New York City now has over 3.33 million units of housing stock, the highest number since 1965, and the number of units increased in all five boroughs between 2005 and June 2008, according to preliminary results of the 2008 New York City Housing and Vacancy Survey, released yesterday. New York City’s rental vacancy rate was 2.88 percent between February and June 2008, down from 3.09 percent during the same period in 2005. Because the survey includes data only through June, it does not address the impact of the financial crisis on city real estate. The number of rent-stabilized units fell by 17,000 since 2005, the study found. The number of people paying more than 50 percent of their income for rent was 29.4 percent, compared to 28.8 percent in 2005. The survey is conducted every three years and is required by city and state rent-regulation laws.
All eyes on rentals now
February 17, 2009 — JAD Realty Group, LLC.
From the February issue: New York City has always been a town of renters. But in the last few years, it was easy to forget that fact, with condo towers selling out in a matter of days and the average price of a Manhattan apartment peaking at a record $1.7 million in the first quarter of 2008, according to Prudential Douglas Elliman. For a time, everyone wanted to own New York real estate, and every broker wanted to sell it. Now that the ensuing wave of job losses has made buying property impossible for many New Yorkers, rentals are suddenly back in vogue. “I wouldn’t want to be selling condos now,” said Richard LeFrak, the chairman, president and CEO of the LeFrak Organization, one of the biggest rental landlords in the New York City area. LeFrak will soon begin marketing a new 33-story rental tower in Jersey City called Aquablu. Occupancy is set for May or June.
▶EAST 49th BELOW MRKT 3 BLKS FRM TRAIN 2nd AVE MARCH◀STUDIO
February 11, 2009 — JAD Realty Group, LLC.BRAND NEW LISTING – MIDTOWN EAST STUDIO
BELOW MARKET – EAST 49TH STREET & 2ND AVENUE
Contact JAD Realty Group for showing times:
Jeffrey Ditri
610.781.8417
 
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BRAND NEW LISTING – MIDTOWN EAST STUDIO
BELOW MARKET – EAST 49TH STREET & 2ND AVENUE
Contact JAD Realty Group for showing times:
Jeffrey Ditri
610.781.8417
▶EAST 80S UNDR MRKT ELEVATOR 200 SQFT GARDEN LAUNDRY◀STUDIO
February 10, 2009 — JAD Realty Group, LLC.BRAND NEW LISTING – UPPER EAST SIDE STUDIO
EAST 88th STREET – ELEVATOR – LAUNDRY
Contact JAD Realty Group for further detail
Jeffrey Ditri
610.781.8417
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BRAND NEW LISTING – UPPER EAST SIDE STUDIO
EAST 88th STREET – ELEVATOR – LAUNDRY
Contact JAD Realty Group for further detail
Jeffrey Ditri
610.781.8417
Brand New Listing – East 70S Studio – Granite Kitchen/Marble Bathroom
February 10, 2009 — JAD Realty Group, LLC.***BRAND NEW LISTING***
UPPER EAST SIDE STUDIO – EAST 70S
Contact JAD Realty Group for showing times:
Jeffrey Ditri
610.781.8417
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***BRAND NEW LISTING***
UPPER EAST SIDE STUDIO – EAST 70S
Contact JAD Realty Group for showing times:
Jeffrey Ditri
610.781.8417
PICS▶UNION SQUARE E 17 RENT STABILIZED IRVING 2/15◀1 BEDROOM
February 10, 2009 — JAD Realty Group, LLC.REDUCED TO RENT – GRAMERCY PARK ONE BEDROOM
IRVING PLACE, RENT STABILIZED UNIT, EXPOSED BRICK WALL
For showing times, please contact JAD Realty Group for more information:
Jeffrey Ditri
610.781.8417
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REDUCED TO RENT – GRAMERCY PARK ONE BEDROOM
IRVING PLACE, RENT STABILIZED UNIT, EXPOSED BRICK WALL
For showing times, please contact JAD Realty Group for more information:
Jeffrey Ditri
610.781.8417
Repricing accelerates for Manhattan office markets
February 10, 2009 — JAD Realty Group, LLC.Asking rent reductions that accelerated through the fourth quarter of 2008 continued in January, with prices down by as much as 30 percent from the peak last summer, commercial brokers said.
