The New Taste for New York Townhouses

The Wall Street JournalDecember 19, 2013
Waves of international buyers are causing a sea change in Manhattan's luxury property market.

Affluent out-of-towners are starting to spurn glitzy, full-service condo buildings as prices reach upward of $90 million, opting instead to buy older townhouses, which are seen as a better value, real-estate agents say.

Brian Lewis, a broker at Halstead Property in Manhattan, says he put a historic Charlton Street townhouse on the market in the spring for $7.25 million and was inundated with inquiries from buyers in Russia, South America and Asia, many of whom planned to use the house as a pied-à-terre. "Usually when I get a call and it's a foreign buyer, I'm pulling out my new development Rolodex," says Mr. Lewis, who later lowered the price to $6.25 million. "The palate of our foreign buyers is changing before our eyes."

The city's townhouses, many of which were built in the late 19th and early 20th centuries, have a reputation for being difficult to maintain. In addition to regular upkeep, tasks like show-shoveling and package pickup typically fall to the homeowner. As a result, historic brownstones have largely been shunned by pied-à-terre buyers and other purchasers who don't plan to use them as a primary residence.

"People look at New York and think of modern conveniences," says Robert Dankner, of Prime Manhattan Residential. "But I have seen more of an emerging trend with buyers who don't live here full time embracing the townhouse market." He is representing a client from Switzerland who is in the process of buying a West Village townhouse for around $10.5 million.

The shift has picked up steam in recent months, says Kevin Royer, an agent at Halstead who is working with an Israeli buyer looking to purchase a townhouse in Brooklyn. "Since this summer, maybe since April, people are suddenly going crazy."

Contributing to the trend is condo boards' increasing scrutiny of buyers' finances. Many boards now ask for extensive income verification from buyers—even all-cash buyers, says Halstead agent Sarah Parsons. "It's almost like a co-op board," she says. Many of her European buyers, who aren't used to revealing financial information, are now choosing townhouses. "They don't want to disclose what they make," Ms. Parsons says.

Price per square foot and perceived investment value are the other main motivators, brokers say. "More and more, the tendency is to go toward a full townhouse purchase because they can be anonymous, and they can get all the space for a fraction of the price," says Adie Kriegstein, an agent at Core who recently represented a French family in the purchase of a townhouse on West 77th Street.

The average price per square foot of a Manhattan townhouse in the third quarter of 2013 was $1,144, compared with $1,379 for condos, according to data by Miller Samuel Real Estate Appraisers & Consultants. At the high end of the market, the price gap widens. A condo penthouse at 15 Central Park West set a record when it closed last year for $88 million, or more than $13,000 per square foot. The priciest townhouse sale on record in the city, by contrast, is the 21,700-square-foot Harkness Mansion on the Upper East Side, which was bought by private-equity investor J. Christopher Flowers in 2006 for $53 million, or around $2,440 per square foot.

Jonathan Miller, chief executive of Miller Samuel, points out that comparisons between new construction condos and resale townhouses are somewhat flawed, especially because brownstones don't have the doormen or views usually found in tall towers. Still, buyers have noticed the price disparity.

Ms. Kriegstein's French client, Cecile Caer, says price was the primary factor in her family's decision to opt for a townhouse. Ms. Caer, 43, says she and her husband, an advertising executive, looked at several condos, including one they liked at the Apthorp on the Upper West Side, but decided that a townhouse offered the best value and potential return on investment. They bought a 5,000-square-foot home for $5.2 million, or just over $1,000 per square foot. "We looked at the townhouse and thought: We can do a beautiful job renovating, have all the space we want and still be at about the same price as buying a condo," says Ms. Caer. The trade-off is that the home needs a major renovation, which likely won't be completed until 2015. But she says she feels confident that for "the price you buy versus the price you can eventually sell, the townhouse was the best investment."

Ms. Caer says she doesn't yet know how much time her family will spend in Manhattan—they also have homes in France and Canada—but she plans on hiring a property manager or housekeeper to check on the home while they are away.

While condo fees in some New York buildings are thousands of dollars a month, Halstead's Ms. Parsons says hiring a property manager or part-time super can cost $200 to $500 per month. And with a proliferation of property-management firms and new technology such as virtual doormen, taking care of homes from afar is easier than ever.

That was certainly a consideration for Carsten Thoma, a 39-year-old Zurich resident who is looking to buy a multifamily townhouse in Brooklyn. Mr. Thoma, who frequently travels in his role as president of Swiss e-commerce firm Hybris Software, plans to keep one unit for his own use when he's in town, and rent out the others. He won't be in New York "a huge chunk of the year," but that doesn't bother him.
"You can easily create a similar experience" to a full-service condo, he says, since there are "concierge services left and right. New York is a super services-oriented city."

Townhouses also come without the monthly common charges that condo owners pay. "We have a lot of international buyers who look at townhouses because they don't want to have to deal with maintenance fees that are very high, and you're not there," says Michelle Bourgeois, an agent at Town Residential. "You can have somebody maintain the townhouse and still come out ahead."

The new interest in townhouses has started to affect prices. Jed Garfield, head of Leslie J. Garfield Real Estate, which specializes in Manhattan townhouses, estimates that during the past two years, prices have grown about 20% per year, compared with 3% to 4% a year before the financial crisis. "The last couple of years, it's really jumped," he says.

