Self-described “hedge fund chick” Julie Macklowe’s outfit at the Whitney Museum Gala on Monday, Oct. 19, consisted of the following: a blue and black minidress with textured bodice and leather skirt, otherwise known as Look 17 of Rodarte’s fall ’09 collection; thigh-high Louis Vuitton leather boots with zippers up the sides, identical to the pair worn by Madonna in the brand’s fall campaign; and weighty diamond earrings.

Since Versace was the sponsor of the party, Donatella Versace outfitted the actresses Lindsay Lohan, Taylor Momsen and Mischa Barton in her designs. “They tried to get me to wear their stuff, but it seemed too kiss-ass to wear the sponsor clothes,” Ms. Macklowe told The Observer, adding: “Last season I feel like it was all long ball gowns, and this season I think I will be in all short. It just feels more appropriate, you know?”

Ms. Macklowe, 31, is married to Billy Macklowe, son of real estate developer Harry Macklowe. She has a small, fit frame; blond, shoulder-length hair; and squinty eyes. She speaks loudly and laughs a lot. She does not care about society-appropriate etiquette and generally avoids the straight, evening-appropriate gowns worn that same evening by Debbie Bancroft, Lisa Anastos and Laurie Tisch, from whom she holds herself somewhat apart. In her own words: “If you’re of the socialite set, you have to care. They are somewhat limited to what their fashion sense is, and is it even theirs? I don’t care. I do what I want.”

Born in Aspen and raised in Arizona, Ms. Macklowe, nee Lerner, graduated from the University of Virginia (’99) in three years with three majors: finance, economics and information management. After a few years in private equity and “doing LBOs” (leveraged buyouts), she moved to New York to work for Metropolitan Capital and was set up on a blind date with Mr. Macklowe. She said she was not familiar with his last name.

“Billy says I was very shy and bashful,” said Ms. Macklowe, chatting with The Observer at the Whitney Studio Party, later on. “He’s probably the only person who has ever thought I was shy or bashful!” They married in 2004 at the Metropolitan Club and had a daughter, Zoe, in 2007.

UNTIL THE END of last year, Ms. Macklowe was a portfolio manager for Sigma Capital Management, one of Steven Cohen’s funds, but after the economy fell apart, she was laid off. Macklowe Asset Management (JMACK Capital), born in January, is a seed fund of Millennium Partners, Israel (“Izzy”) Englander’s fund, and is housed at 666 Fifth Avenue. There, Ms. Macklowe manages some $250 million in investments.

“People were shocked that we were launching a fund when the world was coming to an end,” she said. “But it’s very typical of me. Everyone goes one direction, I go the other.”

Fellow socialite-financier Alexandra Lebenthal told The Observer: “While $250 million seems like an enormous amount of money, to a hedge fund it’s nothing. They spend that on lunch. Successful hedge funds are measured in billions of dollars, so $250 million is just not considered that significant. But bear in mind, it’s seed capital, so if she does well, Millennium could add more money and then other people will add more money.”

Ms. Lebenthal also praised Ms. Macklowe’s initiative. “The hedge fund world is a man’s world,” she said. “It is testosterone-laden, and successful women are very few and far between and that is not because they lack the talent.”

Ms. Macklowe is not particularly popular with other benefit-attending wives who (anonymously) whisper that she’s “too loud,” too “out there,” too “strange.” Which—along with the fact that she always buys, never borrows—is exactly what has made her the darling of the fashion set.

“You see all these amazing things on the runway, and very few people have the guts to wear them,” Ms. Macklowe said. “Anyone can wear something that’s safe, but you have to have a certain amount of courage to … like one year I wore a Zac Posen dress to the CFDAs. It was all one piece of yarn in little pieces and I actually hit the worst-dressed list somewhere!”

Among the other things she’s worn: head-to-patent-leather-toe Chanel (tweed suit, thigh-high white boots) to the Juicy Couture store opening last year; the notorious sculpted Balenciaga floral dress to the 2008 Metropolitan Opera premiere gala; the voluminous hot-pink spatter-painted Dolce & Gabbana dress paired with fingerless leather gloves to the Costume Institute gala last year; a pant-less Lady Gaga look with the Rodarte blazer and Chanel combat boots to a New Yorkers for Children gala in April; and a purple and pink Jason Wu ruffled minidress to the opera just last month. Mr. Wu’s dress is the only of these she borrowed, since it had appeared on the runway in his spring 2010 show just a week prior and was not available for purchase.

“SHE REALLY OPERATES her closet like a business,” said Robert Burke, her good friend and the former men’s fashion director of Bergdorf Goodman. “She looks ahead and plans ahead and the way that she approached buying clothes is very strategically done.”

“She’s a sincere risk taker who doesn’t make her bold, unexpected choices simply and cheaply to turn heads, but chooses more from an almost unspoiled girlish glee in clothes,” said his colleague, Bergdorf women’s fashion director Linda Fargo. “Have you seen her full-wattage smile when she’s really decked? Someone should really bottle and brand her. Forget Barbie! Can you imagine buying Julie dolls and playing her video fashion games with that closet, imaginary places to go and business deals to seal?”

Ms. Macklowe stressed that her current shopping habit is an earned pleasure. Before she made her own money, she said, “I was very fashionable, but I was shopping at Contempo Casuals and Wet Seal and Charlotte Russe. You always have the appreciation, but you can’t always afford that stuff when you’re 21 unless you’re of a family that’s giving you money, which mine wasn’t!” (Ms. Macklowe’s father works in residential real estate in Arizona; her mother is a housewife.)

Julie’s husband, Bill ( who after famously bad-mouthing his own father in a Wall Street Journal article, took over leadership of the much-diminished Macklowe family empire in 2008), does not enjoy going to benefits as much and, according to his wife, is “amused” by her fashion choices. “For our fifth anniversary he has banned all benefits,” Ms. Macklowe told The Observer at the Whitney. Mr. Burke is often her date to various social functions.

“I’ve been to their house a number of times for dinner,” he said of the Macklowes. “They really complement one another. They both have a lot of energy. They have definite opinions. They are both very quick and witty.”

And who wears the pants? “Oh, I wouldn’t even get near that one!” he replied. 

On this particular evening at the Whitney, Ms. Macklowe was accompanied by her friend Jen Failla, whom she introduced as a “hedge fund chick, too.”

When asked if she ever raids her friend’s wardrobe, Ms. Failla, who was wearing a more conventional Dolce & Gabbana gown, said, “Well, I could maybe wear her tops, but not her bottoms. They’re a little Shakira.” (Shakira was, in fact, also a guest that evening.)

The Observer told Ms. Macklowe that given the invitation, we would gladly borrow a few pieces. “Well, you’re little more badass,” Ms. Macklowe said.

“Hey, I’m badass, too!” Ms. Failla piped up, seemingly not wanting to come off prudish.

“Well, she has an image to portray,” Ms. Macklowe said. “I don’t.”

ialeksander@observer.com

Billy Macklowe, the son of real estate great Harry Macklowe—who, in one of the boom's great gambles, famously bought a $7 billion office portfolio only to have to give much of it back to the bank in the throes of the recession, and to sell the GM Building to boot—has officially left his dad's company to form his own firm, called William Macklowe Company.

