REPORT REAL ESTATE Knight Capital Offshore Investors Thrives on Chaos on NYC Buying Binge; on Wall Street Top Leases, Sales PAGE 2 ® PAGE 19 St

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REPORT REAL ESTATE Knight Capital Offshore Investors Thrives on Chaos on NYC Buying Binge; on Wall Street Top Leases, Sales PAGE 2 ® PAGE 19 St CNYB 02-18-08 A 1 2/15/2008 8:36 PM Page 1 TOP STORIES REPORT REAL ESTATE Knight Capital Offshore investors thrives on chaos on NYC buying binge; on Wall Street top leases, sales PAGE 2 ® PAGE 19 St. John’s reports big jump in fall applications; other VOL. XXIV, NO. 7 WWW.CRAINSNEWYORK.COM FEBRUARY 18-24, 2008 PRICE: $3.00 colleges also gain PAGE 3 Tax-exempt How boos for Isiah could derail the big housing Penn Station plan GREG DAVID, PAGE 13 funds are Malpractice panel drying up eyes no-fault birth-injury plan Only 2 or 3 projects THE INSIDER, PAGE 14 with affordable units may get financing BUSINESS LIVES OFFICE ECO-NAGS BY THERESA AGOVINO Getting colleagues to MEETING DEMAND: To go green requires accommodate a wealthy foreign a state housing finance program plenty of patience and guest, Daniel Flannery of is being cut back, which could persuasion PAGE 39 The Ritz-Carlton at Central Park jeopardize a number of affordable built a $1 million suite. housing developments in New York City. david neff david This year, only two or three of $30,000 A NIGHT the approximately 30 projects seeking state tax-exempt financing under the 80/20 Program—build- ings in which 80% of the apart- ments are rented at the market rate Hitting the suite spot and 20% are leased to low-income households—are likely to receive from overseas within 10 days and week stay? More than $200,000. it. Potentially worse is that no oth- What recession? wanted to stay in a large suite on a While most of the city is brac- er projects may get funded in 2009 Hotels cash in on low-level floor. ing for a recession, the priciest and 2010. The problem: No such room Manhattan hotels are thriving, The New York State Housing foreign demand existed. flush with cash from wealthy for- Finance Agency,which issues bonds for luxury rooms Workers were immediately dis- eign visitors who are coming here for the 80/20 Program, says there AT DEADLINE patched to knock down walls in in droves and spending thousands will be only $689 million available four guest rooms on the third floor of dollars a night for premium ac- over the next three years for new YANKEES CAPTAIN DEREK BY LISA FICKENSCHER to create a 1,900-square-foot suite, commodations. Demand is so projects.All of that money will be al- JETER IS OPENING UP THREE featuring two living rooms and a strong that hotels are considering located for this year’s projects. Last Manhattan health clubs in a last september, The Ritz-Carl- dining room with park views. adding more luxury rooms. year,the HFA issued $722.1 million joint venture with 24 Hour ton New York, Central Park hotel The cost of the 10-day renova- “The high end of our business worth of bonds for 80/20 projects. Fitness in the chain’s first foray got a call on behalf of a royal fam- tion? $1 million. is growing by double digits,” says The 80/20 Program is an im- into New York. Mr. Jeter is an ily that was arriving in New York The bill for the family’s two- See HOTELS on Page 8 See HOUSING on Page 9 equity investor in the clubs, called “24 Hour Fitness-Derek Jeter,” though terms of were not disclosed. “You don’t have to play baseball or even be a baseball fan to go work out Media advertising on a downswing there,” he says. Last year, 24 Hour Fitness also signed a 10- year, $10 million deal with the Newspapers most vulnerable; radio, local Yankees that gives it the right MEDIA CULPA to open three Yankees-themed TValso hit hard; Internet prospects bright health clubs in Manhattan. They are separate from the The paper isn’t the only suffer- Jeter clubs. BY MATTHEW FLAMM ing media business. Radio ad rev- enue for the New York market- THE NAMESAKE OF THE on the heels of a 13% plunge in place took a slide in January, and GENERAL MOTORS BUILDING December’s advertising revenue, television insiders predict a low- Time Ladies’ Home has found a new home. GM’s The New York Times said last week single-digit ad revenue drop in the magazine SmartMoney Journal See AT DEADLINE on Page 2 that it would cut 100 newsroom first quarter for the local market- jobs over the course of this year. place. Add magazines to the mix: -39% -22% -15% Some are seeing the bottom fall out AD PAGES AD PAGES AD PAGES (through Feb. 11)2 (through March)2 (through March)2 of their ad page counts. The New York Times 07 Media Group 5 The first quarter of 2008 is al- New York radio marketplace ready looking dismal, following a tough fourth quarter. As talk of a -13%AD REVENUE looming recession grows, media (December 2007; includes -7.5%AD REVENUE companies that depend on adver- International Herald Tribune)1 January 20083 tising are looking with trepidation NEWSPAPER Sources: 1-Company report. 