Saturday, May 14, 2011

Union Square Rental Building Sells for $17M, Will Go Condo

Unlike other upcoming condo conversions we've mentioned lately, 9 East 16th Street should have a relatively easy time of it. The Union Square-area, Louis Korn-designed building has only market-rate tenants, the Post explains, who'll leave once their leases are up, making way for the just-announced conversion of around 15 units by BCN Development, which just purchased the building for $17 million.

A press release fills in a few more deets: work on the conversion will likely start at the end of the summer or in early fall, and the result will be one-, two-, and three-bedroom condos. No word on pricing yet, but the going condo conversion rate is high.

'MIB3' is groovy on Greene

The "Men in Black III" movie is turning a Greene Street loft into a back-to-the-sixties party palace. The upcoming flick, starring Will Smith, Alice Eve and Josh Brolin as the young Tommy Lee Jones character, Agent K, has rented the 9,000 square-foot second floor of 38 Greene St., where it intends to film a crucial scene.

The space has 20 wrap-around windows on Greene and Grand streets.
"The party is going to have an Andy Warhol theme, and they got the most charming loft in SoHo," said building owner David Zar, who was told he could dress up and be an extra in the film if only the busy real estate owner had time to stand around for hours.


"MIB 3" is paying "quadruple" the normal rent, which Zar is splitting with another film industry tenant that is now waiting to move into the loft once filming is over.
The tenant-in-waiting, Logan Media, is a production and post-production facility that is now a block away at 155 Wooster St. The asking rent for its seven-year lease with options was $43 a square foot, so you can imagine what "MIB3" is paying.
Logan was repped by Glenn Teyf, who is now with Gideon Group, while Zar did the work for his own building.
"MIB3" has also rented several other Zar-owned spaces in the area to handle hair, makeup and places for those extras to hang out when they are not actually in front of the cameras.
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The 1896-era residential loft building at 9 E. 16th St. by Union Square is in contract to be sold to BCN Development for around $17 million by an entity controlled by Maurice Laboz and William Punch. BCN will take over the current $9.975 million mortgage with Sovereign Bank.
Craig Nassi, CEO of BCN, said, "It is an amazing building with a gold-mine location, as there is a pent-up demand from people who want to live and own in the Union Square area."
The 50-foot-wide and very ornate building was designed by Louis Korn with 13-foot ceilings and lots of arched windows overlooking the park and a low-rise building to its rear.
As most of the tenants have market-rate deals, the sponsors will have about 15 units for sale once the leases are up and the plan is approved by the attorney general's office in about nine months.
Renovations to the lobby, elevators and other common elements will start as soon as they close on the project in August. Nassi is also thrilled the building has Steak Frites as its retail anchor tenant.
"It's nearly impossible to find great deals like this," said Nassi of the off-market transaction. "Most buildings like this have too many rent-regulated tenants."
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The UK-based online fashion retailer, Net-a-Porter, just signed a 10-year, 32,144 square foot lease at 100-104 Fifth Ave. for the entire 11th and 12th floors. The asking rent was $55 a square foot for the recently purchased building. Launched in 2000, Net-a-Porter has 800 employees in the UK, and this will become its first US office. The company's 3 million fashion customers come from 170 countries, and 90 percent of them are women.
Owen Hane of Cushman & Wakefield represented Net-a-Porter.
"This is the first deal we've done post-closing," said Grant Greenspan of the Kaufman Organization who represented the building along with Michael Kaufman and Elliot Warren. Kaufman purchased the building for $93.5 million in December. "Every floor but one has a lease out for signature," Greenspan said.
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Just in time for the International Council of Shop ping Centers big powwow in Vegas at the end of the month, where more than 20,000 brokers and re tailers are ex pected, Thor's Joseph Sitt is expanding his business inter ests with the founding of a new retail and investment company called Thor High Street Advisors.
Veteran retail brokers now on board include Chris DeCrosta, Robert Draizen and Mitchel Friedel. No one responded to repeated inquiries even though a Web site is already up and running.
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BCN Development betting on condos in Union Square, Downtown Brooklyn

BCN Development is moving forward with two condo conversion projects, with the mindset that local scarcity will lead to success in two different neighborhoods.

The developer is in contract to purchase a rental building at 9 East 16th Street for around $17 million, which will begin conversion later this summer.

“It’s a beautiful, ornate building,” said Craig Nassi, CEO of BCN. “The reason we like the deal is because it’s just so hard find any product in that submarket.” BCN was involved in a bidding war with three other developers for the building, but eventually prevailed, he said.

The Post, which first reported the deal, noted that most of the rental tenants in the property are market rate, and BCN expects to have around 15 condos to sell when the leases expire. Maurice Laboz and William Punch were the sellers.

According to PropertyShark, the 30,680 s/f building is split between 26,430 s/f of residential space and 4,250 s/f of retail. It was built in 1900 and designed by architect Louis Korn. The restaurant Steak Frites is the retail tenant.

The 50-foot-wide building will have one, two and three-bedroom condos with 13-foot ceilings, with the conversion scheduled to begin after the deal closes later in the summer. BCN will also renovate the lobby and retrofit the elevator. It has not yet selected a brokerage firm.

At 184 Joralemon Street in Downtown Brooklyn, BCN is in the clear after a lawsuit involving the building’s sale was dropped, and no appeal was filed.

United American Land, the developer of Soho Mews, had filed a lawsuit in January against Brooklyn Law School, which sold 184 Joralemon to BCN for $12 million in January. United American claimed it had a contract to buy the building for $9.2 million and a lis pendens was filed, but was later dropped.

184 Joralemon was a Brooklyn Law School dormitory for over 30 years, and is included in a proposed “Brooklyn Skyscraper” historic district by the Landmarks Preservation Commission. Joan Wexler, president of Brooklyn Law, testified against the building’s inclusion in the district, which she said would raise the rents of students. In a historic district, landlords are required to maintain their buildings’ fa├žades, which may require additional expenses.

Now, BCN plans to spend $3 million to $4 million in renovating 184 Joralemon, and it plans to start sales at the building in August. The property’s 24 condos will start at $750,000. It is in talks with brokerages and plans to select a marketing agent soon.

“We’re in full gear,” said Nassi.

Generally, BCN seeks conversions, rather than ground-up constructions, because of the risks associated with construction lending and the difficulties in obtaining parcels. One exception is 791 Broadway, which fully leased its 11 units in 45 days. Two-bedroom units started at $3,750 per month. The site’s previous building, which was demolished, was formerly the home of poet Frank O’Hara.

BCN had also planned a condo at the Jewish Daily Forward building at 45 East 33rd Street, but ended up flipping the property to NYC Hotel 33 LLC for $20 million, after buying it a few months prior for $18.5 million.