And he's bringing 12 of his dad's former employees with him.

The younger Macklowe, who famously dissed his struggling dad in the pages of the Wall Street Journal in 2008, was named chairman and CEO of Harry's company, Macklowe Properties, in June of that year. But that move apparently didn't give him the independence he so craved.

Today, Billy's publicist at Rubenstein sent out the following release.

WILLIAM (BILLY) MACKLOWE OFFICIALLY LAUNCHES
HIS OWN COMPANY; ANNOUNCES SUCCESSFUL
REFINANCING OF 400 MADISON AVENUE AND 610 BROADWAY

New York, NY... Real estate developer and investor William S. (Billy) Macklowe has officially launched his new venture, William Macklowe Company (WMC).

Mr. Macklowe and a team of a dozen professionals that joined him from his former company, Macklowe Properties, have established WMC's headquarters on the entire 28th floor at 126 East 56th Street, where they will focus on acquisitions, strategic lending, real estate correlated investments and portfolio acquisitions, both in and outside of New York City. Additionally, WMC will continue management of its own portfolio and will pursue select third-party management assignments.

In an auspicious start to his new business, Mr. Macklowe also announced that he has successfully refinanced two portfolio properties - - the 22-story office building at 400 Madison
Avenue (with $66.5 million in refinancing from Metropolitan Life Insurance Company and Malkin Strategic Capital) and the landmark office/retail building at 610 Broadway in Soho (with a $43 million first mortgage from Eurohypo).
(more)
"We're excited about our business plan and the broad platform we've developed," stated the 42-year-old Macklowe, the company's Chief Executive Officer. "It allows us to be opportunistic in our investment strategy, continuing to use our strengths in both traditional office and residential deals and complex transactions where our broad and unique experience will add significant value."

"Not only will our buildings will be run and operated in the Macklowe tradition, which has long been recognized for exemplifying the highest management standards of our industry, but we are also looking forward to joining with institutional and joint venture partners in new acquisitions and development opportunities where the creative approaches, extensive building experience and diverse capabilities of our platform can help achieve a project's full potential."

WMC's nucleus of seasoned real estate specialists includes Chief Operating Officer Jason Grebin, Managing Director of Finance & Acquisitions Noah Leonard, Executive Vice President of Management Services Jim Migliore and Senior Vice President of Commercial Leasing Ken Dillon.

Respected for his broad real estate expertise, particularly in development, acquisitions, leasing and finance, the younger Mr. Macklowe joined his father, Harry, at Macklowe Properties in 1993. He assumed the presidency of that company in 2002 and took over as Chairman & CEO in 2008. He left Macklowe Properties in July of 2010 to launch WMC.
# # #

drubinstein@observer.com 

William Macklowe rubbed the bridge of his nose and said he was suffering from a sinus headache. It was the first sign of human frailty he'd allowed during the interview, and the interview was almost over.

The nose where he pressed his fingers was aquiline, like the beak of a barn owl. Below, his thin line of a mouth seemed hard-pressed to exhibit anything but irritation. For a man as fastidious as Mr. Macklowe, the ordeal of the past few years--an ordeal that laid low his and his father's business, an ordeal that made his family the poster child of the New York real estate bubble, an ordeal that still elicits invasive questions from intrusive reporters--must seem like medieval torture. Every negative blog post a turn of the rack.

You're just really seeking to move past all of that?

But all of that is over.

That's true. But it still informs our activities. ...

And that will show itself as I move forward.

William (Billy) Macklowe, 42, was born to a father whose immersion in New York real estate would come to dominate his life.

"My dad was less the throw-the-football-around kind of guy and more the let's-walk-building-sites-together," he told Men's Vogue in 2008.

An N.Y.U. grad with a degree in humanities, Mr. Macklowe joined the family firm in 1992. By then, his father, Harry, was an outsize figure in New York City, known as a mercurial, bare-knuckled genius. He started his career as a broker in the '60s, ultimately turning to development and amassing a fortune. He gained notoriety in 1985 when, under cover of night, his development team illegally tore down two Times Square SROs to make way for a new hotel. He was later fined $2 million. Then, like so many others, Harry Macklowe was felled by the real estate recession of the late '80s-early '90s.  

With Billy at his side, Harry quickly rebuilt his fortune. By 2003, he had won the industry's most prized trophy--the General Motors Building at the southeast corner of Central Park.

He solidified his reputation as a real estate virtuoso, the man who built Riverbank West and remade 340 Madison Avenue; the man who would go on to reopen the GM Building plaza to the street and help Apple build the now famous glass cube at the tower's base.

"It's not like Billy can easily replace his development savvy," said Michael Fascitelli, the president and CEO of Vornado, a real estate investment trust, and a longtime business associate of both men. "Harry was really one of a kind."

Yet if Harry was the creative genius, Billy seemed to pride himself on serving as his more practical foil.

"I've spent a considerable amount of time institutionalizing our business," he told Men's Vogue.

"I always thought he brought some stability to Harry's wildness," said a real estate executive who asked to remain anonymous so as not to endanger his relationship with the father and son.

Billy Macklowe also focused his energies on leasing and became a respected negotiator and dealmaker. Thomas Fuerth, an attorney who represented a Christian Scientist church in negotiations with Mr. Macklowe over the redevelopment of 340 Madison Avenue, remembers him as "very knowledgeable."

"He's a good negotiator," Mr. Fuerth said. "Sophisticated, understood the issues. I found it very enjoyable dealing with Billy."

Mitchell Konsker, a broker at Cushman & Wakefield who has helped Mr. Macklowe lease 140 East 45th Street and 340 Madison Avenue, among others, has been similarly impressed. "He is a dealmaker," Mr. Konsker said. "He makes the tenant feel at home. He gives the level of service you would expect from a first-class property. He treats the brokerage community fairly, but he is a very tough negotiator."

Nevertheless, there is an impressive amount of grousing about Mr. Macklowe in the clubby world of Big Real Estate, all of it off the record, lest brokers damage their standing with a family still regarded as powerful. If they're to be believed, Mr. Macklowe has the unfortunate habit of talking down to those he considers beneath him.

"Billy Macklowe is a guy who woke up on third base and thinks he hit a triple," said one broker. 

"He started on third base and he thinks he hit a home run," said another broker separately.

Said a third, "He was always a very arrogant young guy."

"He was really mean to people when they were on the top of the world, and unfortunately that's what people are remembering right now," said yet another leasing broker. "But at the end of the day, he's a really talented guy with a high aesthetic. He's got great taste."

When asked about his reputation for meanness, Mr. Macklowe said, "I've never heard that."

So tell me about cooking.

Why?

I don't know. I'm just trying to get you to open up a little bit. You're so tightly coiled.

No, I'm not tightly coiled at all. So much has been written about the past and all that, it's just not an area that I really wish to comment on.

The past that he was referring to began in 2007, when Mr. Macklowe and his father embarked on one of the most ill-fated real estate ventures of the modern era.

