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The New York Observer | January 16, 2006

The Bond Street Boys

By Michael Calderone

LAST NOVEMEBER, IAN SCHRAGER AND ABY ROSEN INVITED ABOUT 25 OF MANHATTAN'S TOP LUXURY REAL-ESTATE BROKERS TO DINNER AT THE TRIBECA RESTAURANT, BOULEY..

The evening was arranged to celebrate the completion of a luxurious and much-anticipated apartment at 50 Gramercy Park North, the 23-unit co-op the duo had developed together alongside their gut renovation of the historic Gramercy Park Hotel.

But the gossip over dinner and drinks eventually reached as far south as 40 Bond Street, the flashy duo's next residential project, which broke ground about four weeks ago, Mr. Rosen told The Observer in an interview this week. Officially, the new building's sales office won't open until February, according to a representative for Mr. Schrager, and though brokers have been salivating, renderings have been carefully kept out of the public eye.

A lucky few, however, have seen the early renderings at 2 Lexington Avenue, the same sales office Messrs. Schrager and Rosen are using for the Gramercy development. The success of 50 Gramercy, the anticipation of 40 Bond, and news that the duo is in negotiations to buy the Metropolitan Life building at One Madison Avenue for conversion to luxury apartments, Mr. Schrager and Mr. Rosen have become the dynamic duo of development in Manhattan's posh set.

It's a sensible kind of synergy. Mr. Schrager, the Studio 54 co-founder, socialite and boldface hotelier; Mr. Rosen, the business-like (if stylish) German-born developer, whose company's vast holdings include several modern landmarks, such as Lever House and the Seagram Building.

Messrs. Rosen and Schrager have already gained some experience working together on the two comparatively smaller, high-end projects in Gramercy and Noho. And recent business matters aside, they're friendship is already a couple decades old.

"We go back 20 years," said Mr. Rosen. "I know him from being friends socially here and there."

Here and there could easily mean trendy, dimly lit nightclubs, gallery openings, and private parties behind velvet ropes. But it took Mr. Rosen's ascent, and Mr. Schrager's frustration with the hotel industry, to bring them together as a duo.

Back in early 2001, Mr. Schrager and his development team planned to transform a parking lot next to the Carl Fischer building at Astor Place into a 20-story hotel.

But the hotel industry was not obeying his ambitious agenda, stung especially in Mr. Schrager's downtown stomping grounds by the fall-off in the hotel business in lower Manhattan after Sept. 11.

The two developers, who own neighboring homes in Southampton, "started to work on The Gramercy three or four years ago," according to Mr. Rosen, after Mr. Schrager told him of his desire to branch out into residential development.

In 2003, Mr. Schrager and Mr. Rosen purchased the leasehold for the 123-year-old Gramercy Park Hotel, and they're close to seeing it through to completion. For the condominiums--which range in price from $5 million to $16 million and will reportedly house fashion designer Karl Lagerfeld--occupancy should begin towards late March. The hotel is expected to open in mid-May.

For the project, they hired architect John Pawson, known more for high-end commercial buildings around the world-such as Manhattan's Calvin Klein flagship store-than personal residences.

Mr. Schrager's hotel project was not doing as well. In 2003 he had hired the Swiss design team of Jacques Herzog and Pierre de Meuron, the Pritzker Prize-winning designers of the Prada store in Tokyo and the Tate Modern in London, to transform the lot into the Astor Place Hotel.

Around the same time, Mr. Schrager was having difficulty with another parcel, a vacant lot on Bond Street, which he was attempting to build out as a hotel with Richard Born and Ira Drucker (the duo that later developed the two Richard Meier towers on Perry Street).

That project, too, was doomed.

The Astor Place site was ultimately developed by the Related Companies, with a design by Charles Gwathmey; the building is somewhat ponderously called the Sculpture for Living, and it is an apartment house.

And in 2004, 40 Bond Street Partners--Mr. Schrager and Mr. Rosen--spent a reported $16 million on the Bond Street site, located along a cobblestone street between Lafayette and Bowery.

The team, once again, was to develop apartments there; and Messrs. Herzog and de Meuron were brought into design them.

Mr. Schrager stepped down last July from his position as chief executive of Morgans Hotel Group, which owns several ritzy hotels. (Mr. Schrager still has a stake in the company and a two-year consulting contract).

Some of the specifics of this discreet project-slated for completion in Spring 2007--are trickling out.

In November, the design Web log Triple Mint published a tiny image of something called "Project No. 253. Bond Street Apartment Building," pulled off a Web site maintained by the Harvard University Graduate School of Design. (Eventually, Triple Mint was asked by the university take down the small image).

