Vacancies Back in Vogue with Investors
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20100726-NEWS--0001-NAT-CCI-CN_-- 7/23/2010 7:08 PM Page 1 INSIDE MEMO TO BUSINESS: TOP STORIES STOP FRETTING. What Sarah Palin THE RECOVERY should know about IS STRONGER downtown mosque THAN YOU THINK. ® GREG DAVID PAGE 11 PAGE 2 VOL. XXVI, NO. 30 WWW.CRAINSNEWYORK.COM JULY 26-AUGUST 1, 2010 PRICE: $3.00 Vacancies Pfizer’s growth pill PAGE 2 back in A doctor picks up the pieces at North vogue with General Hospital PAGE 2 investors Libraries book cuts Betting tenants will in budget, services ICK! come, rents will rise PAGE 3 Manhattan’s bedbug invasion bites as economy rebounds Art market’s revival stores, offices with costs of battling offers entrepreneurs BY THERESA AGOVINO brush with greatness the creepy critters. Is no place safe? despite falling Manhattan office SMALL BUSINESS, PAGE 12 rents and rising vacancies, investors are snapping up buildings that until recent- BY ADRIANNE PASQUARELLI ly were shunned as undesirable: those with large swaths of empty space avail- move over, dracula. There’s a new bloodsucker in town. Just ask lingerie chain able now or in the near future. Increas- Victoria’s Secret. Earlier this month, after news reports surfaced of a bedbug infes- ingly, they are betting that the improv- tation at a downtown retailer, the Ohio-based company proactively checked its 10 ing economy will spur demand for Manhattan sites and found what officials described as “isolated areas that may have space and reignite rents. been impacted.” It closed one midtown store for several hours and discarded con- “Risk is back,” says Dan Fasulo, a taminated inventory. Such measures cost a bundle, but Victoria’s Secret can at least managing director at RCA Analytics. “Investors are willing to go further out take comfort in the fact that it’s in good company. on the risk spectrum to get the kinds of “This summer alone, we’ve treated about 20 stores,” says Diego Vasquez, gener- returns they want.” al manager at West Village-based exterminator EcoChoice.“Last year, it was most- It’s a familiar scenario, with a couple See ICK! on Page 23 of postrecession twists. During the BUSINESS LIVES boom,investors routinely paid a premi- um for empty space, confident they GOTHAM GIGS See VACANCIES on Page 23 VP of toys and games? Nice work ... P. 25 G ANNE FISHER on great partnerships P. 25 Follow the G MOVERS & SHAKERS Mad Men’s Elisabeth Moss loves NYC,jeans stimulus and Broadway P. 26 G GAEL GREENE discovers money Chelsea’s Cô Ba P. 27 It’s half-spent, and 77% INDEX covers operating costs, NEW YORK, NEW YORK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _6 not shovel-ready stuff THE INSIDER _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _8 VIEWPOINT _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _10 BY JEREMY SMERD CLASSIFIEDS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _20 BUGGED OUT: “Bedbugs scare people,” FOR THE RECORD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _22 says one pest-control a gaggle of newly minted police offi- HOT JOBS _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _25 expert. “Stores don’t cers stood on a subway platform in want to lose business.” EXECUTIVE MOVES _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _25 Grand Central Terminal last week,gig- THE WEEK AHEAD _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _27 gling as if they had just beaten a bad rap. WHAT HE’S READING _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _27 In a sense, they had. Until federal stim- getty images ulus funds were awarded, the city wouldn’t have had money to pay their salaries. But thanks to $39.5 million 30 5 from Washington, D.C., to beef up New York’s public-transit security, 104 REPORT REAL ESTATE cadets graduated July 1 and were work- Battery Park City, new urban model P. 13 ing in the subways a week later. Although the stimulus was present- ELECTRONIC EDITION Plus: largest office leases, sales P. 17-18 ed to the public as a program to create NEWSPAPER See STIMULUS on Page 24 71486 01068 0 20100726-NEWS--0002,0003-NAT-CCI-CN_-- 7/23/2010 7:07 PM Page 1 IN BRIEF NEW YORK-PRESBYTERIAN HOSPITAL, ONE OF NEW YORK’S MOST FINANCIALLY STABLE PFIZER’S B hospitals, cut 200 jobs from its work force of 19,000.The reduction includes 164 vacant positions, plus another 36 managers and staffers who have left the hospital. During the Addition of Wyeth downturn of the past two years, “we have gives drugmaker adjusted our operating budget by reducing expenses and, in some cases, eliminating vacant a lift, but shrinking positions,” a spokeswoman explained. “However, we have decided that given the revenues still likely continued challenging economic climate for hospitals, particularly those in New York state, it is prudent for us to take steps to further adjust BY FRAN HAWTHORNE our operating budget.” a decade ago, Pfizer Inc. snapped CONDÉ NAST NAMED ROBERT SAUERBERG AS up Warner-Lambert and with it PRESIDENT AND CHARGED HIM WITH Lipitor, the best-selling drug on the adopting a new business model that would planet, with sales that topped $11 move the publisher of Vogue, Glamour and The billion last year. New Yorker beyond the glossy printed page. Pfizer followed up seven years The president’s job formerly belonged to ago by acquiring Pharmacia & Up- Charles Townsend, who remains chief john and got its coveted painkiller executive. “We need to move beyond the Celebrex, which turned out to be a magazine,” Mr. Townsend said in a statement. huge bust when that drug was found Condé Nast has frequently been criticized for to produce serious cardiovascular relying too heavily on print ad-page sales, side effects, such as heart attacks. leaving it overexposed to digital competition Win or lose, Pfizer can’t seem to for both consumers and advertisers. It has been shake its addiction to buying its investing a lot, however, in app editions of its growth. With the acquisition of magazines for sale on the iPad—an effort in Wyeth, the world’s largest pharma- which Mr. Sauerberg has been deeply involved. CENTER OF STORM: The Park Place site plans one floor for prayer. ceuticals company is trying again. Two group presidents who had been Nine months after considered potential successors to Mr. that $68 billion deal Townsend, David Carey and Tom Florio, NEIGHBORHOOD JOURNAL closed, it is clear that recently left the company. all the new drugs, re- search projects, labs and scientists that Mosque came with the merger BY THE NUMBERS will give Pfizer a short-term lift. What Weekly shift of the city’s economy is far less clear is WARNING SIGNS Both home building and whether that will be madness home sales figures were weak. Mighty Goldman sufficient to counter Sachs lost its Midas touch, and Ben Bernanke Pfizer’s serious long- dozen of drugs—in- called the outlook “unusually uncertain.” term problems. cluding mighty Lipitor a matter of “Wyeth has a good Pfizer can’t in 2011—opening the R&D pipeline,” says field to generic rivals. $43M -22.6% $90.5M Viren Mehta, the seem to shake By most estimates, the SALE PRICE of DECLINE in NYS SUM Tiger Woods Hamptons home manufacturing earned in 2009- managing member of its addiction resulting flood of cheap 10, the most any perspective Mehta Partners, competitors will slash of ex-wife of Jon jobs between Corzine; $17M off 2001 and 2008 athlete earned which advises invest- to buying its Pfizer’s annual revenues asking price Source: Federal that year ment managers on by $30 billion. Com- Source: Prudential Reserve Bank of New Source: Sports growth Douglas Elliman York Illustrated Locals welcome $100M biopharmaceuticals. pounding this problem, “The question is, is Pfizer’s labs have been project, but others side that enough?” unable to come up with MIXED SIGNALS Venture capital funding for New York area The main problem strong replacements.