In 2007, Stephen Schwarzman's Blackstone Group bested Vornado Realty Trust and bought Sam Zell's Equity Office Properties Trust for $39 billion. The portfolio included some of Manhattan's finest cloudbusters, from the 39-story Plaza district tower at 540 Madison Avenue, catering to high-end boutique firms, to Worldwide Plaza at 825 Eighth Avenue, which housed high-powered tenants like Cravath, Swaine & Moore.

Blackstone, attuned to the roaring market, proceeded to sell off some of its new acquisitions. In a rapid-fire transaction that took place over 10 business days, Blackstone flipped seven midtown skyscrapers to the Macklowes for $7 billion. The family's footprint doubled to more than 10 million square feet. This being the era of overleverage, the family put only $50 million down, using the GM Building and personal assets as collateral, and financing the transaction with short-term loans from Deutsche Bank and Fortress Investment Group.

That wouldn't have been a problem if the real estate market had continued to soar, untethered by any relation to reality. But it didn't. The subprime mortgage crisis and subsequent collapse of Lehman Brothers spread fear in the New York real estate market. Transactions soon ground to a halt, property values fell off a cliff, credit markets withered. The Macklowes were unable to refinance that short-term debt, and they were forced to sell off the seven trophy towers and the GM Building at distressed prices. Billy Macklowe publicly spearheaded the dismantling of the empire. It was one of the most spectacular collapses the New York market had ever seen.

At the time, some people in the real estate community faulted Deutsche Bank for playing hardball with the Macklowes, rather than, like countless other banks, renegotiating and extending the loans until the economy improved.

"Yes, Deutsche Bank should have rolled with it," Billy Macklowe said. "They should have held out for the market to return."

But they didn't, and the fire sale--and recriminations--began. On May 27, 2008, an article in The Wall Street Journal, clearly written with the cooperation of the younger Macklowe, detailed the personal impact of the family's real estate woes, and seemed to place blame for the debacle squarely on his father's shoulders.

"William Macklowe blames his father for making numerous mistakes that led the company to the brink," read the article. "That deal proved to be fateful largely because the elder Mr. Macklowe, 70 years old, personally guaranteed a $1.2 billion loan from Fortress Investment Group.

"The elder Mr. Macklowe also resisted his son's efforts to quickly reduce their risk. 'The issue was my father seeing the victory of the deal as closing of the transaction. I saw victory as exiting the transaction,' William Macklowe says."

Two weeks later, Billy Macklowe was named chairman and CEO of his father's firm. Harry was bumped to chairman emeritus.

Understandably, Billy doesn't like to talk about that time. He doesn't like to discuss his role in the purchase of the seven-building portfolio. Nor does he like to discuss the Journal piece.

You've certainly sought to draw a distinction between yourself and your father, be it in the infamous Wall Street Journal article ...

You know what, just, I don't know what you're talking about.

No?

I think the infamous Wall Street Journal article of which you are speaking is something that happened several years ago, in the past. And I kind of sit here today very optimistic and expectant about what the future holds. And I think that how we will invest going forward will show what lessons we learned in the past. Everything that happens, lessons are learned from positive experiences, lessons are learned from negative experiences. And it's the ability to absorb that, and ultimately put that into your investment. ... That's how we seek to move forward.

Certainly, Mr. Macklowe, who was barely 40 when he began untangling his family empire, has endured something of a trial by fire. And he's widely credited with doing so with aplomb. "He handled it with poise and grace," Mr. Fascitelli of Vornado said. "He tried like hell to play that hand out the best he could."

"He's not a kid, Billy, he's an adult, but he certainly added a number of years of experience [during that period]," Mr. Fascitelli added. "He grew up quick."

On July 26, Billy Macklowe announced he was starting his own firm. It would be called William Macklowe Company.

To enter his new offices, on the 28th floor of Tower 56--the boutique skyscraper that his family sold in distress in the summer of 2008 for $158 million--is to emerge into a blindingly white space that bespeaks elegance and power.

Mr. Macklowe reigns over his new venture from a corner office in the rear, complete with panoramic views of the Upper East Side of Manhattan. On the bookshelf to the right of the door sits a dodo bird figurine. On the base of the figurine is the inscription, "Sam Zell 2009, Survival of the fittest."

Earlier this year, Mr. Zell's Equity Residential agreed to buy three Manhattan apartment towers from Macklowe Properties--the firm founded by Harry--for $475 million. Billy Macklowe, as chairman and CEO of that firm, negotiated the deal.

"I thought he was straight. I thought he was very pleasant. I thought he was very direct. I would like to think those are characteristic that would describe me," Mr. Zell told The Observer. "It was a terrific experience and I would do it again."

That morning, Mr. Macklowe, trim and compact, wore a gray suit, a lavender tie and a large, flat-faced IWC watch.

When asked about the relationship between his father's firm--still in existence--and his own, Mr. Macklowe said, "We have our respective economic interests and shared assets, but the old company has their business and we have ours."

Those shared properties include 400 Madison Avenue, 610 Broadway and other, smaller assets, which are "irrelevant." Mr. Macklowe said the development of the Drake Hotel site, on Park Avenue, between 56th and 57th streets, falls firmly in his father's court.

Now, Mr. Macklowe's firm is focused on four areas: what he calls "pure-play real estate," referring to the buying and selling and operating of properties; strategic lending opportunities; the trade in real estate securities; and real-estate-correlated investments. In contrast to his father, development does not seem a primary interest of Billy Macklowe's. Presumably like his father, resuscitating the family name is. (Harry Macklowe, through a spokesman, declined to comment for this article.)

Mr. Zell says he would happily work with Mr. Macklowe again. Fortress, one of the Macklowes' aforementioned short-term lenders, has expressed the same sentiment. Real estate insiders--even one of those grousing brokers--believe Billy Macklowe has the smarts, name recognition and real estate savvy to go far in the business. On his own.

"This situation wasn't easy to go through, both from a real estate standpoint and from a family standpoint," Mr. Fascitelli said. "The separation, breaking up and doing his own thing was probably invigorating for him."

The next upswing in real estate--and surely there will be one at some point in the next decade--should prove that theory out. 

As Mr. Zell put it, "All of us who are dealmakers live and die by the sword."

drubinstein@observer.com

Julie Macklowe, fashion maven, hedge fund manager, and wife of real estate macher Billy Macklowe, is finally following her passion. 

Trade mag Hedge Fund Alert reports that Ms. Macklowe (profiled by Irina Aleksander in the Observer last year) is ditching the hedge fund business for fashion: "Specifically, she plans to start a fashion-related company and make seed investments in other fashion businesses."

Ms. Macklowe, wife of Billy Macklowe (profiled in the Observer last week) and daughter-in-law to Harry Macklowe, is known for her love of fashion. As she told Irina:

"You see all these amazing things on the runway, and very few people have the guts to wear them," Ms. Macklowe said. "Anyone can wear something that's safe, but you have to have a certain amount of courage to ... like one year I wore a Zac Posen dress to the CFDAs. It was all one piece of yarn in little pieces and I actually hit the worst-dressed list somewhere!"