2-Mediaweek. 3- Miller Kaplan Arase & Co. report. See MEDIA on Page 8 71486 01068 0 CNYB 02-18-08 A 2,3 2/15/2008 8:37 PM Page 1 AT DEADLINE Continued from Page 1 avoiding standing in long lines treasury operations and asset by the harbor. Expecting further management group, which are gains in the spring and summer, now housed in the tower on the San Francisco-based Fifth Avenue, will move to the company is bringing another Citigroup Center next summer. vessel to New York from San The company signed a 10-year Diego and is purchasing a lease for 135,000 square feet at second boat, bringing the size of 153 E. 53rd St., according to its fleet to seven. Peter Riguardi, president of the New York operations of Jones GOLDMAN SACHS, WHICH SO Lang LaSalle, who with FAR HAS AVOIDED THE WORST colleague Lloyd Desatnick of the credit crisis, may be in for represented GM. Asking rent at some pain. Analysts at Fox-Pitt the building was $115 a square Kelton Cochran Caronia Waller foot. Frank Doyle and Dave said Friday they expect the firm Kleiner, brokers at JLL, to take $1.7 billion of write- represented the landlord, downs this quarter associated Boston Properties Inc. with loans made to finance leveraged buyouts. In addition, THE METROPOLITAN TRANSIT they expect the firm will suffer AUTHORITY EXTENDED THE $1.4 billion in losses on deadline for bids on the Hudson principal investments. Rail Yards by a week, until Feb. 26, because it was late in giving CONTOUR VENTURE PARTNERS the development teams some EXPECTS TO ANNOUNCE THIS construction information. It still week that it has raised $24 KNIGHT’S ERRANT: plans to select a developer by the million for its first venture CEO Thomas Joyce saved end of March.The five capital fund.The Manhattan- the firm by cutting staff, development teams are The based firm will use the fund to expanding activities and Related Companies, Extell invest in about 10 startups that making acquisitions. Development Co., Brookfield focus on financial services, new Properties, a joint venture media and business services levinekarjean between The Durst technology in the Northeast. Organization and Vornado Realty Trust, and a joint venture PARSONS THE NEW SCHOOL between Tishman Speyer and FOR DESIGN IS OPENING Morgan Stanley. a 32,000-square-foot center this week that will be an exhibition Cashing in on chaos THE NEW OPERATOR OF THE and meeting space for students FERRY ROUTE TO THE STATUE OF and the public.The $13 million Liberty and Ellis Island says facility combines the ground Climate is just right for trading firm Knight Capital traffic has increased sharply floors of four buildings to create since it took over the concession an “urban quad,” with galleries on Jan. 1. Hornblower Yachts and an auditorium. It will be BY AARON ELSTEIN Chief Executive Terry MacRae named the Sheila C. Johnson says passenger volume has Design Center after the co- from his third-floor office in jersey city,Thomas Joyce can clearly see Wall Street. He increased 9% year-to-date as a founder of Black Entertainment can also happily say that he doesn’t feel its pain. result of warmer weather, as well Television, who donated $7 Instead, his company actually stands as a beneficiary of the carnage on the east side of the as tourists’ ability to purchase million toward building their tickets on the Internet, thus renovations. Hudson. As many financial institutions posted their worst results ever last year, Knight Capital Group Inc. was in celebration mode.Transaction volume at the firm, which trades stocks on behalf of institutional investors, soared 60%, to $3.2 trillion.The surge sent trading revenues up THIS WEEK IN CRAIN’S by 12%, to nearly $750 million. Betting that the good times will keep rolling for Knight, investors have driven its share price up 28% in the past three months. SMALL BUSINESS ------------------- 11 “Volume and volatility translate into strong results for us,” says Mr. Joyce, Knight’s chief See KNIGHT on Page 8 GREG DAVID ------------------------------------13 THE INSIDER------------------------------------14 THE WEEKS AHEAD ----------------15 Two airline mergers would b WEEK IN REVIEW -----------------------16 REPORT: deal. Meanwhile, Continental Air- would mean for New Yorkers is an- Proposed tie-ups lines and United Airlines have let it other matter. 41 REAL ESTATE ------------------------------- 19 would do little to cut be known that they would quickly “Airline mergers are not de- DEALS--------------------------------------------------30 join forces if the Delta-Northwest signed for or by consumers,” says airport congestion; linkup gets off the ground.
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