real estate returns are relatively more attractive to investors, the report notes, and this has helped drive the growth.

The report does state, however, that the combination of a strengthening dollar and falling oil prices “warrants monitoring.”

Investors continue to scramble to buy trophy office properties in Midtown. Canadian investment firm Ivanhoe Cambridge, for example, dished out $2.2 billion for the Blackstone Group’s 1.2 million-square-foot office tower 3 Bryant Park, a deal that closed in January. And today, news broke that developers Michael Shvo  and Vladislav Doronin are paying $475 million for the majority of the Crown Building at the corner of Fifth Avenue and 57th Street – a deal struck at an impressive $1,724 per square foot.

Rendering of a unit at One57

A Chinese investor closed on an 88th-floor unit at Extell Development’s One57 for $47.3 million, according to property records filed with the city today.

An affiliate of the aviation company Pacific American Corporation — under a shell company named Pac Wholly Own LLC — bought full-floor unit #88 at 157 West 57th Street, property records indicate. Department of State records indicate that Gio Qing Chen is CEO of Pacific American. Chen is also founder of HNA Group, China’s largest private airline company. A Pacific American-affiliated LLC also closed on an 86th-floor pad at the building in February for $47.4 million, as The Real Deal reported.

The original asking price for the 6,231-square-foot, four-bedroom, four-bathroom unit on the 88th floor was $52.5 million

Extell, led by Gary Barnett, broke ground on the 94-unit luxury tower in 2009. One57 was one of the first buildings to transform 57th Street into what is now known as “Billionaires’ Row.”

In January, One57 set a new record for the priciest closed sale of a New York City apartment, at $100.5 million, as TRD reported. But the building has seen sluggish sales; a 64th-floor unit closed in December for $25 million, at a roughly 20 percent discount. In the third quarter of 2014, only one unit closed at the building.

Jerry Larkin (Photo: Tobias Truvillion)

From the April issue: Jerry Larkin oversees all leasing in New York and Boston for the mega-commercial landlord Brookfield Property Partners. The Toronto-based firm owns nearly 20 million square feet of office space in New York, including the four-building, 8.5 million-square-foot Brookfield Placeoffice complex, where it has been on a leasing tear in the last 18 months. The complex, which had large blocks of empty space to fill when some of its biggest tenants shrunk or relocated, has signed some of the biggest and most valuable leases in the city. [more]

T-Mobile will pay about $13 million per year to take space and LED signage at Vornado Realty Trust’s redevelopment project at 1535 Broadway, in Times Square’s Bow Tie, according to several industry sources familiar with the deal.

The cellphone retailer signed a lease last month in which it will pay a starting rent of about $8 million a year, or about $2,000 per foot, to lease about 4,000 square feet at 1535 Broadway, the sources said. It will fork over another $5 million for additional LED signage above the store, located on the corner of Broadway and 46th Street.

The price per foot indicates that rents in Times Square remain among the highest in the city. This lease, however, comes in well below the average asking rent in the Bow Tie reported last fall by the Real Estate Board of New York, which was $2,317 per foot.

According to sources, each tenant gets signage above their store, as well as an option to lease space in a band above that, which T-Mobile did. However, that signage is on a lower band of what is now the city’s largest billboard, which debuted in November. The upper portion of the billboard is leased to Google.

T-Mobile would not confirm or deny if a lease had been signed, but said in a statement to The Real Deal: “We don’t have anything to share about the speculation you’re hearing, but we are deeply committed to NYC and our customers – and we’re always looking for fresh ways to engage with them.”

The cellphone carrier’s broker, Paul Berkman of JLL, did not respond to requests for comment, nor did Vornado.

Sherri White and Nicholas Howell of Vornado are marketing the space. A recent marketing email from their firm reveals that this is one of two spaces with signed leases among seven retail spots.

The real estate investment trust’s project is just south of Jeff Sutton’s 1551 Broadway, leased to American Eagle, which also has prominent digital signage.

