News

A taxing head scratcher.

The Real DealJuly 01, 2005

Marketers create traffic jam at a crowded door.

The Real DealJune 15, 2005

Osher names new firm

The Real DealJune 07, 2005

Osher hangs out boutique shingle.

The Real DealJune 05, 2005

Small brokerages will triumph, by Stuart W. Elliott

The Real DealApril 25, 2005

Brooklyn Beats Manhattan

The Real DealJanuary 31, 2005

Scandal! Greed! Conniving! Gluttony! Gallo in $2.4 M. Flip

New York ObserverDecember 17, 2004

Brown Bunny auteur and downtown fixture Vincent Gallo may take risks with film critics (Roger Ebert lambasted the movie as “The worst film in the history of the [Cannes] festival”; Mr. Gallo retorted with unkind remarks about morbid obesity), but he certainly counts his chips in the high-stakes Manhattan real-estate poker game.

 

After already swapping a loft in the glass-clad Richard Meier towers on the western reaches of Perry Street, Mr. Gallo just closed on his second apartment swap in less than a year in the building.

 

In September, he listed his 1,800-square-foot spread on the seventh floor for $2.75 million. Last week, he unloaded it for $2.4 million, according to his broker, Linda Melnick of Stribling and Associates.

 

The move comes after the filmmaker and sometime Republican activist purchased the raw-space spread on the seventh floor for around $2.15 million in December, holding it for under a year and flipping it for a $300,000-plus profit (nice going, Vincent!).

 

“[Vincent] never moved in. He’s still undecided about where he wants to actually plant permanent roots,” explained his broker, Ms. Melnick.

 

Douglas Elliman broker Leonard Steinberg represented the buyer and declined to comment. Mr. Gallo was not available for comment by press time.

 

The buyer of Mr. Gallo’s loft, a finance executive, also snapped up the sixth-floor apartment for just north of $2 million, and according to sources familiar with the building, he plans to combine the two spreads into a sprawling duplex, the only mid-floor duplex in the north tower. (Of course, there is the penthouse duplex-that’s the spread that belonged to Martha Stewart before the dethroned domestic diva sold it for a little over $6 million).

 

The Perry Street towers have made frequent appearances in the city’s gossip pages, drawing media attention for everything from shoddy finishes to problem-riddled construction. Or, as Mr. Gallo himself once told Vanity Fair: “You won’t believe what’s going on in these buildings …. It’s a microcosm of everything ugly in human beings-beautiful, beautiful architecture desecrated by scandal, greed, conniving and gluttony.”

 

But now, with his latest sale, he seems to have weathered the P.R. maelstrom and made out well, financially. In July 2002, the 42-year-old filmmaker purchased the third-floor spread for a reported $2.03 million before unloading it for around the same price.

 

New York Times publisher Arthur Sulzberger Jr. will greet 2005 with one less Manhattan apartment in his real-estate stable. In September, city records show that Mr. Sulzberger and his wife, the artist and writer Gail Gregg, did some real-estate flippage when they sold a 738-square-foot condo at 104 West 70th Street for $800,000. In August 2002, the couple closed on the property for a reported $615,000. That’s a 30 percent profit-not bad!

 

According to New York Times spokeswoman Catherine Mathis, Mr. Sulzberger was traveling and unavailable for comment about his deft real-estate moves. But perhaps he was inspired to sell after perusing The Times’ recently bolstered real-estate coverage, complete with their own celebrity real-estate gossip column! Ms. Gregg was also not available for comment.

 

The Sulzbergers’ Upper West Side spread was reportedly purchased for Ms. Gregg to house her art studio. Ms. Gregg-who, according to her Web site, most recently exhibited at the Gallery at R&F, in Kingston, N.Y.-still lists 104 West 70th Street as her studio address.

 

Ms. Gregg may also miss one added perk of maintaining a studio space at 104 West 70th Street: the buttery confections on sale at the famed Bakery Soutine, which sits on the building’s ground floor.

 

Back downtown, billionaire scion Robert Soros and his wife Melissa have ankled the West Village. In October, the couple unloaded the four-story townhouse at 288 West Fourth Street for $5 million, city records show. At about the same time Mr. Soros, 41, the oldest of George Soros’ five children, was appointed to run the Quantum Endowment Fund, an $8.3 billion investment portfolio.

 

According to city records, finance executive Ronald Layard-Liesching, a partner and director of research for the risk-management firm Pareto Partners, snapped up the Soros’ West Fourth Street townhouse.

 

After pumping six-figure donations into Democratic coffers during this campaign cycle, Mr. Soros boosted his own personal balance sheet with the sale of the West Village manse: The couple purchased the property, which sits between 11th and Bank streets, for a mere $1.9 million in September 1998, city real-estate records show.

