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NEW YORK CITY’S COMMERCIAL REAL ESTATE MARKET Photo: Shutterstock Photo: As top owners, developers, brokers and major city officials gather for the Real Estate Board of New York’s (REBNY) 124th Annual Banquet at the New York Hilton, the industry is gratified by its performance in 2019 and looking forward to a strong market in 2020.

“Despite a challenging political climate, the real estate indus - try is optimistic about the short-term outlook across the five Affordable Housing Crisis in New York boroughs: Important industries and our population continue to grow and the economic outlook is strong,” said James Whelan, Undoubtedly, has an affordable housing crisis, driven president, Real Estate Board of New York. “We look forward to in large part by a severe shortage of available units, noted Whalen. working with policymakers in 2020 and beyond to create smart, “To solve it, we must focus on those individuals and families who data-driven policies that will create housing and promote eco - need assistance paying the rent and create new units for a range nomic growth.” of incomes to establish a robust housing market that offers enough Whelan was named president of REBNY, effective July 1, 2019, choices to renters,” he urged. “The laws passed in 2019 did little to replacing outgoing president John Banks, who retired after five address this crisis. The changes will not ease vacancy rates, create years as REBNY president and 33 years in the private and pub - a single new affordable unit, or assist individuals or families that lic sectors. In congratulating Banks for a job well done, Whalen already have difficulty paying their rent. Going into 2020, REBNY said: “John’s passion, intellect and dedication guided our indus - will continue to fight for policies that result in more affordable hous- try throughout his tenure as REBNY president. He led the way ing and additional tax revenue to pay for vital government services.” through many pivotal moments, negotiations and other import- ant milestones. John remains a trusted adviser for REBNY and for our industry.” Strong Support for ‘Gateway Project’ Whelan said that New York continues to thrive as a global city that attracts new companies and top-tier talent. It enjoys record The future of this thriving city and, indeed, the region, depends on job growth, population growth, near historic low crime rates and the development of new infrastructure projects. REBNY contin- record tourism, but the REBNY president is also concerned about ues to support the Gateway Project, which would create a second harmful policies enacted at the city and state levels that exacer- tunnel under the Hudson River and greatly improve train capacity bate the affordable housing crisis and restrict economic growth. for Amtrak’s Northeast corridor. REBNY backs this massive proj- He said that these policy changes came after the federal gov- ect, which enjoys bipartisan support, and encourages the federal ernment’s elimination of the state and local tax (SALT) deduc- government to do the same. Further, it continues to support other tion. “The elimination of SALT will continue to put a strain on our projects across New York City that will help make its transportation economy,” he warned. “It has incentivized high-income earners infrastructure safe, reliable and modern. to leave the region and will negatively impact the ability of state and local governments to finance basic government services. “A threat to the future of New York is a decline in real estate REBNY’s Focus for 2020 investment, which is particularly impactful for New York City’s tax revenue. The industry’s health is vital to the health of the city, REBNY wants to be the most effective advocate, educator and con- as real estate–related taxes make up more than half of all taxes vener possible for the real estate industry and for New York City collected. This revenue supports vital public services like first overall in 2020, according to its president. Real estate is the city’s responder salaries, public park maintenance and vital repairs to most important industry, powering the success of the five boroughs. the M.T.A.” When real estate thrives, New York City thrives. “In 2020, REBNY will continue advocating for more jobs, more housing and additional tax revenue in order to point the city we all REBNY Policy Winners in 2019 love in the right direction,” explained Whalen. “We will be unrelent- ing in our pursuit of this task and will fight harder and smarter than Turning his attention to REBNY’s biggest policy accomplishments ever for policies that will lead to an even brighter future for our city.” in 2019, Whalen said that REBNY was proud to work with state and local policymakers and an array of advocacy groups to secure passage of a congestion pricing plan that will boost funding for Terrorism Insurance Reauthorization the subway while easing traffic in ’s business district. In other accomplishments, “We worked with local elected offi - Is Critical to City cials and the New York City Department of Sanitation in sup - REBNY has long been a supporter of port of a thoughtful plan to reform the city’s commercial waste the existing legislation regarding ter - collection system,” he asserted. “Our advocacy helped with the rorism insurance and is pushing part - passage of legislation that addresses several environmental, ners in Congress to take the necessary labor and safety goals while also ensuring that all businesses action to extend the program. The first will have the ability to choose from multiple carting companies.” step in the reauthorization process Whalen also mentioned that at the city level, the industry wit - was recently approved by the House nessed how effective its members could be when more than Financial Services Committee, after 1,000 agents attended a City Hall rally and helped ensure that which the full House will vote. If it the City Council did not pass problematic legislation to curtail passes in the House, the Senate will the income of hardworking residential brokers. then vote on it as well. If both houses okay the measure, it will be sent to the president. “The current pro - Cooperation Agreement With posal would extend the program for seven years without changes, Construction Unions which REBNY fully supports,” said REBNY is proud of a historic cooperation agreement reached Whalen. “We are grateful to U.S. with the city’s construction unions. New York City’s real estate Senator Chuck Schumer for his industry fuels hundreds of thousands of good-paying jobs, efforts fighting on behalf of New including union construction jobs that provide a pathway to the York City on this issue.” middle class, according to Whalen. Organized labor is a critical partner in making sure New York continues to grow and thrive. This new agreement marks a turning point in the relationship between the private sector and organized labor. Working closely together, both parties share the goal of stimulating new develop- ment in the five boroughs and fortifying New York City’s status as a global capital. Photo: Getty Images Getty Photo: C M Y K Axxx,2020-01-16,ZJ,003,Bs-4C,E1

