Commercial RE market creeping towards recovery in 2002.As we embark upon the second half of 2002, the New York City New York City: see New York, city.
New York City
City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. economy is creeping back towards recovery. Traditionally, recovery in the real estate market follows the rest of the economy by six months. As owners of over two million SF of well-located secondary office buildings in Manhattan, we are beginning to see increased demand for space and higher rents versus six months ago.
Himmel + Meringoff will continue marketing campaigns for our properties. Earlier this year we hosted a successful broker luncheon at 6 East 32nd St. We highlighted "Six Reasons to Meet Us at 6 East 32nd Street" -- outstanding rental value rental value n. the amount which would be paid for rental of similar property in the same condition in the same area. Evidence of rental value becomes important in lawsuits in which loss of use of real property or equipment is an issue, and the rental value is the , walking distance to all major transportation, award-winning lobby, low loss-factor, tenant-controlled HVAC (Heating Ventilation Air Conditioning) In the home or small office with a handful of computers, HVAC is more for human comfort than the machines. In large datacenters, a humidity-free room with a steady, cool temperature is essential for the trouble-free and superior owner-management. As a result of our efforts, which included spending over $1 million to renovate the property, the property was 100% leased within three months! New to 6 East 32nd St. are Graphic Productions on the third floor with 13,500 SF, Town Total Nutrition with 13,500 SF on the fifth floor and 6,500 SF on part of the sixth floor, and ACC See adaptive cruise control. Construction with 13,500 SF on the seventh floor.
The successful marketing campaign we held last year for the property at 1356 Broadway resulted in the creative sale of the property, for which Insignia/ESG was presented with REBNY's "Deal -of the Year" award. The purchase and sale of 1356 Broadway included the structuring of two intricate deals. The purchase by Himmel + Meringoff included the purchase of four different ownership entities from various selling groups (HSBC HSBC Hongkong and Shanghai Banking Corporation
HSBC Humane Society of Broward County (Florida)
HSBC Humane Society of Bay County (Bay County, Michigan) , an Integrated Resources limited partnership, a net lease to Republic Bank, and a land interest held by a venture capital fund). The complex ownership structure was comprised of a ground lease with a remainderman interest, a building leasehold position within a tax-sheltered limited partnership, mortgages collateralized by both the fee and leasehold interests, and the ownership of air rights that needed to be severed from the building and remain with Himmel + Meringoff as the seller, allowing us to transfer the air rights to another site at an undetermined future point in time.
Record high sales prices have been achieved through a flight of capital running from low interest rates and decreased stock prices to the hope of higher returns in real estate. Although we typically hold properties for long-term ownership, we realize it is currently a seller's market and are presently in contract to sell two properties. At the same time, we are aggressively seeking acquisitions to create value through the three "R's" -- repositioning, renovating and retenanting. We continue to focus on secondary office buildings in Manhattan and the Boroughs. We can innovatively structure acquisitions with joint ventures, net leases with options to buy, partial sale-leasebacks and tax-free exchanges, closing expeditiously ex·pe·di·tious
Acting or done with speed and efficiency. See Synonyms at fast1.
ex with all cash.
As co-chair of REBNY's economic development committee, we are writing a 2002 proposal that will be presented to Mayor Michael Bloomberg's economic consultants. This proposal will focus on ways to revitalize and rejuvenate re·ju·ve·nate
tr.v. re·ju·ve·nat·ed, re·ju·ve·nat·ing, re·ju·ve·nates
1. To restore to youthful vigor or appearance; make young again.
2. the New York City economy with the understanding that the city is facing a $5 billion budget deficit. Therefore, the recommendations will concentrate on expanding the city's tax base through initiatives that are of minimal costs to the city. Proposals will center on business attraction and retention, zoning changes, transportation and infrastructure, new benefits to non-profits, affordable housing development and the recovery of lower Manhattan Lower Manhattan is the southernmost part of the island of Manhattan, the main island and center of business and government of the City of New York. Lower Manhattan is generally defined as the area delineated on the north by Chambers Street, on the west by the Hudson River (North .
We are optimistic that the New York City Economic Development Corporation Overview
New York City Economic Development Corporation (NYCEDC) is a non-profit local development corporation that promotes economic growth across New York City's five boroughs. , through the dynamic leadership of Dan Doctoroff and Andrew Alper Andrew Alper is the former President of the New York City Economic Development Corporation (NYCEDC). President of the New York City Economic Development Corporation
Mr. Alper was appointed as President on January 15, 2002 by New York City Mayor Michael R. Bloomberg. , will be receptive to cutting through "bureaucratic" and archaic zoning laws and unfair bias against the not-for-profit organizations (the REAP benefit packages available to attract tenants to the boroughs exclude not-for-profits). As noted in a recent New York New York, state, United States
New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of Times article, not-for-profits are growing in the number of employees and are a critical part of the New York City cultural base. Further, zoning laws today still protect tenants and industries that no longer statistically exist in areas.
For example, the Garment District The Garment District is a store in Cambridge, MA and is well known for its Dollar-A-Pound clothing store. The Garment District started out as an offshoot of Harbor Textiles, a textile company which produced wiping cloths for industry that began in the late 1940s. is zoned M1-6, which requires 50% of the space on side streets to be designated for manufacturing tenants. Many landlords simply ignore this requirement, putting in broom closet Noun 1. broom closet - a small room for storing brooms and other cleaning equipment
closet, cupboard - a small room (or recess) or cabinet used for storage space manufacturing on a floor. It is not economically feasible to renovate a building and spend several million dollars to upgrade the lobby, elevators and common corridors in one half of the building.
The most important job for the current administration will be the rebuilding of the infrastructure of New York City. As a recently appointed executive board member of the Association for a Better New York (ABNY ABNY Association for Better New York (New York City, NY, USA) ), I viewed Dan Doctoroff's superb presentation of "2012 -- Olympics in Manhattan," which emphasized the importance of the expansion of current subway lines, railroad, ferry and bus service. The #7 subway line extension is crucial to developing the west side of Midtown Manhattan. Currently there is no public transportation to make this area a viable, competitive location for retail and office tenants.
Similarly, the plan for downtown brilliantly developed and presented by Brookfield Properties Brookfield Properties Corporation TSX: BPO NYSE: BPO is a Toronto-based North American commercial real estate company. Brookfield Asset Management owns 50% of its outstanding common shares. envisions a "New Grand Central" in downtown, with direct access for commuters from Long Island and the Metro North/Connecticut area in 20 minutes, rather than the present commute to Penn Station or Grand Central, with a transfer to another means of transportation to continue downtown. This current emphasis on rebuilding New York City's infrastructure is the key to helping to attract new industry growth.
We are hopeful as we pass through the next six months, we will have a stronger and better New York. Change creates opportunity through new challenges and we are forging ahead for an even stronger New York City. Himmel + Meringoff Properties remains committed to Manhattan and the boroughs. We firmly believe that New York City is our international capital of ideas, commerce and finance and will continue to invest our resources in acquiring secondary office buildings in order to rejuvenate this important property class.