Dealmaker, Siegel, ready to fill city's newest tower.
Last week, SJP SJP Sarah Jessica Parker (actress)
SJP Students for Justice in Palestine
SJP St. John's Preparatory School
SJP Society of Japanese Pharmacopoeia
SJP Singapore Justice Party
SJP Saint Joseph's Preparatory School Properties, a real estate firm that has developed office and residential buildings mainly in New Jersey, began construction on what will be its first foray into Verb 1. foray into - enter someone else's territory and take spoils; "The pirates raided the coastal villages regularly"
encroach upon, intrude on, obtrude upon, invade - to intrude upon, infringe, encroach on, violate; "This new colleague invades my commercial real estate in Manhattan; a one million square office tower at the western end of Times Square.
The groundbreaking took place two months ahead of schedule, an indication perhaps of SJP Properties' eagerness to deliver the new tower at a time when the city's office market has arguably ar·gu·a·ble
1. Open to argument: an arguable question, still unresolved.
2. That can be argued plausibly; defensible in argument: three arguable points of law. never been stronger. For years, such construction was widely considered by developers to be too risky because enough of a surplus of space already existed.
But now that rents for high-end offices in Midtown mid·town
A central portion of a city, between uptown and downtown.
US & Canad the centre of a town are at record levels and fast shrinking vacancy rates have left tenants clambering clam·ber·ing
Of or relating to a plant, often one without tendrils, that sprawls or climbs. for the space that remains, 11 Times Square is one among a number of new skyscrapers being built to accommodate the surge in demand.
Yet the building is also different from its peers. Office markets can be volatile and defy the optimistic projections that typically predicate In programming, a statement that evaluates an expression and provides a true or false answer based on the condition of the data. the construction of a building. Because of this, and because buildings take a long time to erect relative to the speed at which the market can change, a developer can break ground when space is at a premium only to finish just in time to see pricing sink.
For this reason, most projects don't get out of the ground without an anchor tenant in place, a space user who agrees to occupy a large portion of the building and who limits the developer's risk by assuring the project some degree of financial security based on the cash flow from that tenant's rent. The majority of new towers have one. One Bryant Park Bryant Park is a 9.603 acre (39,000 m²) public park located in the New York City borough of Manhattan. It is bounded by Fifth Avenue, Sixth Avenue, 40th Street and 42nd Street in Midtown Manhattan. The central building of the New York Public Library is in the park. for instance, a 2.2 million s/f glass tower currently being developed by the Durst durst
A past tense and a past participle of dare. Organization, is largely leased to Bank of America
Bank of America (NYSE: BAC TYO: 8648 ) is the largest commercial bank in the United States in terms of deposits, and the largest company of its kind in the world. . The 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 agreed to occupy half of its new headquarters building on Eighth Avenue, which sits directly south of the former parking lot where SJP Properties is building 11 Times Square. Even Larry Silverstein Larry A. Silverstein (born 1932 in Bedford-Stuyvesant in Brooklyn, New York) is an American billionaire real estate investor and operator and the head of Silverstein Properties, a real estate development group. developed downtown's post-9/11 phoenix, 7 World Trade Center, with insurance proceeds.
SJP Properties however is building 11 Times Square on speculation. Even considering the favorable market conditions, it is among the more confident moves to be made by a commercial developer in recent years and a lot more than just SJP Properties' bottom line is riding on its success. Developers around the city say they're paying close attention to how well the building does because it will be a gauge of how much new space the market is really ready for.
The building's performance also holds strong implications for the far West Side, a neighborhood that the city has tried to reinvent re·in·vent
tr.v. re·in·vent·ed, re·in·vent·ing, re·in·vents
1. To make over completely: "She reinvented Indian cooking to fit a Western kitchen and a Western larder" as a westerly expansion of Midtown but where little new development has actually begun. Although 11 Times Square belongs to the burgeoning western end of Times Square, that section is considered a gateway to the West Side and an indication of its viability, which the city has called essential to its future economic growth.
Observers say that the real estate investment trust, Vornado, is also paying a close eye to what happens at 11 Times Square. Vornado, of course, is in talks to build an office tower over the northern end of the Port Authority Bus Terminal The Port Authority Bus Terminal often referred to merely as "The Port Authority" is the main gateway for interstate buses into Manhattan in New York City. It is operated by the Port Authority of New York and New Jersey. , which is directly across Eighth Avenue from SJP Properties' site. If I I Times Square attracts tenants, it would undoubtedly make the opportunity to build above the noisy and crowded terminal seem far more appealing. In addition, there has been speculation that if Vornado does reach a deal to develop a tower, it could set in motion the Port Authority's eventual relocation of the terminal, which could further galvanize gal·va·nize
tr.v. gal·va·nized, gal·va·niz·ing, gal·va·niz·es
1. To stimulate or shock with an electric current.
2. the neighborhood as an office stronghold.
Given the building's momentous impact, it seems fitting that SJP Properties has hired Stephen Siegel as its leasing broker. It also shows that, despite his outward confidence, SJP Properties' chairman and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , Steven J. Pozycki, isn't taking any chances.