The number of blocks of space in Midtown with dramatic price cuts quadrupled between September and December, according to a CB Richard Ellis report released last month.
Tenant representative broker Norman Bobrow said he saw repricing all over Manhattan. “This has been going on since September of last year but has accelerated, really accelerated, in December and January,” he said. He estimated prices had fallen back to levels last seen in 2005.
The optimism from the inauguration of President Barack Obama on Jan. 20 was quickly dampened two days later by a crushing jobs report that showed the city shed 8,500 private jobs in December and the unemployment rate rose to 7.4 percent, Glenn Markman, executive director at Cushman & Wakefield, said. Each office job loss equates to a loss in demand for about 250 square feet.
Despite the bad news, leasing negotiations have picked up from the near standstill in the fourth quarter of 2008.
“The market had to reduce [prices] because it was too expensive,” said Markman, who estimated prices were off 20 to 30 percent from last year’s highs.
As an example, he said, in late January he was negotiating a lease with a landlord in a Midtown building who had been seeking as much as $80 per square foot. The tenant occupies the space on a sublease, paying about $50 per foot. But as the economy declined, the landlord reconsidered its high price and will likely settle for about $55 per square foot, or a 31 percent cut from the asking price.
“Look what the landlord gets: certainty,” Markman said. “He does not give [tenant improvement] or free rent … and no downtime for leasing.”
Howard Rosenblum, a leasing agent and director at commercial property landlord Kaufman Organization, said owners were aggressively cutting prices by about 20 to 25 percent to attract tenants. But, he said, tenants were still holding off.
“A lot of people are thinking it is going to drop more and don’t want to commit,” he said. Tenants do not want to pay the steep security deposit and some wonder if they will still be in business in the coming years.
But some tenants who do negotiate are signing leases with prices that are below the rents they paid in the final years of a long-term lease, he said.
Neal Lerner, an independent tenant representative broker who works in the 5,000-to-15,000-square-foot range, said tenants willing to sign leases were opting for shorter terms, like two, three or five years. The bet is that rents will be even lower on the expiration of the lease, and they will get a better deal at that time.
“People tend to stay in place and negotiate shorter commitments from landlords,” he said. “They are waiting for a better time when they can take advantage of lower rentals on a long-term basis.”
Midtown
Landlords in Midtown have tripled the amount of space aggressively discounted in their hunt for tenants, slashing prices in December by an average of 19 percent, CBRE reported. The quantity of sites being repriced quadrupled from 30 in October to 134 in December, representing 1.74 million square feet that month, the report said.
Despite the steep reductions, the average asking rents dropped by only $1.98 to $78.89 in December, and vacancies rose 1 point to 7.6 percent, the data said.
Some landlords were holding firm in pricing. Bobrow said there were Class A landlords in Midtown who were reluctant to sign leases at discounts. The building owners sought to maintain the high rents in the office towers so that larger tenants negotiating a lease renewal could not point to lower rents and ask for a similar discount.
Landlords “don’t want to inch down, they want to hold on to the renewals” at the high prices, he said.
Midtown South
Midtown South had its slowest month in leasing velocity since May 2001. Just 80,000 square feet was signed, representing only 20 percent of the five-year rolling average, CBRE said. The anemic month capped the weakest year since 1993. In 2008, 2.58 million square feet was leased, a level 40 percent below the total for 2007, the data showed.
The district saw vacancies rise in December by 1 point over the month earlier to 8 percent, but asking rents remained steady, dropping just $0.03 to $52.43 per square foot.
Downtown
Leasing activity Downtown remained flat while prices declined moderately, in the only one of the three office markets to see positive absorption, the CBRE data showed.
