The U.S. hotel industry posted increased occupancy and revenue per available room numbers for the week ending March 6, according to data from Smith Travel Research, a rare bright spot in what has been a shaky couple of years for the hospitality sector. The 0.9 percent revenue per available room, or revpar, increase, to $52.75, was the third in 18 months and the first that wasn’t holiday-related. Luxury hotels reported the largest increase in revpar, up 10.2 percent to $160.19. Occupancy was up overall to 54.9 percent from 50.9 percent one week earlier, while the average daily rate dropped 3 percent to $96.05. Luxury hotels also were most-improved in terms of occupancy, up 16.5 percent to 66.4 percent. The Miami-Hialeah market was the most-improved region with average daily rates up 10.1 percent to $189.37. “The growth in year-over-year revpar is significant because the occupancies are clearly showing an improvement and the decline in rates is finally starting to slow,” said Randy Smith, co-founder and CEO of Smith Travel Research. “While the size of the revpar increase is not significant, it is a clear sign that the outlook for the industry is improving.” TRD
The office of embattled New York Governor David Paterson scrapped a deal with Aqueduct Entertainment Group (AEG) to develop a casino at the Aqueduct Race Track in Queens, poised to be the Big Apples first gambling destination.
The decision shouldnt have come as a big surprise. Mr. Patersons selection of AEG sparked a furor among losing bidders and prompted a federal investigation, as critics complained that AEG wasnt qualified to spearhead such an ambitious and expensive project.
“The Division of the Lottery has concluded that it cannot issue a gaming license to Aqueduct Entertainment Group (AEG). Therefore, the State has officially withdrawn its support for AEG to develop and operate a video lottery terminal (VLT) facility at Aqueduct Race Track, Mr. Patersons office said in a statement Thursday. The Executive Branch advocates that the selection of the Aqueduct VLT franchisee be done pursuant to an expedited, transparent, apolitical and publicly accountable procurement process.”
Mr. Paterson passed over heavyweight gaming companies like Penn National Gaming and MGM Mirage and New York City real estate veteran SL Green Realty for AEG, which has close ties to Floyd Flake, an influential Queens preacher and former congressman. Critics blasted the choice as politically motivated. The losing bidders even considered a lawsuit alleging AEG wasnt forced to adhere to the same conditions as the other four contenders.
Its unclear how the state will move forward with another bidding process, but some of the companies want back in the game. The SL Green/Hard Rock team is still interested and ready to go forward. We have already fulfilled all of Lotterys licensing requirements and we remain able to deliver on our promises both on expedited timing and on our long-term vision for this exciting project, said SL Green in a statement.
From left: Stephen Himmelstein by day, and Stephen Himmelstein by night; the Love Handles rock out (see Himmselstein in tie dye, at far left)
Fifty-eight-year-old real estate attorney Samuel Himmelstein is getting ready to rock next Friday at Lafayette Grill & Bar at 54 Franklin Street, as his band, the Love Handles, heads back to the stage after a six-month hiatus. Himmelstein, a partner at real estate litigation firm Himmelstein McConnell Gribben Donoghue & Joseph, is part of a six-person band including his old college buddy, tenant advocate attorney Marty Silberman of Silberman Law Firm, 58, who plays the drums. Himmelstein, who plays keyboard, sings lead on a few songs as well as harmony and back-up vocals, and Silberman had talked about forming a band for years before finally doing so in 2001. The band plays music from the 1960s through early 1980s, including hits from Elvis Costello and the Grateful Dead. The group has played at the Cutting Room and the Good Coffeehouse Music Parlor, in Park Slope and for the last three years has been the post-race entertainment at the Komen Race for the Cure in Central Park (see video below). TRD
Crevices, some 15 feet deep, are shown outside three homes at the Rivermist subdivision in San Antonio
Pulte Homes offered to purchase 27 San Antonio homes damaged by a January retaining-wall collapse that created crevices up to 15 feet deep and eight feet wide.
The builder will also erect a new wall, a six-month project with a price tag estimated between $4 and $5 million. Work will begin following city approvals and permits. Given that time commitment, Pulte’s Centex division, which built the homes in this development known as Rivermist, offered to buy back the units deemed uninhabitable.
