Crains New York - May 27, 2013 - (Page 4)

IN THE Facebook friends the Village MARKETS BY DANIEL GEIGER Facebook, the social-networking company with more than 1 billion users worldwide and $60 billion in market value, is considering taking 160,000 additional square feet of office space in Manhattan, according to sources. The company is negotiating to lease the entire seventh and eighth floors at 770 Broadway, a 15-story building that occupies the full block between East Eighth and East Ninth streets. Real estate investment trust Vornado Realty Trust owns the space. Facebook, which went public last year in a record-setting IPO, is looking at space in the 1.1 million-squarefoot building, which served as home to Nielsen before the media company relocated to lower Manhattan last year.Clothing retailer J.Crew also has its headquarters in the building. Facebook’s New York office is currently at 335 Madison Ave., between East 43rd and East 44th streets, where it leased 150,000 square feet in late 2010. That office is home to advertising and sales staff, but according to written reports last year, Facebook had also started bringing on programmers and engineers, competing with other tech companies and Wall Street for talent. It was not clear whether Facebook would continue to occupy that space or sublease it to another tenant if it completes the deal at 770 Broadway, where asking rents are in the $70s per square foot. However, the deal is not yet done, and Facebook could decide to go elsewhere, said people familiar with the company’s real estate search. Executives at Vornado would not comment, and Facebook did not respond immediately to a request for comment. Several sources say Facebook has been looking for expansion space in Manhattan for months and that executives wanted an outpost in Silicon Alley, the nickname given to midtown south, which has attracted dozens of tech companies and startups in recent years. If Facebook completes the deal,it would come at a time when other tech companies have begun to flee midtown south, as occupancy levels and rents have risen precipitously there. Yahoo, for instance, just signed a large lease to move into the old New York Times Building on West 43rd Street. Microsoft earlier this year committed to a deal to relocate its headquarters from 1290 Sixth Ave., another tower owned by Vornado, to 11 Times Square. Ⅲ by Aaron Elstein More space for its growing ranks of engineers hreo.com Social-networking giant mulls adding two floors on B’way FOR RENT: This 18,000-square-foot Southampton mansion is available for nearly $1 million. Hedgies returning to the hedgerows N ever mind that the Dow Jones industrial average is at record highs or bonds trade at nosebleed levels, the market watchers at securities firm ConvergEx Group have discovered a sight to truly behold: a summer house in the Hamptons with an asking rent of nearly $1 million. The property, as you surely want to know, is a “world fabulous” Southampton estate built in 1915 and recently restored to its original grandeur, according to HREO.com. The ample abode measures 18,000 square feet and features 12 bedrooms, 12.5 baths, indoor and outdoor swimming pools, and so on. All this can be yours, for a few months anyway, for $900,000. If that seems a bit steep for a summer house, you cohnreznick.com/think What does CohnReznick think? Game-changing insight can guide your business forward. Find out what CohnReznick thinks at CohnReznick.com/think. can rent the property for the full year for $1.2 million. Truth be told, this property may not fetch a record rental price for the Hamptons. A 2008 Newsday article said someone was seeking $1 million for a house in Sagaponack for the summer before Lehman Brothers collapsed, but it’s unclear if anyone actually hit that bid. If $900,000 is out of your price range, the folks at ConvergEx Group found more than 70 properties renting for at least $500,000 from Shinnecock Canal to Amagansett. There are 400 properties asking at least $250,000. Some of these monster rents result from Superstorm Sandy devastating summer housing in Fire Island and other popular beachfront areas. But the driving force is Wall Street. Thanks to the Dow trading at more than 15,000, many hedgefund managers are minting big money again for the first time in years. And these folks get compensated in cash, the form of payment preferred by real estate agents, not the deferred stock that their brethren at the too-big-to-fail banks tend to get nowadays. Hedge-fund managers make money two ways. First, they collect a management fee, typically equal to 2% of the money they’re entrusted to invest. Second, they collect a big piece of any investment gains they generate in a year,usually 20%. But here’s a big qualifier: In order to pocket some of the profits, hedge-fund managers usually must first recover any investment losses piled up in previous years. Inside the industry, this is known as crossing the high-water mark. Hedgefund managers no better than average—and that describes most of them—could be beating their high-water marks for the first time in years thanks to the market’s impressive rally (up about 15% so far this year), putting them in position to harvest the sorts of sums that drive them to drop high six figures for a Hamptons summer rental. “The Philistines are clearly at the hedgerows,” ConvergEx’s chief market strategist, Nicholas Colas, wrote, “and they have both money to burn and the anticipation of being able to enjoy their summer.” Ⅲ 45% CohnReznick is an independent member of Nexia International 4 | Crain’s New York Business | May 27, 2013 PORTION OF FINANCIAL SERVICES WORKERS IN THE U.S. who report feeling “very or fairly often stressed,” according to a survey by eFinancialCareers.com. Interestingly, 60% of French financial services employees report feeling that way. http://www.hreo.com http://www.cohnreznick.com/think http://www.hreo.com http://www.CohnReznick.com/think http://www.CohnReznick.com/think http://www.eFinancialCareers.com

Table of Contents for the Digital Edition of Crains New York - May 27, 2013

In the Boroughs
In the Markets
Small Business
The Insider
Business People
Opinion
Alair Townsend
Greg David
Steve Hindy
Report: Largest Companies
The List
Classifieds
For the Record
Real Estate Deals
New York, New York
Source Lunch
Out and About
Snaps

Crains New York - May 27, 2013