Back in the fall, The Observer profiled development scion William Macklowe as he stepped out on his own. His father, Harry, along with Billy, had lost much of the Macklowe empire in the bursting of the real estate bubble, and parting ways seemed best. He launched the William Macklowe Company last year. "So much has been written about the past and all that, it's just not an area that I really wish to comment on," Macklowe told The Observer in September.

And so it goes.

Macklowe, fils, is preparing for his first major purchase, according to The Journal, beating out 20 other bidders for 636 Avenue of the Americas. The price is $45.2 million, more than 50 percent higher the $29 million paid in 2004. This is in part because a limited supply of sales is driving up prices, The Journal reports, but Macklowe also said he sees an opportunity to upgrade the building and thus charge more in rent.

Macklowe told The Journal he is at work on at least seven other deals, many in line with his company's interest in distressed assets--an ironic approach, given that Deutsche Bank looked at the old Macklowe empire much the same way when it refused to negotiate with the family on its over-leveraged properties, and instead decided for foreclose on them.

mchaban@observer.com

Only two months after their defection from Cushman & Wakefield, the powerhouse brokerage team at Jones Lang LaSalle led by Mitchell Konsker announced this week that they had snagged leasing duties for William Macklowe's 636 Avenue of the Americas office building.

Mr. Konsker, who has assisted with leasing at many of Mr. Macklowe's other buildings, including 140 East 45^th Street and 340 Madison Avenue, will be overseeing the assignment alongside longtime partner Matthew Astrachan, vice president Jonathan Tootell and associate Matthew Ginberg.

Partnering with ING Clarion Partners, Mr. Macklowe has already begun a repositioning of the 90,000-square-foot building that will include restoration of the façade's historical architecture. When the renovations are complete, Mr. Konsker said, the Flatiron District building will stand as one of the city's most vaunted boutique office offerings.

"Ownership is committed to making a substantial investment in 636 Avenue of the Americas," he said. "The building will offer a tremendous opportunity for tenants looking for above-standard ceiling heights and creative space as well as the prominence of 13,000-square-foot full floors in a modern office building."

jsederstrom@observer.com

Thick black slabs of plywood encase what some call North America's most valuable development site. The location of the onetime Drake Hotel, now a rubble-strewn yard at Park Avenue and 56th Street, is literally a black box.

A black box to everyone, that is, except Harry Macklowe. Barely two years after his fortune was nearly wiped out by an ill-fated $7 billion, seven-skyscraper spree, the litigious genius-just into his eighth decade, with long jowls and a beakish nose-is the surprising developer behind ambitious plans for a possible 70-story condo tower with three stories of luxury retail.

"Harry is a force of nature," said Woody Heller, a top broker with Studley. "He is a man in perpetual motion. He has one of the most creative minds I have ever known."

The golden shadow behind Mr. Macklowe is CIM Group, the Los Angeles-based owner of thousands of apartments nationwide, who bought the distressed site in early 2010 from Deutsche Bank in a $305 million all-cash buy.

"It is one of the most brilliant deals," said Mr. Heller, the sole broker on the sale, "that CIM or Macklowe will have done."

Both partners—who, according to a source with knowledge of the negotiations, have a money partner-developer relationship—disdain media attention and have said nothing about their plans. But, recently, an orange crane appeared in the northwest corner and workers began dismantling an adjoining townhouse on 57th Street. In March, CIM secured a modest $30 million loan, and on Friday The Observer reported that the developers had filed preliminary plans with the Department of Buildings.

That is to say: The stage is set, the characters are in place and the curtain is about to rise on the first act of a new development boom in New York City. And perhaps the biggest plot twist of all: Harry Macklowe is once again a star.

IN 2006, HARRY Macklowe had just completed a peculiar glass cube in front of his GM Building on Fifth Avenue. It would become Apple's new cathedral to high-tech consumerism and one of the world's most profitable retail locations. Banks were willing to lend him money for almost anything he wanted.

What he really wanted, though, was the Drake, a faded Gilded Age hotel set at the inflection point of the city's best retail, office and residential areas. In early 2007, he dropped $418 million and amassed $543 million in loans on buying the site, at 440 Park Avenue. Despite the staggering economics, the deal went smoothly.

"I think that he wanted that very badly and it was a time when financing was not a problem," said one person. "Deutsche Bank was pretty anxious to provide financing to him for anything he did."

Mr. Macklowe originally envisioned a hotel-condo tower, angled at the corner of Park Avenue and 57th Street, sources say, with a Nordstrom's. But like the luxury office tower he built at 510 Madison-whose gestational years as a Setai hotel explain the presence of a swimming pool-his vision for the Drake development has evolved.

He razed the former hotel to the ground, but before he could begin building, in November 2007, Macklowe Properties defaulted on the loan. Unlike many lenders this last recession, Deutsche Bank played hardball and sued its borrower in August 2008. Like a spurned lover, Mr. Macklowe responded in a legal brief that the lender "strung Macklowe Properties along until Deutsche Bank got what it wanted, then refused to honor its commitments-benefiting handsomely from its willfully dishonest, deceptive, bad faith and fraudulent conduct at Macklowe Properties' expense."

Mr. Macklowe's subsequent decline would mesmerize an industry. He started his career as a broker in the '60s and first amassed a fortune as a developer in the '80s, also garnering a reputation as a bare-knuckled player. He gained particular notoriety in 1985, when his development team, under cover of darkness, illegally tore down two Times Square residential buildings to make way for a new hotel. His fortunes dipped during the recession of the early '90s and he, along with his son Billy, built the company back up by 2003—most famously in 2007 by dropping $7 billion to buy seven skyscrapers from Blackstone, using only $50 million of their own money.

By February 2008, a $6.4 billion tab came due. Mr. Macklowe would lose almost everything-including the GM Building and his working relationship with son, who split with him in May 2008 and went on to form his own firm.

The elder Macklowe continued to search for a savior for the Drake site, but few developers in the city had cash to spend on a pricey development in that first bitterly cold winter of the recession. CIM appeared out of nowhere in January 2010 and struck a deal to buy the site that would keep Mr. Macklowe involved. It was the West Coast apartment owner's first New York City buy.

Mr. Heller, who arranged the deal, declined to comment on the specifics, but he said it was the most complex deal he has ever worked on. "They will be fabulously successful together."

CIM, meanwhile, has emerged seemingly from nowhere to become one of the most prolific buyers of troubled luxury property in the city, including William Beaver House, 11 Madison Avenue and the Trump Soho. Still, the West Coast newcomers have said almost nothing about the Drake site.

"It is inarguably the best development site in North America," said Eric Anton, a top broker at Eastern Consolidated who has not been involved in the site. "But they need to get going. Time kills all deals."

AN HOUR AFTER dawn on Monday morning, the 56th Street gate to the Drake site was wide open, and the rubble-strewn lot was eerily abandoned. The Observer strolled past the "Hard Hats Only" sign and felt the crunch of crushed red bricks and discarded soda bottles beneath our feet.