Pulte, the nation’s largest builder, will also cover moving costs, home improvements and reasonable legal fees. For owners who want to keep their homes, it will provide or fund alternative housing until the new wall is finished and certified.
Spokeswoman Valerie Dolenga couldn’t provide a total cost Thursday.
The community’s average selling price is $200,000, though some of the affected homes commanded more because they are bigger and offer city views. Two of the affected addresses have already closed for an undisclosed sales price.
The builder has not addressed other residents’ complaints of reduced property values, leaving some angry. “We’ve worked all our lives for nothing,” resident Dell Hammett told the San Antonio Express-News. “It makes us sick.”
But since the collapse, six homes have sold at prices similar to before the slope’s failure, Ms. Dolenga said, a sign the community is holding value.
In late January, about 90 houses were evacuated following a “significant soil movement” underneath some of the homes. Most owners returned home quickly, but 27 units were deemed unsafe. Those residents are in hotels or short-term housing paid for by Pulte, Ms. Dolenga said.
San Antonio officials later said the retaining wall went up without a permit. A representative for Pulte, which acquired Centex last year, said in January that “it was our understanding that we were in full compliance with the city requirements.” Pulte hired an engineering firm to test and analyze the soil.
Readers, what would you do in similar circumstances?
The Real Deal is looking for your feedback on market-related issues. To read an item about the AEG fallout, click here. To check out a rundown of the former competitors, click here. Please comment below.If you have questions you’d like posted, please e-mail news@therealdeal.com.
Investors, city officials and developer Bruce Ratner, CEO of Forest City Ratner Companies, came together this morning to celebrate the groundbreaking of the new Barclays Center at the Atlantic Yards development. The 18,000-seat arena, which will serve as the home of the soon-to-be Brooklyn Nets, is expected to open in 2010. At the ceremony, Mayor Michael Bloomberg described the Barclays Center as “the first piece of what will be one of the largest private investments and job generators in Brooklyn’s history.” Brooklyn Borough President Marty Markowitz and Governor David Paterson were equally effusive in their praise, describing the development as “a dream” and “a boon to Brooklyn,” respectively. The arena, which is being designed by the Ellerbe Becket and ShoP Architects firms, is also expected to host upwards of 200 events annually, including concerts and non-NBA basketball games. TRD
Fashion mogul Elie Tahari is reportedly looking to unload two residential properties in the Hamptons, as part of a massive sell off of properties, according to the Post. The two homes are a $6.8 million Amagansett property and a yet-to-be-priced Sagaponack home that he purchased for $13.5 million, the first of which, a five-bedroom pad, was purchased in his wife, Rory’s, name. The news comes on the heels of widespread speculation that the couple is considering ending its 10-year marriage.
There could be more trouble brewing for the Jean Nouvel-designed MoMA tower at 53 West 53rd Street. Word has gotten out that the West 54-55th Street Block Association has filed an official petition to the New York State Supreme Court, citing environmental violations and the improper transfer of development rights, according to Curbed. Although it’s not yet clear when the court might make a decision on the petition, the document could put a temporary wrench in the works for the development.
Responding to critics, officials of the Federal Housing Administration are set to warn in Congressional testimony Thursday that a double-dip decline in housing prices may result from even a slight increase in minimum down payments on FHA-backed loans.
An increase in down payments to 5%, from the current minimum 3.5%, would limit new FHA-backed loans by 40%, equivalent to 300,000 fewer home sales, according to testimony that FHA Commissioner David Stevens is set to deliver on Thursday.
“We share the goal of increasing equity in home purchase transactions, but determined after extensive evaluation that such a proposal would adversely impact the housing market recovery,” Mr. Stevens says in his testimony.
The FHA doesn’t make loans but instead insures lenders against losses, and the agency charges insurance premiums to borrowers for that backing. Critics of the agency say that loans with low down payments risk putting taxpayers on the hook for big losses if home prices tumble further. Defaults on loans insured by the agency over the past three years have mounted amid the economic downturn, depleting the agency’s reserves.
