New York PostJanuary 24, 2013
Chelsea $1.095 million
Bedrooms: 2 Bathrooms: 1 ½ Square Feet: 1,100
Featuring an “open” floor plan across two levels on the fourth and fifth floors, this duplex co-op on West 29th Street offers garden and skyline views on the main level, along with a woodburning fireplace and corner kitchen. Both of the bedrooms and a “newly renovated” bathroom are upstairs. Agent: Ryan Fitzpatrick, CORE, 212-500-2112
Brokers WeeklyJanuary 23, 2013
The Wall Street JournalJanuary 22, 2013
The owners of this five-bedroom townhouse spent over 20 years creating their own pocket of suburban living in Chelsea, making a hobby of tackling design, renovation and decor projects in the home. -- Jackie Bischof
John and Penny Marzulli purchased this single-family townhouse on West 19th Street in Chelsea for $837,000 in 1989, according to public records. The couple met when they both worked at international law firm Shearman & Sterling, where Mr. Marzulli still works as an attorney. The facade of the townhouse, pictured, was cleaned and renovated in 2007.
After graduating from New York University School of Law, Mr. Marzulli purchased a different brownstone on 19th Street with two classmates in 1981. Noticing property values were rising, the Marzullis decided to purchase this townhouse on the same block. 'My sense was that the area was on an upward trajectory,' Mr. Marzulli says. The great room is pictured and features one of the home's five wood-burning fireplaces, relined by the couple.
The parlor-floor library provided a place for Mr. Marzulli to work after coming home from the office. 'I've always loved having that space,' he says. Listing broker Vickey Barron of Core describes the room as having 'worldly charm.'
During the initial renovation the couple removed flooring from the parlor floor to create a double ceiling height foyer, which allowed more light into the home.
Here, the master bedroom on the third floor. 'Growing up outside the city, light was exceptionally important to me,' says Ms. Marzulli. The couple considered restoring an original stoop to the brownstone but decided against it, concerned that it would cut off light to parts of the home.
The garden is pictured. The townhouse was listed in mid-December with Vickey Barron and Ryan Fitzpatrick of Core for $7.25 million.
New York MagazineJanuary 20, 2013
407 East 75th Street
Asking price: $12.5 million
A sleek, steel-framed fireplace is carved into the wall of this townhouse’s main living room.
Agents: Emily Beare, Elizabeth Beare; CORE NYC.
New York PostJanuary 17, 2013
UPPER EAST SIDE $4,685,000
303 E. 77th St.
Four-bedroom, 3 1/2-bath full-floor penthouse condo, 2,559 square feet, with direct elevator access, Poggenpohl kitchen with Viking and Sub-Zero appliances, floor-to-ceiling windows and four terraces; Isis building features doorman and storage. Common charges $2,849, taxes $382. Asking price $4,995,000, on market 20 weeks. Brokers: Jarrod Guy Randolph, Core and Elisabeth Mohlmann, Elegran Real Estate
CurbedJanuary 17, 2013
HGTV's Selling New York rides along with brokerages CORE, Kleier Residential, and Warburg as they try to sell fabulous properties fabulously. Here's our recap of how the NYC real estate industry is portrayed to the world, penned by Angela Bunt. Episode air date: 1/17/2013.
On this episode of Selling New York, we meet up with Gumley Haft Kleier agent Margo Fall for the first time this season. She's working with Nell and Chris Stephenson to find them the perfect space as they make the move from California to New York. Their only major requirement is a working kitchen. Shouldn't be too tough—everybody cooks in New York, right? We also join Core hotties Elizabeth Kee and Lindsee Silverstein as they try to sell a client's $4M East Village property....with a fratty appearance and a slide sitting in the middle of the living room. Can they spruce up the space and make it worth the four mill?
The episode kicks off with a lunch date between Kleier Residential agent Margo Fall, and nutritionist/author/buyer Nell Stephenson. Nell's husband, Chris, has been commuting back and forth from L.A. to New York for the last year, not to mention her agent and publisher are also NYC-based. While they love their California digs, it's time to make the move to the Big Apple.
The first stop is at The Indigo in Chelsea. Chris is stuck in a meeting, so it's just Margo and Nell hittin' the streets. As they enter the $2.25M, 2BR, 2.5BA apartment, they're instantly blown away by the humongous kitchen. Because Nell is a nutritionist, having a working kitchen is a must. I mean, look at those guns!
She's also impressed by the outdoor space of the apartment, as every bedroom has its own private terrace. Seems like the perfect pad, but Nell has something on her mind. She doesn't know how to tell Margo...but she's having cold feet about buying a property. Can they look at rentals instead? Margo forces a smile as she watches the dollar signs crumple around her, and through gritted teeth tells Nell not to worry.
In an attempt to bring a little California love to New York City, Margo takes Nell to the Metal Shutter Houses at 524 West 19th Street. It's a breathtaking 2BR, 3BA, and only $12,900 a month! Clearly, writing is a very lucrative career and this is pocket change for the health author.
