Category: Commercial Real Estate

The Mercy Center’s 13th Annual Gala Dinner and Auction
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The Mercy Center’s 13th Annual Gala Dinner and Auction | George Grace

On March 16th, I had the great pleasure of being honored by the Mercy Center of the South Bronx. Mercy Center was founded in 1990 to address urgent problems of the women and children of the area by providing an oasis from a violent home, a place for children to learn to read, and for parents to study English as a second language. Enclosed is a video of my acceptance speech. I hope it will inspire you to support the important mission of Mercy Center.

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What is NYC’s Next Hip Neighborhood—Hudson Yards?
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What is NYC’s Next Hip Neighborhood—Hudson Yards? | Ruth Wharton

Hudson Yards is the largest private real estate development in the history of the United States, and the biggest development in New York City since Rockefeller Center. When completed in 2025, Hudson Yards will have several NYC firsts, including: New York’s first Neiman Marcus, a collection of restaurants curated by Chef Thomas Keller, and The Shed, a new center for artistic invention. In addition, there will be 14 acres of public open space, a 750-seat public school, and an Equinox® branded luxury hotel with more than 200 rooms. The development of Hudson Yards will create more than 23,000 construction jobs.

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Avoid Management by Lease
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Avoid Management by Lease | George Grace

In an ideal world, commercial tenants would work with both internal and external stakeholders to determine how much space they need before looking at properties. Management would go through a strategic planning process to figure out where the company is going, how it’s going to get there, and who’s going to take it there. The company would consult with an architect to determine its exact space needs, and necessary board or upper management approvals would be obtained beforehand.

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Global Office Space Bargains: How Does NYC Compare?
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Global Office Space Bargains: How Does NYC Compare? | Ruth Colp-Haber

Most of we New Yorkers assume that our city is probably the most expensive place in the world. However, with respect to office space, this is not the case. New York is actually the fourth most expensive city in the world. On a worldwide basis, ahead of New York, are Hong Kong, London, and Beijing. Not surprisingly, New York retains the title of “Most Expensive City in the United States.” There are many factors that affect the comparative rate for office rents worldwide. For example, each city has costs on top of the base rent.

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Which NYC Neighborhood Offers the Best Deals on Office Space?
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Which NYC Neighborhood Offers the Best Deals on Office Space? | Ruth Colp-Haber

When I first started in the commercial real estate business, there was a very simple maxim: ask the CEO where he or she lived, and find a property that offered a convenient commute. However, my experience in the business has shown it’s rarely that simple. When companies look for space, they have a lot of conflicting criteria that they use in order to evaluate different NYC locations. For example:

  • How is the subway access?
  • Are there good restaurants and stores nearby?
  • Is the vicinity very crowded?
  • Can you get a taxi conveniently?
  • Is there parking available?

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A Bronx Tale: Millions of Untapped Consumers
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A Bronx Tale: Millions of Untapped Consumers | George Grace

Recently, I’ve started working with a national company based in the midwest. Their New York office is located in Westchester County, but they have become eager to relocate closer to the city. One of the places they are considering is in the Bronx. I thought this was an interesting choice, as I have written previously about how relatively low and stable the rents are in nearby Westchester. My client elaborated that it wants to be in a more densely populated area because of its sales organization; the more people near it, the better off it is.

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THE CERTIFICATE OF OCCUPANCY*
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THE CERTIFICATE OF OCCUPANCY* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

We have all heard the term “Certificate of Occupancy” when involved with a real estate transaction but many of us do not the full ramifications of what it is and what the New York City Building Department (DOB) requires. Don’t underestimate the importance of the Certificate of Occupancy. Whether you’re buying, renovating, or in a legal tussle with a landlord, you’ll occasionally hear talk of the “CO,” “C of O,” or Certificate of Occupancy. And while this legal document isn’t exactly the sexiest part of any real estate transaction, there’s a whole lot of power in this little piece of paper, so much so that it has the clout to win legal cases, end negotiations, put the kibosh on your mortgage, and more.