1440 Broadway in Midtown (inset: Michael Happel)

CVS inked a lease for 22,000 square feet at 1440 Broadway, a 25-story Midtown office building owned by American Realty Capital’s New York REIT. 

The pharmacy will become part of the REIT’s new strategy of repositioning the building by bringing below market-rate tenants to market and creating lower-level selling space with double-height ceilings, according to a release.

“We are quite excited to have a tenant with the consumer demand and credit quality of CVS/pharmacy as our first anchor tenant in the redevelopment of our retail space at 1440 Broadway,” said Michael Happel, CEO of New York REIT.

American Realty Capital purchased 1440 Broadway, between West 40th and 41st streets, in 2013 for $529 million. [PR Newswire] — Tess Hofmann 

From left: Asher Alcobi, a rendering of the living room at 12 East 80th Street and 12 East 80th Street

Access to a private elevator in your own home. The privacy of a townhouse with the bells and whistles of a condo. More than 1,300 square feet of outdoor space. It’s available now, but doesn’t come cheap. An Upper East Side townhouse spanning 7,780 square feet has hit the market for a staggering monthly rent of $103,000.

Peter Ashe Real Estate is listing the seven-bedroom, 7.5-bathroom home at 12 East 80th Street in a co-exclusive with Brown Harris Stevens.

Rendering of the bedroom at 12 East 80th Street

The home, which includes a library office as well as a media room, is being gut renovated, said Peter Ashe’s president Asher Alcobi, who added that he’s marketing it to those who buy in the $20 million range. The property housed two units and was damaged when a two-alarm blaze raged through it in 2010.

Roman Abramovich just bought three townhouses on the Upper East Side to create his perfect — and massive — mansion. “Maybe he needs a place to stay,” Alcobi said.

Manhattan currently has 18 listings asking north of $100,000 per month, according to StreetEasy. The priciest rental listing on the island is a 39th floor pad at the Pierre Hotel for $500,000 a month.

March 2015 National Housing Survey (credit: Fannie Mae)

Homeownership may no longer be a central tenet of the American Dream. The number of Americans who would buy a home if they were to move hit a new five-year low, according to Fannie Mae.

A mere 60 percent of respondents in the mortgage giant’s March National Housing Survey said they would buy – the lowest level recorded in the five-year life of the survey and down from 68 percent a year ago. About 34 percent of respondents said they would prefer to rent, up from 28 percent a year ago.

The nationwide trend mirrors New York City’s widely publicized affordability problem, as Fannie Mae blamed the survey results on sluggish employment and income growth. The survey comes on the back of last week’s disappointing jobs report, which showed the economy adding a mere 126,000 jobs in March – the lowest number in 15 months.

“Consumers are being patient prior to entering the housing market,” Fannie Mae’s chief economist Doug Duncan said in a statement. “Our March survey results emphasize how critical attitudes about income growth are to consumers’ outlook on housing.”

Continually tight mortgage lending may also play a role in discouraging home purchases. Between February and March, the share of respondents who believe it would be difficult to get a mortgage rose from 43 percent to 46 percent.

But while Americans may be cooling on homeownership, they still appear to be confident in the health of the market. Nearly half the respondents said they believe home prices will rise over the coming 12 months, and a further 66 percent believe now is a good time to buy a home – if they can afford it.

Renderings of 42 Trinity Place (Credit: Studio C Architects)

A new look is available at a supertall tower at the Financial District’s 42 Trinity Place.

The project has grown from roughly 300,000 square feet to more than a million square feet since its last renderings were revealed, New York YIMBY reported, because of Trinity Church’s roughly 600,000 square feet of unused air rights that were added to the original allotment of the project.

The project now also includes plans for a 29-story hotel at the long vacant 50 Trinity Place.

Studio C Architects designed the newest renderings, which were obtained by YIMBY. Current plans show an 80-story tower which would stand 1,015 feet tall. Still, the website reported, due to the air rights that have been added to the project, the tower could rise even higher.

Preliminary plans for the site show that the tower will include retail space, three floors for the Department of Education as well as a hotel and residential units.

