M&A Boutiques in for Tough Times Cracks Appearing in Office Rents
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nb35p01.qxp 8/24/2007 8:15 PM Page 1 TOP STORIES REPORT Booming India HEALTH CARE lures Blackstone, Spitzer, insurers other NY investors battle over rates; PAGE 2 NY’s top carriers ® Coach handbags PAGE 15 still fab, but stock falls out of favor on Wall Street VOL. XXIII, NO. 35 WWW.NEWYORKBUSINESS.COM AUGUST 27-SEPTEMBER 2, 2007 PRICE: $3.00 PAGE 3 MARKET FALLOUT When did opera get so hot? More rooftop bars in New York’s future Cracks appearing NEW YORK, NEW YORK, P. 6 Extending Medicaid in office rents to middle-class children is not Brokers report INDUSTRIAL a good idea room to negotiate as STRENGTH ALAIR TOWNSEND, P. 11 fears mount over Sectors leasing the most square feet of office space in Manhattan Obama gets warm Wall Street layoffs in first-half 2007. reception, raises MIDTOWN money in Brooklyn BY THERESA AGOVINO Financial 1,828,141 THE INSIDER, PAGE 13 two months ago, Mark Fried- man began negotiating for an of- Law 1,434,382 fice lease in midtown south for Other 1,166,515 BUSINESS LIVES about $60 a square foot. The par- LIGHTENING UP ties are now discussing a rent in the Entertainment 451,393 low-$50 range, according to Mr. Banking 442,210 Co-workers use buddy Friedman, vice chairman of GVA system to lose weight Hedge funds 428,876 PAGE 27 Williams Worldwide. TOM GENIESSE, “I’m feeling the ability to nego- DOWNTOWN owner of tiate again,” he says. “Building Bottlerocket, says agents are calling me now—that Financial 1,510,239 he can sell wasn’t the case three months ago.” products faster Other 498,227 because he has The credit crunch that is roiling less inventory. the stock market,paralyzing merg- Insurance 290,194 er and acquisition deals, and catherine gibbons catherine stalling building sales is also slow- Law 143,961 UNCORKING A TREND ly chilling Manhattan’s hot com- Printing 121,272 mercial rental market. The finan- Source: CB Richard Ellis See CRACKS on Page 8 AT DEADLINE CITY UNIVERSITY OF NEW New wine stores YORK’S College of Technology has hired 40 new full-time tenure-track faculty members M&A boutiques for the 2007-2008 academic toast of the town year, bringing the total to 344. The hiring marks the largest spirits, came in a dismal third. in for tough times single-year bump in four Stylish showrooms Even more surprisingly, Sherry- decades and comes in response draw with themed Lehmann Wine and Spirits lost its to a 20% increase in students crown not to a longtime rival but to 3 major NYC firms over the past four years, to displays; bitter taste a pair of young upstarts that be- 13,600. CUNY is adding full- for veteran retailers tween them carry less than a quar- may not have much time instructors throughout ter as many bottles. work for a while the university in an effort to The dethroning reflects a huge reduce reliance on part-time BY LISA FICKENSCHER shift in the wine business across the faculty. city. Trendy, design-driven stores BY AARON ELSTEIN for 15 years, Sherry-Lehmann such as Moore Brothers Wine Co. SCALING BACK ON ITS GROWTH reigned supreme as New York and Bottlerocket—the new No. 1 august is traditionally a quiet PLANS, JETBLUE AIRWAYS held City’s top-rated wine store. and No. 2 wine meccas—are driv- month for Wall Street’s dealmak- the number of its employees at No more. ing a corkscrew into the heart of ers—but not this quiet. Grim- 9,700 last year, the first time it When Zagat Survey published traditional wine selling. faced bankers are getting accus- did not increase its staff, its 2008 New York City Gourmet Instead of trying to please all tomed to the idea that the credit according to a report released Shopping & Entertaining guide last palates,the new breed offer a select crisis has ended the three-year cor- by the U.S. Department of month,the venerable store,with its group of labels—which may not porate merger boom. An estimat- See AT DEADLINE on Page 2 dark-wood paneling and cache of even include some of the best ed $73 billion in deals have been more than 4,000 fine wines and known. Instead of drab shop win- struck this month,half the amount dows decorated with sun-bleached of the same month a year ago. lindström bekka satin cloths draped over boxes, the The sudden slowdown puts 35 5 new breed lure customers with profits and bonus pools at risk at all and acquisitions, have had their stores long on style and short on investment banks, but those that share prices hammered amid fears clutter—and open wine cases.The will be hurt the worst are three that business will slow. ELECTRONIC EDITION new crowd also makes shopping Manhattan-based boutique firms: “The logic behind a lot of deals fun by adding gimmicks like