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LEGAL REPRESENTATION FOR REAL ESTATE PURCHASES AND SALES*
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LEGAL REPRESENTATION FOR REAL ESTATE PURCHASES AND SALES* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

The selection of a seasoned, competent and communicative attorney may be the single most important relationship in a real estate transaction. Now more than ever choosing an attorney who is sufficiently competent and whose fee is reasonable and customary is not the only two criteria to select a lawyer. A seller or purchaser should retain an attorney who is competent and experienced, who can protect your interests, who understands the market and who can help and not hinder the transaction.  Remember, if your attorney fails to include important provisions or negotiate a provision properly, the only person that will suffer is the client.

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REAL ESTATE DUE DILIGENCE (Part 2 of 2)*
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REAL ESTATE DUE DILIGENCE (Part 2 of 2)* | Eric P. Gonchar

©2013 Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

This is part 2 of a 2 section article about conducting due diligence on real estate transactions and should be read in conjunction with the sister article.

Financing The Purchase – While Condominiums generally do not set limitations on how much a purchaser may borrow, co-ops generally do. The purchaser must first determine if the co-op will allow the buyer to purchase the apartment with a loan which is secured by a pledge of the shares of the co-op. Many older co-ops do not allow financing at all. For those co-op’s that do allow financing, it is important to determine what the financing limitations are before the contract is signed. If the purchaser wants to finance 80% of the sales price but the co-op only allows 70%, then the transaction should not proceed.

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REAL ESTATE DUE DILIGENCE (Part 1 of 2)*
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REAL ESTATE DUE DILIGENCE (Part 1 of 2)* | Eric P. Gonchar

©2013 Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

This is part 1 of a 2 section article about conducting due diligence on real estate transactions and should be read in conjunction with the sister article.

One of the most important, if not the most important, parts of any real estate transaction is conducting a thorough due diligence review of the property to be purchased. The prospective purchaser should investigate the property thoroughly before signing a contract of sale.

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CUSTOMARY PROVISIONS IN A LETTER OF INTENT FOR A COMMERCIAL LEASE*
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CUSTOMARY PROVISIONS IN A LETTER OF INTENT FOR A COMMERCIAL LEASE* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

In a prior article, we examined the preliminary considerations for a Tenant in leasing retail or commercial space. Once the Tenant has a space picked out, it is time to understand the lease terms and negotiate the lease. The terms of the Lease will be summarized in a document called a “Letter of Intent.” This can be a complicated process, especially considering all the legal terminology and lease-speak that is often more confusing than it is helpful.  Keep in mind, a larger more well established Tenant may have more of an ability to negotiate better terms than a new start-up company without any experience.

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PRELIMINARY CONSIDERATIONS FOR A TENANT IN LEASING RETAIL OR COMMERCIAL SPACE*
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PRELIMINARY CONSIDERATIONS FOR A TENANT IN LEASING RETAIL OR COMMERCIAL SPACE* | Eric P. Gonchar

© Eric P. Gonchar. All rights reserved. No portion of this article may be reproduced without the expressed written permission of Eric P. Gonchar.

There are many considerations a Tenant must take into account before deciding to lease commercial space. But even before finding the right space, in the right neighborhood at the right rent, the Tenant must be prepared to provide certain financial and personal information to the Landlord.

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Why You Should Consider Having an Exclusive Broker
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Why You Should Consider Having an Exclusive Broker | George Grace

Prospective tenants are often resistant to hiring an “exclusive” broker. They feel that if they hire just one company, they’re not going to get to see the breadth of the market and that by dealing with multiple brokers, they will get to see more properties and wind up with a better selection. The reality is quite different — there are valuable benefits to going with just one broker. Some of the main reasons you should consider an exclusive broker:

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Rentable Space or Usable Space?
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Rentable Space or Usable Space? | George Grace

As many tenants know, rents have been rising. The stock market peaked in May (and is threatening a new high again), and according to regular cyclical patterns, it is set to continue rising for another year or two. Continued increases in rental rates can take a HUGE bite out of a business’s bottom line. Consider the following scenario: Back in 2008, when you rented your 10,000-square-foot office space, rent was $40 per rentable square foot.

