Price of Manhattan Apartments Drops For The Fourth Straight Quarter

According to this week’s market reports, the median price for a Manhattan apartment dropped for the fourth straight quarter and U.S. construction spending reached a record high in May.


The average sales price in Manhattan dropped 4.3 percent to $2.2 million in the four weeks leading up to June 1. The slight drop coincided with an increase in recorded sales. During the period, the number of sales stood at 923 transactions, up from 820 deals during the previous month. The most expensive sale for the period was for unit 85 at One57. The 6,200-square-foot home was sold for $53 million, or $8,649 per square foot. Read the report here.

The asking price for Manhattan homes dropped 3.4 percent on a year-over-year basis to $1,714. For the month of June, the housing market’s supply and demand figures remained soft. Supply, as measured through active listings, rose by 8.9 percent compared to the same time last year. Meanwhile, demand, as measured through closed sales, dropped 41.7 percent on a year-on-year basis. Read the report here.

The median apartment price in Manhattan fell for the fourth straight quarter, dropping 9 percent on a year-on-year basis to $1.1 million. The figure represents the lowest median price for the borough since the fourth quarter of 2016. The median price decline in the second quarter was partly due to a sluggish new development market, which registered 30 percent fewer closing compared to the same time last year. Overall, the borough registered a 12 percent drop on a year-over-year basis. Resale apartments also sold for the highest discounts in over five years.


Construction spending in the US rose to a record high of $1.3 trillion in May. The increase, which amounts to a 4.5 percent hike compared to the same month last year, is due to grow in residential and public investment. Private residential spending outpace other segments with a 6.6 year-over-year increase, followed by 4.7 percent for public construction and 1.8 percent for private non-residential construction.

Disney/Fox Deal Could Lead To Real Estate Shakeup Here In NYC

The Walt Disney Company’s $52.4 billion deal to buy most of 21st Century Fox could have big implications for the companies’ real estate in New York City, sources said.

The Los Angeles-based Disney owns ABC, which is headquartered on an Upper West Side campus centered around West 66th Street that the company moved into in the 1980s.

When Disney acquired ABC in 1995 for $19 billion, rumors started to circulate that the West Coast company would put the campus up for sale. Disney never sold, but those rumors have started to pup up again in the wake of the Fox deal.

“It would make sense that ABC or Disney would theoretically be receptive to offers, given the value of that site,” said Gabe Marans, corporate managing director at Savills Studley.

Gary Barnett’s Extell Development and Megalith Capital are building a 25-story condo tower across from ABC’s headquarters with the help of $55 million worth of air rights the partners bought from Disney.

Disney also owns Marvel Entertainment, which occupies 60,000 square feet at 135 West 50th Street in Midtown on a sublease with Alliance Bernstein that expires in 2019.

21st Century Fox, meanwhile, extended and expanded its space to 784,000 square feet through 2025 at the NewsCorp. Building a 1211 Sixth Avenue earlier this year after abandoning plans to relocate downtown as the anchor to Silverstein Properties’ 2 World Trade Center. The deal on Sixth Avenue included an extra 128,000 square feet to make way for Fox employees to relocate from nearby at 1185 Sixth Avenue.

Over on the West Coast, Disney will be leasing Fox’s 2.3 million-square-foot Century City lot for seven years, Variety reported. The property is valued at north of $1.5 billion. Disney already owns a 51-acre campus for its studios in Burbank.

Yellen Says More Interest-Rate Hikes Might Be Coming

Federal Reserve Chair Janet Yellen said more interest-rate increases will be appropriate if the U.S. economy meets the central bank’s outlook of gradually rising inflation and tightening labor markets.

“At our upcoming meetings, the committee will evaluate whether employment and inflation are continuing to evolve in line with these expectations, in which case a further adjustment of the federal funds rate would likely be appropriate,” she told the Senate Banking Committee in prepared remarks Tuesday.

Yellen’s semiannual report on monetary policy is her first since Donald Trump became president vowing to boost U.S. growth, which could push the Federal Open Market Committee to pick up the pace of rate hikes if such steps fan higher inflation. She reiterated that falling behind on inflation could harm to the economy and possible cut short the expansion.

“Waiting too long to remove accommodation would be unwise, potentially requiring the FOMC to eventually raise rates rapidly, which could risk disrupting financial markets and pushing the economy into recession,” she added.

Read Yellen’s Opening Statement

Yellen gave no indication of the timing of the next hike in her prepared remarks. Investors see about a 34 percent chance of an increase at the next meeting of the FOMC on March 14-15, up from about 30 percent before she spoke. Treasuries fell, U.S. stocks pared losses and the dollar rose.

The Fed, which has only raised rates twice since the recovery began in 2009, has penciled in three quarter-point rate increases in 2017, as the economy closes in on the central bank’s goals for maximum employment and 2 percent inflation.

Moderate Growth

Yellen said the Fed panel’s outlook for a “moderate pace” of growth is based on continued stimulative monetary policy, and a pick-up in global activity. She did not mention Trump administration proposals as a key element in the central bank’s forecast.

In response to questioning, Yellen said Fed policy makers will be discussing in coming months their strategy for the balance sheet, which swelled to about $4.5 trillion after the crisis from less than $900 billion in 2006 as the central bank sought to hold down long-term market rates.

She said she expects the balance sheet to end up being “substantially smaller” than it is now, with policy makers wanting to shrink in an “orderly and predictable way.” The Fed doesn’t want to use the balance sheet as an active policy tool and it should eventually be comprised primarily of U.S. Treasuries, she said.

On the economy, she said in her opening statement that consumer spending has continued to rise at a “healthy pace,” supported by gains in household income and wealth, favorable sentiment and low rates. The recent rise in mortgage rates “may impart some restraint” on housing markets, she said.

The Fed chief said changes in fiscal and economic policies could affect the outlook, though she declined to speculate how, adding that it’s “too early to know” what policy changes will be put in place. She urged lawmakers to focus on investments that would improve living standards and raise productivity while noting that she hoped any changes would keep fiscal accounts “on a sustainable trajectory.”

Reform Push

Trump’s victory could expose the U.S. central bank to reforms favored by his Republican party, which still controls both chambers of Congress. Yellen could previously rely on President Barack Obama, a Democrat, to shield with his veto any perceived encroachment on Fed independence.

The shift in power may force her to engage more with lawmakers than in the past. Republicans want to roll back post-crisis banking regulations enshrined in the Dodd-Frank Act, arguing it hurts growth by making credit scarce for small businesses. While Yellen did not mention financial regulation in her remarks, lawmakers had many questions on the issue as the hearing progressed.

In his opening remarks at the hearing, Senate Banking Committee Chairman Mike Crapo said “it is time to reassess what is working and what is not” with financial regulations, which need to “strike the proper balance” between the safety of the system and economic growth.

Trump’s opportunity to influence regulatory policy improved last week when Fed Governor Daniel Tarullo, who oversees bank regulation, announced his departure in early April. It also means that Trump can fill three of the seven Fed Board seats, where there are two existing vacancies, while Yellen’s own term as chair ends in February 2018.

Yellen gave an upbeat description of the labor market saying gains in recent years “have been widespread.” The unemployment stood at 4.8 percent in January.

The personal consumption expenditures price index, the Fed’s preferred price benchmark, rose 1.6 percent in the 12 months through December.

High Line Co-Founder Say Park Failed Residents Of Chelsea

When Robert Hammond first conceived of turning a disused elevated railway on Manhattan’s West Side into a high-design “linear park,” he thought it would attract maybe 300,000 visitors a year. He and co-founder Joshua David didn’t really think about what the High Line could do to the neighborhood, apart from adding a little extra breathing room.

“This was right after 9/11,” Hammond says almost two decades later, sitting in his glassy office perched above the now-famous planked pathway. On a February afternoon, walkers are admiring views of the Hudson River and park greenery hushed grey by winter. “People were worried about buildings falling apart, and whether the stock exchange would leave town,” he says. “New York’s future was not guaranteed.”

In 2016, seven years after it opened, nearly 8 million bodies would flock to the High Line—that’s more visitors than to any other destination in New York City. With those visitors came riches the park’s founders never predicted: Between the glossy condos, eateries, and museums that have flowered around its steel girders, the High Line is set to generate about $1 billion in tax revenues to the city over the next 20 years.

“Instead of asking what the design should look like, I wish we’d asked, ‘What can we do for you?’ People have bigger problems than design.”

By these measures, the High Line is a runaway success. But by one critical metric, it is not. Locals aren’t the ones overloading the park, nor are locals all benefiting from its economic windfall. The High Line is bookended by two large public housing projects; nearly one third of residents in its neighborhood, Chelsea, are people of color. Yet anyone who’s ever strolled among the High Line’s native plants and cold-brew vendors knows its foot traffic is, as a recent City University of New York study found, “overwhelmingly white.” And most visitors are tourists, not locals.

“We were from the community. We wanted to do it for the neighborhood,” says Hammond, who is now the executive director of Friends of the High Line, the nonprofit that funds, maintains, programs, and built the space (New York City owns it, and the parks department helps manage it). “Ultimately, we failed.”

Now he’s course-correcting. Hammond is striving to bring in more diverse park-goers to the High Line’s narrow pathways, and to new public spaces around America. On top of changes to how FHL engages with neighbors, Hammond has founded the High Line Network, a coalition of designers and planners building “adaptive reuse” parks in the High Line mold. Leaders from 17 projects at different stages of life in the U.S. and Canada—think Atlanta’s rails-to-trail BeltLineDallas’ highway cap park, and the 51-mile L.A. River overhaul—have been meeting over the past year to share insights on how to turn disused infrastructure into bustling public amenities.

A lot of the conversation focuses on nuts-and-bolts topics, like capital financing and marketing strategies, attendees say. But at every convening (there have been four since June, in New York, D.C., Toronto, and Houston), Hammond and others have opened up the question of equity—“sort of like a Trojan Horse,” he says—and driven at it hard, to figure out strategies for keeping public parks inclusive.