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HONOREES AT REBNY BANQUET

Each year, REBNY gathers for its Annual Banquet to network with friends old and new Images Getty Photo: and to honor distinguished individuals for their outstanding professional success, their exceptional contributions to the industry and their unparalleled commitment to the civic welfare of New York City. “The REBNY Banquet is one of my favorite evenings of the year,” 32BJ and for the City of New York. He was a respected and val- said REBNY president Whalen, “with thousands of dedicated ued partner of the real estate industry. He devoted his life to the real estate professionals gathering to catch up with old friends labor movement and was a tireless champion of immigrant and and forging relationships with new ones. Each year, our hon - workers’ rights. Kriegel’s work on the New York’s bid for the 2012 orees’ exceptional contributions to all five boroughs serve as Olympics transformed the city. While New York was ultimately reminders that the real estate industry loves and believes in the not selected to host the Olympic Games, the campaign neverthe- success of this city. This year’s distinguished honorees embody less spurred the redevelopment of, among other areas, the Far the spirit that makes our industry so important to the fabric of West Side and the - waterfront. The plan created New York City.” new development and helped trigger an economic resurgence At this year’s celebration, sadly, REBNY will mark the passing of long-neglected neighborhoods across the city. Noted Whalen, of two great leaders it had sought to honor at the event: Héctor “Both Héctor and Jay represented the very best of New York, and Figueroa and Jay Kriegel. Figueroa’s passing was a tragic loss for it is our honor to celebrate their life and legacy.”

Here are the honorees that will be recognized at the largest annual real estate networking event in New York City: 2017. It is awarded to a New Yorker who has displayed exceptional accomplishments and service in the public’s interest. It is named for the late John E. Zuccotti, chairperson of REBNY from 2004 to 2006 and a longstanding member of its executive committee. Héctor Figueroa Zuccotti also had a distinguished career as a public official, including serving as first deputy mayor and chair of New York City’s Department of City Planning during some of the city’s most difficult times.

Héctor Figueroa will be posthumously awarded the Kenneth R. Gerrety Humanitarian Award for his meritorious service to the com- munity and lifelong commitment to improving the livelihoods of his Henry M. Celestino members. The Kenneth R. Gerrety Humanitarian Award was first Vice Chairman, given in 1989. It recognizes REBNY members’ outstanding service L&L Holding Company to the community. The award memorializes Kenneth Gerrety who served REBNY as executive vice president for 18 years.

Henry M. Celestino, vice chairman of L&L Holding Company, will receive the George M. Brooker Management Executive of the Year Award for his superior accomplishments in property man - David R. Greenbaum agement and his outstanding professionalism, civic achieve - Vice Chairman, ment and contributions to the real estate industry. The Vornado Realty Trust management division of REBNY created this award in 1976 to recognize accomplished individuals within the management area. Winners display outstanding professionalism in property management, civic achievement and contribution to the real David R. Greenbaum, vice chairman of Vornado Realty Trust, will estate industry. It was named in honor of its first recipient, a receive the Harry B. Helmsley Distinguished New Yorker Award past vice president of the management division. for his invaluable contributions to New York’s civic welfare and to the broader real estate community. This award, created in 1992, recognizes REBNY members who have a lifetime of exceptional accomplishment in the profession and have made invaluable con - tributions to New York’s civic welfare. The award is named for Kevin R. Wang Harry Helmsley, a leading real estate executive of his time. Owner, KRW Realty

Jodi Pulice Kevin R. Wang, owner of KRW Realty, will receive the Louis Founder and C.E.O., Smadbeck Memorial Broker Recognition Award for his exceptional JRT Realty Group personal and professional integrity, leadership, prominence in the brokerage community and service to REBNY’s committees. This member award was established in 1991 by REBNY’s commercial brokerage divisions; it honors a REBNY broker with personal and Jodi Pulice, founder and C.E.O. of JRT Realty Group, will receive professional integrity, long-term leadership and prominence in the the Bernard H. Mendik Lifetime Leadership in Real Estate Award brokerage community and participation in REBNY’s committees. for her exceptional accomplishments in real estate, her leadership This award was named in honor of an exemplary broker who died and her service to the real estate industry over her career. This shortly after being selected to receive it. leadership award, first bestowed in 2003, is presented to REBNY members who have displayed exceptional service to the real estate industry and professional accomplishments over the course of dis- tinguished careers. It is named for the late Bernard Mendik, chair- person of REBNY from 1992 until his passing in 2001 and longest Robin Fisher holder of that title in the board’s history. Senior Managing Director, Newmark Knight Frank

Jay Kriegel Robin Fisher, senior managing director at Newmark Knight Frank, Senior Advisor, will receive the Young Real Estate Professional of the Year Award The Related Companies for her strong integrity, professionalism and personal ethics. This award is given by the Young Men’s/Women’s Real Estate Association of New York each year to a member whose knowl- edge, skills, integrity and high degree of ethics has contributed Jay Kriegel, senior adviser for the Related Companies, will be post- most to his or her profession and the community. humously awarded the John E. Zuccotti Public Service Award for his exceptional accomplishments and service in the public’s inter- est. This public service award was presented for the first time in C M Y K Axxx,2020-01-16,ZJ,005,Bs-4C,E1

