New York Times Launches Residential Real Estate App

For purposes of full disclosure, I am not an iPhone owner. But that does not stop me from staying updated on the latest apps to hit the market, for that day when I eventually do ditch the Blackberry.

Also, app knowledge comes in handy when you are at a party and in need of small talk, since there is an app for seemingly any topic under the sun. Let's say you and your wife are at her boss's home in the suburbs for a barbecue this summer, and you run into the boss in the kitchen, while your wife is in the restroom.

You: Thank you so much for inviting us to your lovely home.

Boss: My pleasure. It really is a shame that my wife is divorcing me and I am going to be forced to move out of this lovely home. I really need to start looking for a new place. I think I want to move into Manhattan.

You: I think you would find a new app from The New York Times (see below) really useful. I just installed it on my phone. Let's sit down and I will show you how it works.

Boss: You are the best. And so is your wife. We really need to sit down and start discussing her promotion.

The End.

New Report Shows Temp-to-Perm Hirings on the Rise

It seems as if it were just yesterday (in fact, it was just yesterday), that I touched on the concept of a "jobless recovery." In a nutshell, a jobless economic recovery is when growth in the Gross Domestic Product occurs, but without a significant decline in unemployment.

One of the factors causing economic analysts to speak about a jobless recovery have been reports that the rate at which temporary employees are transitioning into permanent hires continues to be extremely low. Whereas approximately 33 percent of temporary workers are made full-time in a normal economy, the temp-to-perm conversation rate during this recession has been at or below 10 percent, according to some reports. An article this week however suggests that a rise in the full-time hiring of temporary workers may be taking place.

According to USA Today, multiple staffing firms are reporting an increase in permanent hiring. In the article, Employco Group President Rob Wilson said about 30 percent of the firm's Carlisle Staffing unit have become permanent hires, while Adecco North America CEO Tig Gilliam estimated a 50 percent rise recently in its temporary placements who go full time. Overall, USA Today reported that about half the firms surveyed by the Society for Human Resource Management are "boosting hiring in March, the most in about two years."

Estée Lauder CEO Speaks a Recession Reality That All Business Owners Should Hear

The Wall Street Journal online (wsj.com) features significant video content. One of the best offerings is a series called "Boss Talk," where a corporate leader answers a few general business questions, and in doing so, manages to pass along some bits of insight and advice.

Above is a "Boss Talk" clip with Fabrizio Freda, CEO of Estée Lauder. I chose to share this video because of Fabrizio's comment regarding the best management advice he has received -

"Take advantage of the recession, to do the changes that you need to do anyway, to then be successful during the after."

Every business owner may have different thoughts run through their head as they read that quote, but I instantly recalled a conversation I had with the CFO of a mid-sized publishing company last week. The CFO said that as a result of the economy, he had been forced to lay-off approximately 15 percent of his workforce during the previous 6-12 months. He contended that although the firm's results were improving and they could financially afford to consider refilling some of the lost positions, this was unlikely. Rather, the poor economic conditions had forced the company's remaining employees to work harder, work smarter and work more productively. In effect, the economic troubles alerted this particular company, and undoubtedly countless others, that they could get by with less.

The CFO's point-of-view when it comes to hiring certainly brings some validity to all the talk of this being a "jobless recovery" - improving economic indicators without significantly improved job's reports. Though we all know that jobs will inevitably be created as conditions continue to improve, the pace and volume of job creation is what is undoubtedly on the minds of millions of unemployed Americans every day. Not to mention office building owners throughout New York City.

New Space Availability Monday

Landlords did some spring cleaning during the first week of March, with nearly 40 new spaces coming onto the market.

With such volume, you might expect the square footage totals for the week to be through the roof. But as 50 percent of the new spaces are 2,500 RSF or less, the market avoided digging itself a major hole to start the month. That being said, 150,000+ RSF of space additions for a week is nothing to sneeze at, and I am already anticipating March to be another month in which availability will rise slightly in Midtown South.

The good news is that for tenants in the market for space in 2010, some appealing options continue to become available. Despite the costs and inconveniences associated with making a move, tenants looking for a space upgrade at reasonable rental rates have to think seriously about relocation at this time.

Total rentable square footage put on the market – 151,404 RSF
Percentage of direct space – 89.4% (135,418 RSF)
Percentage of sublease space – 10.6% (15,986 RSF)

New Space Availabilities:

Meatpacking District - Two spaces of 5,891 and 1,392 RSF in a fully renovated office building. The spaces feature abundant windows and light. Close proximity to A/C/E subway. $52.00 PRSF asking rent, direct lease for 5 years.

West 20th Street, off of Fifth Avenue - 8,200 RSF partial floor, possession in 30 days. Sublet through June 2012.

Broadway in Soho - Partial floors of 5,000 RSF each, immediate possession, direct lease for 5 years. $39.00 PRSF asking rent.

Eighth Avenue in the 20s – 10,800 RSF full floor with possession in June 2010. Exceptionally bright unit with oversized windows. Landlord to provide new building standard office installation. $35.00 PRSF asking rent.

Park Avenue South in the teens - Three full floors of 7,000 RSF each, available in May 2010. $36.00 PRSF asking rent.

Park Avenue South in the 20s - Two contiguous full floors of 9,000 RSF each, with a rcent installation. Possession in December 2010. $36.00 PRSF asking rent.

Seventh Avenue in the 20s - Partial floor of 11,000 RSF. Landlord to build the space for tenant. $29.00 PRSF asking rent.

