Real Estate News, Information, Data and Insights for New York City Real Estate
From NY Post:
Five people were injured, including a firefighter, when a crane collapsed into a neighboring building after catching fire in New York City on Wednesday morning, authorities said.
The construction equipment and debris fell near 41st and 10th Avenue in Manhattan around 7:40 a.m, the FDNY said.
The five injured people suffered non-life-threatening injuries.
July 19, 2023 Ciara Long, Bisnow New York City
From Bisnow:
The owner of a nine-story office condominium in Manhattan’s Garment District has fallen behind on its debt obligation after the building’s sole office tenant stopped paying rent.
The loan backing the commercial portion of the 18-story 315 West 36th St. building, built in 1926, is now in special servicing, according to the Morningstar Credit database. The building’s owner, Walter & Samuels, has been in default since April, according to commentary by special servicer Midland Loan Services.
The largest tenant in the property WeWork, signed a lease in 2015 covering roughly 135K SF across all nine floors of office in the building. But WeWork has stopped paying rent, according to the special servicer commentary, and is not planning to renew its lease for the space.
The building has 143K SF of leaseable space, including ground-floor retail. Walter & Samuels took out a $77M loan at the building in 2018, which matures in March 2028. Walter & Samuels, led by David Berley, paid SL Green $115M for a 35.5% stake in the building a few months after WeWork signed its lease.
WeWork doesn’t list the building on its website, but does offer coworking space down the block at 229 West 36th St.
The building has nine stories of residential condos atop the commercial property and spans 276K SF in total. Ratings agency Fitch signaled in early June that the property’s CMBS debt could face a credit downgrade, Crain’s New York Business reported.
The lender and special servicer have executed a pre-negotiation letter and are starting workout discussions for the space, according to the servicer commentary.
Representatives for Walter & Samuels and WeWork declined to comment to Bisnow.
WeWork’s contraction efforts in recent years have led to upheaval in the office markets it operates in. After closing scores of locations in the early months of the pandemic, it announced last fall it would close 40 more as its losses mounted. It was sued in Chicago earlier this year for vacating a property it agreed to lease until 2033.
In one instance, WeWork stopped paying rent to itself. At 600 California St. in San Francisco, a building in which WeWork has a 3% ownership stake and occupies more than 50%, loan documents indicate it stopped paying rent earlier this year, Bisnow previously reported.
From the Gothamist
Lead pipes may carry water to as many as 900,000 New York City homes, more than 60 years after such pipes were banned across the five boroughs, according to a new report by the New York City Coalition to End Lead Poisoning.
By analyzing publicly available data from the city’s Department of Environmental Protection, the report found that nearly half of all buildings in Brooklyn and Manhattan are served by pipes that are either certainly or potentially made of lead, a dangerous heavy metal that can cause permanent brain damage and other developmental problems in children if consumed. Staten Island’s Port Richmond had the highest proportion among individual neighborhoods.
The pipes need to be replaced for the health of the public, said Joan Matthews, senior attorney with the Natural Resources Defense Council, which contributed to the report. That’s why she and the report’s other authors want the City Council to pass a bill mandating that city agencies replace the lead pipes within the next decade.
New York City treats its water to prevent corrosion, the chemical reaction by which lead flakes off the pipes and into the water supply, according to the Department of Environmental Protection. “While we agree that privately-owned lead service lines should be removed, and are actively working to do that, NYC’s daily water supply is safe,” DEP Commissioner Rohit Aggarwala said via an emailed statement.
But lead levels can still spike depending on the temperature of the water and the time since it was last turned on. Nearly a decade ago, Flint, Michigan experienced a lead crisis after merely switching what water source went through its pipes.
New York City outlawed new installations of lead service lines — the pipes that carry water from central mains to individual buildings — in 1961. But many of the predating lead service lines are still underground, and because so much time has passed, it’s unclear exactly how many remain.
For the new report, the data team for the NYC Coalition to End Lead Poisoning — a group of experts and advocates that’s been campaigning for the cause since the 1980s — studied lead service line records published biannually by the Department of Environmental Protection. The city agency identifies confirmed lead service lines throughout the five boroughs. It also labels a pipe “potential lead” if historical records indicate that at least a portion of the water service line is lead. But it’s hard to know for sure because the pipes were installed so long ago.
The report’s authors classified the number of each service line by neighborhood and joined the counts with population data to estimate how many New Yorkers use the poisonous pipes.
The report found about 40% of citywide service lines include some lead pipe. Those service lines provide water to an estimated 1.8 million people, or more than 20% of the city’s population.
Brooklyn and Manhattan led the city in the estimated proportion of lead service lines, at 46% and 44%, respectively. The Bronx, meanwhile, had the largest chunk of confirmed lead service lines of all the boroughs.