The only sound came from bricks raining down over the northwest corner, falling at the rate of one every 10 seconds from a townhouse being dismantled at 40 East 57th Street. Around the corner, on East 57th Street, workers were rolling out the guts of several townhouses in large gray garbage bins. Only 42 East 57th, a townhouse belonging to the family of Harrods owner Mohammed al-Fayed, which has thus far refused to sell, is still fully intact as is the townhouse at 48 East 57th (the developers can move ahead with the tower regardless of townhouse holdouts, a source said).

While the final stages of destruction are noisily under way, plans have been quietly drawn up to build a condo tower with three floors targeted at luxury retailers and perhaps a hotel in between-strikingly similar to what Mr. Macklowe wanted all along. The building could reach as high as 70 stories, and "it will have extraordinary views," one person said.

That's all anyone knows or will reveal. CIM flatly declined interview requests-as it has with all local media suitors (it has also, we should note, publicly downplayed Mr. Macklowe's role). Mr. Macklowe's assistant also greeted us icily. "Oh," she said, "he is not commenting on that."

With most of the details a secret, faith in the project rests squarely with Macklowe. "When I take Harry Macklowe on a property tour," Mr. Heller said, "I can't keep track of the number of concepts that pass through his mind. I can barely keep up with his eye movement."

Stirrings at the Drake site mark one of the earliest signs of a new development boom in Manhattan as a whole. Construction has started on Extell's 70-story hotel/condo development on 57th Street. Boston Properties is on the cusp of signing the major office lease it needs to move forward with a $1 billion office tower at Eighth Avenue and 55th Street. Durst is expected to break ground by the end of the year on a $350 million apartment tower just south of Herald Square. Most recently, Texas-based Hines Interests is rumored to be moving forward with construction of a glass needle for the MoMA at 53 West 53rd Street.

This is more than enough to rally an industry of optimists. "We've done more development sites in the last 10 or 12 months than we ever would have thought," said Eastern Consolidated CEO Peter Hauspurg, who said he's worked on brokering trades of hotel development sites especially. "It is remarkable in Manhattan. We're marketing a site on Bryant Park to build a 225,000-square-foot hotel and getting interest that is reminiscent of 2007."

"We are witnessing a renewed vigor for solid, well-located development sites from developers and investors alike," said Eastdil Secured's Douglas Harmon.

Nonetheless, an ultra-luxurious condo tower wedged amid glaring black office towers, with a huge retail space once intended for a highbrow British department store, seems like it belongs not in these chastened post-recession days but in ones 36 or so months back. The residential real estate market is recovering fitfully, and job growth remains sluggish amid the usual litany of industry concerns: interest rates, financing, the Obama administration.

Still, the curtain is up with Mr. Macklowe's moves at the Drake. And we've seen this play before.

"Distressed," Mr. Heller said, "is a word we're going to retire from the current lexicon in short order."

lkusisto@observer.com

The Friars Club, once a den of Borscht Belt comedians, is more than the site of legendary comedy roasts—it's home to the National Realty Club’s fortnightly real estate industry events. But now the club, at 57 East 55th Street, could be tied to the proverbial train tracks thanks to the Long Island Rail Road’s Eastside access project.

Planned construction for a ventilation building on East 55^th Street, between Madison and Park avenues, will not only disrupt traffic (while also creating noise, dirt and dust), but potentially threaten the 100-year old building’s structural fortitude, said Friars Club lawyers.

“We are very concerned about the safety of the structure, and with being able to do business there,” said Sid Davidoff, partner at Davidoff, Malito and Hutcher LLP.

Mr. Davidoff said the club and the MTA have been in talks over how the construction will affect his client since July. The MTA claims the extension of the Long Island Railroad to Grand Central will shave 40 minutes off tens of thousands of straphangers’ commutes when all is said and done.

The National Realty Club, a 65-year old organization, has had to move before—its last venue, the Williams Club, shuttered two years ago and sent its alumni to dine at the Princeton Club. Membership chairman Adam Marsh said that they’ve already begun to research new options, but that the Friars Club will be hard to replace.

“People love it,” said Mr. Marsh. “Our main concern is the excessive noise. It will be hard to have the lunch that we do.”

The Club has only been at the Friars Club for two years. He added that many real estate owners are members of the Friars Club.

“Senior management kept us out of the loop about what was going on,” said Mr. Marsh. “So you can imagine our concern.”

The five-floor townhouse where real estate figures from Billy Macklowe to Darcy Stacom have helmed luncheons, is not only old and storied, it retains many of its original stained-glass windows, which were imported from Europe, and has many delicate fixtures, according to the lawyers.

Davidoff, Malito and Hutcher has retained an undisclosed engineering firm to study the structural viability of the English Renaissance-style townhouse. They will share data with the MTA, Mr. Davidoff said.

What’s the alternative to construction on the historic site? Anywhere else on the eastside that already has construction going on, said Mr. Davidoff. “They should consider those locations, and have much less impact on this thoroughfare,” he said of East 55^th Street.

Meanwhile, the MTA said that the construction is not especially threatening to the building. “As we always do, in all of our large construction projects, we will closely monitor the building to ensure that it is not damaged,” said Aaron Donovan, a spokesperson for the MTA.—Guelda Voien

C. Wonder, the preppy apparel and accessories retailer launched last year by designer Tory Burch’s ex husband, Christopher Burch, has signed on for a space at Time Warner Center, according to sources familiar with the deal.

The store, which opened another Manhattan store last October in Soho, will take about half of the roughly 15,000 square feet formerly occupied by the now-defunct bookstore chain Borders on the retail complex’s second floor.

Time Warner Center. (Courtesy Property Shark)

In a review of C. Wonder’s Soho location in recent months, The New York Times opined whether the company’s line of clothing and home decor items was an homage to Ms. Burch’s aesthetic or an attempt to steal her lunch. Like Ms. Burch, the company’s style exudes the uppercrust but is priced for the masses. Even C. Wonder’s logo bears a slight resemblance to Ms. Burch’s iconic medallion, which adorns ballet flats the world over.

Mr. and Ms. Burch divorced in 2006. Before Mr. Burch, Tory, whose good looks and blond hair also made her a popular face among high society in the city, was married to the real estate investor Billy Macklowe.

A spokeswoman for C. Wonder wouldn’t comment on the deal at Time Warner.

H&M is rumored to be in talks for the other half of the Borders space. A spokeswoman at the company wouldn’t comment.

“We’re doing very well here with ten stores from Soho to Harlem,” said the H&M spokeswoman, Nicole Christie. “We plan to continue our expansion. We are planning to open more stores for this year, and that’s not a secret.”

Borders declared bankruptcy last year, leaving vacant several large stores in Manhattan, many of which were quickly filled. As The Commercial Observer exclusively reported last year, the drug store chain Walgreens took a 20,000-square-foot space that the book store formerly occupied at 100 Broadway.

Dgeiger@observer.com

With his clean-cut suits and boyish good looks, it’s hard to imagine Paul Amrich laboring under the summer sun like a grunt, lugging around materials on a construction site.

But when he was a high school and college student years ago, that’s just what he spent his breaks doing, courtesy of his father, a construction engineer who was able to get Mr. Amrich work on sites he was consulting on.