It’s harder than it should be, and the stakes are much higher than visitor statistics. The network of project leaders is tackling a long overdue conversation about how to improve neglected neighborhoods, without pushing away the very people they intend to serve.

The ugly side of “adaptive reuse”

As American downtowns repopulate and densify, green space is at more and more of a premium. Very few open lots that could be turned into parks remain around urban cores; often, land that becomes available holds remnants of the industrial past. That’s why so many of these “adaptive reuse” projects—with sleek aesthetics that often highlight, rather than hide, the old highway/flood channel/railway—are getting built.

Meanwhile, city governments rarely have room in their budgets, or even imaginations, to redevelop those tracts on their own. It’s largely up to private funders to bankroll these projects—and it’s mostly private individuals who dream them up. From an investor standpoint, the High Line’s stunning successes make these projects no-brainers to back: Green space draws new businesses and dwellings. There’s big redevelopment money to be made. So they partner with city governments, hungry for a heftier tax base, to do it.

But these obsolete bits of infrastructure generally have people living near them, and often, they are park-poor, low-income communities of color, forgotten in the shadows of that very strip of concrete or steel. This is true for many of the 17 projects involved in the High Line Network. Planners and designers—who are usually white—may try to engage residents in dialogue; often, they fail.

During the High Line’s planning stages, Hammond and David set up offices inside a local community agency in order to make themselves accessible to public housing tenants, and solicit their opinions on design. But the questions they asked at their “input meetings” were essentially binary: Blue paint, or green paint? Stairs on the left or the right? They rarely got to the heart of what really mattered.

“Instead of asking what the design should look like, I wish we’d asked, ‘What can we do for you?’” says Hammond. “Because people have bigger problems than design.”

His organization finally did launch a series of “listening sessions” with public housing tenants in 2011. What people really needed were jobs, Hammond says, and a more affordable cost of living. Residents also said they staying away from the High Line for three main reasons: They didn’t feel it was built for them; they didn’t see people who looked like them using it; and they didn’t like the park’s mulch-heavy programming.

Those findings led to the several new initiatives. In 2012, FHL launched a suite of paid jobs-training programs aimed at local teenagers, focused on environmental stewardship, arts programming, and educating younger kids. The organization also started to partner with the Elliot-Chelsea and Fulton Houses, the two public housing projects, to develop their programming schedule. That’s how “¡ARRIBA!”, a summer series of Latin dance parties got started—a resident thought it up, and it’s been a big hit. Friends of the High Line also started putting on occasional events within the public housing campuses themselves, avoiding the swarms of tourists.

But there’s a lot the High Line could have done before it opened that it can’t make up for now. Its designers might have paid stronger attention to a few basic principles of attractive public spaces, and specifically those that attract low-income and minority park-users. “The more open and visible a place is, the more easily you transition into it,” says Alexander Reichl, a professor of urban studies at Queens College who has studied social mixing patterns at the High Line. The High Line’s elevated structure naturally preempts street-level walk-ins, but its designers also chose to put in very few staircase entry points, further limiting access.

“The question we're constantly challenging ourselves on is: Who is this project really for?”

There are also no areas for open play, and a long list of posted rules: No “throwing objects” (including, say, a ball), no rollerblades, bikes, or skateboards. It stands to reason that the park would need to prohibit these activities within its narrow confines, but research shows that these kinds of common recreations draw people of color in particular to parks. “How much can you do with an elevated park space?” says Miguel Acevedo, director of the Fulton House Tenants Association. He says he doesn’t fault FHL, given how much they’ve reached out to his community in recent years. Still, “our residents don’t feel it’s a park that is available to them.”

Perhaps more critically, Friends of the High Line could have worked harder from the start to advocate for affordable housing. Hammond likes to say that his park gets too much credit and too much blame for Chelsea’s explosive makeover—city zoning codes were already changing to support redevelopment in the mid-2000s. But the fact is, the High Line has become a symbol of the “new” New York, a city of profound inequality. Luxury high-rises and catwalk clothiers have taken the place of Chelsea’s old bodegas and butchers; neighborhood income disparities are among the city’s most extreme. People can’t afford to shop nearby, and the prospect of shouldering a market-rate rental is laughable. Even though public housing costs haven’t increased for public housing tenants, displacement anxieties are running high.

“The scariest thing is being in this kind of district—especially with the kind of president we have today,” says Acevedo. He could see public housing in Chelsea targeted for redevelopment. “With NYCHA in a large deficit, too, it’s very serious.”

Acevedo wishes that FHL had pushed the city harder to keep more of the land values that the High Line created for affordable housing and public services; although a zoning amendment approved in 2005 did encourage some low- and middle-income rate units to be built, it wasn’t nearly enough. Hammond agrees. “There could have been more government action through zoning changes,” he says. (He also wishes he’d gotten the city to use more tax revenues to fund his own organization.)

But that’s just it: in hindsight, it might be obvious, but few could have anticipated the High Line’s downright gravitational pull on tourists and developers. For new projects that are modeled after it, however, it’s not too late to plan around the social problems that accompany economic success. Hence, the High Line Network. “I want to make sure other people don’t make the mistakes we did, and learn how to deal with these issues,” says Hammond. “We certainly don’t have all the answers.”

The equitable redevelopment toolkit

Other projects in the High Line Network are paying much more than lip service to equity concerns. Washington, D.C.’s 11th Street Bridge Park is national leader on this topic. That $45 million project is making a park out of an old highway bridge spanning the Anacostia River, touching one of the poorest sections of the District. There are sure to be dramatic increases in home values there, and displacement is a real risk. So project leaders are moving ahead of time.

“The question we're constantly challenging ourselves on—with staff and publicly—is, who is this really for?” says Scott Kratz, the project’s director. “For us, before we even engaged a single architect or engineer, we had 200 meeting meetings where we asked: ‘Is this even something you want?’ Going out and getting permission, and then having the community shaping every aspect, has been critical.”

Not everyone would agree that the park will be good for long-time residents. But the most important test will be whether the project can successfully mitigate displacement ahead of time—and so far, the organizers are putting money where their mouth is. In 2015, Kratz and his team released a set of equitable development goals, generated by a working group of local stakeholders. They included neighborhood hiring targets for construction and operations, a strategy to help nearby businesses serve the park, and plans for a land trust to buy up disused properties for future housing projects. The Bridge Park’s organizers have raised $1.5 million so far to implement those goals, including the land trust, which it’s setting up with a nonprofit housing developer. A $50 million investment by the Local Initiatives Support Corporation will further anchor its equity work.

Kratz points to Atlanta’s BeltLine as another leader in keeping affordable housing and equity at the top of their priority list. That $2.8 billion project will turn 22 miles of rusting freight rails into a ribbon of trails, parks, and transit-friendly developments connecting 45 neighborhoods. Special bond measures have created tens of millions of dollars to incentivize affordable housing developments, and several hundred below-market-rate units have already been built.

But it’s a massive project, with unique challenges for each of the enclaves it reaches. Ryan Gravel, the urban planner who first conceived and proposed the BeltLine concept, stepped down from the project’s steering board in September 2016 over concerns about affordability promises not being kept. Funds generated by additional proposed bonds, for example, would only be “a drop in the bucket when compared to the need,” Gravel wrote in his resignation letter, signed by another board member who also stepped down. Gravel figured he’d do better from the outside with his new focus—advocating for equitable development.  

“If you care about the places you’re working in, then you have to be talking about this,” he says. “Because in a growing economy, if you’re building a greenway trail or a transit station or improving a school, it will drive up land values.”

The answer is not not to build parks and other improvements, Gravel says, or to hold neglected places back. The problems are essentially financial, and there are ways to fix them, whether it’s traditional tax credits, (which are already hurting under Trump), subsidies to renters, inclusive zoning, land value capture, or clearing paths in zoning codes for snug accommodations like accessory dwelling units or tiny homes.

Not every tool is right for every city. But tools do exist. “It’s mostly about finding the will,” says Gravel. “That comes from leadership. But the public also needs to say this is important, and needs to demand that we do better.”

Even though he’s no longer officially part of the BeltLine’s development, Gravel has still been attending the High Line Network meetings. He’s been pleased to hear other cities talking openly about equity: The $1.3 billion L.A. River revitalization project is feeling a lot of pressure from housing advocates in Frog Town; New York City’s Lowline—the world’s first underground park—is working hard to engage longtime Lower East Siders in its design. Hammond is proud to report steady changes in the High Line’s visitor make-up: In 2015, 44 percent of park-users who hailed from New York City were people of color, up 20 points from 2010. However, tourists still dominate the space.

The High Line Network should help keep its many ambitious projects accountable to their equity promises, and that is a good thing. Gentrification and displacement concerns arise with almost any new development in this era of city-building, but when it comes to turning certain corners of forgotten neighborhoods into beautiful parks, these anxieties can be especially painful—after all, public spaces are supposed to be for everyone.

Still, big challenges lie ahead, not least of which is the fact that the leaders of the projects in this network are themselves overwhelmingly white. Perhaps this is the most overlooked piece of the puzzle: A diverse set of voices should be at the design table from the get-go.

The same goes for the folks doing the pushback, according to Acevedo.

“I represent people who’ve been here 40 years, and this is all they have,” he says. “I’ll fight tooth and nail to protect them. But people like me, we need to make sure that the next generation knows: if you’re not part of the fight, you might not be living here in the future.”


One-third Of All Manhattan Apartment Leases In January Included Concessions

New York City residential landlords are continuing to rely on renters’ incentives to keep vacancies at bay, a trend that is expected to become more widespread throughout 2017.