Any steps that would sharply restrict the number of borrowers who are eligible for FHA-backed loans, such as higher down payments, would also limit the new business that the FHA desperately needs to help offset rising losses.
“It’s that sort of rationale that got us into the problem in the first place, that we need to be chasing the borrowers to prop up our system,” says Rep. Scott Garrett (R., N.J). “That’s what got us here in the first place.”
Instead of raising down payments, the FHA has already said it will raise the upfront insurance premium that borrowers must pay, and it is reducing the amount of money that sellers can kick in to pay for closing costs. The FHA has also said it will increase minimum down payments to 10% for borrowers with a credit score of 580 or lower.
The FHA is asking Congress for authority on Thursday to raise separate insurance premiums that are paid monthly. The agency is also asking Congress for greater authority to hold lenders accountable for bad loans and to eject lenders that it says aren’t living up to its standards. These proposed policy changes would generate an extra $4.1 billion in receipts for the agency next year, according to the FHA.
Rep. Garrett said he plans to submit an amendment to the FHA’s bill that would increase minimum down payments to 5%. Republicans introduced a separate bill on Wednesday that would make many of the changes proposed by the agency and create additional oversight. But that measure wouldn’t increase minimum down payments.
Angela Iannelli and her 11-year-old Blue Macaw, Luke, missing.
It isnt about the parrot, a lawyer for Angela Iannelli told me.
The issue, insisted the lawyer, Michael Rosenzweig of Edgar Snyder & Associates in Pittsburgh, was the distress inflicted on Ms. Iannelli by Bank of America Corp.s bungling. As we reported Wednesday, the bank apologized for an incident in which its contractors entered her home near Pittsburgh while she was out, cut off utilities, padlocked the door and confiscated her pet parrot. Though Ms. Iannelli had fallen a month or so behind on mortgage payments, her case hadnt reached the stage at which Bank of America would be justified in taking such actions to secure the collateral.
She had to find someone with a bolt cutter to get back into her own house.
Ms. Iannelli, 46 years old, alleges that the incident — which separated her from her 11-year-old parrot, Luke, for more than a week — caused so much emotional distress that she needed a prescription medication for anxiety.
Journalists who cover the foreclosure crisis get calls and emails every day from Americans who complain about banks disorganized and sometimes cold-hearted responses to people trying to save their homes. (We dont hear about the cases in which bank employees do a good job, and surely that happens in many cases.) So why write about Luke the parrot? Because Luke makes a good symbol of what happens when bureaucratic organizations are overwhelmed by a wave of human misery.
Banks mortgage-lending departments are efficient when it comes to making loans and collecting payments. Theyve honed their employee incentives and procedures over decades. They didn’t spend nearly as much time thinking about how to handle defaults and foreclosures because it was always assumed those would remain the exception, to be handled by an obscure department known as loss mitigation.
Today distressed borrowers are hardly exceptional. Nearly eight million households, or 15% of those with mortgages, are behind on their payments or in the foreclosure process. Many borrowers complain that they get the runaround when they call their lenders for help, receive contradictory information from different employees and are required to repeatedly fax in same documents.
Suicide threats from distressed borrowers are so common that one lender, OneWest Bank Group, Pasadena, Calif., has had to establish procedures for alerting the police. Lenders call-center employees are under heavy pressure. These people make $14 or $15 an hour and we ask them to move mountains, a OneWest executive said at an industry conference last month.
In her suit, filed Monday in the Allegheny County Court of Common Pleas, Ms. Iannelli says a contractor hired by Bank of America entered her house about 15 miles north of Pittsburgh in mid-October when she was away. In what it describes as an invasion of the home, the lawsuit says that the contractor stopped utility services, cut water lines and electrical wiring, damaged flooring and finishings, poured antifreeze into sinks and toilets and stole the parrot.
Ms. Iannelli, who owns a diner and works part time as a bartender, alleges in her suit that Bank of America representatives were unhelpful when she called in to protest. They first told her they had no idea where the parrot was. Days later, they finally determined that Luke was at the offices of the contractor in Ebensburg, Pa. — 80 miles from her home. Bank of America didnt deliver Luke home. Instead, Ms. Iannelli had to drive across a mountain range to fetch him. The round trip took about four hours.