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Q. AND A. With Rebny Chairman Bill Rudin, Chairman, Real Estate Board of New York (REBNY) Bill Rudin Chairman C.E.O. and Co-Chairman Real Estate Board of New York (REBNY) Rudin Management Company C.E.O. and Co-Chairman Rudin Management Company Bill Rudin, C.E.O. and Co-Chairman, Rudin Management Company, reflects on his second year as chair of the Real Estate Board of New York (REBNY)

Q: How would you characterize the state of New York M.T.A., the real estate industry successfully advocated to pre- City’s economy as 2020 opens, and what do you vent a misguided pied-à-terre tax, while the revenue-generat- consider key factors to the city’s continued success? ing solution for the M.T.A. still came from our industry in the A: The city’s economy is strong. Employment has reached record form of new increases to the mansion and transfer tax. highs, with more than 4.6 million total jobs, and its 2.5 percent On the city level, we were pleased to see REBNY members year-over-year job growth was higher than the national aver- advocate effectively against legislation that would limit the age. This success is driven by a sustainable engine of progress, income of hardworking residential brokers. More than one thou- with the lowest crime rate of any major city, a booming tech sand agents attended a rally in opposition at City Hall, which sector, a vast transportation network, proximity to world-class helped policymakers recognize the problems with this bill. higher education institutions and unparalleled culture. One of the most significant accomplishments of 2019 New York’s continued success will be a result of sustained was forming a historic partnership between REBNY and the economic growth and the associated creation of well-paying Building and Construction Trades Council to promote economi- jobs and careers, even while advancing progressive goals. For cally viable growth and development in New York City. Our two example, we must remember that providing affordable hous- organizations share a commitment to strengthening the city’s ing, health care and quality education are not mutually exclu- economy and have joined together to create a Joint Industry sive to economic growth; in fact, they are inextricably linked. Advancement Committee (JIAC) to advance that crucial goal. REBNY also continued the work of its cross-divisional Q: How would you rate the health of the city’s real estate Diversity Working Group, in which members actively cre- industry as the new year begins? ate and implement programs that promote diversity across A: Our industry is very healthy. The commercial sector is thriving, our membership and the industry. REBNY launched the with strong figures for commercial leasing that will likely result Real Estate Internship Program in collaboration with the in another record year for 2019. This success is propelled by a Department of Youth & Community Development and the balance between supply and demand, coupled with low interest Mayor’s Fund, which hosted 51 interns across more than a rates that have created an attractive environment. The data sup- dozen leading member firms. ports this, with more than 35.3 million square feet of office space leased in Manhattan alone. That’s a substantial increase from Q: What are REBNY’s key goals for 2020? 2018’s 29.8 million square feet, which was a four-year high. The A: REBNY must continue to be the best advocate, supporter, con- [final] 2019 results do not yet include substantial fourth-quarter vener and educator for smart, data-driven policies that help deals made by Facebook and Amazon. keep New York the greatest city in the world. Our industry is The residential market is facing some challenges, but overall, essential to the health of the city — so essential, in fact, that real projected growth remains high. While the third quarter of 2019 estate last year generated more than half of the city’s tax reve- had a slight decline year-over-year, there were $12.2 billion in nue. As my father always liked to say, what is good for New York residential sales across 11,475 transactions that were expected City real estate is good for New York City. with the passage of new regulations and taxes. Even still, over- Throughout 2020, we will keep advocating for policies all sales throughout 2019 continued to increase quarterly, from that ensure job growth, economic development, investment 10,382 transactions in Q1 2019 to 11,413 transactions in Q2 2019 in housing stock and new affordable housing production. and 11,475 in Q3. That means working alongside stakeholders and institu- Overall, New York City continues to be a thriving metropoli- tional partners across the city and state to push for sensi- tan sector that attracts new companies and talented employees, ble legislative outcomes during the new State Legislative increasing both office and residential activity. Session and in the City Council over the year to come. We must ensure that any new laws or policies implemented in Q: What significant policy changes affected the real estate 2020 are actually helping us continue to attract the next industry and the city’s economy over the past year? generation of companies and jobs, while also strengthening A: Our industry, but also our city and state, faced some major our public infrastructure and supporting New Yorkers of all challenges in 2019. Changes to rent regulation in Albany will backgrounds who already call our city home. not create any new affordable housing, but it has already eliminated tens of millions of dollars in tax revenue by caus- Q: As John Banks retires from REBNY and Jim Whalen ing a significant drop in multifamily investment sales. The takes over as president, what does this change mean City Council’s “Climate Mobilization Act” set the right goal for REBNY leadership? of reducing greenhouse gases 40 percent by 2030, but took A: John Banks led REBNY with a steady and expert hand for five the wrong approach by excluding more than 50 percent of years, successfully leading our organization through many New York City’s built environment from its requirements. challenges, negotiations and complicated issues. Our organi- Meanwhile, elimination of the SALT deduction was felt for the zation and the entire industry are better due to his leadership. first time, further straining our economy. John’s work was always focused on making New York a better REBNY was proud to play a major role in the passage of place, and Jim is already continuing that legacy. Jim has been some important legislation for New Yorkers over the past year. instrumental in REBNY’s work over the past nine years and On the state level, we worked with policymakers and advocates is continuing John’s efforts to build strong relationships with to advance a congestion pricing plan that will generate funding elected officials and key stakeholders. We are very confident for mass transit while also easing traffic in Manhattan’s central in his ability to steer our organization — and our city — down business district. When additional funding was needed for the the best path possible. OUTLOOK FOR NEW YORK REAL ESTATE