The number of leases with concessions reached new highs in January, according to the monthly rental report from Douglas Elliman. In Manhattan, 31 percent of all new leases included some form of concession last month, nearly double what it was a year ago. In Brooklyn, 18 percent of leases had concessions, compared to just 5 percent last year.

“Landlords are trying to strike a balance and that means fine tuning rents to fit market conditions,” said Jonathan Miller, CEO of appraisal firm Miller Samuel and author of the report. He predicts landlords will use concessions even more aggressively in 2017.

“I don’t think we’re at the end of this — nothing is changing and there’s a lot of product coming in,” he said. “The rental market is going to get weaker before it gets stronger.”

In Manhattan, the vacancy rate fell slightly from 2.3 percent from 2.8 percent in January 2016. That’s a sign concessions are working, although they are “painful for landlords,” said Miller.

The borough’s median rental price, after concessions, was $3,259, essentially the same as January last year. Softening in the market continues to be particularly acute at the high end. The median rent of a Manhattan studio was $2,600, a negligible change from last year. But for three-bedrooms, the median price was $5,500, a drop of almost 7 percent. While non-doorman median rent went up 2.8 percent to hit $2,800, the median price for doorman rentals fell back 1.2 percent to $3,750.

Luxury rentals, which account for the top ten percent of the market fell again this month, dropping 5.5 percent year-over-year to a median price of $7,595.

In Brooklyn, the effects of vast amounts of luxury rental product is also being felt. The median rent in the borough was $2,702, after taking concessions into account. That’s a fall of 2.8 percent compared to January 2016, when median rent was $2,779. Just like in Manhattan, the lower end of the market held firm or saw modest gains. But the two-bedroom median rental price was $3,025, a fall of 4 percent year-over-year. For three-bedrooms, it was $3,318, a fall of 8 percent. The luxury market dropped just under one percent to $5,119.

“In the last six months in 2016, you started to see a run-up in Brooklyn in the use of concessions,” said Miller. “Even though the concessions are still less than in Manhattan, the amount of concessions tripled over the year, whereas in Manhattan it doubled.”

The market in northwest Queens continues to be “choppy,” according to Miller. The median rent fell 2.4 percent year-over-year to $2,700. Out of all the leases signed last month, 38 percent included concessions. The concessions are driven by the uptick in new development rentals, which had a market share of 34 percent last month, more than double what it was this time last year.

Biggest Price Cuts On Luxury Units This Week

Price chops in the city’s ultra-luxury market are showing no signs of slowing down.

In total, 15 properties in the over-$10 million market saw a discount of more than 5 percent in the period between Jan. 31 and Feb 6, according to data provided by StreetEasy. 

The biggest reduction was at One Madison Park, where a two-floor condominium had its asking price slashed by a whopping $5.5 million, or 17 percent.

Here’s a look at the biggest price cuts in New York City’s luxury market last week:

23 East 22nd Street, 55/56

23 East 22nd Street, 55/56
Previous Price: $32 million
Current Price: $27 million ($4,070 per square foot)
Percentage Drop: 17 percent

This five-bedroom, five-bathroom “showcase” apartment at One Madison Park was first listed in May 2015, asking $37 million. It was pulled from the market just a few days later, and returned in April last year with a $32.5 million price tag. Last week, the apartment at the Related Companies, CIM Group and HFZ Capital Group-developed property was reduced by $5.5 million, or 17 percent.

The 6,620-square-foot apartment, offered as raw space only, spans across two full floors, according to the listing. If you do happen to have $27 million to spare, buying this apartment would put you in pretty close proximity to Rupert Murdoch. In 2014, the media mogul paid $57.3 million for the four floors above this particular pad, including a triplex penthouse and a three-bedroom on the 57th floor. He listed the penthouse for $72 million in 2015, but yanked it from the market a year later.

CORE’s Jim St. Andre has the listing. He wasn’t available for comment.

151 East 58th Street, 47A

151 East 58th Street, 47A
Previous Price: $13.9 million
Current Price: $12 million ($3,922 per square foot)
Percentage Drop: 14 percent

The owner of this One Beacon Court condo is Scott Kurnit, chair of shopping website But if this recent discount is anything to go by, he may be keeping this 3,000-square-foot home.

Kurnit put the pad up for sale last November with a $13.9 million asking price. Last week, $2 million, or 14 percent, was lopped off the asking price.

The three-bedroom, three-bathroom apartment has floor-to-ceiling windows, 11-foot-high ceilings, custom flooring, views of the city and Central Park, a kitchen outfitted with top-of-line appliances and custom closet spaces.

The Vornado Realty Trust-developed building is also home to another notable price reduction. Billionaire hedge funder Steven Cohen has been trying to find a buyer for his apartment there since 2013. Its asking price has been dropped from $115 million down to $72 million over the years.

Compass’ Victoria Shtainer and Gabriel Zapata have the listing. The brokers could not be reached for comment.

535 West End Avenue, HiFlr

535 West End Avenue “Hiflr” 
Previous Price: $22.7 million
Current Price: $20 million ($2,366 per square foot)
Percentage Drop: 12 percent

This high-floor apartment — as it’s known for privacy reasons — spans 8,450 square feet across seven bedrooms and seven bathrooms, and features custom herringbone hardwood floors, a corner library, a formal dining room and a butler’s pantry. First listed in August last year, according to StreetEasy, the apartment at the Extell Development building was slashed by $2.7 million last week.

Adam Modlin of the Modlin Group has the listing. He declined to comment.

56 East 66th Street

56 East 66th Street
Previous Price: $17.9 million
Current Price: $16 million
Percentage Drop: 11 percent

This 8,000 square foot townhouse has eight apartments across five floors. It could, however, be turned into a single-family mansion with a limestone facade, six bedrooms, five bathrooms and an eat-in kitchen. There’s also potential for fireplaces, a “dramatic” open staircase, a private garden and an elevator, according to the listing.

Built in 1905, the townhouse was on the market for $17.9 million in October, but was dropped down to $15.9 million. It’s claim to 15 minutes of fame? Andy Warhol lived close by at number 57.

The current owner used an LLC to buy it for $14 million in 2015, records show.

Lisa Simonsen and Kristin Lukic of Douglas Elliman have the listing. Neither brokers were available for comment.

720 Park Avenue, #23C

720 Park Avenue, 23C
Previous Price: $22.5 million
Current Price: $20.1 million
Percentage Drop: 11 percent

The chance to own a pad in one of the city’s most exclusive co-op buildings just got a little cheaper — but it’ll still set you back $20 million. Apartment 23C at 740 Park Avenue is a six-bedroom, six-bathroom duplex spanning nearly 7,000 on the second and third floors. The apartment is owned by Mark Magowan, the president of publishing house Vendome Press, and his wife Nina, according to the New York Times. They bought the apartment in 1986. It features a circular staircase, four reception rooms, a gourmet kitchen and breakfast room.

It’s not the first time a expensive pad at the building has been slashed in price. In November, hedge funder David Ganek cut the price of his place at 6/7A, where a young Jacqueline Bouvier lived with her parents in the 1930s, back to $29.5 million. It’s still on the market, according to StreetEasy.

The Trump boost has been helping lately, so I’m encouraged,” said Kirk Henckels, of Stribling, who has the listing with colleague Jennifer Callahan. “The ultra-luxury market has not been good for the last six months or more, but we had as many showings in the past ten days as the first ten days after it hit the market.”

Apartment or Townhouse: Which Was The Better Investment To Make Back In 2007?

Who’s getting the most bang for their buck: Manhattan’s townhouse investors — or those who went the apartment route?

Since 2007, townhouse prices in the borough increased significantly more than apartment prices, according to an annual decade report from Douglas Elliman. The median price of a townhouse last year was $4.9 million, compared to $3.1 million in 2007 — a jump of 59 percent. By comparison, condominiums and co-ops collectively had a median sale price of $1.1 million in 2016, an increase of 28 percent from the $860,000 median price in 2007.

While the figures look dramatic, it’s worth remembering that townhouses make up just 2.6 percent of total Manhattan residential sales.

“It’s a luxury niche market,” said Jonathan Miller, CEO of Miller Samuel and author of the report. “Whereas the apartment market is the market that’s expanding, particularly on the condo side.” Miller said the past decade was characterized by a significant uptick in new development and, up until the past year, an “insatiable demand” for high-end real estate.

The median price of a co-op last year was $771,000, a 14 percent jump from $675,000. For condos, the median sales price rose 58.5 percent between 2007 and 2016, going from just over $1 million to nearly $1.7 million in 2016. Over the past decade, the average price per square foot for apartments jumped significantly, going from $1,120 in 2007 to $1,771 in 2016.

There were 11,459 apartments sold last year, compared to 13,430 in 2007, an all-time record, according to Miller’s figures. Last year, 5,435 condos sold compared to 5150 in 2015, a jump of 5.5 percent year-over-year. However, the co-op sales numbers fell significantly, going from 6,805 to 6,024 between 2015 and 2016, a drop of 11.5 percent.

While overall sales for apartments have been drifting down since 2014, Miller said he expects the number to stabilize and potentially increase in 2017. He added the notion that rising interest rates will cool the market is an “incomplete” characterization.

For luxury townhouses, which is the upper 10 percent of all Manhattan townhouses, the median price was $19.3 million. That figure represented a 29 percent jump from $14.9 million in 2007.

For townhouses Downtown, the median sale price last year was $7.5 million, a 75 percent jump from $4.3 million in 2007. On the east side, the median price for townhouses was $8 million, a 15 percent jump from 2007. The median sale price on the west side last year was $7.1 million, a 52 percent jump from a decade ago.

Most townhouse sales occur in northern Manhattan, where the median price last year was $2.1 million, a 55 percent jump from the $1.3 million median price nearly a decade ago.

When Will Fannie, Freddie Switch To New Credit-Scoring Model?