“You name it, I carted brick and concrete to the bricklayers, lugged sheetrock,” said Mr. Amrich. “It kind of teaches you the value of education. It makes you appreciate the opportunity to be in a city like New York and to be able to walk in and work at a good company. I’m psyched every day.”

Paul Amrich. (Photo courtesy Katie Khouri)

Earlier this year, Mr. Amrich was named a vice chairman at CBRE, one of the highest titles a brokerage executive can achieve at the company. At 39, Mr. Amrich is also one of the youngest executives in the firm’s history to receive such a lofty promotion, which requires yearly commission levels most brokers never even come close to consistently earning. Yet those who know Mr. Amrich are not surprised by his early success.

Mr. Amrich has taken a workmanlike approach to the business that even rivals find hard to begrudge him for.

Take a recent deal at 444 Madison Avenue for example, one of several high-end boutique buildings that Mr. Amrich has built a lucrative business representing. An executive at a competing brokerage firm recounted how he was representing an investment firm interested in taking space at the property. The requirement was for only about 5,500 square feet, a modest deal, and the tenant needed to move fast, requesting to see the availabilities at the property immediately. Late on a recent Friday afternoon, the broker showed up at the building with the tenant in tow, expecting to meet one of Mr. Amrich’s underlings for the tour. Instead, Mr. Amrich was there himself ready to explain the property’s virtues.

“We were there for a small space at a time when most top guys have left the office and already are on their way to the Hamptons,” the
broker recalled. “I was surprised to see Paul. I got the sense from that that he’s just willing to work harder than the next guy.”
Impressed by the presentation the tenant signed on days later.

Mr. Amrich’s hands-on approach stems from important early observations of brokerage. As a broker starting out, he noticed that though top leasing executives might have the business development skills to secure impressive assignments with landlords, they often lost touch by handing them off to staff in order to pursue more work on other buildings.

He vowed not to make the same mistake when he too rose through the ranks and, in fact, took advantage of that shortcoming in competitors.
In the early 2000s, working as a junior for the top leasing executive Tara Stacom, Mr. Amrich dreamed of not just servicing her accounts but winning business. He had noticed 1370 Avenue of the America despite the star-studded team overseeing its leasing. Mr. Amrich suspected that despite the big names, there were few lower-level brokers to do the grunt work of marketing the space and tirelessly taking tenants on showings.

He pitched the landlord, Normandy Real Estate Partners, and won the 350,000-plus-square-foot property, a huge victory for a broker so young. He was undaunted by the surprise win. To hear Mr. Amrich explain it, there is never anything too complicated in a leasing assignment, just fundamentals to which he diligently adheres.

“It was about hitting the marketplace the right way,” Mr. Amrich explained. “You have to be in the trenches and get all over it. It was simple; it wasn’t being presented with good photos, with the right website. Some of those details were just kind of weak and we changed that stuff and crushed it.”

Within months Mr. Amrich and colleagues brought the property to near full occupancy. Having met its leasing goals, Normandy was able to sell the building. But the company, impressed with Mr. Amrich, wanted to show him its gratitude.

“In the sale they arranged, they remained on as a manager of the asset and they kept our team in place as leasing agents,” Mr. Amrich recounted.

The experience cemented another tenet: Do well by clients and they’re likely to remain loyal.

It was around this time that Mr. Amrich was pitching agency work in partnership with Cushman & Wakefield’s Joshua Kuriloff for 2 Grand Central Tower, a property then owned by the father-and-son real estate investment team of Harry and Billy Macklowe. The bank JPMorgan Chase had recently left the property, leaving a huge hole of vacancy about 400,000 square feet in size. Billy Macklowe, who many brokers have called an intense landlord who would work agents mercilessly for results, hired the pair after previous teams failed to find takers for the opening. Just months in, Mr. Amrich found a government tenant to take 80,000 square feet at the base of the tower, what had been some of the hardest vacant space to lease. From 2003 to 2006, the team steadily followed up on their early success and filled the remaining space.

Mr. Amrich had made an impression on the Macklowes. Soon after, Harry invited him to play golf—Mr. Amrich is an accomplished player who went to college on a golf scholarship—in the Hamptons. At dinner afterward, Mr. Amrich remembers Mr. Macklowe scribbling flootplates on the back of a dinner napkin with a pen: a boutique office tower that would cater to high-end financial firms and charge top dollar rents. Mr. Amrich didn’t know it at the time, but Mr. Macklowe was sharing his prototype vision for what would be 510 Madison Avenue.

“I told him, I could lease that for him,” Mr. Amrich said.

It was around 2006 and the Manhattan leasing market was roaring.

Though Mr. Amrich said he remained close at that time with senior-level brokers at C&W whom he worked with, including Ms. Stacom, he was also searching for a career change in order to help shift from being regarded as a top junior-level broker to a team leader in his own right. His potential was no secret to recruiters on the prowl for new talent and soon CBRE, the city’s largest brokerage company, made him an offer to join the company. Mr. Amrich was hired by the firm and took with him an impressive client list and growing portfolio of agency assignments.

Mr. Macklowe’s 510 Madison Avenue was by far his most prominent agency, however, a huge vote of confidence in the young Mr. Amrich’s abilities.

But Mr. Amrich’s big break wasn’t going to come without immense bumps.

By the time 510 Madison Avenue was finished in 2010, Mr. Macklowe’s real estate empire was in serious distress and he was grappling with SL Green, one of the building’s lenders, which was seeking to foreclose on the property. Though the tower featured luxury amenities, such as a private gym for tenants and a roof deck, leasing amid the backdrop of Mr. Macklowe’s financial uncertainty was virtually impossible.

But even through the dark depths, including a fire that ravaged part of the building’s lower floors and set back its construction, Mr. Amrich toiled away loyally, trying to lease the property.

“Every week I lived with the possibility that the building might get acquired and the new owner would want a fresh slate and I would get blown out after putting all those months in trying to lease it,” Mr. Amrich said. “But the respect that Harry continued to show me and his commitment to the project was tremendously motivating. You don’t kick someone when they’re down. I felt like I wanted to hang in there for him and try to help him. And how could you not be motivated by the quality of the architecture that he created? I mean 510 is just incredible.”

Mr. Macklowe eventually relinquished control, selling the tower to Boston Properties. But he championed Mr. Amrich in the transition and the new owner, one of the largest landlords in the city, kept Mr. Amrich as its leasing agent. With the market recovering and the building on strong financial footing, Mr. Amrich has gone on to lease about half of the tower and continues to fill space at impressive rents.

“I’ve learned if you hang in there, there’s usually a happy ending,” Mr. Amrich said.

When the William Macklowe Company acquired 386 Park Avenue South late last month, the firm’s chief executive, Billy Macklowe, wasted no time devising a plan to reposition the 20-story asset, from a building filled with legacy tenants and multiple businesses on each floor to an oasis in Midtown Manhattan for that market’s rapidly growing number of tech startups, media companies and full-floor corporations. But aside from the renovations, Mr. Macklowe and a leasing team headed by CBRE Vice Chairman Paul Amrich created a program at the 270,000-square-foot building, including a pair of 13,000-square-foot, full-floor prebuilt offices designed to house the city’s next big thing. Last week, Mr. Macklowe and Mr. Amrich reviewed floor plans with The Commercial Observer and explained what tenants can expect when space at the building hits the market later this week.