 

The 20-foot-wide home has a kitchen, a living room with fireplace and a garden on the ground level; the second floor boasts two bedrooms (each with a fireplace) and a bathroom; the master bedroom shares the third floor with a separate east-facing studio apartment; and the fourth floor has two bedrooms, a bathroom, a second kitchen and a sitting room.

 

Patricia Cliff and Carter Wilcox, both of the Corcoran Group, handled the sale and didn’t return calls seeking comment. Mr. Soros was traveling and unavailable for comment.

 

The Soroses first listed the spread for $5.15 million in June of this year, before unloading it in October.

 

SOHO

 

110 Thompson Street Studio co-op. Asking: $259,000. Selling: $260,000. Maintenance: $540; 47 percent tax-deductible. Time on the market: four months.

 

Meanwhile, another uptown girl bought this 300-square-foot slice of Soho-but she always knew she wanted to be downtown. The twentysomething wine distributor works in the neighborhood and wanted to live among the stylish lanes south of Houston. So, after leaving behind her Upper East Side rental, she closed on this second-floor studio on fashionable Thompson Street. “It was about the location,” listing broker Gerry Kendrick of Douglas Elliman said of the first-time buyer’s decision to take the Soho plunge. The seller, a book publicist in his 30’s, recently married and relocated to a larger spread in the flower district. His former Soho studio has a garden view, hardwood floors and east-facing exposures adding light to the spread. Vincent D’Allesandro of Fenwick-Keats represented the buyer.

 

MURRAY HILL

34 East 38th Street One-bedroom, three-and-a-half-bathroom co-op. Asking: $1.2 million. Selling: $1.1 million. Maintenance: $2,561; 65 percent tax-deductible. Time on the market: 11 months.

 

I know a place to go. This one-bedroom on 38th Street between Park and Madison covers some 2,000 square feet-a rare find in Murray Hill-and yet it languished on the market for the better part of a year. “It was a tough sell,” said Ella Sacks of the Corcoran Group, speaking of the unconventional layout: a one-bedroom apartment spread across four floors of a Murray Hill brownstone built in 1865. “One of the challenges in selling this apartment was that it’s more like a downtown property.” The sellers, a retired couple, relocated as far downtown as you can go-to South America-and listed their midtown perch with its exposed brick walls, eat-in kitchen and three wood-burning fireplaces. Finally, after 11 months on the market, they found a newlywed uptown couple intrigued by the spread’s unique configuration. Fellow Corcoran broker Margaret Velard partnered on the deal.

 

UPPER EAST SIDE

 

115 East 86th Street Two-bedroom, two-bathroom co-op. Asking: $995,000. Selling: $1.06 million. Maintenance: $1,212; 50 percent tax-deductible. Time on the market: three weeks.

 

Connecticut Yankees have child No. 1: move to an Upper East Side two-bedroom. Child No. 2: shuttle off to the suburbs. That’s what happened with this growing clan when they recently added a fourth member and decided to relocate to the Connecticut wilds in search of more space. “They loved the city, but they couldn’t find what they were looking for,” said listing broker Jane E. Goldberg of Century 21 William B. May. “In the end, they decided they wanted a backyard.” When they listed their 13th-floor spread on Labor Day, they instantly received five all-cash offers. A single travel agent who wanted to hop across the park from her West Side apartment snapped up the place, paying nearly $10,000 over the asking price. The pent-up demand may have been due to the prewar spread’s details, which include herringbone floors and a living room with a wood-burning fireplace. How country!

260 Park Avenue gets 360 makeover.

The Real DealNovember 21, 2004

City Hall: Functional Government Hub Gains Cachet

The Real DealSeptember 01, 2003

Commercial Property / The First Quarter of 1999

The New York TimesApril 18, 1999

The pace of office leasing in Manhattan softened somewhat in the first quarter of 1999, after two torrid years. But asking annual rents continued to increase -- exceeding $70 a square foot in some locations, although the average remains much lower -- and real estate executives say they see nothing on the horizon to prevent the industry from having another prosperous year.

 

''We are at the base of a slowly rising plateau,'' said Anthony E. Malkin, the president of W & M Properties. ''Supply and demand are very nearly in balance, with demand slightly exceeding supply. We can't see dislocations anywhere.''

 

According to figures compiled by Insignia/ESG, a large real-estate services company, 2.9 million square feet of office space was leased in midtown in the first quarter of 1999, a substantial drop from the 5.5 million leased in the first three months of 1998. And the amount of space added to the market exceeded that taken off by 800,000 square feet, compared to the net withdrawal of 450,000 square feet in the year-ago period.

 

Nevertheless, the average annual asking rent in midtown has increased 20 percent over last year's first-quarter level, according to the Insignia/ESG figures, to $44.79 a square foot.