Anyone who has ever tried to sort out a minor problem with a credit-card bill or bank statement by dialing an 800 number will sympathize with Ms Iannelli. She says bank representatives at various times during her ordeal told her they were tired of hearing from her, said their computers were down, put her on hold, asked her to called back later, hung up on her, and advised her to seek help from the police if she was so worried about her pet.
Her lawyer, Mr. Rosenzweig, said Ms. Iannelli is seeking damages of more than $50,000. The amount of any damages would be decided by a jury if the court goes to trial.
A Bank of America spokesman said the bank will quickly to review the allegations in the lawsuit, the actual events that led to them and the causes of those events, and consider any hardship that resulted.
After she drove two hours to reclaim her parrot in October, Luke initially seemed nervous, Ms. Iannelli said in an interview Wednesday. Hes doing very well now, she said.
Luke, a macaw with blue and orange plumage, now may be the nations most famous parrot. His picture was in The Wall Street Journal; he appeared on ABCs Good Morning America television show Thursday.
The parrot had no comment.
Please follow me for housing news on Twitter @jamesrhagerty
Related Companies is close to signing a contract to manage sales and leasing at Muss Development’s new 3.3 million-square-foot Sky View Parc complex in Flushing, Queens, Crain’s reported. The development will set six residential towers and a rooftop park atop a three-story, 800,000-square-foot shopping center. The first three towers are almost complete, but Muss’ financial partner, private equity firm Onex, is said to be anxious about slow sales in the buildings and wanted a change. In a press release last year, Muss said 70 percent of the 448 condo units in the first building were sold, while 30 percent were sold in the second. Sales had not yet started in the third tower at the time. Retail space in the shopping center below had been 70 percent leased, with tenants including BJ’s Wholesale Club and Applebee’s Neighborhood Grill & Bar. Onex invested $66 million in the Sky View Parc project, and both Muss and Onex approached Related as part of a plan to get things back on track, sources said.
1. Former Cendant owner Henry Silverman on Hamptons, NYC real estate buying spree [Post, 5th item] 2.Prudential to launch collaborative virtual tours [Inman News] 3. $19.5M townhouse at 26 West 76th Street in contract [Post, 3rd item] 4.Westin Times Square Hotel forced to pay $3M in damages for hidden camera above baker’s work station [NYDN] 5. Inside “Real Housewife” Ramona Singer’s UES condo [Post] 6.City-run Bronx apartment buildings more hazardous than meets the eye [NYDN]
7. Homes of the world’s richest people, in pictures [Forbes] 8. Screenwriter Paul Schrader buys $1.9M condo at Modern23 [Post, 2nd item] 9.ZipRealty loses $2.1M in fourth quarter [Inman News]
Manhattan residential sales activity picked up for the Corcoran Group in February, according to market data from the residential brokerage. Condominium unit sales
closed by the company increased 9 percent month-over-month, according to the
company’s monthly market snapshot, while co-op sales shot up 23 percent
during that same time period. But while co-op sales prices were able to hold
steady with an approximately 5 percent increase between January and
February, condo prices were 4 percent lower in February 2010 than they were
in the previous month. TRD
While he’s been facing his share of woes at the World Trade Center site, the drama has now moved uptown for developer Larry Silverstein. His building at 575 Lexington Avenue on the corner of 51st Street is facing imminent default, according to Crain’s, as the $325 million loan that he and the California State Teachers Retirement System jointly hold was transferred to a special servicer today. A Silverstein Properties statement said that the company requested the transfer as a part of ongoing negotiations between the lender and the loan holders.