Meanwhile, developers have been flocking to the area. Surrounding projects include 50 West Street, 125 Greenwich Street and 68-74 Trinity Place. [NY YIMBY] — Claire Moses

From left: Steven Roth, Penn Station and 1 Penn Plaza

Vornado Realty Trust is looking to upgrade the area around Penn Station, by investing money in retail space, public plazas and infrastructure.

Office buildings in the blocks surrounding the station are currently considered to be in a second-rate location, which causes them to bring in relatively low rents, according to the Wall Street Journal. Vornado, which owns roughly 9 million square feet in the area, is looking to invest hundreds of millions of dollars. If the REIT succeeds, it could add significant value to its properties, such as the 57-story 1 Penn Plaza.

“There is no reason that we cannot achieve very, very substantial rising rents in Penn Plaza — very substantial, enormous — with a little TLC,” Vornado Chief Executive Steven Roth said during a Citigroup investor conference last month, the newspaper reported. “That’s going to be the principal focus of Vornado in the next short period of time, (the) next couple of years.”

Plans aren’t yet finalized, but some ideas include tearing down some old retail on the same block as 1 Penn Plaza and adding new retail space as well as remaking some entrances to Penn Station itself to ease congestion.

Roth — who is known to be indecisive at times when it comes to large projects, according to the newspaper  — seems to be focused on the Penn Station revamp. He has hired Marc Ricks, a former economic development official from the Bloomberg Administration, to work on the plan. [WSJ] — Claire Moses

From left: 4 World Trade Center and an H&M store

Swedish clothing retailer H&M might be opening up shop on the second floor of 4 World Trade Center.

The European chain is looking to open an outlet store in the base of the building, which would be located directly across from Century 21, according to the New York Post. Westfield Group paid $1.4 billion to operate and manage the retail portion of the WTC.

Eataly has announced it is moving into 41,000 square feet on the third floor of 4 Word Trade Center. Most of the other shops at the 16-acre site, the newspaper reported, are below street level. [NYP, 1st] — Claire Moses

From left: Sutton Place and a rendering of 426-432 East 58th Street

A 900-foot-tall condo building could rise at the swanky Sutton Place.

The 268,000-square-foot building at 426-432 East 58th Street will be the second-tallest tower on the Upper East Side, according to Our Town NY. Only the 1,400-foot-tall 432 Park will be stand taller in the area. The Bauhouse Group is developing the project.

“In the upcoming weeks we will present our specific plans for the site and conduct an open dialogue with members of the Sutton Place community,” Bauhouse Group co-founder Chris Jones said in a news release.

Permits to construct the new residential tower haven’t been filed yet, the newspaper reported.

The project will be named “Sutton Place Development” and will be “an ultra-luxury, as of right, ground up, opportunity which will reach over 900 feet tall and feature unparalleled 360 degree views of Midtown, Downtown Brooklyn and Manhattan, Central Park and the East River,” according to a brochure by Cushman & Wakefield, cited by the publication. [Our Town] — Claire Moses

From left: Aby Rosen, 85 Fifth Avenue and Jeff Sutton

Aby Rosen’s RFR Realty has closed on the sale of an $86 million retail space on lower Fifth Avenue to Jeff Sutton’s Wharton Properties.

The deal for the nearly 13,000-square-foot co-op unit at 85 Fifth Avenue, home to the women’s clothing shop Anthropologie, closed Friday, according to Cushman & Wakefield’s Bob Knakal, who handled the deal.

“The location of this property was exceptional and resulted in investor interest from all over the world,” Knakal said. “Retail space is one of the hottest sectors in town today and this transaction substantiated this trend.”

RFR declined to comment.

Located at the corner of 16th Street just a block off Union Square Park, the property is in a neighborhood that has seen retail rents rise along with a rise in foot traffic drawn in by an influx of office workers in the midtown south market and new residential projects.

Median asking rents on Fifth Avenue climbed 33 percent on the year to $400 per square foot, according to the Real Estate Board of New York’s fall retail report. That was the second largest gain in Manhattan behind East 57th and Bleecker streets.