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How Does the Stock Market Affect Rent Prices in New York?
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How Does the Stock Market Affect Rent Prices in New York? | George Grace

The stock market is a leading economic indicator. It affects the psychology of companies. When the market is up, there is a tendency toward growth and expansive thinking, but when it’s down, people are less likely to spend money on real estate and investments. In New York City, approximately 25% of the economy is tied directly or indirectly to the stock market. Looking at the last 20 years, we can compare the Dow Jones index levels with those of asking rents in New York and see a pattern.

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Due Diligence – Know What You’re Getting Into
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Due Diligence – Know What You’re Getting Into | George Grace

The Latin phrase caveat emptor, or “buyer beware,” is especially true when making real estate purchases. Many businesses assume that the infrastructure of a property they buy functions. For example:

  • Does the air conditioning work?
  • Do the elevators work?
  • Is the structure sound?
  • Does the roof leak?
  • Is the boiler safe, adequate and operational?
  • Does the plumbing work?
When purchasing a building, the structure and operation of the property “should be” in good working order.

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When Does a Lease End?
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When Does a Lease End | George Grace

The best time to leave a property is upon expiration of the lease term, but there is always room for negotiation. Several months ago, a client (the tenant) had a lease that was close to expiration. The tenant was about to sign a lease for a different space, but something happened: Another property came on the market, they looked at it and decided it was much better suited for their business. However, starting all over in the negotiation process would have put the tenant over their current lease expiration date. In order to acquire the new space, the tenant would have to extend their current lease, or pay a penalty.

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The Art of Negotiation
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The Art of Negotiation | Mendy Lipsker

{4:18 minutes to read} Making the deal is all in the negotiation. The job of an agent or broker is basically to be the matchmaker, bringing people together. When people start to feel confident or comfortable with each other, they may be more willing to make concessions on their original proposal in order to work out a deal.

A lot of agents and brokers try to protect their client’s and their own interests by not having the buyer and seller meet. However, at times, the best thing is to bring the buyer and seller together and let them face each other. The broker can then facilitate a negotiation, whether it’s a small deal or a big deal. I have found many times that, if the buyer and seller are reasonable and rational, they’ll find a way to make a deal when they meet each other.

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Are You Proactive or Reactive with Your Real Estate Planning?
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Are You Proactive or Reactive with Your Real Estate Planning | George Grace

Most companies are reactive in their commercial real estate needs, especially as their business locations increase. To become proactive, companies need to see the big picture – there needs to be a vision that comes from the top. If the CEO or Division Manager hasn’t defined a vision for the business, it’s hard to be proactive with real estate. A vision tells people where they want to go, so real estate can be planned and managed in order to support that vision and those business goals.

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Doing the Property Flip – Part 2
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Doing the Property Flip – Part 2 | Mendy Lipsker

{3:00 minutes to read} My last blog discussed “flipping” a property, a popular way to invest which allows you to create profit and cash flow in a reasonably short time. We talked about acquiring the property and financing in Part 1 of this series.

In Part 2, we are going to touch on two other aspects of “flipping,” renovation of the property and making a profit.

Renovating

Sometimes a property can be sold as is and still make a profit. However, if the property is going to need work, you will want to know how much work it needs and what it will cost. Getting an estimate on the renovation work is an important part of the process. If the renovation required is going to substantially reduce your profit, you may want to bypass that property.

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What is the 2nd Century Master Development Plan?
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What is the 2nd Century Master Development Plan | Curtis Battles

{3:48 minutes to read} Historic Union Station in Washington, D.C., which opened in 1908, is a classic Beaux-Arts building designed by famed architect Daniel Burnham. Since the peak of its demand during the mid-20th century, the station has undergone significant restoration, transforming it into the commercial success it is today. Located in the hub of our nation’s capital, it’s no surprise that it is the second-busiest station (after Penn Station) in the Amtrak system. This transportation hub also offers regional commuter rail lines –

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Economic Opportunity in Iceland
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Economic Opportunity in Iceland | George Grace

There were a few rough years after Iceland’s economy crashed in 2008, but things are starting to heat up again. Invest in Iceland is the economic development branch of the Icelandic government. It frequently invites potential investors to visit the country and explore opportunities for growth and development, as well as Iceland’s breathtaking scenic beauty. One of the most compelling reasons for a business to relocate to Iceland is the availability of highly cost-effective, renewable power:

  • Hydro
  • Wind
  • Geothermal

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New Development on Lexington Avenue
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New Development on Lexington Avenue | George Grace

As an exclusive agent, Mohr Partners, Inc. is pleased to offer a community facility site and/or retail condominium for sale or lease:

  • Lexington Avenue, between 101st  and 102nd  Streets
  • Approximately 50,000 square feet of buildable area
  • Retail Component of approximately 10,000 square feet
  • Ground and Lower Level will have high ceilings
The site presently consists of four brownstone apartment buildings and two vacant lots. It is conveniently located a few blocks from Central Park and Mount Sinai Hospital.