EEmerge, an office business center subsidiary of SL Green Realty, has just moved into the 11th and 12th floors of SL Green-owned 1515 Broadway, the famous Times Square home of Viacom and site of MTV studios. The 54-story, 1.9 million-square-foot building, which counts Viacom as its main tenant, will now serve as eEmerge’s main headquarters. The affiliate group, which focuses on flexible and short-term office space, will be utilizing a total of 65,000 square feet in the 72 percent occupied building. TRD
Prudential Douglas Elliman gave The Real Deal an update on its new Web site, which will include VOW capabilities and track listings’ price changes. Elliman has spent a year and more than $1 million developing the new Web platform, which is slated to launch the first week of April, according to Stephen Kotler, an executive vice president at the company. The redesigned site will include a virtual office Web site, or VOW, that allows customers to see not only Elliman’s listings, but all of the properties for sale in the markets where Elliman has offices: Manhattan, Brooklyn, Queens, the Hamptons, and Long Island. Kotler, who is overseeing the launch of the new site, said the fact that Elliman’s VOW capabilities extend to markets outside New York City will set it apart from other brokerage Web sites. “What will make ours stand out is the fact that it’s not just Manhattan,” he said. “There’s nobody in the marketplace that is going to deliver all the [region’s] listings in one place.” “What will make ours stand out is the fact that it’s not just Manhattan,” he said. “There’s nobody in the marketplace that is going to deliver all the [region’s] listings in one place.”
Another New York office building is in imminent default.”
Larry Silverstein, of Silverstein Properties, Inc. and the California State Teachers Retirement System paid $416 million in 2006 for the Manhattan skyscraper at 575 Lexington Avenue.
Today, the propertys $325 million loan has been transferred to a special servicer, because the lender thinks the loan has a higher probability of defaulting during the term, according to Fitch Ratings, which analyzes commercial mortgage-backed securities. As of Oct. 2009, the building had $7 million remaining on its $10 million cash reserve, according to Fitch.
A spokesman for Silverstein, Dara McQuillan, emailed a statement in response to our query:
The transfer of the 575 Lexington Avenue loan to special servicer was done at our request to help facilitate ongoing discussions with our lender about a modification to our loan, which is not currently in default. We are optimistic that these discussions will be productive. This action has no impact on tenant services. Further, the debt is secured exclusively by the property and is not cross-collateralized with any others. It does not impact any other developments or properties in which Silverstein Properties and its various partners are invested. ”
The skyscraper was built in 1958 and renovated in 1990. After buying it in 2006 for roughly $650 a foot, Silverstein installed a new entrance, renovated the lobby with Italian marble and put in new elevators, with the goal of renewing new tenants at higher rents when their leases expired, according to Fitch. At the time the building was fully occupied, according to CoStar Group. But today, the buildings vacancy has risen. Silverstein said that it is in negotiations with a tenant that would put the building at more than 89% occupancy.
Mr. Silverstein is best known as the developer who purchased the World Trade Center lease six weeks before the September 11 terrorist attacks. His company is currently negotiating with The Port Authority of New York & New Jersey in an attempt to work out a stalemate over that site’s redevelopment. An arbitration panel set a deadline of Friday close of business for the parties to hash out a new construction timetable agreement.
1. City to retain rights to Tavern on the Green name [Newsday] 2.Vornado, Brookfield out of the race to own WTC space [NYO] 3. State officials give city go ahead to complete Brooklyn Bridge Park [NYT] 4. AY opponents decry Nets arena groundbreaking as burying “the Soul of Brooklyn” [Atlantic Yards Report] 5. Patrons braving tiny eateries, as space rents at a premium [Post] 6.NYC coffee shops gaining clout, street cred [NYT] 7.WNET getting on-the-street studio space [NYConvergence] 8. Oakland Lake Park Queens cleanup almost finished [NYDN] 9. The downfall of One Madison Park[NYO] 10. Some renters may get cash back by paying online [Rented Spaces] 11. Safety concerns abound over World Trade Center construction[NYO] 12. Rooftop sculptures raising suicide concerns [NYT] 13. More housing information available on smart phone apps [WSJ] 14. Retail receivership chances few and far between [Retail Traffic Mag]
The latest foreclosure prevention initiative unveiled by the Obama administration may have some homeowners scratching their heads. The Home Affordable Foreclosure Alternatives initiative is not a home loss prevention program but, rather, a way of facilitating short sales to eschew the foreclosure path. The program is, as Today Show financial editor Jean Chatzky explains in this video, “for people who’ve tried to get a loan modification, but haven’t been able to or didn’t succeed… Essentially it’s offering a formulaic short sale.”
