Ceruzzi Holdings and SMI USA Secure $200 Million Bridge Loan

Ceruzzi Holdings are proud to announce that we are moving forward with the planned 520 Fifth Avenue project having recently secured a $200 million bridge loan from the professionals at Mack Real Estate Credit Strategies. Along with our partners at SMI USA, we hope to be breaking ground soon on a mixed-use 71-story tower that will stand proudly among neighboring landmarks including Bryant Park, Times Square,  and the New York Public Library.

 

This transaction is yet another manifestation of the robust and lively construction market in New York, and we are happy to take part in a revitalization of the city landscape. Our new project is another piece of the New York City puzzle: not only as an international destination but also as a home to the finest endeavors in architecture, development, and business.

 

We inherited these plans from Thor Equities and are thrilled to have the opportunity to see them through. This project will bring exciting new retail opportunities along with a combination of condominium and hotel offerings. Our planned three floors of retail space offer flagship opportunity and we expect to host some of the top names in the market. Aesthetically, the exciting design by Handel Architects promises to be a new jewel of the midtown skyline.

 

We are eager to get the new project underway, and this new loan will carry proceedings along as we move closer to breaking ground. Upon completion, this high-traffic site will be home to one of the finest new buildings to arrive in New York City since 8 Spruce Street and One57. We have a deep, abiding passion for our cityscape, and are confident that it will shine further at 520 Fifth Avenue.

The Biggest Real Estate Projects in NYC for 2017 and Beyond

Real estate in New York City is booming like never before. It’s not just a matter of new apartment complexes and condos (although we’ve got plenty of those) but massive projects that will alter the landscape of all five boroughs as we know them. As the city’s population has grown ever larger, new developments have popped up all over that promise to modernize and redefine areas that perhaps weren’t previously thought of as attractive destinations. Here are the most promising real estate ventures that will reshape all five boroughs in 2017 and in the years to come.

Manhattan – Hudson Yards

Long considered the most prime undeveloped section of real estate in the city, the Hudson Yards project is finally making some progress. Once marked for a football stadium (which was scrapped), developers quickly refocused to make the area into an entirely new neighborhood of  mixed-use land. Construction is well underway on the 18 million square foot complex of apartment buildings, office towers, and shopping centers, with several towers already standing among the skyline.  The Hudson Yards promises to put a new face on a previously underbuilt section of Manhattan once it’s completed in 2024.

Brooklyn – Pacific Park

The area where Prospect Heights and Fort Greene meet Downtown Brooklyn has been the site of some of the city’s biggest development projects, most notably Atlantic Terminal and the Barclays Center. The area will be reshaped further by Pacific Park, a sprawling residential project due to be built above the site of the Vanderbilt train yards, immediately adjacent to the two existing megaprojects. The “Park” promises housing units to accommodate all income levels, as well as new shops and restaurants in an area already teeming with options. In addition, 8 acres of green space will be available for residents and tourists alike to enjoy at their leisure.

Queens – Hunter’s Point South

The boom in housing units on the Queens waterfront continues, with some affordable units to be places in the new Hunter’s Point South development. Distinct from similar building projects in other boroughs, a majority (over 60%) of the Hunter’s Point living spaces will be earmarked for low- to moderate-income renters. Brand new park space and apartment towers will be a reminder that Queens is not a place to be overlooked for a spectacular view and neighborhood amenities.

The Bronx – Bruckner Market

From a symbol of urban decay to a NY Times-approved destination to visit in 2017, the South Bronx is in the midst of the biggest transformation perhaps the country has ever seen. A hallmark of this change is the new Bruckner Marketfood hall to be built in a formerly abandoned warehouse on the waterfront facing Harlem. Similar to halls in Manhattan and Brooklyn, Bruckner Market promises to be a hub of affordable restaurants, fresh-food markets and a potential beer garden, aiming to bring neighborhood residents together under one airy roof. Residential buildings are also slated for the area, turning a former ghost town into a booming point of pride for long-suffering Bronxites.

