Building permits fall dramatically

The projected total in the city for 2016 is13,000; last year permits topped 56,000     by Greg David


The demise of the controversial 421-a tax break hasn’t eliminated interest in residential building in the city, but it has reduced it to a level not seen since the financial crisis.

That’s the bottom line on this week’s release of the latest building-permits data by the U.S. Census Bureau.

Here are the numbers through July:

Borough July Year to Date
Bronx 409 2,335
Brooklyn 247 1,913
Manhattan 291 1,094
Queens 211 1,433
Staten Island 43 664
Total 1,201 7,439

If permits continue at this pace, developers will seek just under 13,000 permits this year, about the same number as in 2012.

One explanation, of course, is that builders accelerated their plans last year to make sure they qualified for the tax break, which expired Dec. 31. The 2015 total of just over 56,000 permits topped the most recent peak, in 2008, by more than 20,000 and was the highest since 1962.

The problem is that New York City’s growing population, now more than 8.5 million, requires more housing, and a lot of it. The Real Estate Board says the minimum we need is at least 20,000 new units a year. If prices and rent increases are going to be moderated, the number is almost certainly much higher.



The private players

A snapshot of some of the quiet investors bankrolling NYC deals

August 01, 2016
By E.B. Solomont

Eyal Ofer

Eyal Ofer

New York City real estate has had silent investors for as long as developers have been buying and selling property. But as the world economy grows more uncertain and lenders pull back, that quiet money is playing a bigger role in clinching deals here. And, in some cases, it’s getting louder as once-hushed players take on more visible roles. Below is a look at some of the notable private investors bankrolling real estate activity in NYC.

Eyal Ofer/Global Holdings
Estimated net worth: $8.9 billion
Fortune made in: Shipping

Eyal Ofer’s firm Global Holdings has a stake in $2.3 billion worth of New York City real estate, according to Real Capital Analytics. Patriarch Sammy Ofer, who was once Israel’s richest man and died in 2011, made a fortune in shipping in the 1950s, ‘60s and ‘70s. Then, in the 1980s, his son Eyal began leveraging that fortune and investing in New York real estate. The company is best known as a longtime (and quiet) backer of Zeckendorf Development, with stakes in a number of the company’s projects, including its marquee condo 15 Central Park West and its more recent and upcoming towers. But Global Holdings has recently taken on a more visible role, partnering with Rudin Management at Greenwich Lane. After under-the-radar office investments such as 875 Third Avenue, acquired in 2013 with partner Miller Global Properties, Global Holdings bought out Miller for $100 million in 2014 to become the building’s sole owner. In another solo deal earlier this year, Global Holdings picked up 1250 Broadway for $565 million. Ofer, 66, was born in Israel, but currently lives in Monaco. In addition to owning a stake in Royal Caribbean Cruise Lines, Ofer is an avid collector of contemporary art, and his family donated $13 million to the Tate Modern in 2013.

Beny Steinmetz/BSG Capital
Estimated net worth: $1.28 billion
Fortune made in: Diamonds, mining

Born and raised in Israel, billionaire Beny Steinmetz is about as taciturn a real estate investor as they come. While there’s scant evidence of his holdings in New York, he’s a known backer of Ziel Feldman’s HFZ Capital. The now-60-year-old was born into a diamond trading family and in 1978 moved to Belgium, where he learned the trade.  Today he considers himself a citizen of the world — flying on his private jetbetween Tel Aviv, where his family lives; London, where his mining company BSG Resources is headquartered; and Geneva, where Steinmetz maintains a legal residence. (He also has a French passport.) BSGR has a strong — albeit controversial — presence in Africa, where Steinmetz landed lucrative mining contracts in Guinea in 2008 that have been the subject of corruption and bribery probes. In 2014, Steinmetz reportedly sold his stake in Geneva-based Steinmetz Diamond Group to his brother for an undisclosed sum. Layers of corporations shield the true extent of Steinmertz’s holdings, including his stake in BSGR, which is controlled by a trust of which he’s a beneficiary. “I don’t really care what everyone thinks,” he told the Israeli newspaper Yediot Aharonot in 2013, referring to his reluctance to give interviews or even appear at industry events. “I think I’m balanced. Some people might say I’m cold-hearted.”

