BY BILLY GRAY

Just when New York’s traditional geographic dividing lines were beginning to seem quaint, Hurricane Sandy made landfall and brought them back to light.

Downtown, which over the years had become harder and harder to distinguish from uptown, was plunged into darkness, sending the relatively young and vaguely creative well above 14th Street nosebleed territory in search of power. Only the Brooklyn side of the Williamsburg Bridge stayed illuminated, a stark metaphor for the borough’s slow transformation into a contender.

But in commercial real estate, boundaries continued to disappear. In January, Condé Nast expanded its 1.05-million-square-foot lease at 1 World Trade Center by 138,773 square feet, helping lower Manhattan shed its stodgy finance-centric reputation and prompting slight panic among the owners of Midtown media canteens like Michael’s.The French advertising giant Havas Group inked a deal in March for 226,000 square feet at 200 Hudson Street, partly thanks to the growing tech presence in Tribeca and Soho’s western fringes. In July, the New York Genome Center and Amerigroup signed 171,000- and 165,029-square-foot leases, prominent instances of the medical and health care boom in Manhattan. (Cornell’s $2 billion graduate science campus will be a capstone on this progress when it opens on Roosevelt Island.)

Jay-Z christened the Barclays Center in September when he kicked off an eight-night residency at the arena, a homecoming for the Brooklyn-born rapper and a victory for Forest City Ratner Companies, which had steered the contentious Atlantic Yards development project through years of local opposition. Next up for Downtown Brooklyn is more than eight million square feet of office, residential and retail space, some of it modular. But for now, Barclays Center is nipping at Madison Square Garden’s heels in the race to be New York’s prime stage.

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BY BILLY GRAY

In one of the biggest real estate stories to break this year, the commercial real estate company Grubb & Ellis filed for bankruptcy in February, listing $150 million in assets and $167 million in debts. The company agreed to sell nearly all of those debts to BGC Partners, the financial brokerage firm headed by Howard Lutnick that entered the real estate fray in 2011 with its acquisition of Newmark Knight Frank.

The melding of Grubb & Ellis’s broad array of corporate clients and financial services with Newmark’s strength in the New York market would create a formidable national powerhouse. But the merger was held up for longer than expected in U.S. Bankruptcy Court as Grubb & Ellis brokers fought against terms that they alleged used commissions owed as incentives to remain with the unified company.

BGC cleared these hurdles and closed on the acquisition in April, leading to the creation of Newmark Grubb Knight Frank. The Commercial Observer spoke to Mr. Lutnick—the chief executive of Cantor Fitzgerald before BGC broke away from it—about NGKF’s big first year, his love for and tussles with brokers, and his company’s future designs on commercial real estate.

The Commercial Observer: How would you assess the performance of Newmark Grubb Knight Frank since the merger?
Mr. Lutnick: The combination of Newmark and Grubb & Ellis has really been—what’s the best way to say it?—empowering. It has Newmark’s tremendous strength on the East Coast. And the depth and breadth of the Grubb franchise coming on top of that has really put us in an extraordinarily strong position. And the merger has gone incredibly, seamlessly well. It was swift, and very successful, including hitting industry margins in its first quarter as a unit.

Despite financial woes that led to its bankruptcy, Grubb & Ellis, like BGC, maintained a solid roster of financial services clients. As NGKF seeks tenants now, how does it balance financial clients with those from other sectors like tech and retail?

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BY BILLY GRAY

“It was intended to be iconic,” MaryAnne Gilmartin said of the Barclays Center’s façade of undulating rusted steel just three months after the wildly controversial arena opened its doors.

But while the arena’s architecture aimed to lodge itself in the public consciousness, the Atlantic Yards development project, of which Barclays is the preening firstborn child, couldn’t have anticipated the discord it would ignite in the Brooklyn neighborhoods it promised to reactivate.Toronto Raptors v Brooklyn NetsMs. Gilmartin is the executive vice president of commercial and residential development at Forest City Ratner Companies. Bruce Ratner, the Forest City chief executive, became the public face of Atlantic Yards as the $4.9 billion, 22-acre project withstood withering scrutiny from its neighbors-to-be, starting with its proposal in 2003.

Barclays Center opened on September 28 with the first of eight sold-out performances by Brooklyn bard Jay-Z. Barbara Streisand, another Kings County native, followed Hova. So did the rechristened Brooklyn Nets. Musicians as schizophrenically diverse as Justin Bieber, Bob Dylan and Rush have played the 18,000-seat complex, making it a rival to Madison Square Garden for the city’s pre-eminent stage.

Meanwhile, the development’s opponents wonder how Bieber Fever and creaky nostalgia tours came to define Atlantic Yards. “It’s an irrelevant distraction,” Daniel Goldstein said of the marquee entertainment reeling fans and dollars into Downtown Brooklyn.

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BY KARSTEN STRAUSS

The Children’s Aid Society has expanded its footprint in Harlem, signing a nine-year, 3,500-square-foot lease at 219 West 135th Street. The lease execution took place on November 30 and the asking price for the property was $65 per square foot.

“We are leasing it to offer some of preventive services which are part of our foster care program,” said Anthony Ramos, director of marketing and communications for the organization. Much larger than its previous location at 69 West 118th Street, the new spot in the five story prewar building owned by New Parque, Inc. will accommodate more staff. “We’re relocating because we recently expanded our program,” said Alirio Guerrero, director of preventive services for the Children’s Aid Society.

With funding from the New York Administration for Children’s Services, the society was able to hire five new staff members for a program to offer services for families that are at risk of being separated and having their children placed into foster care. “That program is up and running, but we’re all cramped in a very small office,” Mr. Guerrero said.

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