Staten Island – Empire Outlets and NY Wheel

Not to be forgotten, Staten Island has been making it’s own waves in the redevelopment boom. Most intriguing (for now) on the island are the planned Empire Outlets, which will bring luxury outlet shopping to the five boroughs for the first time. The Outlets are part of a larger plan to vitalize the St. George neighborhood into a destination for visitors and residents. Directly adjacent to the outlets will also be the planned NY Wheel: a massive, 630-foot tall ferris wheel (the largest in the world) which promises spectacular views of the entire city.

How a Background in Law Can Boost Your Business

Every lawyer has gone to law school, but not everyone who goes to law school becomes one. Many law students and degree holders don’t end up actually practicing, but can end up in a variety of fields, including running their own business. Far from being a waste of time, these years in law school can produce some great habits and bits of knowledge that will be a boon to you as a business owner. These are just a few of the benefits:

Negotiations and Disputes

No matter what your business does, there will always be a need for negotiation skills. Getting the best deals possible will be a vital need for your company and attending law school will give you a great skill set in this area. On the same token, those skills also translate well to mediation and conflict resolution, a great ability to have when managing an organization with a diverse group of employees. Getting all parties to see benefit and come to amicable conclusions is a strong hallmark of a quality leader.

Optics

Image isn’t everything, as some say, but that’s not to mean it isn’t still extremely important to your business. No matter what industry you’re in, your reputation is of supreme importance and can be the difference between struggling and success. As company leader with a law degree, you will demonstrate to clients or partners that you’re someone to take seriously, who is capable of managing difficult tasks. At the very least, the degree shows that you can achieve difficult tasks.

Organization

One of the skills learned in law school is the ability to separate problems into their discrete silos. There, they can be dealt with separately and in an orderly fashion, something that is mandated in the legal world. Adapting this approach to solving any business issues that arise will define you as a leader and is simply a good way to attack your company’s problems. This calm, rational attitude will keep things from getting out of hand and provide a good example for your employees to deal with their own workplace issues.

Contracts

While you may not be able to get away with acting as primary counsel for your own business (you’ve got other things to do), your legal background will be a big help in your understanding of contracts and other legalese that you’ll encounter. Rather than seeing them as incomprehensible screeds necessitating a translator, you’ll be comfortable looking things over before your lawyer does. Spotting issues other entrepreneurs wouldn’t ought to give you a leg up.

Ceruzzi Properties Refinances Land Beneath NYC’s Iconic Lipstick Building

louis_ceruzzi_lipstick_buildingIf you squint at New York City’s Lipstick Building, from a distance, below, or a neighboring skyscraper, you get why hardly anyone calls it 53 at Third. The tiered, cylindrical structure really does resemble something you’d find at Sephora, only it’s 453 feet tall (and contains office space instead of wax, rouge, and cocoa butter).
My company Ceruzzi Properties recently refinanced land underneath the iconic building with a fixed-rate loan of $272 million from Credit Suisse (as reported by the Real Deal.)
We originally purchased the ground in 2016 at 883 Third Avenue in February 2016 for $453 million, while also assuming a $267.5 million loan which originated a decade ago with an above-market interest rate of 6.21 percent. This loan opened for pre-payment this April.
Both the original sale and the refinancing were organized by Holliday Fenoglio Fowler (HFF). According to HFF’s managing director, Christopher Peck, “This transaction is further evidence as to the strength of the debt capital markets when financing trophy-quality real estate for trophy-caliber borrowers… Not only was pricing incredibly strong, but Credit Suisse’s process was exceptional, closing a complex transaction within a very tight timeframe.”
With the Federal Reserve expected to raise interest rates twice this year, getting a fixed rate on the loan was a huge win for Ceruzzi Holdings and our partners. As I told the Wall Street Journal recently, there’s a lot of talk and action about the Fed raising interest rates. Had we done a floating-rate loan we would have definitely been subject to those increases.
It’s a huge win, then, that the refinancing deal remains fixed, avoiding penalties. Along with its partner SMI USA, we nailed down a fixed-rate loan from Credit Suisse at 3.35 percent with a four-year term. SMI USA—a real estate development, investment, and management firm based in New York—is the U.S. subsidiary of Shanghai Municipal Investment.
Ceruzzi Properties has a number of developments in the works, including a high-rise on East 50th St., luxury residences on East 86th, and a mixed-use condo and retail development on the corner of 43rd and Fifth. The Lipstick Building’s unique aesthetic aside, this purchase is the latest smart investment I have a good feeling will be worth more than its weight in makeup.