The median sale price of a Manhattan luxury condo was $5.25 million in the third quarter, compared with $4.32 million for townhouses, according to Miller Samuel. But townhouses have shown more appreciation over the past six years, with the median price increasing 12.9%, compared with 11.1% for luxury condos. For luxury townhouses, the median sale price jumped 20.4%, from $15.2 million to $18.3 million, between 2009 and 2013.

Here & There

New York PostDecember 17, 2013
Gaga and Jim Carrey’s real estate hunters Tom Postilio and Mickey Conlon invited Christine Ebersole and David Hyde Pierce to a party. Nice but nobody got in. The joint was shut . . . Katie Couric’s deal is one more year. Stations assembled for her program are returning to ABC’s affiliates . . . America Ferrera, who always says nice things, raving to whoever’ll listen about “A Gentleman’s Guide to Love and Murder.” Calls it “freaking hilarious.”

One Museum Mile Condos 90 Percent Sold

The Epoch TimesDecember 17, 2013
NEW YORK—The East Harlem luxury residential building One Museum Mile is now 90 percent sold.

The building sits on the northeast corner of Central Park. It’s between multi-million dollar pre-war co-ops on Fifth Avenue and Harlem, which is quickly filling out with big retail and residential developments. It sits at the north end of the row of museums lining Central Park known as Museum Mile.

One Museum Mile set a neighborhood record earlier this year with a $3.565 million sale.
The building also houses the Museum for African Art. That museum’s former president, Elsie McCabe, has called Museum Mile institutions economic engines for the neighborhood and city.
One Museum Mile was rebranded with the new name two years ago.

“What we needed was to identify the building in such a way that put it on the map,” said Tom Postilio, a founding member of CORE. Postilio was part of the team brought on to market the building after two other marketing teams fell through.

“We looked at the reasons it was not selling as well as it should have at that time, and what we did was rebrand it,” said Postilio. What they found was the building was quintessentially New York.
“It’s on Fifth Avenue, it’s a beautiful part of Central Park, Robert A. M. Stern is the architect, it’s a ground up new development, and you’ve got a museum in the building,” said Postilio.

The “eureka” moment, he said, was coming up with the name. The city had extended the boundaries of Museum Mile up to 110th Street, and he realized driving down Fifth Avenue, the condo development was the start of the Mile.

“And then from there it’s been a very successful campaign,” Postilio said. “We’re very thankful the market improved and helped us as well.”
In the last six months, 33 contracts totaling $65 million closed.

One Museum Mile 90% Sold

CurbedDecember 16, 2013
EAST HARLEM—Neighborhood record-setting condo development One Museum Mile has hit 90 percent closed and in contract, according to reps for the sales and marketing team. In the past six months there have been 33 closings totaling more than $65 million.

Covetable Home FAQs

New York MagazineDecember 15, 2013
How do I get into an 80/20 or Mitchell-Lama building?

Until last year, when the city moved the whole process online, applying for affordable housing like an 80/20 development—where 80 percent of the units are market rate and 20 percent are well below—meant sending in individual postcards that would enter you into a lottery for a particular building. That’s if you were lucky enough to find the ads buried in the Daily News, El Diario, or the Amsterdam News announcing openings for these high-rises. Now all it takes to get started is a visit to the city’s NYC Housing Connect website, which lists projects currently accepting would-be tenants and the deadlines and income caps associated with each one, plus an online form you’ll need to submit. You can track your application online—the process can take anywhere from two to ten months before you hear back. If you’re rejected, the site will let you know how to appeal or redirect you to other developments.

If it’s a Mitchell-Lama apartment you specifically want—though their numbers are dwindling as their contracts expire—visit the Department of Housing Preservation and Development website. Mitchell-Lama apartments work a little differently from 80/20s; you’ll need to send in a letter and an application to the managing agents for each one. Most have waiting lists, and often they’re closed, but when they do open up, the development runs ads in local papers, and you’ll have to act on them fast. Waiting lists are typically chronological, though sometimes veterans and people with disabilities get to move ahead of others. You can sometimes inherit a spot on the wait list if, say, your parents were prescient enough to sign up back in the late eighties, but even if you were an infant at the time, you would have had to have been on the application already, says attorney Dean Roberts, a Mitchell-Lama specialist.

Another way to land one is to move in with a family member who already lives in a Mitchell-Lama apartment. Not to be too macabre, but should your relative pass away, you can take over the place if you’ve been living there at least two years.

How do I get past an insane co-op board?

1. Keep your skeletons in the closet. “The closer to sainthood you are, the better,” says Stribling’s Kirk Henckels. “You should live and die by your reputation.” If there’s something you’re apprehensive about—an unflattering “Page Six” item, for example—discuss it with the listing’s broker, who can float the issue by some board members to see if it actually poses a problem. Whatever you do, says one agent, don’t write a letter explaining your past scuffle with the attorney general—it’s best to communicate your worries sotto voce.

2. Call up Michael J. Fox for a favor. Avoid Madonna. Those looking to call in a celebrity reference should avoid flashy names, says one high-end real-estate executive, and stick to those with more gravitas like Fox, Katie Couric, or Tom Brokaw. Politicians are risky; a letter from Bill de Blasio may not have its intended effect if there’s a Koch brother on the board. “You do not ever want a reference who is high profile in any negative way,” says one broker who handles listings in white-glove co-ops. Best to stick with well-respected references from noncontroversial fields—an Ivy League or hospital president is ideal.

