Crains New York - May 27, 2013 - (Page 23)

REAL ESTATE DEALS Real estate confab reflects optimism downtown A ttendance at the Global Retail Real Estate Convention in Las Vegas last week rebounded to its highest level since the economic downturn. At least 33,000 guests attended the conference, a bellwether for the health of the retail sector in the city, according to ICSC, the organization that hosts the annual conference.The figure is at least 10% higher than last year’s attendance level, but still far below the record 47,000 in 2007, prior to the market collapse. “Transaction volumes are up, and folks are feeling very positive about the short to medium term,” said Robert Knakal, chairman of brokerage Massey Knakal Realty Services. The conference serves as a prominent platform for landlords and brokers to market available spaces to tenants. For instance, Bradley Mendelson, a broker at Cushman & Wakefield, pitched Toys “R” Us’ 100,000 square feet of space in the heart of Times Square. That multilevel space could become available in 2016 if the toy giant does not renew its lease. The space would be one of the largest, most expensive storefronts in the city up for grabs. Developer Young Woo & Associates, which will develop Manhattan’s Pier 57 into a 400,000-square-foot urban market, was also promoting its project. Seven temporary retailers, housed in refurbished shipping containers, will open there after Memorial Day, said Adam Zucker, an executive at the firm. —daniel geiger Fla. eatery shells out tacos in B’klyn A popular Florida restaurant is branching out north this summer Brooklyn at 339 Adams St. with a New York outpost. Rocco’s Tacos, a restaurant with five locations in South Florida and Orlando, will open its first location outside the Sunshine State in The restaurant inked a 15-year lease in the busy area that is home to Danny Meyer’s Shake Shack and quick-service chain Panera Bread. The 14,500-square-foot space is spread over the ground floor and a lower level. The asking rent averages out to roughly $100 per square foot. Rocco’s Tacos was represented by Jordan Cohn of SCG Retail, a division of the Shopping Center Group. Mr. Cohn said Rocco Mangel, one of the owners and the founder of the restaurant, has had his eye on New York since launching the chain in 2007. “They’ve been looking at sites in Manhattan and Brooklyn,” Mr. Cohn said. Downtown Brooklyn eventually became the eatery’s destination of choice because of the opportunity to capture hungry crowds en route to the Barclays Center and to cash in on the area’s growing popularity with residents from nearby neighborhoods like Boerum Hill and Brooklyn Heights. Muss Development, the owner of 339 Adams St., was represented by Ariel Schuster of Robert K. Futterman and Associates, as well as by in-house rep Ross Spitalnick. —ali elkin Tumblr’s instant millionaires other startups right away.” Yahoo’s billion-dollar New York infusion will help make Silicon Alley a little more like Silicon Valley,where Internet giants have long fed money and talent into startups that then bred more startups in a virtuous circle. About $66 million will go to the company’s employees. That’s an average of around $370,000 per worker, though a handful who were among the first hires will get $1 million-plus payouts, according to research firm PrivCo. Money is not the only reason a big sale or an IPO can be transformative. Last year’s big New York deal, the $689 million purchase of Buddy Media by Salesforce.com, led two Buddy Media employees to launch their own startup. The money from the sale of the social-media marketing juggernaut last June made for a nice bonus, but it wasn’t what prompted them to go off on their own. “Just watching how they could build a business in Manhattan and have a successful exit, that was enough to inspire [me],” said Wesley Barrow, the former director of Eastern sales at Buddy Media. “I was able to take that success story and say, ‘Why can’t I do that?’ ” The example of Nomi Mr. Barrow is now chief revenue officer of Nomi, an online marketing startup on East 21st Street that he launched with another Buddy Media alumnus, Corey Capasso— who had joined Buddy after selling it his own startup, Spinback. The duo, along with Salesforce alumnus Marc Ferrentino,had Nomi up and running by late August. By the end of December,they’d raised $3 million in seed funding. Nomi—which helps brick-andmortar businesses connect their online and offline marketing programs—has 25 employees, a number that will grow to more than 40 by the end of the year, according to Mr. Barrow. Kevin Ryan has also seen firsthand how IPOs and big exits fuel the New York ecosystem. He helped take DoubleClick public in 1998 and steered it to a $1.1 billion sale to private-equity firm Hellman & Friedman in 2005. Around 30 DoubleClick alumni have gone on to become CEOs of other companies or to found startups of their own. Mr.Ryan himself has co-founded five companies since leaving DoubleClick, where