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Roads vs. Rails: Which is the better investment
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Roads vs. Rails: Which is the better investment | Curtis Battles

{3:50 minutes to read} Across the country, many states are facing an epidemic: the basic infrastructure is aging rapidly. Bridges, highways, and railroads often need to be replaced or undergo major repairs. This challenge is here to stay until it’s resolved across the country. It’s a hot topic for debate, especially in large metropolitan areas. In Connecticut, Governor Malloy has recently created a 5 year transportation vision plan to help guide this discussion. He is trying to balance the needs of drivers, as well as public transportation commuters.

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Negotiating the “Total Cost” of Your Rental Agreement
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Negotiating the Total Cost of Your Rental Agreement | George Grace

“Total cost” encompasses more than the rent. When negotiating a commercial lease the “total cost,” including each of these factors, must be considered:

  • Loss factor: The difference between the rentable and the usable square feet. In New York City, a commercial space which is 10,000 rentable square feet might only contain 7,000 usable square feet. It is important to know the difference.
  • Free rent: Sometimes a landlord will draft a lease where the face rent is very high, then give copious amounts of “free rent” to justify the higher face rent amount.

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How Executive Real Estate Decisions are Made
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How Executive Real Estate Decisions are Made | George Grace

When corporations are looking for office space, they typically start by casting a large net. This involves taking the interests of all key players into consideration before narrowing down the choices. For example, we recently met with a client looking to rent commercial space:

  • The chief marketing officer and the sales manager wanted an attractive space to impress clients. It should be noted that their vision was the most costly.

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How Do I Get Out Of My Commercial Real Estate Lease? Part 2
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How Do I Get Out Of My Commercial Real Estate Lease? Part 2 | George Grace

In the previous post, we discussed subleasing, assigning, desk-sharing and the option to cancel as some of the remedies a business might use to get out of a lease. In this post, we discuss the least desirable ways to get out of a lease: buyout and litigation. Buyout The last option before going to court is to buy out the lease. If a business is paying way below market rent for its space, the landlord will be more likely to take the space back for nothing.

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How Do I Get Out Of My Commercial Real Estate Lease?
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How Do I Get Out Of My Commercial Real Estate Lease | George Grace

“Getting out” of a lease for a business is usually a last resort, but sometimes a necessary one. The good news is that there are methods available to expedite an early out. Planning before the lease is signed is essential. Inability to pay the rent isn’t the only reason a tenant may need to break a lease. It may be more important if you are very successful and need larger space. Here are the lease clauses and methods to consider:

  • Subleasing
  • Assignment
  • Desk-sharing agreements
  • Options to cancel
  • Buyout
  • Landlord breaches

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5 Important Factors in Finding a New Headquarters
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5 Important Factors in Finding a New Headquarters | George Grace

When a new client meets with a tenant representative broker, one of the most important pieces of the consultation is utilizing the client’s goals and aspirations as a “road map” to the right building. That map may cover different terrain in each tenant’s case, but there are 5 basic factors to consider that are universal in any move:

  • Operational parameters: This is a question of the circumstances in which the client needs its business to operate,

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Cost vs. Necessity: How These and Other Factors Affect the Decision Making Process
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Cost vs. Necessity: How These and Other Factors Affect the Decision Making Process | George Grace

Helping clients make difficult real estate decisions is an important aspect of a broker’s job. Whether they are starting a new business or relocating an existing one, there are many factors to consider. A client in midtown Manhattan is looking to relocate their business. They have the option to: (a) stay where they are, (b) move to a new space in the same neighborhood, or (c) move to another location (such as lower Manhattan which is a popular option). For this client, together we looked at 30 different buildings.

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