 

''For some reason there was a rush to close deals in the fourth quarter and so some that were set for the first quarter got done before the end of the year,'' said Joseph R. Harbert, the chief operating officer of Insignia/ESG's New York Metro Region.

 

Mr. Harbert said that rising rates were inducing some tenants to leave midtown for less expensive parts of the city, but he added that demand was such that rental rates still had room to climb. ''We have seen deals in the $70's,'' he said. ''Whatever dropoff there was in the first quarter did not affect the high end of the market. And prices have not peaked yet.''

 

He said part of the problem was the short supply of available office space. ''When you have a primary availability of 7 percent,'' he said, ''it means there is just not enough space out there.''

 

Because each company has different ways of categorizing and counting transactions, the numbers vary from report to report. But the trends are clear in all the reports. ''The Manhattan office market started 1999 at a slower pace after two back-to-back record-breaking years,'' reported Cushman & Wakefield, another large real estate services company. ''With traditional large space users stalling expansion, overall leasing activity was down 17 percent from the first quarter of 1998, the lowest level of first quarter activity since 1995.''

 

''There were no megadeals in the first quarter,'' said Alex Cohen, Cushman & Wakefield's senior manager for research. ''Reuters and Rock West got done before the end of the year,'' he said, referring to the 855,000 square foot building that the Reuters news agency is building with the Rudin family at 42d Street and Seventh Avenue and the 1 million square foot building the financial services company Morgan Stanley Dean Witter is planning to build with the Rockefeller Group on a lot on Seventh Avenue between 49th and 50th Streets, just west of Rockefeller Center.

 

BUT the lack of big deals in the quarter does not mean there are none to be had, Mr. Cohen said.

 

He said the accounting firms of E & Y Kenneth Leventhal and PricewaterhouseCoopers, the NASDAQ financial exchange and the CIBC Oppenheimer financial services company are all locking for new locations and each is shopping for about 1 million square feet of space.

 

''They are all looking for the best deal,'' Mr. Cohen said. ''They just haven't found it yet.''

 

He said premium buildings in prime locations, like 9 West 57th Street, have been signing leases calling for annual rents in the ''low to mid-$70's.'' He said demand remains strong for space along Madison and Fifth Avenues in the 50's by companies that feel they need a presence in New York and a posh address as well.

 

''The brokers are being contacted by people who say they just have to be in New York City,'' Mr. Cohen said. ''That part of the market is as dynamic as any time in the last 24 months.''

 

While some companies track vacancy rates, Williams Real Estate uses a different measure, the vacancy rate plus all space expected to come on the market within a year, and calls it availability.

 

By that measurement, the availability rate in Midtown South decreased 0.4 percent to 7.8 percent, as a net 277,000 square feet were taken off the market. This decline in space pushed the average annual rent up 42 cents to $30.38 a square foot.

 

The availability downtown moved in the opposite direction, increasing from 12.1 percent to 13.2 percent as an additional 1.1 million square feet was added to the market. But the rent trend was the same as the rest of Manhattan, with annual rent moving up 20 cents a square foot to $31.49.

 

''In the Williams view, availability increased from 9.7 percent to 10.2 percent in the quarter, which added a bit of liquidity to the market, but is not statistically significant,'' said Robert L. Freedman, the company's vice chairman.

 

Mr. Freedman said the explanation for the increase in rents and availability downtown was the completion of renovation programs in older buildings in the area and the offering of space to the market. ''A number of buildings have been redeveloped and the rents reflect the better bricks and mortar,'' he said.

 

According to his company's calculations, the average annual asking rent in Manhattan is $38.45 a square foot, up $1.02 in the quarter.

 

He said the question is where the ''sweet spot'' is in the current market; that is, the highest rent tenants will accept without motivating them to look elsewhere.

 

He said that $50 a square foot in annual rent was a resistance point for many companies, so the question is how much below $50 is considered acceptable. ''The sweet spot is probably around $42-$43 a foot,'' he said.

 

If that is as high as most tenants are prepared to go, it insures that there will be no new construction in midtown, because rents of at least $50 a square foot are needed to justify building, Mr. Freedman said.

 

The strong market is permitting landlords to reduce their concessions packages, which have already shriveled from those in the early and middle years of the decade. In those times owners offered hefty packages of $40 or more a square foot for the cost of interior alterations, and free rents of a year or more.

 

''In Midtown South, in Flatiron, in Chelsea, the rents are up 20 to 30 percent and the owners are offering nothing for work, they are as-is deals,'' said James S. Meiskin, the president of Plymouth Partners, which represents tenants.

 

He added that free rent was down to three or fourth months, which is the time it takes to build the interior and during which the tenant is not occupying the space.

 

HE said the lack of space and the stiff terms being demanded by landlords are going to lead companies to look for alternatives. ''Some people are being driven to the fringes, to places that had not even been looked at before,'' he said. ''Now people are looking at Ninth and 10th Avenues in the 40's and 50's.''