The district had a net absorption of 270,000 square feet, but for the full year the area had a negative absorption of 1.59 million square feet, compared to a positive absorption of 1.33 million square feet in 2007, according to CBRE.
Average asking rents fell from November to December by $1.51 per square foot to $47.68 per foot, while vacancy rates were steady at 7.4 percent.
Markman said brokers were keeping a close eye on three financial firms that occupy 7.5 million square feet downtown — Bank of America, Goldman Sachs and American International Group.
Bank of America is absorbing Merrill Lynch, Goldman Sachs is moving to a new headquarters in 2010 and AIG may sell some of its buildings for residential use.
“Depending on what the companies look like a year from now, that will have an effect on the marketplace,” he said.
Tenants in position to bargain – The Real Deal New York Real Estate News
February 6, 2009 — JAD Realty Group, LLC.Biggest price cut of the day
February 6, 2009 — JAD Realty Group, LLC.
770 Park Avenue, #14B
The unit with the biggest price cut today in Manhattan is a two-bedroom, three-bath co-op at the Rosario Candela-designed 770 Park Avenue, according to Streeteasy.com. The apartment, unit #14B, was cut by $2.4 million and is now listed for $7.5 million, down from its $9.9 million listing. The apartment was originally put on the market at $10.95 million in May 2008, and cut to $9.9 million in September. Brown Harris Stevens’ Nancy Elias and John Burger are listing the unit, which also has a 45-foot terrace. The $2.4 million cut from the unit is almost double the average price of a co-op in Manhattan, which was $1.21 million in the fourth quarter of 2008, according to appraisal firm Miller Samuel.
Meanwhile, the most expensive unit to come on the market today is a $9.35 million condo at 151 East 58th Street, One Beacon Court. The 2,410-square-foot unit has three bedrooms and three baths. Brown Harris Stevens’ Linda De Luca and Corinne Vitale are listing the unit. On Monday, a One Beacon Court unit had the biggest price cut of the day.
Luxury stores can’t afford Madison Avenue
February 5, 2009 — JAD Realty Group, LLC.
“For Rent” signs, like this one at 753 Madison Ave., are becoming a familiar sight along the avenue’s “Gold Coast.”
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After more than 30 years on Madison Avenue, the retailer E. Braun & Company is packing up its $3,500 hand-embroidered tablecloths and $2,390 bedding sets and will defect in April for cheaper space on Park Avenue.
And it is not alone. New York’s most elegant shopping corridor, the Gold Coast of Madison Avenue, from 57th Street to 72nd Street, is pockmarked with vacancies as retailers flee sky-high rents. More than two dozen retail spaces are on the market and are either empty now or about to be. Windows that once showcased hand-tooled leather suitcases are now plastered with for-rent signs.
“This is as bad as I’ve ever seen it,” said Alan Victor, a broker who has worked the street for more than four decades and who is an executive vice president of the Lansco Corporation.
Another broker, Gene P. Spiegelman, an executive director at Cushman & Wakefield, said that 13 percent of the retail spaces on Madison Avenue were available either as a direct lease or a sublet. Not included are those with tenants who would move if the right offer turned up.
“There are tenants that say, ‘If you get me a good sublease, I’ll take it and run,’ ” said E. William Judson, a broker who is also the chairman of the Madison Avenue Business Improvement District, a group made up of property owners and retailers. “Some people are thinking, ‘Maybe I’ll either downsize or I’ll close the store.’ If they have a lousy day, they say, ‘Let’s get out of here.’ If they have a good day, they say, ‘Let’s stay.’ ”
Lately, the people who sell $2,400 leather bags and $1,600 satin-and-rhinestone evening sandals are more likely to have bad days. Of all retail chain categories, luxury stores had the greatest decline in sales in 2008, falling 7.5 percent from 2007, according to the International Council of Shopping Centers, a trade group. From 2004 to 2007, by contrast, the luxury sector outperformed all other categories by a wide margin.