Staten Island had a below-average proportion of lead service lines at the borough level, but its Port Richmond neighborhood, situated on its North Shore, had the largest share by far of lead service lines: an estimated 61% of its pipes are either believed or confirmed to contain lead. East Harlem, Coney Island in Brooklyn and Jamaica in Queens also ranked high on the list of neighborhoods most plagued by lead service lines.
The smoke shop that was located at 346 West 52nd Street in Hell’s Kitchen recently closed. The store is now vacant.
From W42ST.NYC:
There were signs of change at 606 9th Avenue (between W43rd/W44th Street) this week, where a smoke shop vanished this week after a court case between landlords and Citi Deli Corp — more recently known as Milky Way Exotics — was decided in favor of the landlords this January. The building’s owners filed suit against the tenants for defaulting on their lease terms in December 2022, alleging that Citi Deli Corp “had impermissibly altered the use of the premises by ‘including the sale of smoking supplies,’ thereby ‘changing the nature of the retail sales’ from a grocery/convenience store into a ‘smoke shop.’”
The owners of Citi Deli Corp argued that while they were selling unlicensed smoking-related products, they had continued ‘to stock and sell grocery store items and lightly prepared foodstuffs’… in compliance with the lease.” Photos of the store renamed as Milky Way Exotics convinced officials otherwise, and the “deli” was ordered to vacate. According to local sources, the sheriff’s office raided the establishment on April 10, although the shop reopened April 11 and remained in business until this week. W42ST has reached out to the plaintiffs for further comment on the case and will update if we hear back.
The brand-new ground-floor LIDL grocery store plans to work with Hire NYC to hire locals when it opens in the early months of 2026. Numerous employment opportunities will be generated by the store for the neighborhood. Lidl, which has its headquarters in Arlington, Virginia, has now signed a second lease in Manhattan. The community responded favorably to its February 2022 debut in Harlem. The store will provide value, a straightforward and effective shopping experience, as well as sections for meats, seafood, fresh produce, flowers, and other daily grocery essentials. On the east coast, Lidl runs more than 170 stores, including 25 in New York State. At the moment, Lidl has locations in Astoria, Queens, Staten Island, and Harlem in New York City.
“MAG Partners and Lidl U.S. announced a lease for an approximately 23,000-square-foot grocery store at 335 Eighth Avenue, a mixed-income apartment building being developed within the Penn South campus, an affordable housing cooperative located in the Chelsea community of Manhattan, N.Y.
30% of the 188 apartments in the residential building are designated for low- and middle-income New Yorkers as part of the Affordable NY Program. Construction is anticipated to start in the third quarter of 2023, with on-site demolition set to start in May.
From Supermarketnews.com (Lidl Will Open Second Grocery Store in Manhattan, 2023)
From Foxnews.com:
The New York City street where a parking garage collapsed, killing one person and forcing five others to be rescued from the building, remained closed a day later on Wednesday because investigators have not yet revealed the suspected cause of the building’s sudden collapse by Lower Manhattan’s Financial District, which reportedly had four active violations.
He stated that the building had an ongoing violation since 2003. The buildings commissioner claimed that a request had been made in 2010, but she made no mention of whether the infraction had been fixed. Vilenchik continued, promising further information later on, “There are some active permits on the building, one related to electrical work on the premises.”
In order to determine a potential cause for the collapse, “our engineers deployed and are currently inspecting neighboring buildings and reviewing footage from drone pictures,” the man stated. “We are going to continuously review and research property profiles to understand the history of the building, certificate of occupancy, and all other records, and I will update this information.”
According to the records of the NYC Department of Buildings, the parking garage at 57 Ann Street had 19 violations that were resolved or defaulted on, and another four that were still active and required a certificate of correction. According to WABC, the identical parking structure owned by the Great Neck, New York-based 57 Ann Street Realty Association has 64 infractions with the Department of Buildings dating back to 1976. On Wednesday, Fox News Digital contacted the buildings division to get more information.
Six employees were in the building when the garage collapsed at 4 p.m., a few streets from City Hall and the Brooklyn Bridge and around half a mile from the New York Stock Exchange, according to FDNY Chief of Operations John Esposito. Four of them were taken to the hospital and were in good health. One individual passed away, and another declined medical help. He described how a few of the concrete slab floors gave way, crushing some of the automobiles inside and delaying operations. The FDNY proceeded to search the cars even after they thought everyone had been located.
From Foxnews.com
At least for a few days, it appeared that the Flatiron Building had sold on Wednesday. With an offer of $190 million, Jacob Garlick, the auction’s highest bidder, won. Jeffrey Gural was taken aback by this as his family company was thought to be the most likely buyer for the remaining 25% of the building, which is currently owned by a four-owner consortium. The long-running impasse between Gural’s group and the final fifth proprietor, Nathan Silverstein, was resolved with the court-ordered sale.
