Building owners with just one or two properties may soon be able to tap into the real-estate investment trust market.
We caught up to Cantor Fitzgerald’s Howard Lutnick at the Bloomberg Real Estate Conference last week and asked if he had been thinking about grouping single buildings into REITs so the owners could take advantage of the capital markets.
“We think about it all the time,” Lutnick replied.
The first targets would likely be current Newmark Knight Frank client-buildings that could be grouped into either private or public REITs.
Lutnick’s public company, BGC Partners, which services financial institutions and is committed to “knowing how much anything is worth at any time,” completed its purchase of Newmark & Co. Real Estate last month, and there have been questions as to how the two companies will add value to each other.
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In a deal worth about $75 million, the ownership of the city’s first Apple store at 103 Prince St. in SoHo is changing.
Sources tell us Stanley Chera’s Crown Acquisitions has joined contract holder Ralph Tawil’s Centurion Realty to buy the roughly 30,000-square-foot building on the northeast corner of Greene Street.
“It’s pretty much an income stream [deal],” said one source, as Apple has at least eight years left on its lease. “They are buying the corporation that owns the fee.”
The former post office was leased by the Berk family’s Ingersoll Realty in 1975 with options through 2005. City records don’t show a deed, but a post office spokeswoman told us the lease was canceled in 2000. The building was leased to Apple in 2001.
Apple recently closed the store for a complete renovation and expansion into adjacent former post office and basement space and has opened temporarily at 72 Greene St.
Calls and e-mails to the parties were not returned by press time.
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The Service Employees International Union Local 32BJ is psyching up its members for a strike on Jan. 1. Members say they learned a lot from the four-week strike in Jan. 1996 and are ready to picket again.
“It was not as aggressive, it was not as united and not as coordinated” as it could be, said union member Sandy Deleon, who works at Donald Trump’s 40 Wall St. “It is going to be great. . . . That is what we are aiming for, and that is what we are getting ready to do. Personally, it will go down in history.
“I’m not looking forward to a strike,” Deleon added, “but if they force us, we will go on strike. I don’t think the city can take two weeks with us on the street.”
Office cleaners, porters and elevator operators get $22.65 an hour, totaling $905.02 per week and adding up to $47,061 per year. But owners make other contributions, including health and welfare benefits, that bring their annual costs to nearly $77,000.
Office cleaner Fadila Mrkulic, a 39-year union member nearing retirement who now works from 5 p.m. to 12:30 a.m. in a Midtown East office building, begs, “Please don’t touch my pension!”
She said she’s grateful to have a job so she can raise her family, but as a single mother and grandmother, can’t save any money because her own apartment rent is $1,500 a month and “keeps going up.”
“If we have to go on a strike I will do what it takes,” said Mrkulic who has her warmclothing ready to wear on the picket line. “Right now, this contract is all about how will we survive, how can we pay rent, and how can we pay our bills? It’s not how we can save money and go on vacation.”
Union spokesman Matthew Nerzig said, “We’re looking for raises, no doubt about it, and about maintaining a benefit package that enables them to keep up with the cost of living.”
SEIU Local 32BJ presented its demands to the owners’ representatives from the Realty Advisory Board yesterday as talks got under way on a contract that affects somewhere between 22,000 and 30,000 workers in 1,000 to 1,500 commercial buildings.
Owners say economic times are rocky and that since they provided the union with raises averaging 4.18 percent each year over the last four years, property taxes are up 26 percent while vacancy rates rose from 5.6 percent to 9.7 percent. Also, Class A asking rents went down from $88.37 per square foot to $61.31 per square foot.
The RAB also says it needs to hold down costs to keep and maintain the buildings so it can hire more union employees.
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Upper West Side council member Gail Brewer has been meeting with the Department of City Planning to implement zoning that would restrict larger stores that she says are taking over from mom-and-pop shops.
Brewer has been coming up with schemes to kill larger stores like drugstore chains and banks for several years. At the Council of New York Cooperatives and Condominium expo on Sunday, she told me they are “bad for children” because there is not enough variety.
In one instance that riled community members, several small retailers were booted from one block on Amsterdam Avenue to bring in a mega-Dylan’s Candy Bar, which then backed away from the deal, leaving empty storefronts.
Brewer said her plan won’t be a “taking” and will be presented to the Community Board in December.
In an e-mail, the DCP said a Special Enhanced Retail District “would provide unique zoning tools to support this diversity of retail services and foster a dynamic and pedestrian oriented streetscape” by requiring a minimum number of stores per block and limiting ground-floor frontages “where appropriate” along portions of Broadway, Amsterdam and Columbus from 72nd to 110th Streets.”
Similar “tools” are proposed for Fourth Avenue in Brooklyn and are already at work in the prior rezonings of 125th Street and Downtown Brooklyn.
Retail broker Jeffrey Roseman of Newmark Knight Frank Retail, says if neighborhoods like Williamsburg don’t want chain stores, the retailers listen.
“Government should not artificially control the market,” Roseman said.
“They’ve tried it before on East 86th Street by limiting to 5,000 square feet, and it didn’t work. It backfires because . . . you will get fast-food heaven and electronic stores.”
Steven Spinola, president of the Real Estate Board of New York, dubbed the plan “ridiculous,” saying, “There has been difficulty renting out the space on 125th and on East 86th Street it didn’t work at all. Sometimes the city doesn’t learn from its mistakes.”
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A mac-and-cheesy mom and pop spot is coming to Murray Hill in the 1,900- square-foot-plus basement of 157 E. 33rd St.
The owners of S’Mac on East 12th Street, Sarita and Caesar Ekya, signed the new 12-year lease for their second location at a rent of about $70 a foot.
Eric C. Roth, president of ECR Realty, negotiated a direct deal with the Ekyas, who will open by early spring after a build- out.