The recent holiday season was the worst in four decades for the retail industry. Sales at Neiman Marcus’s specialty division, which includes Bergdorf Goodman, declined 31.2 percent. Tiffany reported that sales in stores open at least a year were down 24 percent.
“If you’re in New York, and you’ve got the financial services industry in a depression, how can you possibly do well in high-level goods?” asked Howard L. Davidowitz, chairman of Davidowitz & Associates, a retail consulting and investment banking firm.
Madison Avenue has traditionally catered to the wealthy, but until Polo Ralph Lauren opened at the former Rhinelander Mansion on 72nd Street in 1986, most of the shops were private boutiques like E. Braun. In 1998, the stretch on Madison Avenue known as the Gold Coast surpassed Causeway Bay in Hong Kong as the most expensive shopping strip in the world, Cushman & Wakefield reported, with annual rents averaging $550 a square foot. By then, Giorgio Armani had two 16,000-square-foot stores on Madison and Hermès was about to move there from 57th Street.
For many international retailers, a Madison Avenue address was viewed as essential for promoting their brand, even if sales were not robust enough to justify the rent. Often, part of the rent came out of the marketing budget — a practice that brokers say is fast disappearing.
Rents began escalating rapidly a few years ago, after the stores on the Madison Avenue side of the General Motors Building, at Fifth Avenue on 58th and 59th Streets, were expanded and began commanding annual rent of more than $1,000 a square foot, said Benjamin Fox, the president of Winick Realty Group, a New York retail brokerage.
In 2007, fancy jewelers clustered on the avenue, especially between 61st and 64th Streets. They were able to afford higher rents because their costly merchandise could fit into smaller spaces and more revenue could be squeezed out of every inch. Rents skyrocketed to $1,250 a foot or even more. (Even so, Fifth Avenue between 49th and 59th Streets is now ranked as the world’s costliest shopping strip, with asking rents as high as $2,000 a foot. Its luxury tenants share the avenue, however, with shopping-mall clothing chains like Diesel and Abercrombie & Fitch.)
Retailers typically expect their rent to equal about one-tenth of their sales volume. “In a prime location like Madison Avenue, most retailers will change that to 25 percent,” said Joel Isaacs, the president of Isaacs & Company, a retail brokerage. Even under that formula, a tenant paying $1.25 million for 1,000 square feet would need to have nearly $5 million in annual sales.
Today, however, asking rents on Madison and elsewhere are dropping by as much as one-third, brokers say. And many landlords will offer more concessions than before, like additional months of free rent. “If you’re a good retailer and you’ve got a good product, the landlord wants you,” said Faith Hope Consolo, the chairwoman of the retail group at Prudential Douglas Elliman. “The word ‘no’ no longer exists.”
Taking advantage of the softening market, Lalique, which sells crystal goods, gave up its two-level store near 63rd Street — now occupied by the watchmaker Mauboussin — and is moving into smaller quarters five blocks to the south, with lower rent than it would have paid six months ago, Ms. Consolo said.
The astronomical rise in rents did not cause all the impending vacancies on Madison. Some tenants, like the jeweler Graff, have moved to larger quarters nearby. (Hublot, a Swiss watchmaker, recently came close to leasing Graff’s former store but got cold feet and withdrew, said Robert C. Fink, director of leasing for the landlord, the Winter Organization.)
William Friedland, the Gold Coast’s largest property owner, is emptying out a building that houses the restaurant La Goulue and several stores in order to redevelop it.
Frederic L. Barbatelli, a co-owner of E. Braun, said he was moving to be closer to D. Porthault and other Park Avenue purveyors of luxury home goods. But Ms. Consolo, who is offering a Mini Cooper to the broker who snags a lease for E. Braun’s Madison Avenue space, between 63rd and 64th Streets, said the store had been driven out by high rents.
Mr. Victor of Lansco said that lower rents would be good for Madison Avenue. “The market reached a crazy level,” he said. “A lot of people who wanted to look at Madison Avenue couldn’t make it pencil out. This may be a reality check. It will still be high-end, but it will be a healthier Madison Avenue.”