3. Come with cash. A lot of it. If you’re buying, say, a $10 million apartment for all cash, as many of these buildings require, you’ll need at least that amount left over after the purchase in liquid or easy-to-liquidate assets. (A $20 million purchase will necessitate a net worth of at least $60 million in the pickiest of buildings, says one broker.) Portfolio statements must be easy to comprehend, your source of income transparent. “If the board can’t wrap their mind around it, forget it,” says one agent.

4. Don’t bungle the interview. Once you’ve been invited to meet the board, you’re well on your way to an approval. But you can still sink the deal. “Dress as if you’re going to your grandmother’s funeral,” suggests Henckels, and don’t ask questions. “You never know when you’re going to ask one that’s sensitive.” And resist sending a thank-you note post-interview. “This could be viewed as trying to influence the process,” explains Henckels. You could always send flowers after you’ve been approved.

Is there a way to get on some list for a condo that hasn’t been built yet?

Brokers and developers can’t sell their properties before the state attorney general’s office gives them the green light, but they can gather names of interested parties. To make that list, you’ll need to get on their radar before sales offices even open. If you don’t want to park yourself at the city’s permits office, you can regularly scan trade publications like The Real Deal and blogs like Curbed and Brownstoner to see which projects are rumored to be headed your neighborhood’s way. They’ll always mention who the developer is, so you can give the firm a call. And while this might sound obvious, keep your eyes peeled for billboards and other signage around the city or ads announcing a condo is “coming soon.” They’ll have a phone number or website to contact for more information—use them. Of course, it’s not the end of the world if you don’t make the early cut, especially since the first units available are generally not the most prime: “Sometimes,” Doron Zwickel, director of new development at the brokerage firm CORE, says, “apartments released at the early stages are on a lower floor or have less favorable views.”

How can I score a rent-stabilized apartment?

Setting out with the specific intention of landing an something that’s rent-stabilized is not easy. First you should sniff around in your own building. You may not have a regulated unit now, but your neighbors’ might be, and your property manager might be able to hook you up. And moving in with someone already living in a rent-stabilized apartment is a shortcut. Of course, Streeteasy can be a useful tool (type “rent stabilized” to filter results), or try stalking the Gypsy Housing group on Facebook, a place where actors, dancers, musicians, and other performing artists share leads on cheap apartments, says broker Matthew Tully, who has relied on the list before.. If none of these pan out—and you have some time on your hands—you could always procure a complete list of stabilized buildings from the New York City Rent Guidelines Board website. Or, if you know exactly which building you’re interested in but aren’t sure it’s stabilized, enter the address through the state’s Division of Housing and Community Renewal’s Rent Regulated Building search tool. (In general, buildings constructed between 1947 and 1974 that have six or more units are likely to be.)

A Year After Sandy, Manhattan Real Estate Better Than Ever

The Epoch TimesDecember 14, 2013
NEW YORK—Not even a superstorm can put a damper on Manhattan’s real estate market.
The Financial District was crippled for weeks after Superstorm Sandy causing city, state, federal, and private resources to be poured into stormproofing efforts. But as time passes, it seems what’s out of sight is out of mind.

Adie Kriegstein, a CORE real estate agent, said that a recent condo buyer started her search in Battery Park and then the Downtown area. Kriegstein said that her number one concern was: how did the building fare during Sandy? Ultimately, the client went for affordability.

“Out of everything, she bought in the Seaport,” said Kriegstein. The area has some of the oldest buildings in the city and bore the fury of the storm surge that hit Manhattan.

Although the building lost electricity and the lobby flooded during the storm, no stormproofing efforts were made afterward. Kriegstein said for those looking to buy real estate in New York City, concerns over future storms are not top of mind.

“Price per square foot often trumps all,” said Kriegstein. The passage of time also seems to dim the memory of damage done. In Kriegstein’s experience, there were buyer concerns for about six months after Sandy, but they subsided along with the visible damage Downtown.

But even when the storm first hit, prices weren’t affected, according to Pete Culliney, director of research at CityRealty.

After the storm, Culliney got requests to look at his numbers in the aftermath for drops in prices, people leaving the area, et cetera.

“I didn’t have anything,” Culliney said. “I expected to see diminishing amounts of rise, anything along those lines, but it hasn’t.”
Culliney noted that at 250 West St., a building that had been three-quarters in contract before the storm, was expected to sell out before the end of the year. Then the storm hit.

Electrical equipment was damaged because the basement flooded, but the lobby was fine. There were worries the pricing would suffer afterwards, but all of the contracts were closed after the storm and the rest of the contracts were snapped up without a discount, Culliney said.

The Price of Peace of Mind

Living in Manhattan is costly, and so is moving a building’s mechanicals from the basement to the top.
With dozens of residential buildings in progress, the influx of residents in the Financial District, and the memory of Sandy still fresh, one would expect stormproofing to be worked into new developments.
Many developments did work the preventative measures in, and it has a lot to do with the types of buildings going up in the Financial District.

“It comes down to the haves and the have-nots,” said Culliney.