The selling point of this apartment are the windows, which fold into themselves, leaving the entire living room wall open to the outdoors. The apartment is huge, filled with light and exposures, and has tons of storage for these furniture-less nomads. Plus, the kitchen is just perfect. Nell loves it and is ready to pull the trigger, but her gut is telling her to look at one more property just in case. Margo's reaction.
"I'm so sick of having to explain the harsh reality of New York real estate to these fun-loving Californians."
Although it seems Nell is sold on the Metal Shutter House(s), she still heads to200 Chambers Street in Tribeca to check out a 2BR, 2BA, listed at $12K a month.
The best feature of the apartment is the large, open living room that's lined with windows. The sleek, contemporary apartment has the non-cluttered look that the Stephensons are into, but Nell's not compelled. She still wants Shutter House. Time to bring hubby Chris in to get his blessing!
Chris loves the apartment, and with a sicky view of the Empire State Building, what's not to love? But Margo doesn't have time to celebrate yet: She needs to get all the paperwork ready for the apartment so the Stephensons can get board approval before they head back to California.
When we next catch up with Margo, she's making her way over to the Stephensons' awesome new pad to eat some of Nell's delicious cooking that she wont shut up about, and to make sure they're all settled in their new place (which is completely undecorated and they obviously haven't moved in yet). Bottle of wine in tow, she arrives and is ready to dig into Nell's fancy meal.
Mmm, I love… lettuce.
As a present to Margo for finding them the perfect space, Nell gives Margo a gift. A bonus? A referral? Nope: An autographed copy of her book, "Paleoista." It's just what she's always wanted.
One rental crisis averted, one more to go. This time it's with Core agents Elizabeth Kee and Lindsee Silverstein (not to be confused with Lindsay). They're working with online poker player Phil Galfon to try and sell his East Village apartment, located at 425 East 13 Street, aka the A Building. Phil couldn't be there for the initial meeting because online poker was made illegal in America last year, so he's hiding away in *gulp* Canada. His manager, Michael Stoltz, shows them around the 4BR,
Over Skype, Phil tells the ladies that he's spoken to three other agents who have all priced the apartment at $4M. But is he bluffing? Ms. Kee and Ms. Silverstein think that in order to hit the $4M mark the apartment needs some minor repairs and a complete restaging, because, as Elizabeth says, "Right now the apartment looks more like a frat house." I don't know what college she went to, but unless they forgot to show the urine-and-vomit-stained rugs during the tour, it doesn't look like any frat house I've ever seen.
I will crush you in Mario Kart.
After getting the go-ahead from Phil to do a little redecorating, it's time for these ladies to go shopping! They head to Lazzoni to pick up furniture that will hopefully turn this bachelor funhouse into a suitable four-million-dollar home.
The girls meet up with Phil and Michael at Bowlmor to discuss business. You can tell Elizabeth is horrified yet fascinated by the meeting spot. It's so different from where her other clients usually take her. First the slide, now the bowling...Phil's unlike any man she's ever met. He's so intriguing...
The dudes clearly took the girls here in an effort to try and pick them up. It's the same type of non-date that a guy asks you on when he's like, "Hey, want to meet up and have some food?" but never actually comes out and says it's a date so he doesn't have to deal with the potential rejection. Or paying.
The ladies explain their marketing plan, which is essentially just having a party filled with "influential trend-setters" aka any of their clients who have more than 1,000 Twitter followers. Phil's like, "Yeah yeah, that's great, now come sit on my lap and let's eat some more of this chicken strip basket."
The next time we see the budding couple is when Elizabeth and Lindsee are showing off the renovated apartment to Phil. The new décor and furniture have really transformed the space, and while Phil says it's not how he'd decorate it, he can see the vision. Wow, Lizzy, is that a new dress? And your hair and makeup – so fresh! It's almost like you're trying to impress somebody.
Did he really just say, "Let's sell it, I like to win?" We get it, you're a professional poker player.
It's the day of the shindig, and bottles are poppin' and hors d'oeuvre are rockin'. The party filled with "influential trendsetters" is a big success, and people seem to love the slide. In fact, it almost became a trending hashtag on Twitter! Finally, the property has generated the buzz it needed to get some offers. Or has it? So far the press has been amazing, but no bids yet. Via Skype, Elizabeth reassures Mike that because of the unique space it might take some time for people to make offers.
Then, in an effort to use as many poker puns as possible in the last two minutes of the show, she says that she knows they took a gamble hiring them as agents, but they're sure once they get the apartment sold it'll be a jackpot for them all. Lindsee is just like, "WTF did she just say? God, I hope I get to work alone next time."
After holding a broker open house at the property, the ladies receive an offer on Phil's apartment which the update says is currently in negotiations. Since this episode went into production, the place has actually sold, to someone who doesn't want to keep the slide.