he was CEO, in 2005. He is now chairman of Alley Corp., an umbrella corporation for three companies. Exit obsessions Two of those companies, Gilt Groupe and 10Gen, are frequent topics of IPO speculation.The third is Business Insider, a fast-growing news website. YAHOO’S $1.1 BILLION TUMBLR PAYOUT: WHO GOT ALL THAT CASH? Even later VC investors, such as Greylock and Insight Venture Partners David Karp, founder of the blogging site The company’s 178 employees $114M $66M $209M $97M $218M Later VC investor Sequoia Capital Total = $1.1 billion Source: PrivCo estimates $396M Early individual investors, including Next New Networks founder Fred Seibert (left) and Betaworks founder John Borthwick Early VC investors Union Square Ventures (Fred Wilson is a partner) and Spark Capital split this pot. bloomberg news Continued from Page 1 BARE BONES 1293 BROADWAY 1166 SIXTH AVE. 1359 BROADWAY ASKING RENT; TERM: $60 per square foot; long-term lease ASKING RENT; TERM: $46 per square foot; medium-term sublet ASKING RENT; TERM: $40s per square foot; seven years SQUARE FEET: 160,000 SQUARE FEET: 39,100 SQUARE FEET: 10,300 TENANT; REP: ASA College; in-house representation TENANT; REPS: 5W Public Relations; L. Craig Lemle and Nick Zarnin of Studley TENANT; REPS: FLSV Fund Administration Services; Anthony Sciacca and Robert Silver of Newmark Grubb Knight Frank LANDLORD; REP: JEMB Realty Corp.; Bobby Dweck, independent broker BACK STORY: The school, which offers degree programs in fields including accounting and computer programming, will more than double its existing space at Herald Center by moving to the fourth, fifth, sixth and seventh floors in June. SUBLANDLORD; REP: D.E. Shaw & Co.; Roger Griswold of CBRE Group Inc. BACK STORY: The firm, whose clients include Whole Foods, McDonald’s and Evian, moved into the fourth floor of the 1.5 millionsquare-foot tower. Mr. Ryan cautions entrepreneurs against obsessing over an exit strategy. “What we focus on is building the businesses and making them big and profitable,” he said. “Journalists still assume everybody wants to go public, but [the situation] is so far from that.” He added:“It’s like you’re 23 years old and your grandma keeps saying, ‘How come you’re not married?’ ” Ultimately, building a successful industry may be less about giant exits than creating the next behemoth. “You want some businesses to grow and grow and become a force in their own right,” said Mr. Bowles of the Center for an Urban Future. Still, a single exit can have a long ripple effect. Michael Walrath left DoubleClick in 2002 to found ad tech firm Right Media, which Yahoo bought in 2007 for $850 million. He now spends his time nurturing other companies. “The financial windfall is a piece of the puzzle because it gives you flexibility,” Mr. Walrath said. “What’s more important is that you get a sense of how companies are built, how you get them off the ground and scale them. So they become a lot less daunting.” The financial windfall does come in handy, however. With his payout, Mr. Walrath has invested in 60 companies through WGI Group, the early-stage venturecapital firm he co-founded five years ago. He serves as chairman of two of them. What he likes best is working closely with the companies as an adviser. “The more experience you have, the more valuable your input becomes,” he said. Ⅲ LISTEN to a discussion at CrainsNewYork.com/podcasts LANDLORD; REP: Malkin Holdings; in-house representation by Tom Durels BACK STORY: The tax consulting and accounting firm, which already occupies 3,800 feet on the 12th floor, will take additional space on the 10th floor. TREMOR FELT IN NYC TECH IPO MARKET TREMOR VIDEO, an online video advertising network founded in 2005, last week filed to go public. It is one of three New York tech companies to attempt an initial public offering since Facebook’s troubled IPO last year. Liquid Holdings Group, a financial tech company, filed to go public in April, according to Renaissance Capital, which tracks IPOs. Onlinestock photo marketplace Shutterstock raised $77 million in an IPO last October. The firm aims to raise $86 million. It recently ranked No. 5 in a Crain’s list of top IPO candidates among New York tech companies. Others on the list include Gilt Groupe, Yodle and Tumblr—which Yahoo just agreed to purchase for $1.1 billion. The rankings were based on the amount of funds raised. Tremor has raised $116 million in venture-capital funding since its founding. It is banking on a growing market for online video advertising and its position as a leading player in the field. According to its S-1 filing with the Securities and Exchange Commission, Tremor’s revenue grew 17% in 2012, compared with the prior year, to $105.2 million. The company’s net loss in 2012 narrowed to $16.6 million, from $21 million. —MATTHEW FLAMM May 27, 2013 | Crain’s New York Business | 23 http://www.Salesforce.com http://www.CrainsNewYork.com/podcasts

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