For example, the residential complex at 2 Gold St. and 201 Pearl St. were badly damaged by Sandy. This spring the owners installed a 13-by-11 foot $250,000 flood-proof door with nitrogen-fueled gaskets to protect their basement. Other buildings have taken measures to get the electrical equipment from the basement to higher levels.

“The more luxury buildings are going to do more, and you’re going to see more in your pricing,” Culliney said. “Those are the buildings that are going to do more and give this sort of peace of mind to their buyers.”

If anything, prioritizing preventative measures is increasing property value.

“Sales prices and the number of closings have increased significantly in the past year and there is over a dozen new residential developments in the works in the Financial District alone,” said Ariel Cohen of The Ariel Cohen Team at Douglas Elliman.

The demographic downtown is younger than that of Midtown, and price per square foot is still considerably lower. The current mutually-beneficial trend of residential and retail is causing the area to thrive as well.

Over the past year, according to the Real Estate Board of New York’s Fall 2013 Retail Report, the Financial District saw the greatest increase in price per square foot at 69 percent, but is still far, far below the price of other neighborhoods at $257 per square foot.

The Fifth Avenue Corridor saw an 18 percent jump from last year but holds its top spot as the most expensive with an average rent of $3,170 per square foot.

Commercial Concerns

Companies’ concerns vary a bit from residential.

According to developers, Sandy brought up the issue of being able to provide spaces that can withstand business interruptions.

“We have some very active 24-hour tenants,” said Michael Phillips, COO of Jamestown Properties, at a Crain’s panel. “[Connectivity is] paramount to the value of space.”

Con Edison was not prepared for the storm and buildings with basement-level generators were out of power for a long time. Along with a reduced workforce, the connectivity of Con Edison’s grid had issues according to a utility workers union report looking at Sandy damage.

Silverstein Properties, one of the largest developers downtown, touted its continuity plan after the storm. Tenants at 7 World Trade Center and 120 Broadway were able to return to their offices a few days after the storm.

Jeremy Moss, Silverstein’s vice president of leasing, had stated the strategy was an expensive and time consuming effort that takes away from their core business, but sent a clear message business continuity was their priority.

Transportation adds value to real estate as well, and with the Fulton stop changes underway malls like Westfield and Brookfield have signed on to the area. Westfield has been quiet about their leases, but Brookfield has announced tenants including Theory, Burberry, Hermes, and Salvatore Ferragamo.
Conde Nast is headquartering in 1 World Trade Center along with the The U.S. Army Corps of Engineers, U.S. Customs and Border Protection agency and the federal General Services Administration. Media company GroupM signed on as 3 World Trade Center’s anchor tenant recently as well.

Long Term?

Post-Sandy, the city directed a lot of attention and eventual funding to resiliency. Architects and designers are taking the issue into consideration as well, and some say the efforts aren’t looking long-term.

Two years before Sandy, the Museum of Modern Art and P.S.1 Contemporary Art Center put together the “Rising Currents” exhibition with plans from five interdisciplinary teams. The project addressed the rising sea levels that will eventually diminish the amount of land along the waterfront.

The stance the designers took was largely that infrastructure should allow the water to come and go–infrastructure that would probably change the value of property levels, as they included ideas like wetlands, hanging structures.

“I think it makes people feel like something is being done and protects local resources,” said Susannah Drake, founder of the interdisciplinary firm dlandstudio of the work being done without a systems-based approach. Drake’s firm dlandstudio participated in the exhibition partnering with Architecture Research Organization. “It’s not the systems based approach that is needed in the long term.”

“Over the last 400 years the edge of Manhattan has been completely transformed to support new economies and ways of living,” Drake said via email. “It’s time for the next century’s transformation.”

Some parts of the city are already below sea level, like Chelsea where Kriegstein has sold real estate there for eight years. Unlike the Financial District, the visible damage was minimal so she didn’t hear the same concerns from buyers in Chelsea post-Sandy.

“Property values keep going up and up—some of those buildings that were worst damaged have had bidding wars on the apartments there,” said Kriegstein.

StreetEasy Rings in the Holidays at Umami Burger

The Real DealDecember 13, 2013
Real estate listings and data provider StreetEasy celebrated the season last night at a party that brought together brokers, staffers and clients. Super broker Dolly Lenz made a brief appearance, as did Ryan Serhant, a Nest Seekers International broker and star of Bravo’s “Million Dollar Listing New York.” The party was held at Umami Burger at 432 Sixth Avenue in the West Village.

StreetEasy co-founder and Chief Technology Officer Sebastian Delmont, along with the company’s data guru Sofia Song, was on hand to welcome over 200- guests, who also included Rubicon Property co-founder Jason Haber, Miron Properties founder Jeff Schleider, CORE co-founder and CEO Shaun Osher and a smattering of journalists from local news outlets. Spencer Rascoff, CEO of StreetEasy’s parent company Zillow, which acquired the listings site in August, also made an appearance.

The open, two-story venue featured neon burger lights and red-leather banquette booths along the downstairs wall, with standing tables and a bar in the second floor, fronted with floor-to-ceiling windows. Guests nibbled mini versions of the California-based burger restaurant’s truffle burger, finishing the snacking with ice cream cookies.