Borrowers probably know that their credit score is a crucial factor in their ability to qualify for a mortgage. They might also know that their score can vary depending on the type of scoring model their lender uses. If it’s an old, outdated version, they might get a lower score. If it’s a newer, more advanced model, they’ve got a better shot at being scored more fairly.

That brings up a long-festering controversy: The two behemoths of the mortgage business — Fannie Mae and Freddie Mac — continue to use a credit scoring model that even its developer, FICO, says is not as “predictive” as its much newer models. Worse yet, Fannie and Freddie require that all lenders who want to submit loan applications to them must use the same, outdated technology.

The net result, agree critics from the lending industry, consumer groups, civil rights organizations and even a bipartisan coalition of legislators in Congress, is that many applicants don’t get the credit scores they deserve. Meanwhile, many other consumers — estimates put the figure at more than 30 million — aren’t even scoreable using the models currently employed at Fannie and Freddie. Disproportionately, critics say, these are people who don’t make heavy use of the credit system or are young and don’t yet have much information in the files of the national credit bureaus. Large numbers of them might qualify for a mortgage, say scoring experts, if they were simply given a fair shot.

Fannie’s and Freddie’s government regulator, the Federal Housing Finance Agency, acknowledged the problem two years ago, when it directed the companies to begin examining how to improve their scoring systems. The FHFA told them to “conclude [theirassessment,” and “as appropriate, plan for implementation” of a better approach in 2016.

Since it’s now December and there have been no announcements about possible reforms, it’s appropriate to ask: When are Fannie and Freddie rolling out their new and improved scoring models and what will they look like? The question is especially timely given the release in late November of a new study from the Urban Institute documenting how recent credit standards in the mortgage arena have impacted millions of would-be borrowers.

Researchers found that roughly 1.1 million home-loan applicants were turned down in 2015 because the standards used to evaluate them were much more stringent than they were in the pre-housing-boom era, when defaults were relatively low. Between 2009 and 2015, “lenders would have issued 6.3 million additional mortgages,” researchers calculated, “if lending standards had been more reasonable,” as they were back in 2001.

A major culprit: a big shift toward the highest credit scorers when it comes to mortgage approvals. From 2001 through 2015, the share of borrowers approved for mortgages who had FICO scores above 700 jumped to 66 percent from 51 percent, while those approved with scores below 660 more than halved to just 14 percent from 31 percent. Preliminary figures for 2016 showed that credit scores of approved applicants at Fannie and Freddie averaged between 752 and 754, according to loan technology firm Ellie Mae. That stands well above the average score among all Americans of just 699, according to score developer FICO. (FICO scores range from 300 to 850, with low scores indicating higher risks of default.)

In response to the question, a spokesperson for the FHFA said that Fannie and Freddie continue to discuss their plans for scoring reforms with “a broad range of stakeholders” about the “cost, operational implications, and potential impacts on access to credit.”

Who exactly are some of these “stakeholders” and how do they see this issue? Among the most directly affected are the banks and mortgage companies that deal with the two companies daily. They strongly favor a move to more advanced scoring models to broaden the base of potential home buyers and borrowers without exposing themselves or Fannie and Freddie to higher risks of default.

Michael Fratantoni, chief economist for the Mortgage Bankers Association, said in an interview that “by sticking to old models we are disadvantaging” sizable numbers of consumers. Groups such as Fratantoni’s also want to see the introduction of advanced scoring models from companies other than FICO permitted as an option by Fannie and Freddie. One possible example is VantageScore Solutions, LLC, which offers a rival system now used in most other segments of lending.

“We are on the record for more competition in this space,” Fratantoni said. “We shouldn’t be locked into just one set of scores.”

Nor should millions of potentially credit-worthy consumers.

Kenneth R. Harney is a syndicated columnist.

Luxury Pads With The Biggest Price Cuts This Week

Which asking price will get whacked this week?

Two adjacent co-ops belonging to “The Sopranos” creator David Chase received one of the biggest price reductions in the city’s over-$10 million market during the past week. The penthouses at London Terrace were listed last year for $16.5 million, but are now asking a more subdued $14.9 million.

In total, 13 ultra pricey pads received reductions of more than 5 percent in the period between Jan. 9 through 15, according to data from StreetEasy.

Here’s a look at the biggest chops in New York City for the week:

795 Fifth Avenue, 2204

795 Fifth Avenue, 2204
Previous Price: $25.9M
Current Price: $22.5M
Percentage Drop: 13 percent

Back in May 2014, this four-bedroom co-op hit the market for an ambitious $33 million. But that was back when ultra-luxury pads were selling like hot cakes, and sellers had high hopes for what their apartments could (and often would) fetch. In October 2014, the asking price was shaved back to $29.9 million, where it sat for nearly 18 months. In March last year, the price was slashed to $25.9 million. Last week, it was dropped again by 13 percent, and is now asking $22.5 million.

The unit in the famed Pierre Hotel building has north, south, east and western exposures, as well as expansive views of Central Park. Each bedroom has an en suite, according to the listing. There are two kitchens, a service entry and concealed china cabinets.

Designed by architect Leonard Schultze, the building opened in 1930. It is now owned and operated by Taj Hotels Resorts and Palaces, according StreetEasy. In 2015, Charlene Haroche, the widow of travel agency mogul Gilbert Haroche, purchased a co-op in the building for $22.9 million.

Brown Harris Stevens’  Paula Del Nunzio has the listing. She did not return a request for comment.

7 Bond Street, PHAB

7 Bond Street, Penthouse AB
Previous Price: $14.5M ($4,222 per square foot)
Current Price: $12.9M
Percentage Drop: 11 percent

Designed with the help of a Feng Shui master and a building-biology consultant, this 3,000-square-foot penthouse is now on the market asking $12.9 million. Owned by hedge funder Jason Pickard, the four-bedroom, three-bathroom apartment was renovated as a “healthy living retreat.” It has naturally-sourced and reclaimed building materials, a 1,200-square-foot outdoor terrace equipped with built-in speakers, “mood lighting” and an irrigation system. All the water in the apartment is filtered and there are sound-dampening windows to minimize noise.

Pickard, who paid $9.2 million for the apartment for the apartment in 2013, told Architectural Digest in August that he wanted to design a place that was “organic, nature-friendly and peaceful.”

But despite the “mindful design,” and the links to the musician Moby — who also owned an apartment in the building — the unit has sat on the market since September. It was first listed for $14.5 million, and was reduced by 11 percent to $12.9 million last week.

Ryan Serhant and Amy Herman of Nest Seekers International have the listing. Neither returned a request for comment.

47 West 24th Street, PHAB

470 West 24th Street, Penthouse AB
Previous Price: $16.5M
Current Price: $14.9M ($2,980 per square foot)
Percentage Drop: 9 percent

David Chase, the creator of “The Sopranos,” put these adjacent, but not combined, London Terrace penthouses on the market for $16.5 million in April last year.  Alec Baldwin and his wife Hilaria reportedly toured the units in September, but it clearly wasn’t to their liking. The price was slashed by 9 percent last week, and the apartments are now asking $14.9 million.

The apartments together have roughly 5,000 square feet, five bedrooms, four-and-a-half bathrooms and a terrace with 360-degree views. Chase bought one of the apartments, once owned by writer and activist Susan Sontag, for $9.6 million in 2013. Plans to combine the two co-ops have been approved, according to the listing. The new place would include an eat-in dining room and a north-facing master bathroom with views of the Empire State Building.

Joshua Wesoky and Steve Dawson of Compass have the listing. The brokers did not return a request for comment.

435 East 52nd Street, Apt 16C

435 East 52nd Street, 16C
Previous Price: $11.7M
Current Price: $10.8M ($2,700 per square foot)
Percentage Drop: 8 percent

This 4,000-square-foot apartment, which is owned by financier and philanthropist Edmund Hajim, first hit the market in October 2014 for $14.7 million. Over the past two years, it’s been removed from the market and reduced several times. Last week, $900,000 was sliced from the asking price. It’s now on the market for $10.8 million.

The co-op in the exclusive River House has three bedrooms and three bathrooms, as well as a wood-burning fireplace, a mahogany paneled library and a chef’s eat-in kitchen. The Art-Deco building has a staff of 36, including a full-time concierge, doormen, handymen, and an on-site property management office.

Buyers, beware, however: the co-op board is notoriously strict. It’s turned away a number of applicants, including Richard Nixon, Diane Keaton, Joan Crawford and Gloria Vanderbilt. In the 1990s, billionaire Wilbur Ross, now Trump’s pick to head the Commerce Department, was knocked back by the board. But he got his revenge in 2015, buying a unit in the building for $7.8 million. The building certainly has some famous faces. Henry and Nancy Kissinger have a unit there, as does Uma Thurman.

Joshua Wesoky and Steve Dawson of Compass have the listing. They did not return a request for comment.

12 East 13th Street, PH

12 East 13th Street, Penthouse
Previous Price: $20M
Current Price: $18.5M ($3,243 per square foot)
Percentage Drop: 8 percent

This 5,700-square-foot triplex apartment at DHA Capital and Continental Properties’ 12 East 13th Street hit the market in November 2013 for $28.4 million. Seven months later, the asking price was lifted to $30.5 million, and then dropped last November by $10 million to $20 million. It’s now on the market for $18.5 million.

The sponsor unit has four bedrooms, four bathrooms and two 900-square-foot private terraces.

DHA Capital and Continental Properties paid $32 million for the 45,000-square-foot property in 2012. Apartments in the building hit the market in 2013, ranging from $7.5 million to $28.5 million for the top triplex.

Steven Fisch, of Continental Properties, told the Wall Street Journal at the time that the companies were seizing on the limited supply of ultra luxury properties in the city.

“It’s a very different market now,” said Compass’ Herve Senequier. “Properties above $15 million have received pricing adjustments, and the price now makes more sense.”