Crain’s first reported the deal, though the seller was identified only as a company named Caguax.

Anthropologie, the co-op’s sole occupant, is set to occupy the space through 2021. The co-op unit has 6,406 square feet on the ground floor with another 6,540 square feet of sellable space below ground.

Sutton recently agreed to sell the upper floors at the Crown Building, which he bought late last year in a blockbuster deal for $1.8 million, to luxury residential developer Michael Shvo.

Rosen is at work on a number of high-profile projects, including the Norman Foster-designed condominium tower at 100 East 53rd Street. He also recently began making over the graffiti-scarred mansion at 190 Bowery.

From left: Jason Fritton and Ron Suber

This Patch of Land is looking pretty fertile. The real estate crowdfunding firm raised $23.6 million in its Series A round, CEO Jason Fritton told The Real Deal.

The capital raising makes the California-based startup one of the best-funded real estate crowdfunding platforms in the U.S.

The fundraising round was led by investment firm SF Capital Group, whose president Neil Wolfson will join Patch of Land’s board. Ron Suber, head of peer-to-peer consumer lending platform Prosper, also invested in the firm.

The amount raised in Series A funding exceeds the approximately $17 million Patch of Land claims to have raised for real estate projects through its platform since it launched in 2013, highlighting the confidence its investors have in the real estate crowdfunding space’s further growth. In May, rival Fundrise raised a record $31 million from the likes of Silverstein Properties’ Marty Burger and Ackman-Ziff Real Estate Group.

Unlike major rivals such as Fundrise and iFunding, Patch of Land is a peer-to-peer lender — it exclusively originates loans. So far, the firm has focused on one-year residential purchase and rehab loans under $1 million. But flush with new capital, it is now looking to expand its range.

The firm will begin originating loans between $1 million and $5 million with terms of three to five years, Fritton said. It will also offer commercial and new-construction loans, and already has $15 million worth of loans in its pipeline.

The new funds are crucial to the planned expansion because Patch of Land pre-funds its deals. In other words, the firm commits a loan and then assumes the risk of finding enough investors through its platform to finance it. This approach is crucial to the startups appeal, Fritton said, because borrowers often need loan guarantees quickly. But it also requires significant cash reserves. Having the ability to pre-fund its deals was one of the key reasons why Fundrise set out to raise investment last year.

Fritton said Patch of Land also plans to use a big chunk of the money to hire new employees such as loan officers, underwriters and processors, and to invest in technology. The startup claims to operate in 15 states, and has originated a handful of loans in Greater New York. It recently closed, for example, on a $250,000 purchase and rehab loan for 714 Pennsylvania Avenue in East New York and a $350,000 purchase and rehab loan for 89-09 120th Street in Richmond Hill, Queens, both residential buildings.

Last month, Jared and Joshua Kushner raised $18.3 million for Cadre, a real estate investment vehicle catering to institutional investors, as TRD reported.

Robert Durst in New Orleans

Robert Durst was indicted in New Orleans on charges of possession of a firearm by a felon and simultaneous possession of a firearm and a controlled dangerous substance.

The suspected murderer is being kept in New Orleans while these proceedings are carried out despite charges in Los Angeles for the murder of his friend and confidante Susan Berman. His extradition to California will wait until the charges in New Orleans are settled, the New York Post reported.

He had previously been arrested on March 15 for Berman’s murder, and separately arrested the next day in relation to the weapons charges, but had not been formally indicted until today.

The Real Deal reported on Durst’s potential strategy if he is tried in Los Angeles for Berman’s murder. His supposed admission to multiple murders at the conclusion of the HBO series “The Jinx: The Life and Deaths of Robert Durst” has fueled much debate about whether the evidence will hold water in court. [NYP] — Tess Hofmann

From left: Empire State Building, Thomas Durels and William Cohen

Workday is relocating its New York headquarters to a 21,401 square foot space on the 49th floor of the Empire State Building – moving its operations from one Empire State Realty Trust property to another.