This year’s fête felt cozier than StreetEasy’s 2012 holiday party, which had about 200 guests at the large North Cabana of the Maritime Hotel, at 363 West 16th Street in Chelsea.
An old-timey photo booth made a reappearance at this year’s shindig, luring guests with a spread of accessories that included oversized sunglasses, pirate hats and reindeer antler headbands.

Owned For 1 Week, Walker Tower 2BR Now Wants $2.9M More

CurbedDecember 13, 2013
Chelsea's record-breaking, highly-praised conversion, Walker Tower, has its first resale—and it's fittingly ridiculous. The seller wants nearly $2.9 million more than the $5,027,609 that he paid for it, but what's totally absurd is that the seller closed on the unit exactly one week before re-listing it. Evidently, the seller, a man named Burt Freiman, believes that his weeklong ownership of the 2BR/2.5BA 2,179-square-foot unit increased its value by more than 50 percent to $7.9 million. Even if it was a resale from a certain blonde actress, that increase would still be mindboggling.

Walker Tower Buyer Flips Out — $2.9M profit after one week?

The Real DealDecember 13, 2013
The buyer of a two-bedroom condominium at Walker Tower is trying for the high-profile Chelsea building’s first resale.

One week after purchasing the 2,179-square-foot unit for $5 million, the owner, Burt Freiman, listed it for almost $7.9 million, Curbed reported, citing StreetEasy. CORE brokers Reba Miller, Susan Rubell and Julia Cole have the listing. (CORE had initially been marketing the JDS Development and Property Markets Group project, until Douglas Elliman took over when CORE’s Vickey Barron joined the firm.)

Sales at the 1929 building, converted to condos from its previous use as copper wire storage by Verizon, launched in June 2012. Closings began last month, as previously reported. Actress Cameron Diaz and eponymous cosmetics line owner Laura Mercier picked up units at the property, at 212 West 18th Street, in the last week.

We Hear

New York PostDecember 13, 2013
That Town & Country’s Jay Fielden hosted a soiree with Mike and Irena Medavoy for Anjelica Huston’s new book Friday in Beverly Hills . . . That Falco Ink partners Janice Roland and Shannon Treusch celebrated their firm’s 15th anniversary at the Palm . . . That hairstylist Julien Farel, whose clients include Rachel Weisz, will give consultations to celebrate his Anti-Aging Haircare line at Bergdorf Goodman on Saturday . . . That HGTV stars Tom Postilio and Mickey Conlon threw their holiday bash at the Friars Club.

Shabby Chic – New York’s Market for Multi-million Dollar Fixer-uppers

Brokers WeeklyDecember 12, 2013
As condo prices in Manhattan’s luxury market rise to record levels, fixer-uppers are one of the last options for bargain hunters.

“Here’s an opportunity to save a lot of money and do it yourself,” said CORE broker Reba Miller, standing in a full floor condo on East 66th Street. “There is just a very limited supply for people who want a big space in Lenox Hill.

“Would this appeal to someone from China who wants a brand-new apartment? No. It appeals to someone who understands charm.ˮ

The 3,600 s/f apartment hasn’t been renovated in years, and Miller estimates that the buyer would have to invest $2-3 million — that’s on top of an asking price of $9 million. But she claims this is still a bargain compared to new developments and conversions such as the nearby Marquand, an HFZ conversion project, where similarly sized apartments start around $15 million.

There are plenty of good reasons to buy fixer-uppers. They are often significantly cheaper than finished luxury apartments — despite the renovation costs — and they allow buyers to create a living space according to their own tastes. But somewhat surprisingly, brokers still tend to have a hard time selling them.

Last year, Corcoran broker Deanna Kory sold a 5,000 s/f fixer-upper co-op on the Upper East Side for just under $9 million. “It was a bargain for my buyers, who had decided that they wanted to do their own thing anyway,” she said. But Kory also said most people who looked at her Upper East Side fixer-upper showed little interest.

Regulations that leave buyers little time for improvements are one reason for sluggish demand. “Some buildings have summer work rules. A lot of times, people would get apartments and for the life of themselves couldn’t get them renovated over the summer,” said Kory.

If regulations are lax, as in the case of Kory’s Upper East Side listing, the effort involved in renovating is still a big deterrent. “People realize it costs a lot to renovate, and are not always so incredibly anxious to buy,” Kory said. “It takes a lot to renovate these apartments.”

The often year-long renovation process is a particular deterrent for foreigners. Conversions and luxury developments in Manhattan have sold at record prices in part because of demand from wealthy Chinese, Middle Eastern and Eastern European buyers. But foreign millionaires tend to have neither the patience, nor the knowledge of local regulations and contractors to go through a renovation.

Unsurprisingly, brokers say that New Yorkers are the most common buyers of fixer-uppers.
But even if regulations are favorable and buyers are willing to renovate, there is still a third obstacle: fixer-uppers tend to make a bad first impression. Compared to shiny new luxury condos, fixer-uppers look like an apartment well below their price range, and require a lot of imagination from buyers.

“The problem with an unrenovated unit is that people often don’t know what they are looking at, that’s why they pass on it,” said Kory. “It is hard for people who don’t have vision.”

In 2011, Karina Sagiev of Evans Real Estate Investments had a 1,800 s/f fixer-upper at Park Avenue and 57th Street listed for $2.5 million. “It had a beautiful terrace and beautiful views, but everyone who walked in was shocked — it was written on their faces,” said Sagiev. “The fact that the address was Park Ave made it more shocking. This type of clientele wants beautiful apartments, not projects.”