Senequier is marketing the apartment with colleagues Leonard Steinberg, Herve Senequier, Amy Mendizabal and Calli Sarkesh.

Stairway to Hudson: $150M Sculpture In The Works

More than three years after he boasted that the centerpiece of Hudson Yards’ public plaza would be New York’s Eiffel Tower, Related Companies  chairman Stephen Ross Wednesday unveiled the design for a 16-story web of interconnected staircases that will rise among the mega-projects glass-and-steel towers.

The structure, titled “Vessel” and designed by Thomas Heatherwick, comes with a price tag of $150 million and will be in place at the Far West Side campus’ public square in two years.

“I wanted to create a 365-day Christmas tree,” Ross explained, comparing the copper-colored spectacle to Rockefeller Center’s holiday attraction during an unveiling ceremony.

Heatherwick’s structure, currently under construction in Italy, is made up of 154 interconnected staircases – some 2,500 steps – and 80 landings designed to offer various views of the new live-work-play neighborhood, which opened its first building in late May.

Several hundred onlookers gathered outside the 7 train subway station entrance to get their first glimpse at the long-awaited landmark as the sounds of construction buzzed on the surrounding towers.

Heatherwick noted he and his team felt “enormous pressure” to create a centerpiece that could compete for attention with the skyscraper around it where “the height wasn’t the main thing.”

“Vessel” can accommodate 1,000 people at a time within its lattice of staircases, which rises from a base measuring 50 feet in diameter that will widen to 150 feet as it climbs.

Ross had long wished to make a big splash with the centerpiece, and Related insiders had joked that there existed one picture of the sculpture that the chairman kept in his wallet.

Mayor Bill de Blasio, who was on hand for the unveiling ceremony and had seen early inspiration photos of the project, confirmed that Ross did “a very good job of keeping it close to the vest.”

“[That] added to the excitement,” he said.

Brexit’s Residential Boon

U.S. homebuyers are seeing new opportunities with interest rates at near-record lows

August 01, 2016 
By Kenneth Harney

When mortgage interest rates slide close to all-time lows — as they have since the Brexit vote — should one sit on the fence? Or pursue the financial opportunities that didn’t exist when rates were half a percentage point higher or more?

In July, according to Freddie Mac, 30-year fixed rates dropped to an average of 3.41 percent, just above the historic low of 3.31 percent set in November 2012. Fifteen-year fixed rates, popular with homeowners seeking to become mortgage-free faster, dropped to a stunning 2.74 percent. Five-year Treasury-indexed
“5-1” hybrid adjustables, which carry a fixed rate for the first 60 months then morph into one-year adjustables, hit 2.68 percent.

For potential first-time buyers or homeowners considering whether to refinance, or thinking about trading up or downsizing, rates this low could be worthy of attention.

Consider these illustrations of what a half percentage point cut in rate can mean, provided by Mike Fratantoni, chief economist for the Mortgage Bankers Association. For buyers purchasing a home costing $239,700 with a 5 percent down payment, a drop in rate from 4 percent to 3.5 percent will save nearly $100 a month in principal and interest. Those buying a house with the current median-sized purchase loan amount of $299,900 will save about $1,500 a year in principal and interest, or $125 a month.

For those living in metropolitan areas such as Washington, D.C., New York, Boston, San Diego, Chicago or Miami, where median prices are much higher, the savings on a refinanced mortgage that flow from just a half a percentage point decrease in rate can run substantially higher.

There’s another impact of falling rates: They lower the amount of qualifying income needed to get a loan. A buyer seeking to purchase a first home for $241,000 this spring, at a rate of 4 percent with a 20 percent down payment, may have had the application declined because his or her income came close to what the lender required but didn’t quite hit the mark. However, at a 3.5 percent rate, a buyer doesn’t need as much income to qualify. According to Danielle Hall, managing director of housing research for the National Association of Realtors, a half percentage point drop in rate reduces the minimum qualifying income to buy a house by roughly $1,000 per $100,000 in home price with a 20 percent down payment. On a $241,000 house, a rate cut from 4 percent to 3.5 percent would lower the qualifying income by $2,626.

Savings like that matter not only to first-time buyers with modest incomes but also to the owners of moderately priced houses and condos who are seeking to sell to those previously locked-out purchasers. A successful sale may then allow the sellers to buy another house — a nice win-win.

Not surprisingly, the rate declines are triggering boomlets in new mortgage applications, which rose by 14.2 percent last month, according to the Mortgage Bankers Association. The association’s refinancing index jumped even more — 21 percent — and the purchase loan index was 23 percent higher than the same week in 2015. Mike Eastman, vice president and senior loan officer at Washington First Mortgage in Fairfax, Virginia, told me “the phones are ringing” both for home-purchase loans and refinancings. He described what an applicant with a high credit score in a $600,000 house in Virginia could save by opting for a “5-1” hybrid: $171 a month, or $10,260 less in principal and interest during the first 60 months. That’s real money, he said, and “people should look at these (hybrids)” because they carry low rates and can be useful in a variety of financial-planning situations.

How long are mortgage rates likely to remain at or near these levels? Nobody knows. But Sean Becketti, chief economist for Freddie Mac, says post-Brexit capital markets are “skittish” and “we don’t expect any meaningful, sustained increases in the near term.”

So take a hard look. Competent loan officers have computer software that can quickly give buyers and owners the answers they’re after: How much of a rate decrease justifies doing a refinance? How long will it take to recoup the transaction costs via the monthly savings? Does a buyer’s income finally qualify them to buy the house they want?

Kenneth Harney is a syndicated columnist.

Andrew Cuomo Wants To Be New York’s Next Master Builder

TRD Special Report: A year into his second term, Gov. Andrew Cuomo is a man with a limited legacy. Well before fiascoes like the Moreland Commission, there were triumphs: He signed same-sex marriage into law just months after taking office, and in 2013, inked what he calls the “toughest” gun control law in the country.

But when it comes to being a gubernatorial icon, nothing says “remember me” like giant infrastructure projects. On their paths to the White House, Franklin Roosevelt and Nelson Rockefeller constantly touted their records of public works that transformed New York. Cuomo, who likely shares their presidential ambitions, has some catching up to do.

Which is perhaps why, in the days leading up to his sixth State of the State address, the governor evoked the names of Rockefeller and Robert Moses. The parallels were in reference to his Built to Lead program, a proposed $100 billion investment in the state’s infrastructure that includes overhauls of LaGuardia Airport, Penn Station and the Jacob K. Javits Center.

“It is a development initiative that would make Gov. Rockefeller jealous,” Cuomosaid of the program.

These are not exactly modest comparisons. Rockefeller created the predecessor to the Empire State Development Corporation, and Moses, though controversial, is a colossus of urban infrastructure. But they make clear that Cuomo is willing to bet that big development projects will serve as his springboard to higher office. If they are actually completed, that is.

Rendering of the Jacob Javits Center

“These [developments] would be the most visible and the most tangible memorials to his term in office,” said David Birdsell, dean of the Baruch College of Public Affairs. “But the projects need to be received well. Clearly, you don’t want to become the rest stop on the New Jersey Turnpike.”

The ‘get shit done’ guv
In his 2011 inaugural address, Cuomo laid out the parameters of his office.

“A governor’s inherent power is limited. A governor’s potential power is limitless,” he said. “The potential power of the governor is to mobilize the people of the State of New York. And that is the real power.”

The highlight of his tenure, so far, is the New NY Bridge, a $4 billion replacement of the Tappan Zee Bridge. His administration said that after “more than a decade of discussion and delay,” Cuomo swooped into office and “pushed the project forward from dysfunction to construction in less than one year.” The eight-lane bridge is slated for completion in 2018 and, in many ways, is a case study for Cuomo’s governing style.

“Clearly, you don’t want to become the rest stop on the New Jersey Turnpike.” — David Birdsell, dean of the Baruch College of Public Affairs

“This is a governor who says he wants to get stuff done. His shtick is ‘I get shit done,’” said Philip Plotch, an urban planner who served as the director of the World Trade Center redevelopment and special projects for the Lower Manhattan Development Corporation.

Cuomo’s approach to the project did indeed have echoes of Moses, according to Plotch, but perhaps not for the reasons the governor would have hoped: He was able to get the project off the ground, Plotch said, by eliminating previously-included mass transit components, scaling back the project and minimizing public participation. Speed trumped all else. The governor, Plotch said, was more interested in “public relations” than “public input,” and made major project decisions behind closed doors. Representatives for the governor contested this, pointing to roughly 600 community meetings held on the project. Plotch said that public meetings held during Cuomo’s administration were held to sell the plan rather than solicit input.

He also noted that Cuomo secured a $1.5 billion Transportation Infrastructure Finance and Innovation Act (TIFIA) federal loan for the project, allowing him to have the glory of bridge-building while leaving the headache of repayment to his successor.

“So you get to go to the ribbon-cutting, you can name the bridge after your dad if you want, and you don’t have to pay back the loan for five years,” Plotch said.

Still, some applaud Cuomo’s approach. Ken Patton, a former dean at New York University’s Schack Institute of Real Estate and former administrator at the New York Economic Development Corporation, said continuing to ignore the bridge’s sorry state would have been “shortsighted and morally bankrupt.”

“So you get to go to the ribbon-cutting, you can name the bridge after your dad if you want, and you don’t have to pay back the loan for five years.” — Phillip Plotch, urban planner

“I think where there’s a will there’s a way, and I think if he needs to bend the rules or double down, he does,” Patton added.

In 2014, Cuomo took heat for trying to use $511 million from a revolving Environmental Protection Agency fund for the bridge project. The agency eventually agreed to contribute just $1.3 million. As of right now, bridge costs, thanks in part to a proposed $1.1 billion bond from the state Thruway Authority, are covered through the remainder of 2016 and possibly through the first quarter of 2017, according to administration officials. Martin Robins, the founder of the Alan M. Voorhees Transportation Center and one of the creators of NJ Transit, said that though funding questions remain, Cuomo has secured “sound” low-interest public financing and got agencies to work together when his predecessors could not.