Major real estate companies heavily involved in the New York City marketplace contacted for this section, like the Real Estate Board of New York itself, were pleased with the New York City real estate market results in 2019 and look forward to a strong 2020. Here is the outlook and analysis from some of the key companies in the New York City marketplace.

structed in 1866–67. The current owner, Taconic Investment Partners, Newmark Sees Continued Expansion restored its original cast-iron facade and created, in effect, a new building. “Everything about this building is state of the art,” said Falk. of Tech and Media Companies in City “It is located between Union Square and Chelsea and has an extraor- The most remarkable trend in commercial real estate in New York dinary roof deck, oversized arched windows and very high ceilings.” City has been the tremendous expansion of the tech and media sec- Newmark is looking for tenants for this building who desire new tors, according to David A. Falk, president, New York Tristate Region space with character. While many tenants think ‘brand-new’ means Newmark Knight Frank (NKF). “Google’s expansion deals at Hudson steel and glass, here is an example of a building constructed over 150 Square totaled about two million square feet,” said Falk. “Facebook years ago that feels entirely brand-new in 2019.” is taking about the same amount of space at Hudson Yards, and The rise of the need for flexible office space is another strong trend Amazon is adding about 350,000 square feet on West 34th Street. that Falk sees for the city. “In the past, small companies have taken “In the history of New York real estate, how many times has a com- short-term sublets that were far from perfect,” said Falk. “For this pany decided to expand by one or two million square feet?” he asked. new offering of flexible space, small companies pay a premium but “It was unheard of as these are deals of true positive absorption, and they now have complete flexibility and can preserve capital. Today, not just a firm renewing a lease. Additionally, smaller tech companies traditional landlords are considering dedicating a portion of their that decided to make New York their home four or five years ago, ini- buildings to offer tenants flexibility. For example, the landlord could tially leasing a small space, have exploded onto the market.” devote one floor in a one-million-square-foot building for flexible While many of these companies are moving into new office prod- office space. That space could be appealing to small companies uct, what is happening to the space that is vacated? There is good needing to quickly locate an office and thus draw in new tenants that news there as well, according to Falk. “The owners of those older might seek larger space in the future. It is also a fantastic amenity for buildings are investing a significant amount of money to redevelop the larger tenants that need growth space from time to time.” the space, but they are not simply putting on a fresh coat of paint; Looking at other areas of the commercial real estate market as instead, they are taking older buildings and creating a modern image 2020 opens, Falk said the retail market will continue to refine its to compete with Manhattan’s finest properties. For example, with evolving relationship between brick-and-mortar and online shopping. 1271 Avenue of the Americas, the owner reskinned the property and “In the physical world you’re going to see fewer larger single-tenant created a feeling that reflects today’s office standards.” deals and instead more smaller deals offering a curated experience,” Another example of this trend in which Newmark has been involved he estimated. “These smaller deals will allow retailers more flexible is the timeless 817 Broadway. Remarkably, 817 Broadway was con- leases as they test various new in-store models, locations and prod- C M Y K Axxx,2020-01-16,ZJ,007,Bs-4C,E1

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LEADING NYC CAPITAL MARKETS THANK YOU TO OUR WORLD-CLASS CLIENTS FOR YOUR TRUST & BUSINESS

SALES AND FINANCING HIGHLIGHTS

The Biltmore Park Lane Hotel New York, NY New York, NY

Client: Financed for: The Parker Family Estate Witkoff / Mubadala / Highgate & The Moinian Group Sold to and Financed for: BentallGreenOak & Slate Property Group

Truffles Tribeca 114 West 41st Street New York, NY New York, NY

Client: Client: The Parker Family Estate The Blackstone Group & EQ Office Arranged a Joint Venture and Bridge Sold to and Financed for: Clarion Partners Financed for: The Related Companies & The Parker Family Estate

Parker Towers 888 Broadway Forest Hills, NY New York, NY

Client: Financed for: The Parker Family Estate Normandy (Columbia Property Trust) / Sold to and Financed for: Invesco The Blackstone Group

Parker NY Hotel 300 Lafayette Street New York, NY New York, NY

Client: Client: The Parker Family Estate The Related Group Sold to and Financed for: GFI Hotel Sold to and Financed for: Group & Elliot Capital Nightingale / Wafra

55-01 2nd Street 32 Old Slip City, NY New York, NY

Client: Financed for: The Holterbosch Family RXR Realty Opportunity Zone Site Zoned for 1.6M SF Sold to: TF Cornerstone