a dog Evercore Partners Inc., Greenhill was cheap credit, which is fast dis- tie-up area. & Co. and Lazard Ltd. These appearing,” says Andrew Clare, a NEWSPAPER See NEW WINE on Page 9banks, which specialize in mergers See PARTY’S on Page 8 71486 01068 0 CNYB 08-27-07 A 2 8/24/2007 7:01 PM Page 1 AT DEADLINE Continued from Page 1 slated to open in the Flatiron New York investors Transportation last week.The District in November. Owner Queens-based discount carrier Claire Chambers has signed a says it offered its 2,000 flight 10-year lease for 2,000 square attendants feet at 3 E. 17th St., just off of jumping into India voluntary Fifth Avenue. Asking rent was year-long about $150 per square foot. furloughs David Baker of Isaacs & Co. with bloomberg news represented the tenant, and Blackstone, others get in on the action early health benefits, and about 100 Darrell Rubens of Winick accepted. JetBlue continued to Realty Group negotiated on BY SAMANTHA MARSHALL add flights but pared its behalf of landlord Maurice operations to 78 crew members Laboz. global market jitters are doing little to dampen New York per aircraft from 90 in prior years. THE METROPOLITAN investor interest in India, where real estate continues to be one of TRANSPORTATION Authority is in the hottest growth sectors, retail is booming and billions of BETHPAGE FEDERAL CREDIT talks with Internet search dollars of foreign capital keep pouring in. UNION IS SHARPLY increasing its engine Google to develop mortgage-lending efforts in online transit guides for New Blackstone Group Holdings, led by Stephen Schwarzman, is response to a 50% surge in York City. Google, based in just one of the latest firms here to jump in with both feet. Last applications, while banks pull Mountain View, Calif., week, the private equity giant announced the $116 million back from residential lending. introduced its online guides in purchase of a 50.1% stake in India’s largest garment The 146,000-member credit 2005 and has already produced union—open to anyone living, them in Dallas, San Diego and exporter, Gokaldas Exports Ltd., with plans working or doing business in other cities. Google makes to secure another 20% of the company for Nassau or Suffolk counties— money by selling advertising on $49 million. has increased its year-end the sites, where restaurants, Also last week, Lehman Brothers mortgage lending target to $280 hotels and other local businesses million from $183 million, a can buy ad space aimed at Holdings Inc. purchased 26% of a unit of 53% increase. potential travelers. But New India’s Edelweiss Capital, a deal worth York would be the Internet about $44 million, according to reports TENANTS OF STUYVESANT TOWN company’s largest transit guide AND PETER COOPER VILLAGE project to date. in Indian media. Just a week earlier, will appeal a judge’s decision to Lehman announced it would buy the throw out their lawsuit ROSIE O’DONNELL WILL HEADLINE institutional equities arm of Indian attempting to reverse the sale of THE OPENING NIGHT of the fourth brokerage firm Brics Securities for an the complexes to Tishman annual New York Comedy Speyer for $5.4 billion. Eric Festival, marking her first stand- undisclosed amount. Levine, a partner at Wolf up show in years.The Nov. 6-11 “The trend is growing in a Haldenstein, who claims the festival has added three venues: multitude of interests, particularly buildings’ owners violated the The Beacon Theatre, where See INDIA on Page 7 law by raising rents on some comedians Bill Maher and rent-stabilized apartments while Denis Leary will perform, the receiving tax benefits, says that 92nd Street Y and Mo Pitkin’s. New York State Supreme Court Last year, 60,000 people INDIA A GO-GO Judge Richard Lowe III attended the event at eight incorrectly interpreted the law. locations. Attendance is Top three industries for New York investors in 2007. expected to rise sharply this year TOTAL JOURNELLE, A STORE THAT WILL and American Express is SECTOR DEALS AVERAGE INVESTMENT OFFER LINGERIE designed for offering exclusive tickets to its women over 35 years old, is cardholders. I Industrial/energy 8 $34.5 million $275.7 million Telecommunications 2 $48.2 million $96.4 million Consumer products THIS WEEK IN CRAIN’S and services 4 $14.8 million $59.3 million As of Aug. 21. Source: Thomson Financial STEPHEN SCHWARZMAN’S Blackstone ALAIR TOWNSEND -------------------11 Group purchased a 50.1% stake in India’s largest garment exporter. WEEK IN REVIEW -----------------------12 redux THE INSIDER------------------------------------13 SMALL BUSINESS ------------------- 14 REAL ESTATE DEALS--------------14 Waiting rooms go high-tech REPORT: HEALTH CARE------15 “I think every physician in Man- Manhattan in the next year.