 

He noted that the architectural firm Gwathmey Siegel & Associates had located at 475 10th Avenue at 36th Street, a 1913 industrial building that was renovated in 1994.

 

Some real estate executives attribute the current prosperity to the turmoil in debt markets that started last August and gradually settled down during the rest of the year. Steeply increased prices for capital reduce the availability of funds for development, they say, preventing overbuilding.

 

''The most significant fact today is the overhang from the capital markets of last year,'' Mr. Malkin said. ''Risk capital for new development has disappeared. It's gone.''

 

But, he added, ''Financial markets are quite healthy for viable projects. The money is available.''

 

He said the uncertainty about buyers obtaining financing had caused many companies, including his own, to withdraw properties from the market or not offer them at all. ''When the capital market took the guns and swords out of the hands of children the transactions market was distorted,'' he said.

 

But with the crisis largely resolved, he said, he expects property sales to begin to resume in the second quarter.

 

New News/Press

Luxury Daily
New luxury development projects in the NoMad, north of Madison Square Park, district of Manhattan indicate that the once-overlooked neighborhood is on the rise as other areas become squeezed.

Real estate firm Core recently closed sales for the residential condo 241 Fifth, commanding prices ranging from $820,000 to $10 million. Not to diminish the potential of parts of the city, Core also wrapped up sales further up Fifth Avenue for the property One Museum Mile on the same day.

“There’s a ceiling in every market, but I don’t see [development] slowing down soon, because there’s really no quality inventory on the market right now,” said Shaun Osher, founder and CEO of CORE, New York.

“It was all about how we told the story,” he said.

Rising developments

The NoMad district has been gathering momentum for a few years. A spate of restaurants, retailers and other attractions have spurred interested buyers to consider the many residential buildings emerging.

Residential property, 241 Fifth Avenue, developed by Victor Homes, is the latest example of the real-estate commotion in the area. The wait list for the property’s 46 condos grew to more than 500 during the sales period.

During the first two months of the building’s launch, 50 percent of the units were in contract. Ninety percent of the units were in contract by the six month mark.

The 20th floor penthouse commanded $10 million at $2,600 per square foot, while the building average reached $2,000 per square foot.
Mr. Osher concedes that although the 241 Fifth location does not offer much in the way of surprise, the property offers all the amenities luxury consumers have come to expect.

A 24/7 concierge, rooftop terrace, fitness center, yoga room, and private treatment room can be accessed by guests.

One Museum Mile up the street also enjoys tremendous interest from prospective buyers due to the property’s proximity to Central Park and luxury retailers.

“We used a lot of different marketing initiatives to position the building as part of One Museum Mile, one of the most exciting condo projects in that neighborhood, to really show the buyers that the amenities extended beyond the building itself,” Mr. Osher said.

Bend the trend

The New York luxury real estate market has been abuzz with surging numbers posted left and right, but will the trend continue?

Although the overall number of apartment sales rose 26.8 percent to 3,297 in the fourth quarter of 2013, the median sales price of the entire market has not caught up to the 2008 peak. Also, a wave of new variables such as new qualified mortgage rules and potentially rising interest rates could clamp what would be another year of double digit growth.

Luxury real estate prices remained relatively flat in 2013, but demand continues to climb in the world’s major markets, according to a report by Christie’s International Real Estate.

The luxury units sold in London rose 937 to 5,693 in 2013, while the units sold in New York rose 709 to 4, 721 in 2013. Although selling prices have not surpassed any records, asking prices are at all-time highs, indicating that brokers expect that enough ultra-affluent buyers are prowling the market.

“In a market which is a seller’s market, where there is no inventory, it’s easy to sell a building overnight,” Mr. Osher said.

On The Market

Architectural Digest

93 Worth Street is mentioned in Estates - On The Market of Architectural Digest's March issue. 

Disco Balls Not Included

New York Magazine

Is David LaChapelle leaving the East Village? The downtown fashion photographer and director is selling his beloved Second Avenue pied-à-terre, a 1,350-square-foot sixth-floor corner unit with two bedrooms (three if you convert the formal dining room). The apartment is priced at $1.695 million—$100,000 less than its initial asking when it debuted on the market late last fall. Listing broker Jason Walker, senior vice-president at Prudential Douglas Elliman, says the famed shutterbug oversaw a meticulous renovation, managing to modernize the space while keeping its prewar bones (crown moldings, beamed ceilings, crystal doorknobs) intact. Apparently LaChapelle, who recently bought a twenty-acre farm in Maui, is busy with real-estate deals on both coasts; according to the blog the Real Estalker, he’s also selling his house in Los Angeles, for which he may have already found a buyer. 

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