Mr. Rosen said he expects sales prices to range from about $2,500 to $3,000 per square foot. At that rate, prices for a one bedroom could be around $3 million, with two bedrooms reaching about $5 million. In addition, there are also three bedroom units, penthouses, and the five townhouses (which include separate entrances but all the services of a condominium). Units on higher floors should understandably command more money, with the penthouse units expected to reach as high as $4,000 per square foot, according to one broker. That's Richard Meier territory!

"It is supposed to be a cast-iron building molded out of glass," said broker Leonard Steinberg of Prudential Douglas Elliman, who also publishes a monthly Luxury Letter. "It will be interesting to see how it blends into the neighborhood."

Mr. Steinberg described the floor plans as "stunning, with "elegant, wide rooms," but he admits that the ultra-modern design may not suit everyone.

"The taste is very specific; they'll love it or hate it," said Mr. Steinberg of potential buyers. "The people who read Wallpaper are going to love it. It's very cutting-edge modernist."

"The townhouses have this stairway--they almost reminded me of a James Bond movie," said Mr. Steinberg. "I could see Goldfinger stepping down that stairway."

Mr. Rosen emphasized the other architectural highlights, such as the "glass curtain wall," high ceilings and spacious loft environment.

"You are dealing with extremely detailed bathrooms and kitchens," he said, "and a facade that is a very unique facade--that has almost never been done."

"I think that Ian is going to set the bar in residential development," said Dennis Mangone, a senior vice president at the Corcoran Group. Mr. Mangone is well-versed in Mr. Schrager's stylish career, having gotten into Studio 54 back in the day, and attending both the official (and unofficial) openings for the hotelier's upscale Delano hotel in Miami, in 1995.

"He has an incredible sense of knowing how people want to live, who can live anywhere," said Mr. Mangone. "Ian did this with the hotel business. He didn't recreate Marriott. He searched the world for a really forward design aesthetic."

Obviously, there are big differences between residential development and hotels, with one being a permanent residence for most (pied-a-terre buyers, notwithstanding), and the other a temporary place to crash. Therefore, the quality has to be there for the long haul. Apparently, some buyers are already convinced.

"Six or seven [contracts] are out, and most of them have been signed," said Mr. Rosen of the units already released. "There is a very strong demand. We haven't even started marketing it."

Marketing for both 50 Gramercy and 40 Bond will be handled by the Sunshine Group, the venerable marketing company that is now merged into the Corcoran Group's marketing division.

Despite working in the city's residential market for just a few years, Mr.. Schrager's performance was described in very flattering terms by Louise Sunshine, who claims to have "learned from the best," meaning Donald Trump. An apprentice long before the reality show, Ms. Sunshine broke out on her on in the mid 1980's.

"I think that Ian Schrager is a brilliant residential developer," said Ms. Sunshine. "I have learned so much from him in this short period of time. I'm 65 years old, so for me it is unusual to have this sort of experience, where he is the teacher. Actually, I should be paying him."

The Schrager-Rosen partnership is already charting an ambitious course. A combination of hotel and condominium development projects in Florida, for one.

"That's the concept right now--hotel and condo together," said Mr. Rosen. "We are doing some stuff in Florida; we are working on a couple of things that I don't want to get into."

Then there's the Met Life building. When built almost a century ago, the spindly tower, overlooking Madison Square with its white marble facade and signature clock face, was the city's tallest building.

Last month, the flashy duo were reportedly close to signing a contract to purchase the building, which already changed hands to SL Green Realty just last March for an estimated $918 million. Credit Suisse First Boston, the building's current tenant, will leave by the end of March.

"I don't want to talk to much about it, but it is one of the things we're doing," said Mr. Rosen of the purchase.

"It doesn't get better," he said. "That's what we do. We focus on iconic buildings and make them livable--make them great."

Of course, turning One Madison Avenue into the next hotspot for wealthy residential buyers will be a massive undertaking.

"We don't step on each other's toes," said Mr. Rosen of his partnership with Mr. Schrager. "We let each other work and do what we are good at. Which is the basis of every good partnership."

"Ian is a good trend-setter," he continued. "I am more of an architecture buff and an owner of high-end office buildings, said Mr. Rosen. "I have a very good relationship with lenders and construction people. So it's a good venture."

As close as they expect to be working over the next few years, there are still differences of personal taste, with Mr. Schrager, the perennial downtown personality, looking to move to Bond Street himself.

"He's going to take the penthouse," said Mr. Rosen. "It's a once in a lifetime opportunity. Herzog and de Meuron are not going to do ten buildings in this town."

Mr. Rosen has already spent time living in the neighborhood close to 40 Bond, having first moved to Great Jones Street when he came to the country in 1987. And despite his aesthetic sensibilities--which veer toward contemporary artists like Andy Warhol and Damien Hirst--Mr. Rosen is perfectly content in the traditionally rarified backdrop of the Upper East Side, rather than living side by side with the Art Basel contingent downtown.

"I live in a townhouse," said Mr. Rosen. "I like prewar; I like high ceilings. I like the privacy of it."