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ucts. Retailers will also be more cognizant of making their brick-and- Retail [leasing rates] is still witnessing some price discovery, having mortar locations personal and interactive as a way to get customers dropped 5.7 percent year over year to an average of $756 per square to connect with their respective brands and get them in the door.” foot in the 16 major retail corridors, according to CBRE. Further down- ward pressure is likely to continue. These price adjustments have led to momentum in leasing activity in 2018–2019. Four Commercial Real Estate Trends to When New York Tristate C.E.O. Tighe was chairman of REBNY sev- eral years ago, she was a champion for much-needed infrastructure Watch in 2020 improvements and the rezoning of key sections in the city to bring CBRE New York Tristate Region sees four trends that merit atten- them into the 21st century. “Infrastructure improvements need to tion in 2020, according to Mary Ann Tighe, C.E.O. of the region. The promote connectivity throughout the New York metro area so that first is the continued growth of tech inside and outside the city. “NYC companies can capitalize on Tristate’s strong labor pool,” she said. metro tech talent, which totaled 264,000 jobs [these are tech work- “The M.T.A.’s robust capital plan is an excellent start to keeping the ers across industries] accelerated its growth for the second consecu- city functioning, but connection to New Jersey via the tunnels at tive year, indicating that both mature and start-up firms are attracted Penn Station needs to be addressed proactively instead of reactively. to the area,” she explained. “In 2019, tech has tallied nearly 5 million Improving intraborough transit via ferry and/or streetcars would also square feet of leasing velocity, both renewals and new leases. This benefit the growing Brooklyn and Long Island City office markets.” is 55 percent ahead of the tech industry velocity over the past five Rezoning in key areas has had a tremendous impact on growth in years, which was 3.1 million square feet a year.” the city. “Hudson Yards rezoning led to nearly 10 million square feet The second trend, flight to quality — both new construction and of office commitments over the past decade. Similarly, downtown best-in-class space — continues, according to Tighe. The addition has seen tremendous success at the World Trade Center properties. of new construction to the market has presented opportunities not As of today, 4 and 7 W.T.C. are completely leased, 3 W.T.C. is over witnessed in Manhattan in decades. Large-tenant (100K+) leasing 80 percent leased and 1 W.T.C. is about 80 percent committed. New showed a strong preference for new and renovated projects, with construction is yet again scarce downtown,” she said, “so 2 W.T.C.’s 3 81 percent of leasing in this size range occurring in this product type. million square feet would be a welcome addition to the market.” A third trend is an insatiable appetite for amenities on the part of The infusion of new supply downtown and at Hudson Yards caused tenants: “Ten years ago, services were limited to conference centers, numerous tenant relocations and sparked owners of older product to gyms and newsstands, but today tenants demand an array of ameni- reinvest, such as the 550 redevelopment. Midtown ties including bike storage space, health-and-wellness programming, East rezoning will be the next phase of massive improvement of the common areas, collaborative space and specialty cafes,” explained office stock in that neighborhood. “We are already seeing firms flock the CBRE New York Tristate C.E.O. “Outdoor space and terraces to One Vanderbilt and J. P. Morgan’s commitment to the corridor is have become an aggressively marketed amenity in the last decade. a boon to what has been New York City’s premier office district for Seventy-nine percent of all buildings completed since 2010 and cur- quite some time,” she concluded. rently under construction have some form of outdoor space. A CBRE study showed that floors with terraces achieve a 14 percent premium.” Finally, C.E.O. Tighe said that flexible space — whether operated The Durst Organization Redevelops by a co-working provider or designed by a tenant or landlord — is marked by expensive build-outs, nontraditional (i.e., fewer offices) 825 3rd Avenue and Other Properties layouts and shorter lease terms. “The market for this type of space The Durst Organization reported another robust leasing year for has changed the way landlords plan their portfolios and how tenants 2019 with one million-plus square feet of space leased as it continues approach their space requirements,” according to Tighe. extensive redevelopment of its portfolio with the upgrading of 825 On office leasing in general, Tighe is pleased with its balance and Third Avenue, according to Tom Bow, executive vice president of the diversity. “No single industry represented more than 23 percent of company. The company helped redevelop the Midtown 3rd Avenue total leasing this year,” she said. Although financial services repre- area in the 1960s after the old Third Avenue El subway tracks were sented the lion’s share of leasing with 23 percent, other industries removed, resulting in the creation of a dynamic new business district. continue to show strength, such as law, which made up 9 percent The 40-story 825 Third Avenue tower was completed in 1969. and has been stable and strong over the past five years. Tech firms For the past 25 years, the entire building had been leased by one made up 18 percent of leasing velocity this year, up from the typical company. When the company’s lease expired on April 30, 2019, it was 10 percent over the last five years. And even with a decline in leasing a perfect time for Durst to jump in and bring the building up to today’s by flex operators, they accounted for roughly 10 percent of the total standards. Durst added completely new building systems, created a leasing in 2019, down from 15 percent in 2018. The market’s overall new lobby and new storefronts, spending a total of $100 million on its leasing volume is trending very close to the 2018 total, which was the redevelopment efforts. Virtually all tenants demand extensive ame- best year since 2000, according to CBRE. nities today, so Durst created an amenity package for the 12th floor In the fast-changing world of retail, CBRE’s Tighe said that online of this building that is sure to please future tenants. Once on the 12th stores are now being used as main sales channels, while brick-and- floor, tenants have access to amenities on the interior and great out- mortar stores are becoming marketing channels. Thus, physical door space that captures the views of exciting . stores require smaller footprints. On top of this, fewer firms are will- Durst will deliver space to tenants in the third quarter of 2020 with ing to pay high rents or commit long term. “While flagship locations move-ins likely in the first quarter of 2021. and department stores are not signing mega deals, other sectors The company is pleased to announce the 100 percent leasing of are thriving,” Tighe underscored. “Food and beverage and apparel its huge superblock project on 57th Street between 11th and 12th [retail] have been surging, accounting for 32 percent and 16 percent Avenues. The Hospital for Special Surgery (H.S.S.) took the last floor of the deals signed in Manhattan in 2018 and 2019, respectively.” in the building called Frank. Durst’s superblock is composed of three Tighe went on to say that retail is experiencing a “barbell buildings: Frank, Via and Helena. “H.S.S. now occupies 100 percent effect”: retailers that focus on discount goods or high-end luxury of the commercial space in the Frank building,” said Bow. “We also are still relevant and expanding in the city – for example Target completed three new retail deals [on the superblock]; 100 percent of has signed multiple deals over the last two years with most being that space is now leased.” 10,000-plus-square-feet locations. Additionally, pockets of Durst has finished its redevelopment of 1155 Avenue of the Americas, Madison Avenue, SoHo and Herald Square are being filled with which it said is like no other building in the city. First opened in 1984, high-end apparel, accessories and cosmetic tenants. the structure recently underwent a $110 million capital improvement “Another retail leasing trend has been the coalescing of leasing program. Upgrades include a new lobby, destination dispatch eleva- around high-trafficked areas,” said Tighe. “Major retailers looking in tors, new windows and floor-to-ceiling glass at the building’s cham- the Plaza district are targeting the areas around 57th through 59th fered corners. In addition, a rooftop pavilion is under construction Streets to capitalize on foot traffic while other areas of the city are that will offer unparalleled views of Bryant Park, the Empire State seeing similar trends. Midtown South’s TAMI [Technology, Advertising, Building and One World Trade Center. Media and Information] leasing on the office side has been followed In addition, Durst is redeveloping its 151 West building by retailers moving to ‘hot’ areas with strong office populations like [formerly 4 Times Square]. A large amount of space in the building Meatpacking and Flatiron/Union Square.” was occupied by the publisher Condé Nast. At the end of its lease at the building [on April 30, 2019], the publisher opted to take space at Durst’s 1 World Trade Center property in Lower Manhattan. Since that lease expiration, Durst has already leased 17 of 19 floors formerly occupied by Condé Nast. Further, it has leased 40 percent of the Skadden, Arps space that it is vacating in the building. BELOW LEFT: 817 Broadway What is attracting new tenants to this building? It could well be BELOW RIGHT: 550 Madison a new amenity brand, Well&, that Durst has launched for its resi- dential and commercial properties. Well& brings many people and businesses together under one roof to work, play, live and thrive. The brand was unveiled at its reimagined Frank Gehry Cafeteria on the new 45,600-square-foot amenity floor at 151 West 42nd Street. WellPlated is Durst’s artisanal food hall curated by master chef Charlie Palmer, offering equal parts casual culinary elegance and neighborly comfort for people who like to eat. The Green, a coffee and cocktail bar, is the social heart of the floor. There’s also a large conference facility for building tenants called WellSaid, which is powered by Convene, and offers flexible meeting and event spaces to host conferences, town halls, corporate events and more. Photo: Alex Fradkin Alex Photo: Rendering: Visualhouse Rendering: C M Y K Axxx,2020-01-16,ZJ,009,Bs-4C,E1