“Some people think it was brilliant and some people think it was reckless,” Robins said of Cuomo’s approach. “He broke an intergovernmental knot that had developed, it was a Gordian knot between the Metro-North, DOT and Thruway Authority.’’

Like the New NY Bridge, many of the projects Cuomo is focusing on have been several decades in the making and have failed to launch for myriad reasons. Efforts to red­esign Penn Station began in the 1990s but were stalled by faulty design specifications. Laments over LaGuardia Airport’s logistical shortcomings fell on deaf ears. And, for several years, many called for an expansion of the Javits Center but Cuomo, in 2012, suggested a plan to tear it down and build a new one — a plan that eventually fell through.

Rendering of LaGuardia Airport

But in the past year, Cuomo has restarted the redevelopment of Penn Station, unveiled a $4 billion redesign for LaGuardia and proposed a 1.2 million-square-foot expansion to the Javits Center, expected to cost $1 billion. These projects may not have gotten their start with Cuomo, but in one way or another, he has taken them over. Critics say he is simply parlaying his white-knight role in these long-stalled developments into a presidential run. But admirers point to sheer force of position: As governor, Cuomo has the necessary agency to prioritize these projects, and to cajole or bully the involved parties to get them done.

“It’s the old ‘If you don’t have governor power, things don’t happen,’” said Richard Anderson, president of the New York Building Congress. “What Gov. Cuomo has realized is that he’s the only person in the state of New York that can make some of these things happen.”

Tunnel vision

In the late 1990s, the late U.S. Sen. Daniel Moynihan proposed converting the James A. Farley Post Office into a train hall for Amtrak. In 2005, Related Cos. and Vornado Realty Trust won an RFP to develop the Moynihan Station project. Since then, the project has seen four different designs, one of which included moving Madison Square Garden into the post office. Sources who have followed the project’s history closely told The Real Deal that previous administrations let the project languish even as the developers invested millions. This lack of government interest caused MSG to pull out and instead renew at its current location, these sources said. What followed was years of an unsuccessful search for a new tenant for the post office. Then the market collapsed.

“I think where there’s a will there’s a way, and I think if he needs to bend the rules or double down, he does.” — Ken Patton, former administrator at the New York Economic Development Corporation

“I think the project came pretty close in 2007 and 2008 when it was Vornado and Related creating a plan for both sides of Eighth Avenue,” said Juliette Michaelson, executive vice president of the Regional Plan Association, a nonprofit urban planning think-tank whose board includes executives from both developers. “That was such a massive project. It was tens of billions of dollars and millions of square feet, and it collapsed.”

In January, Cuomo booted Related and Vornado off the project by issuing a joint request for proposals (RFP) for the $3 billion redevelopment of both Penn Station and the Farley Building, dubbed the Empire State Complex. The separation may be temporary: Related has indicated that it plans to pursue a bid for this iteration. Though Vornado has remained quiet about its future role, the company has worked hard to amass a huge stake in the area in the form of 8 million square feet of office space.

The new RFP includes five possible design options for the redevelopment of Penn Station, one of which includes removing MSG’s Paramount Theater to create an entrance at Eighth Avenue. Representatives for MSG declined to discuss the history of the project but said that they “fully support the governor’s plan.”

According to representatives with the Empire State Development Corporation, one of the lead agencies on the project, past efforts to expand Penn Station were hamstrung by the projects being approached in isolation, rather than as one interconnected complex. Cuomo is also trying to implement a different delivery system to speed up the project. In his 2016 budget proposal, he suggested allowing ESD to use design-build, a method where the landlord signs a single contract with a team that handles both design and construction. Only five state agencies currently have the authority to use the method, which is often touted as a time and money saver. Design-build was used for the new Tappan Zee Bridge and by some estimates has shaved 18 months off the construction time and roughly 15 percent off the cost.

Michael Evans, president of the ESD subsidiary Moynihan Station Development Corporation, and Joseph Chan, executive vice president of real estate development at ESD, credited the governor’s focus on getting buy-in from Amtrak and other entities.

“As staff we can toil away at any project,” Chan said, “but when the principal gets involved and says this is important, it delivers a level of hope to the stakeholders that this is going to get done.” Representatives for Vornado and Related declined to comment.

Executives at Skidmore, Owings and Merrill, an architecture firm which has been involved with the Moynihan Station project since the 1990s but officially came on board in 2010, said it had limited access to the post office until 2007, when the state acquired the building.

Rendering of the Farley Building redevelopment

“This [version of the project] is realizable. The other one wasn’t funded, it didn’t have the political traction to move forward,” said Roger Duffy, design partner at SOM. “Lots of people are focused on the symbology of things, and I think that misses the entire primary point of a transportation facility. This is certainly beautiful and appropriate in terms of history and scale, but it also works. People need to understand how much better this is than the current condition.”

The plan has its share of detractors, however. David Gunn, who was president of Amtrak from 2002 to 2005, wasn’t initially aware of the governor’s plans to reboot the project when reached by phone. But he reiterated his previous criticism of the redevelopment, saying that moving Amtrak’s train hall across Eighth Avenue would burden passengers with a longer commute. (Gunn said that most passengers arrive by subway; ESD officials contend that most come by cab). Commuters aren’t interested in shopping at a retail mall in Moynihan, Gunn said — they just want to get from A to B as quickly as possible.

“It is not an improvement for the passenger,” he said. “It’s an improvement for the real estate developers and the politicians. Cuomo probably doesn’t have a clue, or he doesn’t care.” Cuomo has certainly been accused of being buddy-buddy with developers before, and his strong financial ties to the real estate industry — developers and brokers were among the top contributors to his reelection campaign — ensure it’s a topic that often comes up.

Ultimately, better design or not, a $3 billion question remains: The governor hasn’t detailed how these projects will be financed. Richard Ravitch, who served as lieutenant governor under Gov. David Paterson and earlier chaired both the New York State Urban Development Corporation and the Metropolitan Transportation Authority, said that these infrastructure projects aren’t really priorities until there is a clear source of funding.

“This isn’t just ‘throw something against the wall and see what sticks.’ These are all projects that are going to get done.” — Bill Mulrow, Cuomo aide

“These projects are all commendable,” Ravitch said. “I think the question that the political system hasn’t answered is ‘how the hell are we going to pay for it?’ I think until we get an answer to this question, all these projects are purely aspirational.”

Cuomo’s camp maintains the governor has laid out clear funding plans for these projects. For Empire Station Complex, Cuomo said the developers will invest $1 billion, while federal and state government agencies will foot $325 million. The rest will be paid for by yet-undetermined private investment in exchange for future revenue from retail and commercial rents at the complex.

Bill Mulrow, Cuomo’s top aide and a former senior executive at the Blackstone Group, said these projects would shape the state’s legacy, rather than just Cuomo’s. The governor isn’t in the business of proposing projects that won’t get done, he added, citing the example of the New NY Bridge.

“He’s focused on it, and we already demonstrated that we’re getting results with a project that had languished for decades,” Mulrow said. “This isn’t just ‘throw something against the wall and see what sticks.’ These are all projects that are going to get done.”

Higher ground

Some believe Cuomo’s ambitious development agenda is a ticket out of Albany. If a Democrat takes the White House in 2017, Cuomo will either run for re-election after his second term ends in 2018 or find another job and wait for his shot at the presidency, said Gerald Benjamin, an expert on city and state government at SUNY New Paltz. If a Republican wins, Cuomo may make a play for the office sooner. For now, he is systematically rolling out ambitious projects, taking financial risks and figuring out what it will take to get them done on the fly, Benjamin said. To fail to complete these projects would be somewhat damning for Cuomo, he said, but not necessarily a calamity.

“He’s trying to fill out his resume,” said Robert Shapiro, president of City Center Real Estate and an expert on air rights and assemblage. “If you got the proposal out there, you can say, ‘this is what I’m trying to do for the city and the state.’”

Shapiro isn’t confident the projects will be completed, saying they have an “eternal life.”

Pulling off these “big tough brawny projects” would surely give Cuomo bragging rights for the rest of his political career, Baruch’s Birdsell said. To his credit, Cuomo can also boast reversing a “remarkable scheme of failure” that dates back to his father’s administration: Late state budgets. Under Cuomo, the state has passed a balanced budget by deadline fives times in a row (though, last year’s was technically late by a few hours), which isn’t a small feat, Birdsell said. But when it comes to visible testaments to his mettle as a leader and his ability to cut through bureaucratic morass, these projects would get the most mileage — a fact that some say has shifted his focus.

This change was good news for the beleaguered ARC tunnel, the proposed new rail tunnel under the Hudson River. Following years of silence, Cuomo only recently embraced the project, now known as the Gateway Tunnel. As recently as August, the governor said he wouldn’t pay for it, insisting it wasn’t his state’s responsibility. But in November, the federal government agreed to pay for half of the $14 billion project, with New York and New Jersey splitting the difference.

‘We have been working to break the federal logjam and get the federal funding that this massive undertaking requires,” Cuomo said at the time.

“Our role, as we see it, is to hold the governor’s feet to the fire.” — Joe Sitt, head of Thor Equities

Robins, who worked as project director on the ARC tunnel from 1994 to 1995, noted a “remarkable transformation,” with Cuomo going “from being recalcitrant to becoming a partner to the plan.”

The governor apparently recalibrated his focus on LaGuardia as well. In late 2014, Cuomo and Vice President Joseph Biden announced a contest to redesign the airport. At the time, Joseph Sitt, head of Thor Equities and chair of the Global Gateway Alliance, a group that advocates for a major overhaul of the airport, criticized the governor for using the much-needed improvements as political capital — Cuomo was up for re-election.