The
Intercontinental Times Square
is set to open
in July.
From the March issue: Just as New York City’s painful and protracted hotel sector slump finally seems to be hitting bottom, the industry has a new problem on its hands: It’s about to be slammed with a dramatic increase in new hotel rooms.
Research by The Real Deal and by hospitality analyst HVS found at least 28 new hotels slated to open this year or next. The largest is the more than 600-room Intercontinental Times Square, which is set to debut in July; the smallest is the boutique 56-room Habita Hotel on the High Line on the West Side.
Meanwhile, another nine are in the works with unknown completion dates. Smith Travel Research estimates the increase of rooms in New York at
5.1 percent, while PKF senior vice president John Fox puts the increase
at a possible 8 percent, with 5,000 to 6,000 new rooms set to be added
to Manhattan’s roughly 72,000 existing rooms available per night. The
jump, Smith estimates, is the largest annual increase in hotel supply
in Manhattan since 1987, the year the firm set up shop. [more]
The Empire Ballroom at the Grand Hyatt New York hotel at 109 East 42nd Street between Park and Lexington avenues has just completed a $12 million renovation, according to the Hyatt Hotels Corporation. The 18,000-square-foot space was redesigned by Looney and Associates. The nearly-century-old ballroom, once known as the Commodore Ballroom, has been an historic site, particularly for political figures — it’s where John F. Kennedy accepted the Democratic nomination for president 50 years ago and where Hillary Clinton once celebrated her successful senate race. TRD
Tenants were evacuated today from 1182 Broadway at 29th Street, a former manufacturing building that had been illegally transformed into a residential rental space, according to Curbed. The building lacked several basic safety features, the Department of Buildings said, including fire sprinklers, secondary exits and adequate stairwells to avoid entrapment. The building owner, Mocal Enterprises, was handed violations for the improper conversion and for allowing tenants to move in despite the building’s lack of necessary permits. The units, which had rents ranging from $2,900 to $6,000, were marketed as “live-work space[s],” that would cause “your artistic juices… to flow.” Mocal, for its part, said it’s currently working with DOB to “resolve this unfortunate situation.”
While World Trade Center site Tower 1 is on its way up, there hasn’t been much development going on at the site otherwise, according to an NBC tour of the site. Most significant could be the lack of progress at World Trade Center
towers 2, 3 and 4, which have not been completely funded. In terms of
construction, “2 and 3 — there’s nothing’s happening; 4 — a few
floors perhaps.” And at the site of the performing arts center, funded
by the city, “there’s nothing happening on that either.” The memorial
and museum is supposed to be partially open some time next year and the
transit hub is slated to open, at least partially, in 2013.
On the Upper East Side, new Swedish beauty boutique In & Out has opened on Madison Avenue between 77th and 78th streets. Today only, the Time Warner Center at 10 Columbus Circle is offering a pop-up tea party from until 6 p.m., featuring tea service, snacks and other treats. In Midtown, the Heartland Brewery is coming to where 41st Street intersects with the Port Authority, Eater reported. In Chelsea, a new eatery called Alpha Asian Cuisine is opening on the corner of Eighth Avenue and 19th Street. Famed restaurateur Jean-Georges Vongerichten has opened a new restaurant called ABC Kitchen on the first floor of ABC Carpet in Gramercy at 18 East 35th Street between Park Avenue South and Broadway. New Indonesian restaurant Satay Junction has opened at 28 Greenwich Avenue between Charles and West 10th streets in the West Village. Also, restaurateur Cobi Levy is one step closer to opening a tapas bar at the former Beatrice Inn spot at 285 West 12th Street on the corner of West 4th Street, after getting some tepid support from Community Board 2.
The Real Deal is looking for your feedback on market-related issues. Please comment below.If you have questions you’d like posted, please e-mail news@therealdeal.com.