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WearegratefultotheNewYorkbrokerage community for another great year together.

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Finally, Durst is excited by the market response it is receiving to its new offering called Durst Ready. There are six to seven Durst Ready spaces designated throughout the portfolio at this point. Durst Ready combines the agility of private, furnished, wired, move-in ready office space with the service, prestige and reliability of a 100-year-old, fam- ily-owned real estate company. The company provides space for smaller companies that are looking for co-working space, but this could well be a better alternative.

Concern About Legislation in Albany Grows John A. Catsimatidis, C.E.O. of Red Apple Group, a conglomerate that owns and operates assets in the energy, real estate, finance, insur- ance and supermarket industries, is growing increasingly concerned about legislation in Albany, such as new residential and commercial rent-control laws, that could severely impact the economic health of New York City, a city he has loved and lived in all his life. “I’ve been in the real estate business for 42 years in New York City,” he said. “Today, I am more concerned than ever about the state of the city because of legislation coming out of Albany.” A major financial decision he made recently should be a warn- ing for the city. Red Apple recently completed the development of two twin luxury residential towers on the Coney Island boardwalk with unobstructed ocean views and direct access to the nearby beach at a cost of $300 million. Catsimatidis’ intention was to build three additional residential towers in the same area to complete the Coney Island skyline. Now he is delaying this plan. Instead, he is tak- ing the money originally slated for Coney Island and investing it in a development in St. Petersburg, Fla. “Florida is a growing market with low taxation and regulations that encourage rather than dis- courage business,” he continued. “Many of my friends in the real estate business are moving to Florida to escape New York’s high taxes and burdensome regulatory environment. With the legisla- tion coming out of Albany, I think this trend could accelerate.” He is also concerned about businesses leaving the city as well. He said that J.P. Morgan recently made the decision to move thousands of employees out of New York. “If other companies were to take that Rendering: March Rendering: same route, it would impact the city greatly,” he warned. Red Apple Group directly and through its real estate oper - ating company Red Apple Real Estate owns and manages over 5 million square feet of real estate primarily in New York City, Pennsylvania, Ohio and Florida. In addition to the two recently completed residential towers in Coney Island, Catsimatidis is proud of ABOVE: 825 Third Avenue the four residential towers that the firm completed in the Fort Greene OPPOSITE LEFT: Pool, Ocean Drive, Coney Island section of Brooklyn in recent years. These projects include: 86 Fleet Place, a 33-story, 440-rental-unit building, features an ele- OPPOSITE RIGHT: New plaza outside 1345 Avenue gant curved facade and panoramic skyline views. Building amenities of the Americas include a fitness center, resident lounge, pet park, children’s playroom, landscaped terrace and rooftop deck. Ground-floor retail space and parking anchor the newest addition to Brooklyn’s best neighborhood. The Margo, a 228-unit, 16-story building located at 180 Myrtle