According to auctioneer Matthew Mannion, there were 11 registered bidders when the auction started, but only “four or five actually placed any bids.” Once the bids reached about $160 million, Gural, a well-known New York real estate professional, and Garlick, a Virginia investor who owns a few buildings nearby but is largely unknown in the public, engaged in a two-person bid-’em-up race. When Garlick won, he cried out in joy and told NY1 that experiencing it had been a “lifelong dream of mine since I’m 14 years old. I’ve worked every day of my lift to be in this position. He then left without saying anything further in public or, it appears, to any of the other parties involved. “We are honored to be a steward of this historic building, and it will be our life’s mission to preserve its integrity forever,” he said before leaving. He failed to deliver the required 10% down payment on Friday, according to The Real Deal. He appears to have received an extension of one or two days after that, but he also missed that date. The building’s conflicting parties’ mediator, attorney Peter Axelrod, told the Times, “I suspect he didn’t have the money, or that he realized he overbid and decided not to proceed.”
According to Mannion, the auction was unique. For a property this scale, prospective buyers typically need to put up a few million dollars up front to prove their legitimacy. This time, buyers had to register ahead of time but weren’t needed to make a payment. It’s unclear whether, per the terms of sale, Garlick will be liable for a portion of his bid anyhow, to cover the costs of the auction and lawyering and generally causing a headache. Mannion says, sounding a little surprised, “I’ve done thousands of auctions and you can count the amount that didn’t require a down payment up front on one hand.”
Since he withdrew, Gural, the underbidder, is being given the property for $189.5 million. Given that his offer was increased by about $30 million in the dying seconds, he is almost certain to decline. It appears likely that the building will be put back up for auction and that, when it does, he will get a second, somewhat less costly bite of the apple.
Why enter an offer in an auction if you lack the funds? Garlick may have been covertly working for his soon-to-be-former partner Silverstein, who stands to gain from a higher final price, Gural hypothesized to the Times. That is known as shill bidding, and it is prohibited.) Alternatively, it’s possible that Garlick was simply swept up in the excitement of the situation. According to study on the subject, the possibility of losing to a rival can trigger a type of fight-or-flight response depending on a number of physical factors, such as blood oxygen levels. In essence, people simply keep moving forward against all logic when they become engrossed in the present. When it’s time to write the check, the smoke clears, and they stealthily return to their corners or their workplaces in Virginia.
From Curbed.
From Bloomberg.com:
One of the prospective buyers vying for a sandwich company is Roark Capital Group. People with knowledge of the situation say Subway. According to the individuals, who requested anonymity because the situation is private, other private equity firms are also thinking about making a bid for the Milford, Connecticut-based business.
One of the individuals claimed that Subway is aiming for a valuation of more than $10 billion. According to another source, some potential buyers may place a $8 billion valuation on the company. No definitive choice has been made, and Roark may decide not to pursue a deal for Subway, the sources continued. A Roark Capital representative declined to respond. Requests for feedback from a Subway spokesperson were not answered. One of the biggest restaurant chains in the world, Subway, which has about 37,000 franchised locations across more than 100 nations, announced in February that it was considering a sale and was collaborating with JPMorgan Chase & Co.
The Atlanta-based Roark Capital, which is run by President Paul Ginsberg and Managing Partner Neal Aronson, has supported a number of food chains, including the parent companies of Arby’s, Dunkin’ Donuts, Carvel, and Carl’s Jr.
On Wednesday, the Flatiron Building brought in $190 million at a live auction.
In Lower Manhattan, the public auction took place in front of the state supreme court. A group of real estate firms controlled the Flatiron Building prior to the auction, but they couldn’t agree on refurbishment plans or potential tenants. They were compelled by a judge to put the building up for sale.
Tom Brady, a real estate broker with Douglas Elliman Real Estate, stated, “I didn’t want to miss this iconic event. The final offer, according to Brady, was reasonable but higher than he had anticipated. You’re talking about one of the most iconic and well-known structures in the world, he remarked. One of the most photographed man-made structures in the world, and I think the new owner deserves praise for it.
A group of real estate firms controlled the Flatiron Building prior to the auction, but they couldn’t agree on refurbishment plans or potential tenants. They were compelled by a judge to put the structure up for sale. The final company to occupy all 21 office floors of the building, MacMillian Publishers, left in 2019. In order to modernize the outdated building and lower its carbon footprint, the owners removed the ground-floor stores and spent $100 million on the renovation. Garlick’s toughest rival was Jeffrey Gural of GFP Real Estate, one of the building’s previous owners. He said, “I wish you hadn’t shown up,” in response when asked if he had any words for the winner.
However, the bids became excessive. Gural called for a break and, after speaking with a person, declared: “It’s not worth it.” If I’m being completely honest, I was somewhat astonished. I never imagined that the building would receive such a high bid. Although it’s a gorgeous structure, it requires $100 million in improvements. It’s essentially empty, he declared. The winning bid of $190 million was almost four times greater than the initial $50 million offer.
From NY1.