In a business stuffed with prodigious dealmakers, Siegel is widely regarded as one of the most influential real estate brokers and among a select few who have the highest level of clout with tenants and landlords alike. As much as the building's shiny new glass facade and myriad of amenities provide a tremendous boost to its prospects, so too does Siegel's name as its lead leasing broker, given the relationship he is known to have with numerous large space users and the reputation he holds among those he doesn't.
It was Siegel's influence, in fact, that allowed 11 Tunes Square to be built in the first place. The former parking lot on which the building will be constructed had been owned by the well-known New York real estate family, the Milsteins, who for years had postponed development.
"I had visited with the Milsteins for two years to try to convince them to build and understood that they didn't have the appetite to do it," Siegel said. "They were busy with too many things."
Despite their indecision about the site, the Milsteins had refused offers from potential buyers or the process of openly going about a sale for fear of alienating the Empire State Development Corporation--the state economic development agency that has dictated Time Square's redevelopment--and consequently dashing their own ability to build on the parcel should a deal fall through.
"They didn't want to be perceived as sellers for a variety of reasons," Siegel said. "They had the ESDC ESDC Empire State Development Corporation
ESDC Extra Segment Descriptor Cache
ESDC Extremal Self-Dual Code approval hanging over them and they didn't want to get in trouble with that process."
Siegel, however, was able to convince the family to let him shop the site to a potential buyer that he suspected would be interested and also be willing and able to pay the exorbitant price that the Milsteins wanted. That the Milsteins allowed him to do this is evidence of the kind of trust developers and owners have in Siegel. Without disclosure of just who the deal would be brought to at the outset of Siegel's pitch, the Milsteins couldn't be sure that the site wouldn't secretly be shopped to a number of potential buyers--a risk that they would have been unwilling to take on any other broker.
"The fact that the Milsteins knew when they said 'Don't market this property,' that I wouldn't, made them comfortable to say 'Go ahead and take it to that one client'," Siegel said. "Based on credibility and trust, I was able to tell them that I had a buyer and that we'd get a big price and, at the same time, I was asking SJP if we could build a building there and get in the ground and the answer was yes."
Siegel said that the Milsteins wanted a signed contract within two weeks and an irrevocable hard deposit of $15 million, incredibly stringent requirements that, without Siegel's hand in the negotiations, might otherwise have complicated and strained the deal's negotiations.
"We did the contract in that two weeks working day and night," Siegel said. "I was 100% sure that if the circumstances were correct SJP would buy it and then I was 100% sure that the Milstein's word was good. No one deviated one iota from their word and the deal got done."
Although his experience is anchored mainly in office leasing, Siegel has been able to apply his deal-making expertise to a variety of transactions in a way that seems to transcend the normal specialization among brokers. Last year, for instance, he teamed with Andrew Goldberg, a retail broker at CB Richard Ellis CB Richard Ellis Group, Inc. NYSE: CBG is a multinational real estate corporation currently based in Los Angeles, California, U.S.A.. On December 20, 2006, the corporation, also known as CBRE, completed acquisition of Trammell Crow Co. in a transaction valued at $2. where Siegel is chairman of Global Brokerage, to do one of the largest high-priced retail deals of all time; Gucci's 45,000 s/f lease at the base of Trump Tower Trump Tower
Trump Tower is the name used for several skyscrapers owned and operated by real estate magnate Donald Trump. Each of these skyscrapers is predominantly composed of residential condominiums and found in major cities. , where rents are among the highest in the world.
Goldberg and Siegel--along with Goldberg's brother Jeffrey--also operate a real estate company outside of CBRE CBRE CB Richard Ellis (real-estate firm)
CBRE Chemical, Biological, Radiological and Explosive
CBRE Component-Based Reliability Estimation
CBRE Coldwell Banker Richard Ellis (Boston, MA) that owns and manages affordable residential buildings in the city. The company, named SG2 after Siegel and the two Goldberg brothers, most recently purchased a 51-building Bronx portfolio for $300 million that boosted its inventory of apartments to roughly 5,500 units. The group has been able to avoid the controversy many residential real estate investors A real estate investor is someone who actively or passively invests in real estate. An active investor may buy a property, make repairs and/or improvements to the property, and sell it later for a profit. have met when trying to acquire buildings in lower income neighborhoods that provide affordable housing for the city's middle class--a property type whose dwindling dwin·dle
v. dwin·dled, dwin·dling, dwin·dles
To become gradually less until little remains.
To cause to dwindle. See Synonyms at decrease. supply has become a charged political issue.
"We went in recognizing that these building are different, that they're affordable, and our track record is that we upgrade the buildings with things like better security and improving the condition of the buildings," Siegel said. "We raise the rents on turnover, but we don't empty buildings and rush to condo them. I describe it as the tortoise versus the hare, slow and steady wins the race. Our buildings average $814 per month in rent in the Bronx. If we get them to $1000 a month, that's still affordable and we'll do just fine, we'll be very happy."
Siegel's business with SG2 and his managerial-sounding title as chairman of Global Brokerage has led some competitors, he says, to claim that he has become too distracted to handle large deals. In reality, Siegel, long a top real estate executive at the Edward S. Gordon Company and then at Insignia ESG ESG Enterprise Strategy Group (Veritas)
ESG Emergency Shelter Grant (Florida, USA)
ESG Expeditionary Strike Group
ESG Electronic Service Guide (used in DVB) , shrugged off management responsibilities when CBRE purchased Insignia ESG in 2003.