The apartment, completely gutted and with all of the walls removed, simply didn’t look appealing enough. Even though Sagiev had contractors and a potential post-renovation floor plan ready, no one was interested. After one year and more than two dozen showings, the seller took the property off the market again.

Making a fixer-upper look good is perhaps the biggest challenge for brokers.

When Frances Katzen of Douglas Elliman put a gutted apartment on Seventh Avenue in Chelsea on the market, she decided to stage part of it to show what it could look like.

“People buy with emotion and with numbers; it has to make sense. If you have a property with phenomenal views and great potential, you will need to create one portion of the home as a finished look, it really helps drive home the point,” Katzen said.

Her strategy paid off. The apartment is currently under contract with a buyer who plans a complete renovation. Katzen is convinced that buying a fixer-upper is worthwhile, despite the effort involved.

“Nowadays people buy luxury apartments that are almost like hotel rooms,” she said. “But if you can buy an apartment on a high floor, or with park view, that just happens to need renovation, it can be much more rewarding. This is for people who want to leave their own imprint.”
The architect Marc Spector, principal of the Spector Group, has done interior work on several fixer-uppers. He said that renovating a 5,000 s/f apartment from the gut can cost between $800 and $1,500 per s/f, and yet he has noticed an “insatiable demand” for fixer-uppers.

“It’s all about location, that is the key. What you’re seeing in New York right now is that those who have the means are looking for these diamonds in the rough,” he said. “The challenge is finding an apartment that hasn’t been changed in 30 years. If you can find them, you can renovate and sell them with an enormous profit.”

New Listings: 29 West 74th Street, #3B

Brokers WeeklyDecember 11, 2013
Upper West Side
29 West 74th Street, #3B

Designer studio in elevator, townhouse co-op. Tastefully renovated, the home has a decorative fireplace and an open living space with 11 ft. ceilings, custom white oak hardwood floors and crown and base molding. The separate kitchen has open shelving and storage. Mosaic-tiled bathroom. Building features include a video intercom system, on-site laundry, bike storage and extra common storage. No pets permitted. 80% financing allowed. Listing brokers: Patrick Lilly and Cassie D'Agata, CORE.

“Law & Order” Cop Richard Belzer Finally Ditches UWS Digs

Luxury Listing NYCDecember 11, 2013

Two years after first listing his apartment, “Law & Order: Special Victims Unit” actor Richard Belzer has sold his combination co-op at 60 Riverside Drive for $3 million, according to city property records filed today.


The cop show star and his wife, actress Harlee McBride, first listed the four-bedroom, three-and-a-half bathroom home two years ago, with Douglas Elliman’s Arthur Korant and Harry Kendrick, asking $3.19 million. Two months later, the couple chopped the price to $2.9 million, but apparently to no avail.


While the apartment was no longer listed on Street Easy, it finally traded, and for close to the original ask, records show. The buyers were an Ariel and Catherine Deckelbaum. Ariel is the deputy chair of the corporate law department at law firm Paul, Weiss.


Belzer and McBride paid $541,000 for one unit at the building in 2006, but the other half of the combination abode does not seem to appear in city records.


Belzer and McBride were downsizing their New York City digs because they spend the bulk of their time in the south of France and planned to seek a smaller unit in the same building, the actor told New York magazine when he listed the apartment. He added that the home boasts lovely views of the Hudson River.


The building, which sits between West 78th and West 79th streets, boasts a doorman and bike storage, according to Street Easy.


Calls to Ariel Deckelbaum, Korant and Kendrick and an email to Belzer’s assistant were not immediately returned.

The Marketing Mavens of Real Estate

The Native SocietyDecember 10, 2013
In this series, we focus on real estate marketing chiefs who possess a superior ability to understand consumer wants and needs and how to implement their expertise. It’s their time to shine!

Founder & CEO
CORE Group

Under Shaun's leadership, CORE has become a powerful boutique brokerage representing some of the finest new developments and highest-valued resale properties in the city. A talented musician and native of Johannesburg, South Africa, Shaun traveled to the United States at the age of 21. He graduated from The New School and began his real estate career in 1994. Soon he became recognized as the top downtown agent—a distinction he maintained for the next 15 years. His expert opinion is frequently sought by top consumer and trade media outlets, including The New York Times, The Wall Street Journal, Bloomberg and Crain's. Shaun has been a guest lecturer at Columbia University and New York University and has participated in numerous industry panels.

1) In this digital age, how does your firm utilize social media, if at all and stay ahead of the competition?
Today’s buyers and sellers are extremely tech savvy. We embrace technology and use it as a platform to promote the business philosophies and ideas of our brand and agents. CORE believes in innovating the New York City real estate industry and we have paved the way for new technology by being the first brokerage to have a proprietary blog, which we contribute to multiple times daily. CORE was also the first brokerage to harness Pinterest to promote and showcase our new listings. Facebook and Twitter are also invaluable tools that we use to connect with our consumer and promote our listings, brand and agents.

2) What do you love most about your firm?
CORE has a culture unlike any other brokerage. We believe in trust and transparency and our agents and management team share ideas and information which has proven to be mutually beneficial to our business, clients and company morale.