Lease Transaction Friday

At 100-104 Fifth Avenue, three leases have recently been signed - Dimension Capital Partners leased space on the 7th floor of 10,554 RSF for 11 years, with a reported low $50s average base rent over the term, plus a substantial construction allowance and free rent from the Landlord; Gabbe Group renewed its lease for 6,901 RSF; and Jarvis W. Irving & Company leased 2,349 RSF...Realty TV show producer Left/Right signed a 10-year lease for 10,000 RSF for 9th floor space at 39 West 19th Street, where the asking rent was in the low $30s PRSF... ReachLocal signed a 10-year lease at 112 West 34th Street, where asking rents were in the low to mid $40s PRSF; Creative Realities signed a 5-year lease for 8,500 RSF on the entire 14th floor at 1140 Broadway, where the asking rent was approximately $35.00 PRSF.

Jobless Claims Fall, But Job Interview Tips Still in High Demand

Job Interview at IKEA

Despite the glimmer of positive news this morning that new claims for jobless benefits fell last week, each of us likely know several people who are unemployed. I unfortunately know a number of people who have been out of work for well over a year.

I read an article on Forbes.com called How To Ace Your Interview and thought it might be beneficial to pass along. Unemployed friends tell me that they have been interviewing fairly consistently with different firms, but have been told that they are either not the right fit for the job or the firm is holding off on making a hire. Either way, the consistent grind of preparing for and carrying out interviews is taxing, and there is a possibility that bad interview habits can develop. So click on the link and pick up a few pearls of wisdom. And good luck.

Midtown South March Madness: 300,000+ SF of Leases Reportedly in the Works or Completed

I tend to keep my reporting of Midtown South leasing activity to the Friday column. However, there have been enough noteworthy transactions, both confirmed and rumored, popping up in the real estate press the past few days that a mid-week exception seems warranted. And as someone who has been overly vocal about my belief that the Midtown South market will emerge from its malaise much sooner than others have predicted, I am a little anxious to spread word of positive news.

Let’s start with the confirmed. The New York School of Interior Design has signed a 20-year lease according to Crain’s New York Business for 40,000 RSF on the entire 2nd and 3rd floors at 401 Park Avenue South. The asking rent for the space was reportedly $45.00 PRSF. The facility will serve as the school’s graduate center and will be able to accommodate up to 209 students. LEED Gold certification will be pursued for the space, which the school hopes to partially occupy by this fall, with full occupancy planned by February 2011. The nonprofit school’s headquarters location will remain on the Upper East Side.

At 333 West 34th Street, the Metropolitan Transit Authority signed a 112,940 RSF lease, per the New York Post. The asking price for the space was $42.00 PRSF. A few interesting things about that lease:
- The MTA reportedly has an out clause it can exercise in the 4th or 7th years of the lease
- The MTA is exempt from paying real estate taxes on this space as a result of a law that relieves government agencies from real estate tax payments when they lease a block of space as a separate tax lot. Building owner SL Green had previously structured the building as two separate tax lots, and the MTA is the beneficiary. SL Green is the biggest landlord in Manhattan and arguably the shrewdest landlord in Manhattan - they almost always position themselves in the most advantageous positions and almost never miss a trick.

Now for the rumors, all of which I saw in the usually reliable Real Estate Weekly.
- Publicis Modem, the digital advertising subsidiary of Publicis Groupe, is reportedly close to a deal to relocate from 22,000 RSF at 75 Ninth Avenue to more than 50,000 RSF of offices being sublet by CBS College Sports Television at 85 Tenth Avenue.
- The City University of New York is said to be in talks to lease more than 130,000 RSF at 395 Hudson Square, with sources telling Real Estate Weekly that the school will use the space to relocate some of its operations from 555 West 57th Street, including a data center facility.

Landlord Default From A Tenant's Perspective

The financial health of commercial Landlords has been a topic of conversation on MidtownSouthDaily.com for many, many months, and stories of Landlord default in one form or another seem to hit the news weekly. Just yesterday, I saw this story on 29 West 35th Street, where it is alleged in a lawsuit filed last month that an investor in the property defaulted on a $29.2 million mortgage loan and the building could be facing foreclosure. The story talks about the problems this situation obviously creates for the holder of the mortgage, and how brokers involved with the building are allegedly claiming non-payment of commissions. But what about the tenants?

Not having spoken to tenants at 29 West 35th Street, I cannot address what issues, if any, they have specifically experienced as a result of that building’s alleged financial troubles. However, generally speaking, tenants with unstable owners or owners in unstable positions could face a myriad of problems:
• Non-payment or non-reimbursement of tenant improvement allowances for construction
• Unfulfilled or unfinished construction on tenant’s behalf
• Inferior construction as a means of reducing capital expenditures
• Delayed or non-delivery of base building work such as HVAC units and bathrooms
• Diminishment of building services, including reduced hours for heating and air conditioning and less frequent cleaning of common areas
• Unresponsiveness to tenant requests for services or unresponsiveness to complaints due to a reduced work staff

Ultimately, tenants with a pending lease expiration have to take the responsibility, along with their brokers, of investigating the financial well-being of the buildings they are considering. Crain’s New York Business ran a good article of February 15, 2010 titled “Tenants scoping landlords’ fiscal risk,” which is worth a read. The article outlined not only some of the problems Landlords are currently facing, but also some of the remedies my colleagues are proposing to help protect tenants.

Included with the article was a list of the top 10 danger signs tenants should look out for. Here it is:
1. Debt service, maintenance costs exceed the rent roll
2. Significant debts are coming due by 2012
3. Vacancy rates are exceptionally high
4. The mortgage exceeds the building’s current value
5. The building was purchased in 2006 or 2007
6. Brokers’ commissions are being paid late
7. Lobby, common spaces are dirty; maintenance poor
8. The landlord is unresponsive to tenant’s needs
9. Tenants’ spaces are being remeasured frequently
10. There are surprise recalculations of electric rates