Morad Ghadamian

Morad Ghadamian

Morad Ghadamian/Marjan International Corp.
Estimated net worth: Unknown
Fortune made in: Carpet imports

Ghadamian, 66, was born in Iran and lives in Manhattan in a $27.5 million co-op at 810 Fifth Avenue. He’s a frequent backer of developer Joe Moinian, a fellow Persian Jew whom Ghadamian counts among his “best friends.” After gamely taking a side role to Moinian when it came to real estate investment, Ghadamian has recently become slightly less obscure. Earlier this year, he acquired a 50 percent stake in Central Park South’s Hilton Garden Inn from Starwood Capital Group, which co-developed the hotel with Moinian. Ghadamian’s son, Daniel, is a principal at Capstone Equities, which is overhauling a former Playboy Club at 5 East 59th Street in Midtown.

Abraham Fruchthandler/FBE Limited
Estimated net worth: Unknown
Fortune made in: Stock market, real estate

A frequent backer and partner of prolific Brooklyn landlord Ruby Schron, Fruchthandler reportedly has a stake in (and helps manage) 25 million square feet of real estate nationally, including 4,000 residential units. An Orthodox Jew like Schron, Fruchthandler’s profile is low and appears to be staying that way, even as he increasingly backs smaller developers. Notoriously press-shy, Fruchthandler invested alongside Schron and the Witkoff Group in the Woolworth Building in 1998. But FBE’s largest known investment is the overhaul of the 6.5 million-square-foot, 16-building complex known as Industry City, a redevelopment project the firm is partnering on with Schron’s Cammeby’s International, Jamestown, Belvedere Capital and Angelo, Gordon.

Bashar Kiwan

Bashar Kiwan

Bashar Kiwan/Al Waseet International
Estimated net worth: Unknown
Fortune made in: Media

After launching the first Arabic-language, classified weekly newspaper in Kuwait in 1992, Bashar Kiwan made a fortune by expanding that publication into a media empire, Al Waseet International, which includes newspapers, radio stations, digital platforms and advertising services. Five years ago, the French-Syrian-Kuwaiti businessman turned to real estate. The charismatic and entrepreneurial 49-year-old has strong ties to the Saudi royal family — Sheikh Sabah Jaber Mubarak al Sabah, son of the Kuwaiti prime minister, is chairman of Al Waseet. Kiwan’s biggest New York City investment was reportedly in the Witkoff Group’s Park Lane development, though exactly how much cash he put up is not public. And Kiwan, who lives in Kuwait, is now out of that deal: In April, Chinese conglomerate Greenland Groupreportedly acquired Al Waseet’s stake.

David Cohen/Carlton Associates
Estimated net worth: Unknown
Fortune made in: Family started Duane Reade

The investment arm of the Cohen family — whose brothers Abraham, Eli and Jack Cohen founded the now-omnipresent pharmacy chain Duane Reade in 1959 — has real estate assets valued at $2 billion, according to RCA. Carlton Associates, started by Jack, is now run by his son, David Cohen. In 2014, Carlton partnered with Schron and low-profile investor David Werner to buy the land under 100 West 57th Street for $285 million. In a 2012 deal, Carlton took on a more visible role when it partnered with Werner and real estate investor Joseph Mizrachi to buy a 1.1 million-square-foot Chicago office tower for $350 million — a record that year. Carlton also has a stake in One Court Square in Long Island City.

Michael Dell

Michael Dell

Michael Dell/MSD Capital
Estimated net worth: $23.2 billion
Fortune made in: Computers

After launching the personal computer giantDell Inc. from his dorm room at the University of Texas-Austin, Michael Dell became the youngest CEO of a Fortune 500 company in 1992 when he was just 27. Often called a tech industry “wunderkind,” the now 51-year-old waged a fierce battle to take Dell private in a $25 billion deal in 2013. While Dell has been making tech headlines, his family office, MSD Capital, has been investing Dell’s personal fortune since 1999 in car companies, restaurants and retail — alongside real estate holdings valued at about $3.5 billion, according to RCA. For the better part of the past decade, MSD has been co-developing an 865-acre resort in Hawaii, which includes a golf course and Four Seasons hotel. In New York, MSD and Goldman Sachs purchased equity stakes in the Related Companies in 2007 totaling 7.5 percent. Although Dell has no plans to take a more active role in New York City real estate, the firm recently invested in Sharif El-Gamal’s condo at 45 Park Place, as well as Adam America Real Estate’s residential development at 22-12 Jackson Avenue in Long Island City.

Editors comment: it should be noted that after this article appeared, Michael Dell was named as an investor/owner in Andrew Pensons Grand Central Station holdings.