3) What is your creative marketing motto/philosophy?
I founded CORE on the belief that the real estate industry could be modernized, which is why we value technology so much. We've made innovation one of our key marketing tenets from the beginning and, as a result, CORE continues to be a leader in the digital space. We're always looking to what's new, what's next and how else we can keep evolving both our business and the business of real estate.

4) What part of NYC do you see becoming the go-to spot in 2014 and any buildings in specific?
South of 34th Street from the Highline park to Park Avenue is the hottest neighborhood for new development and investment.

5) Coffee or tea?
Both, depending on my mood and the occasion.

New Listings: 45 Park Avenue, 1503

Brokers WeeklyDecember 04, 2013
Patrick Lilly and Adie Kriegstein at CORE have just listed this two-bedroom, 2.5 bath at 45 Park Avenue for $2.5 million. They call it an "elegant, loft-like condo" with a split bedroom layout and large living and dining area. The open chef's kitchen is outfitted with Viking and Sub-Zero appliances. The bathrooms have Kohler fixtures. Both bedrooms are en suite and have five-fixture configurations. The master bedroom has two walk-in closets. 45 Park Avenue was voted best new residential building when it was built by SJP Properties in 2007. Designed by architect Costas Kondylis, the building has a full-time doorman and concierge, fitness center, cold storage and residents lounge.

Have You Heard...

Brokers WeeklyDecember 04, 2013
CORE's Tom Postilio and Mickey Conlon hosted a private cocktail event benefiting March of Dimes at the home of legendary Grammy award winner David Sanborn and his wife Sofia.

The event showcased Sanborn's five-story townhouse, which is currently on the market for $12 million.

Postilio and Conlon are the exclusive listing brokers for the home, which boasts five bedrooms, four wood-burning fireplaces and a recording studio on the top floor.

Guests at the event included Bravo's Million Dollar Listing star, Douglas Elliman agent Louis Ortiz.

House of the Week: 45 Park Avenue, 1503

New York PostDecember 04, 2013
Murray Hill
$2.5 million | Square feet: 1,440 | Common charges: $1,968
Bedrooms: 2 | Bathrooms: 2½

This Costas Kondylis-designed condo on Park Avenue, between 36th and 37th Streets, offers hardwood floors throughout, an open kitchen with name-brand appliances and granite counters, and floor-to-ceiling windows in the large living/dining area. The full-service building offers “hotel-like” concierge service, a fitness center and a landscaped sundeck. Agents: Patrick Lilly and Adie Kriegstein, CORE, 212-612-9681 and 917-921-6929.

Flegg Has Star Turn in Reality TV Show

Courier Mail BrisbaneDecember 04, 2013
Is Bruce Flegg eyeing a career as a reality TV star?

The LNP MP has been featured on a US reality television show that chronicled the purchase of his swank, $1.2 million Fifth Avenue apartment.

Before their relationship went sour, Mr. Flegg dispatched his former lover Sue Heath to the Big Apple to buy him the Manhattan pad. The Member for Moggill allowed the process to be documented for the series Selling New York

Site on Bond St. Sold in Quiet Off-market Deal

Crain's New York BusinessDecember 02, 2013
One of the last buildings ripe for development on a tony block-long stretch of Bond Street was sold in an off-the-market transaction late last month. Joshua Gurwitz's Good Property Co. snatched up the building at 31 Bond St. between Lafayette and Bowery streets for an undisclosed sum.

Mr. Gurwitz plans to create a handful of new luxury units by renovating the NoHo building that has seen a variety of uses over its more than century-long lifespan, having housed everything from offices and artists' studios to performance space, according to city documents. Details regarding the exact plan and timeline for 31 Bond St. are expected to be announced within the next year, according to David Beare of the brokerage firm Core, who represented the buyer.

"It is probably going to be one of the last development opportunities on Bond Street," Mr. Beare said.

The mostly landmarked area north and south of the cobblestone street have proven fertile ground for luxury buildings and celebrity tenants in recent years. Among the notable developments are famed hotelier Ian Schrager's 40 Bond St. with its heavily articulated green-glass façade, which is right across the street from number 31. Other notable projects include the BKSK Architect-designed, nine-unit luxe condo development 25 Bond St. and DDG's seven-unit, bluestone condo building at 41 Bond St.

In this case, the previous owners weren't actively looking to sell, but Mr. Beare happened to be walking by the building in the spring and decided it would make for a great residential conversion, not to mention one of the last such opportunities on the block.

He eventually connected the owners to Mr. Gurwitz, who leapt at the opportunity to buy the property. Once the renovations are complete, Core will be selling the units, which Mr. Beare expects will attract tenants looking to take advantage of the trendy street's location and slightly secluded atmosphere.

"NoHo seems to be this cool enclave with a lot of the things SoHo has, without the pedestrian traffic and commercialization," he said.

Good Property Plucks Rare Conversion Spot on Bond Street

The Real DealDecember 02, 2013
Joshua Gurwitz’s Good Property picked up 31 Bond Street in an off-market sale and will likely transform the property into one of the nabe’s many new luxury projects.

CORE’s David Beare represented Gurwitz in the sale, and said that the exact plan for the building, located on a popular NoHo stretch, will be announced within the next year.