Mobile advertising company MoPub will relocate to a 13,121-square-foot prebuild on the 12^th floor of Billy Macklowe’s 386 Park Avenue South in June, the New York Post reported earlier this week.

The mobile company, currently based at 71 Gansevoort Street in the Meatpacking District, offers an advertising serving platform for mobile application publishers, allowing clients to manage advertising on both iPhone and Android devices. Headquartered in San Francisco, MoPub was founded by former Google and AdMob employees and is backed by venture capital groups Accel Partners, Harrison Metal Capital and Jafco Ventures.

William Macklowe Company acquired 386 Park Avenue South last September in a deal reported to be worth between $110 and $120 million. New ownership quickly instituted a plan to reposition the 20-story building, including creating a prebuild program on two of the building’s 13,000-square-foot floors. The renovation process is ongoing, including upgrades to the front entrance, lobby and elevators, the Post reported.

Tim Gibson of Cushman & Wakefield represented the tenant in the transaction, according to the Post report. Paul Amrich, Neil King, Ross Zimbalist and Kerry Powers of CBRE represented the landlord.

MoPub, C&W and CBRE did not return requests for comment.

The communications agency Profero signed a long-term, 13,121-square-foot lease at 386 Park Avenue South.

Sam King and Gerry Miovski of CBRE represented the tenant, which specializes in digital advertising and marketing. Paul Amrich, Neil King, Ross Zimbalist and Kerry Powers, also of CBRE, represented the landlord, a partnership between William Macklowe Company and Principal Real Estate Investors, LLC. Asking rent was between $50 and $60 a foot.

386 Park Avenue South

Profero will move into a full floor of pre-built offices in the 20-story Midtown South tower. "Our high-end pre-builts have been well-received by the new media, creative and technology-focused users in this submarket,” said WMC Chief Executive Billy Macklowe in a prepared statement.

The tenant will relocate from 28 West 25th Street.

Last month, the mobile ad firm MoPub inked a similar full-floor deal for 13,121-square-foot at the property. WMC acquired 386 Park Avenue South last summer for a figure reported to be between $110 and $120 million.

One of their first initiatives was a prebuild program spanning two floors--now both leased--complete with polished concrete floors, three-walled conference rooms, a bullpen desk layout, exposed ventilation systems and other design elements in favor with the young tech cohort. Additional renovations have remade the facade, front entrance, lobby and elevators.

A Commercial Observer article last fall said that WMC wanted to move the building away from "legacy tenants" and toward start-ups. That process kicked into high gear when the law firm Brandt Steinberg & Lewis moved from 386 Park Avenue South to 1430 Broadway and continues today.

Sequence has signed a sublease for a 4,577-square-foot portion of the fourth floor at 636 Avenue of the Americas, smack at the center of the booming Flatiron District, The Commercial Observer has learned from CompStak.

The subtenant will pay rent in the high-$50s per square foot in the three-year five-month deal, according to CompStak’s data, and will sublet the space from SecondMarket, an online marketplace for illiquid assets.

As reported by The Commercial Observer, SecondMarket signed a 50,000-square-foot deal at the William Macklowe Company property in 2011. The company’s 10-year deal for floors three through six carried asking rents between $55 and $60 per square foot.

The fully-furnished, pre-built fourth floor space features two offices, two small conference rooms, one large conference room and seating for 22 people, according to a listing on View the Space.

Billy Macklowe acquired 636 Avenue of the Americas in partnership with Clarion Partners in early 2011. Mr. Macklowe later secured a $25 million mortgage on the 90,000 square-foot property.

Jim Wenk, Kurtis Gibbs and Paul Formichelli of Jones Lang LaSalle represented SecondMarket in the transaction, according to the VTS listing. Mr. Wenk had previously represented SecondMarket in the company’s initial lease at the building. A JLL leasing team led by Mitchell Konsker represents ownership at 636 Avenue of the Americas.

NewsCred has signed a lease for the entire 13,121-square-foot sixth floor at Billy Macklowe’s 386 Park Avenue South, The Commercial Observer has learned.

The tenant will pay rent starting in the low-$50s per square foot in an eight-year deal, according to data from CompStak. Asking rents at the Midtown South property range from $55 to $72 per square foot.

386 Park Avenue South

William Macklowe Company acquired 386 Park Avenue South last year in a deal be worth more than $110 million. New ownership quickly instituted a plan to reposition the 20-story building to appeal to the tech and creative tenants flocking to Midtown South.

“It’s been a full on repositioning effort, the building was very tired with a high level of vacancy,” Mr. Macklowe told The Commercial Observer, estimating the building was 55 percent vacant at the time of acquisition. “These are very dynamic companies and the building has to appeal to that tenancy.”

Renovations include a new lobby, which opened two weeks ago, and an elevator modernization. The first two elevator cars are expected to be back in service by the end of the year, with the remaining two coming online in late spring of 2014. The landlord also plans to install a glass box and roof deck to connect with the top floor. The amenity is expected to be exclusive to the top floor tenant.

A content marketing and syndication platform, NewsCred was founded in 2008 and is currently headquartered at 27 West 24^th Street. The tenant will move in to a full-floor prebuilt space in the second quarter of next year.

NewsCred received $15 million in Series B funding in March of this year. The company did not return a request seeking comment. 

Neil King, Ross Zimbalist, David Young,  and Paul Amrich of CBRE represent the landlord at 386 Park Avenue South. Elie Reiss of Skylight Leasing represented the tenant. CBRE did not return a call requesting comment. 

Email marketing company Movable Ink has relocated to new offices at William Macklowe Company's 636 Avenue of the Americas in the Flatiron District after subleasing 13,000 square feet across the entire fifth floor from SecondMarket.  

636 Avenue of the Americas

The company tripled its employee headcount in 2013 and the space marks the third time the firm has moved in the last several years, most recently departing from their offices at 5 West 19th Street for the new sublease.   

The space gives the expanding firm a furnished space and open layout, while keeping its roots in the neighborhood alongside tech mainstays Twitter, Spotify, Mashable and WeWork.

Movable Ink's technology enables marketers to personalize and adapt content in real-time, even after an email has been sent, according to a statement from the company, which does business with brands like Comedy Central, RadioShack, Finish Line, Saks Fifth Avenue and Seamless. Last month the company also announced its acquisition of tech company Mailrox and digital product studio Eastmedia. 

Billy Macklowe and his firm acquired the six-story, 90,000 square-foot property at 636 Avenue of the Americas in partnership with Clarion Partners in early 2011. 

Though rents were not revealed, when creative development company Sequence signed a 4,577-square-foot sublease in the building for a portion of the fourth floor, also from SecondMarket, in August of last year, that firm paid in the high-$50s per square foot.  