Arthur Becker/Atlantic Investors LLC
Estimated net worth: Unknown
Fortune made in: Tech

A onetime restorer of historic homes and former stockbroker at Bear Stearns, Becker made his fortune buying and selling technology companies. Most recently, the 66-year-old was CEO of web hosting company NaviSite Inc., which he left in 2010. Through his Atlantic Investors LLC, Becker has a stake in $500 million worth of real estate, according to RCA. While he’s quiet as a mouse, he has backed some big projects, including Michael Stern and Kevin Maloney’s 111 West 57th Street. He’s also backing a planned condo at 124 Sixth Avenue, a former carwash, being developed by Maloney’s Property Markets Group and Robert Gladstone’s Madison Equities.

Raymond Gindi/Gindi Capital
Estimated net worth: Unknown
Fortune made in: Retail; owns Century 21 department store

The Gindi family, which started the discount chain Century 21, currently has a stake in nearly $5 billion worth of real estate, according to RCA. Raymond Gindi, who is in his late 40s, is a well-known entity in New York real estate, but is rarely in the spotlight unless it has to do with the retail business started in 1961 by his father, Al, and uncle, Sonny Gindi. But there’s no denying Gindi Capital’s significant influence in commercial real estate. (Fun fact: Cousin Eli Gindi, a onetime owner of the Plaza Hotel’s Oak Room, closed the iconic restaurant in 2011 amid a dispute with then-landlord Elad Group.) In 2012, the family’s investment arm – Gindi Capital — sold a portfolio of 26 buildings (primarily in Manhattan, with a handful in Brooklyn and Queens) for $164 million, and in 2014 it leased a 19,000-square-foot office in Herald Square, from which it now manages its war chest. Gindi’s New York investments include an unknown stake in the Bryant Park Hotel, alongside Rainbow Shops owner Joseph Chehebar and investor Philip Pilevsky, as well as a stake in 490 Fulton Street in Downtown Brooklyn with Crown Acquisitions. The Gindis are also investors in Vornado Realty Trust’s 650 Madison Avenue and Silverstein Properties’ Silver Towers, though they rarely get mentioned in connection with those buildings.

Hotelier Richard Born plans 350-unit residential building in Hell’s Kitchen

BD Hotels filed plans for 39-story mixed-use building at 515 West 42nd Street

August 16, 2016 
By E.B. Solomont

Travel Inn Hotel at 51 West 42nd Street in Midtown West and Richard Born

Travel Inn Hotel at 51 West 42nd Street in Midtown West and Richard Born

Sorry, tourists! Hotelier Richard Born is rolling out the welcome mat for permanent guests with his latest project in Hell’s Kitchen.

Born’s BD Hotels, best known for developing trendy spots like the Mercer and Stanhope Hotels, filed plans to build a 39-story, mixed-use building at 515 West 42nd Street, according to plans filed with the city’s Department of Buildings. The new building will be home to 350 apartments, filings show.  

Located one block west of BD Hotel’s forthcoming micro-unit Pod Times Square hotel, the site is currently home to a seven-story Travel Inn Hotel.

According to the DOB, the planned building will have more than 277,000 square feet of residential space, plus another 4,300 square feet of ground-floor retail. Amenities will include an outdoor garden, fitness room and game room, according to filings, as well as a common terrace and sky lounge on the 38th floor.

There will be 10 apartments on each of the third through 37th floors. According to filings, 10 apartments will have private terraces.

Handel Architects is the architect of record for the project.

The property has been in Born’s family for more than three decades. Born’s father, Robert Born, himself a developer, bought the property for an undisclosed price in 1981, according to property records.

It’s unclear if the units at 515 West 42nd will be condos or rentals, and Richard Born did not immediately respond to a request for comment.

Earlier this year, BD Hotels said it would lease furnished apartments at its forthcoming Pod Times Square hotel at 400 West 42nd Street. The 665-room hotel, where hotel rooms go for $180 a night, will have Pod Pads on the 23rd through 27th floors.
Born and business partner Ira Drukier have developed residential properties before, including 173 and 176 Perry Street with architect Richard Meier. They also converted a Cass Gilbert office building at 90 West Street into a 410-unit rental with the Kibel family in 2008.

BD Hotels is not shifting away from its bread-and-butter hotel business, however.

In July, BD Hotels bought a stake in the landmarked Hotel Chelsea at 222 West 23rd Street, which they plan to renovate and reopen with 120-plus hotel rooms by 2018. Renovations involve working with the hotel’s 51 tenants to renovate and/or preserve their apartments.