The amount Gurwitz paid for the property was not disclosed, Crain’s reported.

“It is probably going to be one of the last development opportunities on Bond Street,” Beare told Crain’s.

Directly across the street is hotelier Ian Schrager’s 40 Bond Street, where Latin crooner Ricky Martin recently listed his $8.3 million condominium, and BKSK Architect’s 25 Bond Street and DDG’s 41 Bond Street are close by.

The previous owners, CC NY Realty, who paid $3.54 million for the property in 2011, according to city records, were not looking to sell when Beare approached them, he told Crain’s. Beare said that he came across the building on a neighborhood stroll and thought it would be a great spot for a residential conversion. He linked the owners to Gurwitz, who enthusiastically latched onto the idea of purchasing.

CORE will be marketing the units once conversions are completed, Beare told Crain’s.

31 Bond Development Site Sells

CurbedDecember 02, 2013
NOHO—Josh Gurwitz of Good Properties negotiated an off-market deal to buy 31 Bond Street for an undisclosed sum, and has plans to convert it into condos. The brokers, already in place, are calling it "one of the last development opportunities on Bond Street."

The Architectural Charm of 57th Street

The Epoch TimesDecember 02, 2013
NEW YORK—As towering residential developments rise one after another south of Central Park, the historic architectural treasures on 57th Street have been a bit overshadowed.

“There are many famous buildings there designed by famous architects,” said CORE real estate agent Doug Eichman. Buildings by Emery Roth and Warren & Wetmore sit on the same street as Carnegie Hall and the Crown Building where the Museum of Modern Art held its first exhibition, all just blocks from Central Park.

Eichman, who has sold real estate in the area for over a decade and has been a resident since 1992, said the energy of the neighborhood has changed over time as well, holding onto the arts and culture of the city, but adapting to new buyers’ needs.

“I think part of the appeal of 57th Street is the history and the fact that it’s one of the prettiest streets in the city that’s lined with these prewar buildings,” said Shaun Osher, CEO and co-founder of CORE. “[That] gives that street its texture.”

“It’s literally right at the center of New York City, and it [has the] proximity to the arts and culture that makes this city great,” Osher said.
Best of Both Worlds

The 57th Street corridor has gotten much attention from residential buyers from as close as the next street over, to as far away as Asia, as the new developments and the old cater to a variety of tastes. While international buyers or investors have given the luxury high-rise residences a lot of attention because they aren’t always full time residents, New Yorkers know and love the prewar buildings.
“The prewar co-ops are like joining a club, to some extent,” Eichman said.

A handful of buildings are prewar cooperatives, and then there are buildings built in the 1960s that mimic the style and layout of the prewar architecture, Eichman said.

“The demographics have changed; there are families that have been interested in the neighborhood because of the spaciousness and the layout—multiple bedrooms, large, gracious apartments,” Eichman said of the coveted co-ops. Even families with students attending private schools in the Upper East Side want to live in the area because of the generous space they can’t get elsewhere.

The addition of Whole Foods at the Time Warner Center played into the change in energy of the corridor as well, Eichman said.
Renovations can involve the full building, as well as individual units. Residences are often opened up to allow more sunlight in, but most prefer to keep the prewar details as they upgrade.

The co-op boards are very aware that buyers are seeking out more amenities and family-friendly additions, and are upgrading the interiors.

Eichman noted a co-op board president had reached out to him to better understand how to add value to the building. Now they’re considering adding amenities like a gym, a playroom, upgrading shared areas like the lobby, adding storage space, and re-evaluating the building’s plumbing to allow for washers and driers in the units.

“That’s the way they can drive share price up and they can compete dollars per square foot on a co-op, versus dollars per square foot on a condo,” Eichman said. “You can’t change the size of an apartment, but you can increase the intrinsic value by adding amenities to the building.”

The appeal of the ornate detail found in the architectural prewar buildings, even after renovations, makes the locations great for events, Eichman said. For example, a penthouse on 57th Street is perfect for a book signing.

“This is a very architectural space,” Eichman said. “We’re kicking it up a notch on the actual events that we do in the neighborhood and making people aware of what’s going on.”

Residential Rising on 57th

With rezoning allowing for new heights to be reached so close to Central Park, some of the city’s tallest buildings are now lined up on the 57th Street corridor.

TF Cornerstone’s 606 W. 57th St. residential project, designed by Miami-based Arquitectonica, is just the latest of the bunch.

The long list includes Extell Development Co.’s One57 and Macklowe Properties’ 432 Park. The Durst Organization’s pyramid on 625 W. 57th St. designed by Bjarke Ingels Group is still in progress, as is the skinny SHoP Architects-designed tower, 107 W. 57th St., by JDS Development and Property Market Group.

The sky-high towers are all nestled in the area because, as many developers have noted, the vantage point allows residents a great view of the park, the Hudson River, and the southern half of Manhattan.

The Lonny Gift Guide

Lonny MagazineDecember 01, 2013
For our shoot, we borrowed the keys to a three-bedroom, three-and-a-half bathroom penthouse -- yours for a mere $9.75 million -- at 241 Fifth, a new condo building from the CORE Group, in New York City's up-and-coming NoMad neighborhood. Designed by ODA Architecture, the apartment features 11-foot ceilings and a rooftop terrace with a separate kitchen and a hot tub.
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