AVISON YOUNG CUSHMAN & KAUFMAN NORMAN BOBROW THANK YOU Josh Goldman WAKEFIELD, INC. ORGANIZATION Josh Berger Adam Ardise Jared Sternberg BENCHMARK Lou D’Avanzo Elliot Warren SAVILLS We are grateful to the New REAL ESTATE GROUP Peter Berti Stephen Berliner Brian Dooley Drew Braver KIAN REALTY Christopher Foerch York brokerage community Barry Garfinkle Jacqueline Thong Zev Holzman Gary Greenspan CBRE Oliver Petrovic for your support in helping Gordon Hough Paul Amrich LEE & ASSOCIATES Brian Scharfman David Mainthow Erik Schmall us lease over 1,000,000 SF Joseph Cabrera Nick Masi Peter Braus Brendan Cavender Richard Kave Greg Taubin in 2019. Fernando Murillo Scott Weiss Georgina Cook Andrew Ross Brad Schwarz Alice Fair Robert Tanzmann JP Sutro Je‡rey Fischer Mark Zaziski WINICK David Glassman Barry Zeller MHP REAL ESTATE Steven Baker Scott Gottlieb SERVICES Kenneth Hochhauser Adele Huang GLEN EQUITIES LTD. Fernando Murillo Neil King VERUS REAL ESTATE Tim Kuhn Alan Schwartz NEWMARK KNIGHT Douglas Durst Christopher Mansfield Victoria Bokk John Nugent HAWKINS WEBB FRANK Michael Wellen Philip Hertling David Berke VICUS PARTNERS Sacha Zarba Robert Emden Waite Buckley HUDSON REAL David Emden CRESA ESTATE PARTNERS David Falk Neil Goldmacher Gregg Cohen Alexander Schwartz Jason Greenstein Barry Lewen Jonathan Durst Michael Ippolito IMMOBILIA ADVISORS Daniel Katcher CS ENGEL & ASSOCIATES Ewa Bindek Brian Lee Carol Engel Ana Garcia Chris Mongeluzog Brad Needleman COLLIERS INTERNATIONAL ISA REALTY GROUP Jonathan Ortiz Aidan Campbell Louis Franco Peter Shimkin Zachary Cilman Joseph Isa Brett Stein Eric Ferriello Hal Stein Michael Thomas JONES LANG LASALLE Moshe Sukenik Travis Wilson Kirill Azovtsev Bobby Blair Robert Gibson Seth Godnick Blake Goodman Justin Haber Martin Horner Matt Ogle Kyle Riker Steven Robinson Steven Rotter Calum Waddell C M Y K Axxx,2020-01-16,ZJ,011,Bs-4C,E1