Elliot Warren, leasing director at The Kaufman Organization, represented Movable Ink, while Jim Wenk of Jones Lang LaSalle represented SecondMarket

Medical space designed by Mascioni & Behrman at 7 Mott Street

This year is likely to revolutionize the health care industry as 3 million to 4 million previously uninsured Americans have access to medical coverage due to the Affordable Care Act. Between the increasing number of patients, the high prices of real estate and greater demands for efficiency, health care pros are shrinking and altering their work spaces to get patients in and out with ease and speed.

Perhaps the most significant change to affect the real estate industry is the move away from overnight stays in hospitals to shorter-term stays in ambulatory care facilities. Treating patients in these facilities costs less, and with the advent of technology, surgeries that previously had to be done in a hospital can now be done in an ambulatory setting.

Another shift that has been having a huge effect on health care real estate is the absorption of small practices by larger organizations that are multispecialty and multi-location. And then there are the urgicenters, which provide immediate emergency medical help and treatment for a minor illness or injury. While hospitals are trying to get into the urgicenter arena, they “have been late to the game,” said Scott Mason, an executive managing director and leader of the health care practice group in the Americas at Cushman & Wakefield.

Finally, there are now retail establishments like Duane Reade and CVS that are administering medical treatment.

A shift away from a clinical experience to one more akin to shopping has become commonplace at medical facilities.

“At the end of the day, it needs to feel more like a retail type of experience,” said Mr. Mason.

Perkins Eastman is developing an integrative services building in New York City that will allow a patient to be driven up to the front door, grab food on site, plug in a laptop and hang out in a garden. He couldn’t reveal the client.

“We’re building softer clinical environments,” said Jeffrey Brand, a principal and the national health care leader at Perkins Eastman.

So while doctors are looking to conserve money, greater care is being put into office appearance. Doctors now want to have “a clean, contemporary, high-tech space,” said Ciro Fraschilla, president of Mascioni & Behrman, who has been using a more expensive faux wood finish for the floors at many medical practitioners’ offices rather than the traditional carpeting.

Not all has changed in the sector of medical facility real estate. Behind the scenes, there are some logistical elements that always need consideration: power configuration, especially if there are day surgeries being done, height of the ceilings of operating rooms, structural issues because of the weight of imaging equipment and windows in patient rooms, said Timothy Krawetz, the head of the New York health care group for engineering firm Syska Hennessy Group.

Looking ahead, Mr. Mason said New York City can expect to see a model where people would pay by the month for access to a team of medical professionals that would facilitate all medical care. There would be no waiting rooms. After checking in, patients would go directly to their assigned exam room.

As of now, health care is being delivered in more collaborative spaces, with a team treatment-style approach. Currently out of style is the traditional approach of seeing a primary care doctor in one building, a cardiologist in a second building and a pharmacist in a third building. Craig Beam, a managing director at CBRE heading up health care services, said that health care has become more about “treating the population’s wellness.” And often this is being accomplished in one facility.

As hospitals get pressed to limit overnight stays, the ambulatory care business has been booming.

“Definitely, we’ve seen a huge increase in ambulatory care, and Obamacare, or Affordable Care, has a lot to do with it,” said Jeffrey Drucker, who manages the New York City practice of the national health care design firm Array Architects. “We’re starting to see facilities with empty beds or beds being repurposed.” Array’s New York City clients include Montefiore Medical Center, NewYork-Presbyterian Hospital, Mount Sinai Medical Center, North Shore-LIJ Health System and Health & Hospitals Corporation.

He noted that with increased competition, hospitals are now trying to differentiate themselves “by focusing on branding, customer service, design process and flexibility.”

Dan Dolsen, a managing director at CBRE, who does business development for the national health care services group, is actively looking for sites throughout New York City for big health systems to expand with ambulatory care. “And I’d say that pretty much all the major systems are looking at sites,” he said.

Working with less space, architects and developers are forced to come up with more efficient, and multipurpose, office configurations.

Health care spaces, said Paul Wexler of the health care properties team at the Corcoran Group, “need to be designed in as efficient a manner as possible.”

Architects and health care real estate pros Commercial Observer talked to ticked off a number of health care real estate design trends that are taking off.

There is a move away from every physician having an office or consult room and more of a focus on multifunctioning spaces. The examination rooms are being designed so that physicians can do all of their work in them, or they can document notes at a touch-down space outside of the exam rooms. Instead of nurses’ stations, architects are building team centers, which are configured differently than traditional nurses’ stations with more table tops with computers. Waiting rooms are shrinking, and architects are instituting a kiosk check-in system.

Also, more space is being freed up by the requirement that health care providers convert paper medical records to electronic in order to keep their existing Medicaid and Medicare reimbursement levels.

Medical practitioners are being smart when they are building, anticipating growth in their practices down the line.

At 62 East 88th Street, Mascioni & Behrmann is building a 4,400-square-foot office suite for a three-doctor practice, according to Mr. Fraschilla. The plans call for three consultation rooms, five examination rooms and a medical records office space, which will later become an exam room. There will also be two consult rooms that will be subleased to a psychiatrist. Mr. Fraschilla said he is installing plumbing in the walls of the psychiatrist’s offices in case they later are turned into exam rooms.

With the move away from hospital stays, medical practices are providing more comprehensive services.

“A lot of hospitals are building mixed or integrative services,” said Mr. Brand. “It’s a one-stop shop for patients.”

Several people interviewed for this article emphasized how health care real estate today is all about doing more with less.

The square footage required to support a physician has decreased, Mr. Dolsen said, to 1,800 square feet per physician from 2,400.

This is in part because there is a much higher level of standardization, with a focus on efficiency, when doctors become part of group practice. The spaces are less customized around individual doctors.

“We’re building virtual clinics, where independent practitioners can move into a space and it’s basically plug-and-play,” Mr. Beam said.

There are common waiting areas tenants are centralizing laboratory facilities, imaging equipment and file storage spaces.

Before, an individual doctor’s waiting room would usurp 20 percent of a doctor’s space, Mr. Mason said. As part of a larger medical outfit, the doctor could decrease that figure to 5 to 10 percent with a common waiting room, and it could look a lot nicer with an investment from all of the doctors.

“A lot of this,” Mr. Dolsen acknowledged, “is being done for cost reasons.”

With medical space options tight in residential buildings, many small practices are leasing space in commercial buildings.

One developer is repurposing a commercial building downtown as a medical center housing doctors with different specialties.

William Macklowe Company is turning the 250,000-square-foot building at 156 William Street into a medical hub. Approximately 124,000 square feet spread over four floors will be available for lease in June, with the rest available on a rolling basis as tenants’ leases expire.

William “Billy” Macklowe, the founder and chief executive officer of William Macklowe Company, said the building has big floor plates and multiple entrances, the latter of which would allow individual tenants to have their own dedicated entrances.

“I think we’ll see larger group tenancy,” Mr. Macklowe said. “We have 24,000-square-foot floors. They can split to halves or thirds, but I prefer to do a full floor.”

Speaking to the increasingly commercial- and retail-minded philosophy behind medical real estate, Mr. Macklowe said that finding medical practitioners to lease space at 156 William Street requires “think[ing] about tenanting a mall.”