Friday, March 10, 2006


Lois Weiss reports that two valuable sites on Fifth Avenue are on sale.

As of yesterday, Douglas Harmon of Eastdil Secured is officially marketing the 23-story 522 Fifth Ave. for Rockpoint and Stellar Management, sources said.

The venture bought the 595,000-foot building and land separately for a combined $217 million just last year.

After aggressively toying with leasing, they just decided to move forward with the big flip.

A conversion to a hybrid hotel, retail or residential are all possible for the property that sits on the southwest corner of 44th Street at Club Row. JP Morgan is to move out by this summer.

The other property is at 400 Fifth Avenue. It's a vacant site and can be for hotel, residential and/or office use. It might go for $400 a foot or even $500 a foot.

The 400 Fifth Ave. site on the northwest corner of 36th Street is being sold by the joint venture of Lehman Bros. and Yitzak Tessler.

It's also ready to plunge skyward to 550,000 gross feet and down two levels for a garage.

"You have a clean slate and it's ready to roll," said Stacom.

It can support 190,000 feet of hotel uses, along with residential or even offices.

Because the venture already includes air rights from 404 Fifth Ave., the landmarked Tiffany Building across the street, and the sloping land, its view corridor stretches to the Atlantic Ocean, Stacom told us.

Pricing may approach $400 a foot - which is what Stacom obtained from Madison Equities for the Hearst hotel site at 55th and Eighth Avenue - another busy developer believes it will go for more and could hit $500 a foot.

"There's not a lot out there for land," he advised.

New York Post Online Edition: realestate



Commercial real estate is also humming in Scottsdale, Ariz. A two building complex on the Camelback Corridor was purchased by a California concern.

A two-building office complex in the Camelback Corridor has changed hands for $94.5 million.

KBS Realty Advisors of Newport Beach, Calif., purchased the office complex, called 3131 and 3133 East Camelback Road, from an investment client represented by Lowe Enterprises Investors, a national real estate investment, development and management company based in Los Angeles.

The property consists of a four-story building with 196,823 square feet and a three-story building with 99,594 square feet. The smaller building is occupied by Charles Schwab and Co.

The deal was brokered for the buyer and the seller by Dennis Desmond and Trevor Klinkhamer, both senior vice presidents at Trammell Crow Co.'s Phoenix office.

Phoenix Business Journal: California company buys Camelback office complex for $94.5M - 2006-03-09



The conversion of hotels to condos has been all the rage, in Manhattan, lately. Harry Macklowe is now ready to convert some tired properties to a hotel/condo mix.

HARRY Macklowe is readying a major new hotel/condo development at one of Midtown's most valuable locations, just as central Manhattan has grown increasingly starved for first-class hotel rooms and while the market for mixed hotel/apartment projects remains strong.

Sources said five old brick structures at the southwest corner of Madison Avenue and 53rd Street will soon be razed for a tower of several hundred thousand square feet, with a hotel to occupy roughly the lower third and the luxury apartments the upper floors - a formula similar to that at a planned new project on the site of the Mark Hotel.

Steve Cuozzo writes that Maclowe is keeping his plans for the Midtown properties close to the vest...

In fact, Macklowe has kept his plans under tight wraps, and word of the demolition plans had the real estate and hotel worlds buzzing yesterday. Cushman & Wakefield investment-sale specialist Ron Cohen said Macklowe "has thought about it for a long time" and at one point even considered selling the assemblage.

CB Richard Ellis investment-sale specialist William Shanahan, who's not involved with the property today but who brokered the sale of 16-20 E. 53rd to Macklowe some years ago, called the site in the heart of Midtown's retail, office and museum district "perfect, ideal" for a hotel/condo combination.

Sean Hennessey, a Lodging Investment Advisers hotel analyst, said Macklowe's plans are similar to other developers. "The rebound in the hotel industry has led developers to focus on exploiting unmet need," he said. "And hotels serve the purpose of sitting at a project's lower levels, thus pushing the apartments up higher where they command better prices."

Although the wider condo market shows signs of softening, it doesn't yet apply to prime locations where residents can avail themselves of first-class hotel services.

Meanwhile, Midtown and the Upper East Side have lost thousands of hotel rooms in the past few years to residential conversion at the Plaza, St. Regis, Intercontinental and Stanhope, among others - a decline only partly offset by the growth of "boutique" properties in remote neighborhoods.

Cushman's Tom McConnell said, "Macklowe works in mysterious ways."

New York Post: Macklowe's March by Steve Cuozzo



Cesar Conda makes an argument on how capital gains taxes are a drag on the economy...

"The capital-gains tax impedes business creation and entrepreneurship. History shows that the amount of seed-capital funding available to fledgling start-ups is highly sensitive to changes in the capital-gains tax. For example, when the top capital-gains tax was slashed from 49 percent in 1977 to 20 percent in 1983, the amount of venture-capital funding for new firms increased from $68 million to $5.1 billion - a 700 percent increase. Conversely, when the capital-gains rate was raised to 28 percent, venture-capital funding fell by almost 60 percent (between 1986 and 1991).

New business start-ups, particularly in the innovative high-technology sector, have been the engine of our economic growth and are critical to global international competitiveness. Leading-edge companies like Google, eBay, and JetBlue got their start with venture-capital funding.

Furthermore, start-ups depend heavily on equity investments by individuals - friends, family, and other informal sources - who are sensitive to the level of the capital-gains tax. In a survey of 284 new companies undertaken in the late 1980s, professors William Wetzel and John Freear of the University of New Hampshire found taxable individuals to be the major source of funds for those start-up firms, raising $500,000 or less at a time. A high capital-gains tax rate would certainly discourage equity investments by individuals.

By promoting economic growth, a zero capital-gains tax would over time produce additional tax revenue. As former Federal Reserve chairman Alan Greenspan once explained, "If the capital gains tax were eliminated - we would presumably, over time, see increased economic growth which would raise revenues for personal and corporate taxes as well as other taxes that we have." [The] major impa"

Cesar Conda: Zero Capital Gains Tax Rate on NRO Financial:


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