Ceruzzi’s 803-foot Tower, Expanding Skyward in Midtown East

Louis_Ceruzzi_Skyscraper-1004x675For many, living in a brand-new, sparkling Manhattan skyscraper is the ultimate dream. With Ceruzzi Property’s 64-story tower underway in Midtown, that dream is not long for sleeping. Come 2018, the 803-foot building will be completed, creating opportunities for Manhattanites to claim the swoon-worthy condos of their hearts’ desire.
Foundation work having begun last September, the project is currently in progress at about a dozen stories high. It can be viewed rising skyward between Lexington and Third Avenues in Midtown East. The construction status is the latest exciting development for a project that has evolved plenty since its inception.
Located at 138 East 50th, the site was sold to Ceruzzi Properties by Extell back in 2014. At the time, the lot was slated to become an enormous hotel complete with 53 stories with 764 rooms. Since, the plan has changed, adding height to the project as well as condominiums.
Instead of the 53 stories, it will stand at 64, with 124 spacious apartments averaging over 1700 square feet each. The residential portion will sit above 7,500 square feet of retail, qualifying the property as mixed-use. Mixed-use developments are a relatively new phenomenon in New York City, having achieved popularity starting in the 1970s when the city began giving zoning bonuses for such properties. Though there are some additional costs like extra elevators and added entrances, the diversity of mixed-use buildings are considered healthy for city dwellers as well as visitors.

Louis_Ceruzzi_Midtown_Map

At 64 stories, the skyscraper will be a formidable one. It might have even been among the tallest residential buildings two decades ago, but thanks to the 2000s “supertall boom,” as YIMBY calls it, residential towers between the 700 and 1000 foot range are becoming increasingly common in several Manhattan neighborhoods, Midtown East included.
With the boom in supertall residential buildings, we can also expect added density to the streets. Since foot traffic helps boost local businesses, and thus, the economy, this will benefit the city, but may lead to crowding concerns.
Ceruzzi Properties is contributing to this boom in more ways than one, with another tower slated for construction not far down the road on Fifth Avenue between 43rd and 44th Streets, where an even-taller 71-story building has been planned for some time.
In the meantime, the 50th street tower will continue its ascent. Designed by Pelli Clarke Pelli Architects, it should be a wonder to behold, with lower floors wrapped in a “terra cotta screen wall with integrated louvers,” amenities co-located within the base, and glassy upper floors with staggered setbacks and louvers in the facade.
Residents will enjoy tall ceilings with floor heights starting at 10’6” to 11-2 range in middle levels, and rising to 13’6” on the penthouse floor. Additional perks include on-site parking, swimming pool, a fitness center, and spectacular views.
Construction is expected to finish sometime in 2018, after which condo-lovers’ dreams will be closer than ever to fruition.

The Smart Entrepreneur’s Guide to Taking Risks in Real Estate

drawing-1919080-1920_origYou’ve heard it before, and you’ll hear it again: there is no reward in life without risk. In the sometimes-daunting and always-towering world of real estate, this is certainly true. To get even one property off the ground, you’ll need to take calculated risks. To become enormously successful, you’ll need to bravely forge forward in the face of uncertainty.