The hope now, Sitt said, is that Cuomo views the success of the project as essential to his political future.

“We’ve tried so hard to make this a political issue for him,” Sitt said. “We’re hopeful that we’ve made it important enough in the eyes of the constituents, that yes, it will make a difference to his future and his future in politics. Our role, as we see it, is to hold the governor’s feet to the fire.”

For more than a decade, the alliance pushed for major improvements at the airport but their pleas were ignored, Sitt said. He added that though the governor may be using LaGuardia and other projects to pave his path to the White House, he is also delivering much-needed infrastructure updates to the state.

“I think he’s got higher hopes. He hopes to one day run for president,” he said. “At the same time, I think he sincerely wants to see these things get done.”

Cost Of LaGuardia Redevelopment Flies Up To $8B!

It appears the estimated cost of redeveloping LaGuardia Airport has climbed by about $1 billion.

According to an agenda released by the Port Authority of New York and New Jersey Friday, the redevelopment of the Terminals C and D will cost $4 billion — $1 billion more than Gov. Andrew Cuomo has previously announced. Delta Airlines, which is leasing the terminals, is currently in the early stages of designing the new terminals.

At the groundbreaking for construction at Terminal B last month, Cuomo announcedthe total project — the redevelopment of terminals B, C and D — would weigh in at an estimated $7 billion, with Delta’s terminals accounting for roughly $3 billion of the bill. Representatives for the governor could not immediately be reached for comment.

The agency will contribute up to $600 million to the construction of these terminals, which will connect to Terminal B, according to agenda documents for next week’s meeting. Port Authority  is expected to vote on its contribution to the project on Thursday.

Cost changes for major infrastructure projects are fairly common — one extreme case is the World Trade Center Transportation Hub, whose final tab was at least double its $2 billion estimate.

The price tag attached to the airport’s redevelopment has been a sore spot for some Port Authority board members. At a meeting in March, a few of them squabbled over whether the cost of the Terminal B redevelopment would cost $4 billion or $5.3 billion — the discrepancy hinging on whether or not previous work done onsite should factor into the total projected bill.

Officials have long touted the project as one of the biggest private-public partnerships in the country, since a majority of the project is funded from private resources. LaGuardia Gateway Partners — which includes Skanska, Vantage Airport Group and Meridiam Infrastructure — is designing, building, financing and operating the first phase of the airport project, the demolition and rebuilding of Terminal B.

Luxury contracts down 15 percent during Q2

From top: 400 East 67th Street PH31. Bottom: 141 East 88th Street PHG

From top: 400 East 67th Street PH31. Bottom: 141 East 88th Street PHG

The number of contracts signed on luxury pads priced at $4 million and up dropped nearly 15 percent during the second quarter year-over-year, according to Olshan Realty’s weekly market report.

In all, there were 343 contracts signed during the quarter, down from 402 last year even as prices jumped 6 percent to $8.2 million from $7.7 million. Meanwhile, the average number of days on market increased nearly by 24 percent to 274 from 221, and the average discount ballooned to 7 percent from 4 percent.

For the week of June 20-26, there were 25 contracts signed on properties $4 million and up, with a total weekly asking price sales volume was $192.8 million. The average number of days on market was 326; average asking price was $7.7 million; and average discount was 8 percent.

The No. 1 contract signed last week was a penthouse at 400 East 67th Street, asking $16.95 million, down from $21 million in July 2014. With 4,073 square feet, the duplex penthouse has three bedrooms and a 53-foot great room, plus two terraces totaling 3,000 square feet. One is planted with grass and trees, and has an outdoor kitchen and fireplace. The unit last sold for $11.2 million in 2011.

The runner-up was a penthouse at 141 East 88th Street, asking $16 million. The 4,710-square-foot duplex has four bedrooms and a 1,211-square-foot terrace.[Olshan Realty] — E.B. Solomont

Fed Opts Not To Hike Interest Rate

The Federal Reserve decided not to raise the fed-funds rate following its meeting Wednesday, with chair Janet Yellen citing “headwinds blowing on the economy.”

The central bank’s governors also signaled slower rate hikes to come, and lowered their forecast of U.S. economic growth. The Fed now anticipates growth of 2 percent in 2016, down from earlier projections of 2.2 percent, according to a new release.

Fed governors’ average predictions still point to two more rate hikes this year, but a larger number of governors than previously predicted there could be just one increase.


“We need to assure ourselves that the underlying momentum in the economy has not diminished,” Janet Yellen said at a press conference.

The non-action was largely as expected. Last month, three Fed officials known for their mainstream views suggested it was moderately likely the bank could raise rate, but that was before the Bureau of Labor Statistics released last month’s surprisingly weak employment data. — Ariel Stulberg

Chinese Investment In US Real Estate Expected to Slide

With China’s domestic economy faltering, investment in U.S. and New York real estate is expected to slow over the next two years, according to a new report from the Asia Society.

The spigot won’t be shut off altogether: Some $58 billion is still expected to be deployed into commercial real estate in the U.S. between 2016 and 2020, according to the report’s authors. But they spoke of an 18- to 24-month “hiatus” that’s already underway as the Chinese government tries to right its economy.

The Chinese government has been taking longer to approve investments abroad in recent months, signaling an effort to staunch the flow of funds overseas, the authors wrote.

“We don’t see that as stopping investment abroad, and in fact, it hasn’t,” said Arthur Margon, a partner at Rosen Consulting Group, which was commissioned by the Asia Society to produce the report. “They’re trying to get righted while they defend their currency and fight inflation, so they’re changing the short-term strategy.”

Overall, Chinese investment in U.S. commercial real estate reached $8.5 billion in 2015, a record high and a 70 percent jump from 2010, according to the 111-page report, released on Monday. Compared to other countries, China ranked No. 3 among foreign investors in commercial real estate around the U.S. in 2015, behind Canada ($24.6 billion worth of investment) and Singapore ($14.6 billion).

Chinese firms set the table in New York, representing 56 percent of transaction volume between 2010 and 2015, including $9.56 billion in commercial real estate during the five-year period. High-profile plays include Anbang Insurance’s $1.95 billion acquisition of the Waldorf-Astoria Hotel, as well as Greenland’s 70 percent ownership stake in Pacific Park in Brooklyn.

“New York has been a major focus and it’s the largest recipient of Chinese investment in commercial real estate,” said Margon, citing the stability of real estate here. “They’ve been very active in just amassing properties across the spectrum.”

Prominent New York real estate players have been divided on the fate of Chinese investment in recent months. Earlier this year, Related Companies CEO Jeff Blau said developers “should be looking for other sources of capital over the next few years.”

Last week, panelists at The Real Deal’s New York Real Estate Showcase and Forum said they believe Chinese buyers are more eager than ever to park their money in a safe haven. “You may see a different economy in China, but the Chinese are still buying here,” said Elizabeth Ann Stribling-Kivlan, president of residential brokerage Stribling & Associates.

On the residential side, Chinese buyers outpaced investors from all other countries, purchasing $28.6 billion worth of property in 2015 and besting Canada’s $11.2 billion and India’s $7.9 billion.

Despite the buzz surrounding Chinese buyers of New York City condos, the vast majority of residential investors have scooped up property in California, which accounts for one-third of such investment in the U.S., compared to New York’s 7 percent. Deep-pocketed investors still flock to New York, where they can buy and sell condos with relative ease, Margon said.

Other findings by the Asia Society include:

  • $93 billion in residential investment between 2010 and 2015;
  • $17.1 billion in commercial real estate investment between 2010 and 2015;
  • $9.5 billion investment via the EB-5 visa program;
  • a $207.9 billion position in U.S. government-backed mortgage bonds; and
  • $8 billion in loans made by Chinese banks for commercial real estate projects in the U.S.

Correction: The subhead misstated the total investment in U.S. real estate; it’s believed to be $110 billion, not $100 million as initially reported.

“We’re Going to See Some Real Distress”: Witkoff

Steve Witkoff isn’t known for pulling punches. And he wasn’t about to start today.

“I believe that we’re going to see some real distress,” the developer said Tuesday, sounding alarm bells over the state of New York’s new development market.

Speaking about the new development market at Weiser Mazars’ Commercial Real Estate Summit, Witkoff said “Miami is a brewing storm and it’s going to get even worse out there (…) and I think in part we’re going to see it in New York.” His firm, he claimed, tracks at least 15 new projects in New York that sell just one percent of their units per month.

“That’s a 100-month sellout. Unless you’re MaryAnne Gilmartin or Larry Silverstein you can’t withstand a 100-month sellout.”

Gilmartin, the CEO of Forest City Ratner, and Marty Burger, CEO of Silverstein Properties, happened to share the stage with Witkoff for the panel, which also included Howard Hughes Corp. CEO David Weinreb, Ackman Ziff’s president Simon Ziff, and Cole Schotz attorney Leo Leyva.

Two years ago, such a panel would have been an occasion to gush about never-ending demand from foreign investors. But Tuesday’s talk was more somber, focusing on the numerous challenges facing a swooning market. Top of the list:tighter financing.

“A lot of investors hit the pause button,” said Ziff, whose firm specializes in capital markets brokerage. He said demand from investors has cooled across the capital stack, be it senior debt, mezzanine financing or equity.

“It’s just taking a lot more conversations to get a lot fewer people to the table,” he said.

Weinreb stressed the importance of building up cash reserves as financing grows tighter, while Leyva observed that developers are forced to spend more on loans. “Strong sponsors trying to go to the banks are not getting financing,” Leyva said. “You’d be surprised as to the names of some of the sponsors or developers that are using non-traditional financing. This year we’ve seen a huge surge in bridge lending.” Howard Hughes Corp., he revealed, plans to finance its South Street Seaport commercial development through its own balance sheet.