The human-resources software vendor currently occupies 7,000 square feet at One Grand Central Place on East 42nd Street, but plans to make the move this fall, according to the New York Post.

Workday follows broadcasting company Media General, which announced in January that it would move from One Grand Central Place to a 26,782 square foot space on Empire State Building’s 62nd floor.

Asking rents at One Grand Central Place have been rising and were in the high-$50s per square foot at the end of last year, the Post reports, adding that ESRT is now asking $65 per square foot for space on the 48th floor.

Robert Lowe and David Berke of Cushman & Wakefield represented Workday. Ryan Kass and Fred Posniak of Empire State Realty Trust, as well as William Cohen, Jonathan Tootell and Shanae Ursini of Newmark Grubb Knight Frank represented the building. [NYP, 3rd] — Rey Mashayekhi

From left: A rendering of 500 Metropolitan Avenue and 452 Rodney Street in Williamsburg (inset: Joseph Chetrit)

The Chetrit Group is looking to construct a 160,000-square-foot building in Williamsburg, according to permits filed with the city today.

The five-story property, located at 452 Rodney Street, will rise right next to Chetrit’s 14-story hotel project at 500 Metropolitan Avenue.

Filings indicate the new building will have 14 residential units divided among more than 65,300 square feet, indicating large-sized units. The remainder — and largest part — of the building will be devoted to commercial space.

The neighboring building at 500 Metropolitan Avenue will hold roughly 89,000 square feet of residential space and 56,584 square feet of commercial space.

A representative from Chetrit could not immediately be reached.

Kunicki Bernstein Architects is serving as the architect of record, the filings show.

1. Chinese investor buys One57 pad for $47M
2. Shvo, Amanresorts buy most of Crown Building for $475M
3. Soho retailer Pearl River Mart shuttering Broadway store 

Like The Real Deal on Facebook for breaking industry stories, links to quirkier pieces and lively conversation about important properties in New York and around the world. [TRD‘s Facebook Page]

A rendering of 220 Central Park South

One of the mystery penthouses at 220 Central Park South is now officially listed on the project’s offering plan, and it’s asking $100 million.

Penthouse 73, a duplex on floors 73 and 74 of the Robert A.M. Stern-designed building, will span just over 9,500 square feet with a 713-square-foot terrace. The pad will have five bedrooms, six bathrooms and two powder rooms, according to an amendment to Vornado Realty Trust’s offering plan filed with the Attorney General. The penthouse is asking $100 million, or nearly $10,500 per square foot, according to a copy of the amendment obtained by The Real Deal.

The amendment, dated March 27, still excludes five of the building’s priciest pads, including the top penthouse, which sources said could ask between $150 million and $175 million. The building’s offering plan was approved March 4, as TRD first reported.

Penthouse 73 (Click to enlarge | Photo: E.B. Solomont)

In addition to the $100 million penthouse, prices have changed for other units. A 6,591-square-foot pad on the 48th floor, initially asking $55 million, is now priced at $64 million. One floor up, a $60 million condo is now priced at $69 million.

Following the price change, the building’s total sellout is $2.7 billion, compared with the original sellout of $2.4 billion.

The average price per square foot of the listed units is now $7,514, higher than the initial price of $7,374.

Penthouse 73 (Click to enlarge | Photo: E.B. Solomont)

The long-awaited building, which overlooks Central Park, is one of several Billionaires’ Row luxury towers with penthouses priced at $100 million or more.

Extell Development shattered the city’s record for priciest condo sale with a $100.5 million sale at One57 last year. Zeckendorf Development is asking $130 million for its penthouse atop 520 Park Avenue, and the Chetrit Group and Clipper Equity will ask $150 million for the penthouse at the Sony Building at 550 Madison Avenue.

Still, even among these projects of what’s being described as “the new gilded age,” 220 Central Park South’s ambitious pricing stands out.

On average, One57 asked $6,888 per square foot; Macklowe Properties and CIM Group’s 432 Park Avenue asked $6,894 per square foot; 550 Madison is asking $4,791 per square foot on average, and 520 Park will ask $6,742 per square foot.