I’ve always been a risk-taker. In fact, my decision to pursue real estate was a risk in and of itself. Before entering the real estate industry, I was lawyer to a development firm. In this position I witnessed first hand that, in fact, the grass and money were greener on the other side.

In many “grass is greener” situations, the punchline is that the grass isn’t so green after all once you’ve hopped the fence. Is it a risk to switch industries in hopes of brighter pastures? Inherently. But it’s against my nature not to explore promising opportunities—I needed to take the risk. And I truly believe it’s my drive to take risks that give me a competitive edge.

So here are some pointers on taking calculated risks in real estate, and what making informed leaps of faith can do for your career in this industry.

Educate first, risk later

As said George S. Patton said, “Take calculated risks. That is quite different from being rash.” In other words, risks on a whim should hardly count as risks, period—it is foolish beyond measure to put yourself in a vulnerable situation without cautious vetting and planning first. When an opportunity presents itself, investigate it thoroughly: what are the potential benefits? What are the potential pitfalls? Weigh these factors before making your move.

Smart risk-takers are able to make calculated risks with speed. If you sit on something too long, the opportunity may pass. My advice is to tune out your emotions when making such decisions—fear and greed especially—and pay attention to logic first and foremost. Know what you’re getting into and be prepared to deal with every outcome.

If you can’t lose it, don’t risk it

Many real estate entrepreneurs come from old money, or have established power and connections in some way. This makes it difficult for hungry up-and-comers to level the playing field because, while existing entities can take risks without thought, one risk for an entrepreneur can be the difference between fortune and utter failure.

It’s common wisdom that if you can’t lose something, you shouldn’t risk it. This may seem like a huge barrier to success, but in reality it just means you need to build your tolerance and understand it. Your financial, personal, and business circumstances should all be considered carefully, fortifying these areas to allow for more risk and reward. The stronger your buffer, the more opportunities will come into focus on the horizon.

Seize new markets

When I decided first to move from commercial to residential, then from Connecticut to NYC, some considered the move foolish, and the result of a lack of experience. But here’s the truth: everyone is inexperienced at some point or another, and there is no way to get from one end of the spectrum to another without trying.

The key is paying attention to different markets, discovering openings, and making space for yourself to succeed there. Knowing all about real estate trends is a good place to start—what’s heating up and what’s cooling down; which neighborhoods have deficits and which are experiencing glut.

Hire a great team

All the risk-taking in the world may be for naught if you don’t have a great team to back you up. I like to surround myself with the most intelligent and talented people in the business so that I can be confident in every decision we make as a team.

With great support, I know that my own blind spots (we all have them) will be challenged. We arrive at decisions together, then execute projects together, and provide quality service from start to finish. No man or woman can do it alone. The more trusted advisors you have, the more collective knowledge you have at your disposal.

Find the right partners

Lastly, entrepreneurship in real estate has more to do with strategic partnerships than you might think. You’ll want to look for partners who share your mission and values, or who have something to offer that you don’t, making you a stronger force together—and one more capable of taking risks.

As another example, I’ve partnered with a number of big buyers in Chinese real estate. They have a strong understanding of the condo market in New York City, and tend to have buying power and liquid capital. Strategic partnerships help to accomplish mutual goals, drive profit, and stimulate the economy. A good partner is a source of stability when you take risks, too.

As a risk-taker myself, I’ve seen my fair share of failure and success. But if there’s one piece of advice I can leave prospective entrepreneurs with, it’s that it’s worth it to not just stay comfortable. Mark Zuckerberg may have said it best: “The biggest risk is taking no risks.”

louis ceruzzi world trade center

NYC Architecture: The Three Tallest Buildings in The City

New York City is a place of extravagance. It’s a whirlwind of bigger, better, classier, and more luxurious. Of course, the architecture and real estate in New York City never fails to disappoint in that regard. We are home to some of the tallest buildings in the world, and (I may be biased) some of the most beautiful architecture as well.

Explore some of the tallest buildings our gorgeous city has to offer.

Read More