Panelists also complained about rising construction costs and delays, caused by booming demand for a limited number of contractors. Over the past three years, “I would bet you that you can’t name me one single project that was on time and on budget” Witkoff said. “That’s how stretched ;subcontractors] are, that’s how bad schedules are.”

“The risk-reward equation has changed dramatically for sensible people,” he added, arguing that rising construction costs and increasing delays discourage developers from building.

Burger agreed. “We’re always trying to get the A team from our contractor, but the A teams today are stretched across seven or eight projects when they should only be working on three or four,” he said. “The architects, consultants and engineers are all stretched. It’s really hard to get quality work out of anyone because they’re taking on too much work.”

Gilmartin bemoaned a lack of government support for new development in New York, pointing to the expiration of 421a and uncertainty over the future of the EB-5 visa program, both programs Forest City has made repeated use of.

“The debacle over 421a will have far reaching implications for ground-up residential construction,” she said.

The Real Estate Chiefs Who Get Paid The Most

CEO pay may be increasingly coming under the microscope these days, but real estate’s top NYC executives are still raking it in.

Although public companies are changing their compensation models to ensure that CEOs don’t get monster pay packages while their companies’ finances falter, so far pay reductions have remained largely at bay.

This month The Real Deal combed through disclosures filed with the U.S. Securities and Exchange Commission to find out just how much some of the industry’s top-paid chiefs are bringing home. The numbers are staggering. The Blackstone Group’s CEO took home nearly $800 million — though that’s with his corporate dividends tallied in. Meanwhile, Elliman’s chairman, Howard Lorber, and General Growth Properties’ CEO, Sandeep Mathrani, racked up $42.5 million and $39.2 million, respectively.

Still, new public disclosures that take effect in 2017 could curb those amounts going forward.

The SEC regulations will require public companies to publish ratios comparing their CEO’s pay with the median pay for their workers.

And if that weren’t enough to rein in compensation, political pressure is also mounting.

Democratic presidential candidate Bernie Sanders has made the issue a central one on the campaign stump. “The average chief executive in America now makes nearly 300 times more than the average worker — and the gap between the people at the top and working families is growing wider and wider,” he said recently.

There’s also sluggishness in the REIT sector that’s prompting public real estate firms to at least think twice before dishing out giant salaries with no strings attached.

Together these three realities have prompted many public real estate companies to retool their compensation models to ensure that their CEOs are rewarded only when their companies do well. More specifically, companies are upping the percentage of executive compensation that’s considered “at risk,” meaning that it’s awarded only if executives deliver on performance goals.

“A number of companies have transitioned from old structures to more measurable ones that pay out based on coherent, multi-faceted results,” said Alexander Goldfarb, a REIT analyst at investment bank Sandler O’Neill + Partners. “They’re putting in performance metrics and measurable goals.”

It’s a fine line to walk since companies need to keep compensation and incentive packages lucrative in order to recruit and retain talent.

Still experts and analysts say real estate CEOs can’t be lining their pockets with millions of dollars a year while their investors absorb losses.

Of course, private firms like Related Companies and Extell Development are not subject to the same levels of scrutiny since they’re privately held and do not have the same obligation to investors.

Read on for a closer look at what some of the top-paid industry bigwigs are making — and how their pay formulas are changing.


Stephen Schwarzman:
$799.2 million (including dividends)
Blackstone Group

Turbulence in both the financial and real estate markets didn’t put a dent in Stephen Schwarzman’s 2015 bottom line — or in his private equity fund’s performance.

The co-founder and CEO of private equity and real estate giant Blackstone racked up nearly $800 million in compensation and dividends derived from his ownership stake in the company.

Schwarzman’s base salary — which has been just $350,000 since the firm went public in 2007 — is just a starting point for what he earns in a given year.

The mogul also took home $88.3 million in firm profits through carried interest payouts, a whopping $644.8 million in dividends, and other various extras. That added up to $799.2 million in total compensation, up from $689.3 million the previous year, regulatory filings show.

However, a huge chunk of that pay comes from the skin Schwarzman has in the game: He owns about 20 percent of the company.

While Schwarzman is one of the largest shareholders in the company, all named Blackstone executives officers are required to personally invest alongside the funds the company manages. “We believe this strengthens the alignment of interests between our executive officers and the investors in those investment funds,” the company recently said in an SEC filing.

The company did not disclose a salary for its real estate chief Jon Gray, but he is no doubt doing just fine on the compensation front. His division has been firing on all cylinders. Late last year Blackstone acquired the massive Lower East Side apartment complex Stuy-Town for $5.3 billion alongside Ivanhoe Cambridge, a move that helped boost its real estate assets under management to over $100 billion.

Schwarzman, meanwhile, has enjoyed the benefits of his massive payouts for years. For his 60th birthday in 2007, he took over the Park Avenue Armory and had Patti LaBelle sing him “Happy Birthday.” Rod Stewart, Donald Trump and Barbara Walters were also there. He’s also donated huge sums to the likes of the New York Public Library ($100 million in 2008) and his alma mater Yale University ($150 million in 2015).

Howard Lorber:
$42.5 million
Vector Group

Douglas Elliman chairman Howard Lorbersaw his total compensation jump 40 percent last year from 2015 as revenue from his real estate operations soared.

His total package came to a whopping $42.5 million.

That broke down into a base salary of $3.1 million, stock awards totaling upwards of $30 million and various other non-equity awards and options.

The figures were outlined in a March 25 proxy statement filed with the SEC by Elliman’s parent company, Vector Group Ltd., where Lorber is president and CEO.

Lorber’s contract with Vector, which was renewed last November, states that the board can periodically increase his salary — but can’t lower it. Lorber is also eligible for a bonus of 100 percent of his base salary. Even if he’s fired, Lorber would continue to receive his $3.1 million base salary for 36 months plus the average amount of his last three bonuses during those three years. In addition, all his outstanding equity awards could be vested, according to the SEC filing.

Lorber declined to comment on his compensation, but insiders told TRD that the $42 million is artificially inflated by the CEO’s stock awards, which were given this year but vest gradually over the next decade. In other words, those funds are promised but have not yet been delivered in full.

Lorber is also entitled to various benefits, including a full-time company car and driver, a $7,500-a-month allowance for hotel stays, two club memberships as well as use of the corporate aircraft.

Meanwhile, Lorber also sits on the board of the hot dog giant Nathan’s Famous, which paid him $616,000 last year for serving as the chair of its board.

Lorber, it seems, does not need to be too concerned about a performance-based pay reduction — at least for now. The real estate part of his empire has been doing well: Elliman reported revenues of $637 million in 2015, a 17 percent increase year over year.

And Lorber has clearly been in a celebratory mood. He recently shelled out $15 million for a pad at 432 Park Avenue.

Sandeep Mathrani:
$39.2 million
General Growth Properties

General Growth Properties’ CEO Sandeep Mathrani has come a long way since emigrating from India 37 years ago by himself at age 16.

The executive famously got his first taste of the real estate business after selling his Nissan Sentra to raise funds to buy an apartment.

That’s a far cry from where he ended 2015. The CEO wrapped up the year with the promise of full pockets, thanks to his $39.2 million compensation package.

That hefty payout from the mega-mall operator included two massive stock awards — one for $25 million and the other for $10 million after Mathrani inked a new contract last year, according to SEC filings. However, most of that cash won’t vest until 2020, meaning that he won’t see all of it unless he stays at the firm and hits his performance targets for the next four years.

Mathrani’s actual base salary was $1.2 million. He also took home an additional $3 million bonus in addition to his stock awards.

But his compensation was contingent on his hitting several performance targets in 2015.

The firm — which bought the Crown Building in Midtown for $1.75 billion in partnership with Jeff Sutton in December 2014 — wanted him to increase mall occupancy nationwide, locking in new leases at rates 10 percent higher than exiting ones, and add to the firm’s new development pipeline.

Mathrani is the only executive officer at GGP who is not an “at-will” employee, meaning he’s guaranteed a so-called golden parachute or payout if he’s fired without reasonable cause.

Mathrani had jumped to GGP from Vornado in 2010 to help restructure the firm as it emerged from a high-profile bankruptcy. Last year, the firm sold the fourth through 24th floors of the Crown Building to Michael Shvo and Russian developer Vladislav Doronin for about $500 million.

David Neithercut:
$12.7 million
Equity Residential

Sam Zell may be the face of Equity Residential, but he doesn’t bring home as much as his top underling.

The REIT’s CEO, David Neithercut, took home $12.7 million last year — $11.8 million of which is tied to his performance over the next three years at the company, according to SEC filings. Yes, Neithercut, who was named CEO in 2005, gets the vast majority of that cash only if he meets certain targets.

Still, his pay is close to four times the $3.3 million pocketed by Zell, chairman of the company’s board, in 2015.

Last year was a strong one for Equity Residential. It ended the year with annual revenue growth of 5.1 percent, filings show. That bottom-line figure was boosted by the sale of 72 properties nationwide consisting of 23,262 apartment units to Starwood Capital Group for $5.37 billion. The deal, which took place last October, generated an 11 percent return.

But had that deal flopped, executive salaries could have taken a hit.

“The compensation committee believes that as the responsibilities of our executives increase, the proportion of their total compensation that is ‘at risk’ and dependent on the company’s performance should also increase,” the company said in filings.

Meanwhile, Zell is the only member of the board whose travel expenses are not covered by the company. His retirement benefit comprises a minimum $500,000 annual payment for a 10-year period — unless he’s fired for a reasonable cause.

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Tour Demi Moore’s $75M penthouse in the San Remo

When Demi Moore listed her penthouse apartment atop the San Remo, it made quite the splash. Not only is it the former home of two movie stars (Moore lived there with her ex, Bruce Willis), but it has a shocking price tag of $75 million.

One year later, LLNYC took a tour of the grand listing, and while we can’t say definitively whether it’s worth the price, it’s certainly worth a look inside.