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Avenue, is a luxury rental development that features a private efficient, productive and inviting.” gym, 24/7 coffee station, space for private parties, children’s The enhancements at 1345 extend to the streetscape with the playroom and rooftop terrace. reimagining of Fisher Park and the public plazas surrounding the two The Giovanni, at 81 Fleet Place with 205 rental units, makes a million square foot tower. The renovation also incorporates new foun- dramatic impression with a light and airy lobby and 24-hour con- tains, comfortable seating, lush landscaping and public art. cierge. There is a lifestyle level connected to the lobby that fea- “We’ve extended the look and feel of nearby Central Park up to our tures amenities such as a residents’ lounge, media room, fitness front door, ensuring that the tenant experience will begin with their center, yoga room, game room and landscaped terrace. first step onto the property,” said partner Ken Fisher. “These out- The Andrea, at 218 Myrtle Avenue with 95 rental units, offers con- door improvements, combined with curated retail offerings like Blue temporary style, spacious interiors and stylish amenities. Bottle, Wagamama and Quality Bistro and the upcoming opening of a full-service amenity center, will allow Fisher Brothers to serve our tenants’ needs at every point in the workday.” Fisher Brothers Sees Office Leasing The cornerstone of the amenity experience is “@ease,” a propri- etary five-star hospitality brand. According to managing director of Activity Near Two-Decade High the commercial Portfolio Crystal Fisher, “@ease will pair an experi- New York’s office market continued on its impressive run in 2019 ential tenant mobile app with a white-glove amenity and conference with leasing activity once again hovering around two-decade center to produce an experience that suits the tastes of today’s highs. The market continues to be strong for owners of new and tech-savvy workforce.” The amenity program, which will be phased reimagined office buildings. Fisher Brothers, which is currently in throughout the portfolio, incorporates meeting spaces, lounge undertaking a portfolio-wide capital improvement program, is areas, a fitness facility and grab-and-go food concept. a case study on the value of adapting traditional Midtown office Fisher Brothers is effecting a similar transformation at 299 buildings for the 21st century. , its Plaza District headquarters. In collaboration with Its transformation of 1345 Avenue of the Americas is a perfect Rockwell Labs, Fisher Brothers will install a 60-foot-long cinematic example. Working with Skidmore, Owings & Merrill LLP and Rockwell art piece utilizing interactive technology. The L.E.D. lobby display Group, Fisher Brothers crafted a brighter, more spacious and inter- also varies based on the time of day and seasons, thus ensuring active lobby by raising ceiling heights, expanding the main entrance the screen is ever changing. and installing an L.E.D.-powered luminous wall. “While our current These pioneering projects follow successful reinventions of capital improvement program is the most ambitious in the firm’s his- 605 Third Avenue, where Fisher Brothers installed two digital tory, it remains 100 percent rooted in Fisher Brothers’ proud tradition glass walls that act as giant kaleidoscopes, and Park Avenue of architectural excellence and customer service,” said partner Plaza, which now features a biophilic public arcade highlighted Winston Fisher. “Just like the tenants we serve, Fisher Brothers by a moss-covered wall, resides at the forefront of innovation and thrives by being ahead bamboo trees and over- of the curve in producing office environments that are modern, sized windows. l

Rudin Management Company thanks the following tenants and brokers for making 2019 another successful year.

Balade Your Way Dorilton Capital Management Government of Ireland Mitchell & Titus Perkins Coie LLP Stikeman Elliott (NY) LLP Winick: Daniyel Cohen Byrnam Wood: Gordon Ogen Houlihan-Parns Realto JLL: Shawna Menifee CBRE, Inc.: Michael Wellen, Cushman & Wakefield: & Aaron Fishbein c/o GHP Office Realty: & Eliza Akers David Kleinhandler Jeffrey C. Heller Downtown Holding LLC James J. Houlihan & Cara Chayet Bergen Cove Realty Inc. CBRE, Inc: Bruce Surry MTS Hospitality Systra Consulting, Inc & Eric Sears Granite Capital Murro Realty: Pure Ktchn Savills: Lance Leighton, Bluefin Holdings II Henry Rossignol Kassin Sabbagh Realty: Evan Margolin Newmark Knight Frank: Edna McConnell Clark Humana at Home, Inc. Marc Sitt & Charles Goldman Erik S. Harris Foundation Cushman & Wakefield: National Football League Savills: Ira Schuman Andrew Ross Cushman & Wakefield: Reform Alliance The Jockey Club Brill & Meisel Lou D’Avanzo Park Avenue Interior Partners: Elefterakis, Elefterakis Israel Policy Forum The Small Door Choice Logistics & Franklin Speyer Michael Hennessy & Panek Lee & Associates: Greg Tannor Arlington Group: Rick Heilman J Strategies, Inc Thomas Cordasco NCS Pearson, Inc. RogoŒ & Company & Zachary Diamond Colliers International: Curtis+Ginsberg Company, Inc.: Cresa: Mike McKenna Howard Kaplowitz Schpoont & Cavallo Tribeca Film Institute Architects LLP Thomas Cordasco & John Brasier Nordstrom Park Avenue International Wharton Property Unibet Interactive Inc. Ember Infrastructure Crown Retail Services LLC: Partners: Michael Hennessy Advisors, Inc.: Ruth Colp January Digital Cushman & Wakefield: Management Stephen Stephanou & David Alperstein Savills: Stephan A. Steiner Smartstream Michael Baraldi & Thibauld Veil Essex Management Company & Ira Schuman Douglas Elliman Commercial: & Lexie Perticone Custom Protective Services Northstar Capital Funds James Gross Newmark Knight Frank: Andrew Fit4D, Inc. La Prairie, Inc. Villeroy & Boch USA Inc. Sachs & Bill Levitsky Cushman & Wakefield: Savills: John Mambrino, OGS Solstice Residential Group Colliers International: Yarden Drimmer Nick Farmakis CBRE, Inc.: Bruce Surry Avison Young: Jamie Covello Christel Engel Davis & Gilbert LLP & Conor Golden & Michael Bertini & Steve Siegel & Albert Wu CBRE, Inc.: Lewis Miller, Wafra, Inc. Brian Gell, Scott Gottlieb Fit Small Business Lenox Corporation Partnership for Squash and Education CBRE, Inc.: Clyde Reetz & Michael Wellen MHP Real Estate Services LLC: New York City Alliance Libbey Glass WWRD US, LLC Randy Sherman & Eric Lassoff Newmark Knight Frank: Savills: Peter Cipriano Dill & Parsley LRG Energy LLC Hal Stein & Todd Stracci Kassin Sabbagh Realty: Flag Telecom Avison Young: Corey Dicker Albert Manopla Savills: Evan Margolin & Joseph Gervino

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