It was easy sales all around in this episode, and we even got to see some potential young love blossom. For that reason, this episode gets 4 out of 5 cackling Kleiers.
Brokers WeeklyJanuary 16, 2013
CurbedJanuary 11, 2013
While 245 Fifth Avenue has been enjoying its permanent winter, construction has continued at 241 Fifth Avenue, a rising ODA-designed condo building. New York YIMBY has a fresh construction update, and things are pretty far along! The 210-foot tower will have 46 units, and pricing was originally said to be in the $2 million to $2.5 million range. The project received a stop-work order in mid-December due to lack of an FDNY permit.
New York Daily NewsJanuary 09, 2013
Prices are skyrocketing as prospective buyers add their names to long waiting lists for digs on upper West Side and beyond.
There are 1,200 prospective buyers for 62 units at 101 West 87th St. The availability of Manhattan condominiums has hit an all-time as prices continue to rise.
They probably should be called “condo- minimums .”
The number of available condos in Manhattan is at an all-time low — creating a seller’s market that is sending prices sky high.
On the upper West Side, for example, only 329 condos were available through November.
"Back in 2005, that 329 would have been available in one building and there would be five more buildings just like it in the same
neighborhood," said Adrienne Albert, CEO of the Marketing Directors, which tracks inventory of available units.
"That means price will continue to go up, and maybe for 18 months."
Developers who have condos to sell are reaping the benefits.
At 101 W. 87th St., more than 1,200 prospective buyers were on a waiting list for just 62 units.
Buyers have scooped up pads at Bazbaz Development's 101 West 87th St., which was 40 percent sold without a launch.
"There are just many more buyers than available apartments," said 101 developer Sonny Bazbaz, who has apartments ranging from
$790,000 one-bedrooms to $7 million penthouses. "If you have good product, it's gone. People are buying off floorplans and renderings."
The shortage is severe in many neighborhoods compared to four years ago:
- In downtown below 14th St., there are 606 apartments available, down from 1,737.
- In the upper East Side, there are 407 apartments available, down from 891.
- In Midtown East, there are 473 apartments available, down from 719.
The problem is a lingering hangover from the recession when banks were unwilling to give construction loans for large-scale developments.
As a result, few new buildings entered the marketplace — and the ones that are going up aren’t likely to be available for up to two years.
Developers with available units are already raising prices — and buyers are acting fast.
"They’re starting to realize if they don't buy something now they will lose it and pay more," said Michael Vargasm founder of Vanderbilt Appraisals. "We have five months of inventory left in the city. That's nothing."
Broker Jarrod Guy Randolph just sold a $4.685 million penthouse at Isis, a condo at 303 E. 77th St. after receiving multiple bids.
“Anyone sitting on a condo is in control," said Core’s Randolph. "They’ll make a lot of money on a resale over the next few years."
CurbedJanuary 04, 2013
HGTV's Selling New York rides along with brokerages CORE, Kleier Residential, and Warburg as they try to sell fabulous properties fabulously. Here's our recap of how the NYC real estate industry is portrayed to the world, penned by Angela Bunt. Episode air date: 1/3/2013.
In the first episode of the new year, we're introduced to CORE SVP Mickey Conlon, who's working with an Australian client to try and find her the perfect space on a less-than-perfect budget. With only a week to close the deal, Mickey aims to show her that if you want NYC views, you have to pay NYC prices. Also featured on this week's episode are the women of Warburg, Leslie Modell Rosenthal and Deborah Lupard. They're working with the New York Foundation for the Arts to bring fabulous artwork into their listings. The only problem: one of the apartments refuses to allow any holes to be put into the wall. Oy. It's always something.
Mickey Conlon, the SVP of Core, kicks off the episode when he meets with Sue Heath, a client from Australia. Her partner, Bruce, buys real estate as a hobby, so she's in the city scouting apartments for the week. Saying that you buy real estate as a hobby is like saying you travel or practice philanthropy as a hobby. It's essentially saying, "In my spare time, I like to be filthy rich." Her initial budget ranges from $600-800K, and she wants something that "feels like she's in New York." You know, perhaps something with a view of a skyscraper or a Manhattan landmark. Or maybe something that overlooks a few dumpsters and homeless people. That's uber New York.
The first property Mickey shows Sue is a 1BR, 1.5BA located on West 57 Street. Near the theaters, parks and shopping, this is as "New York" as it gets.
It's a spacious pad, with a view of the Hearst Building (like Sue has any clue WTF that is), and a teensy tiny Statue of Liberty out the living room window. It fits the bill for the client—except that the ceilings are kind of low. Besides, in a strategic move by Mickey to show Sue how much bang for your buck you get in Manhattan (hint: none), this apartment is actually listed at $1.345M. Which is about $500k over budget. You're not in Aussie any more, honey.
Mickey is desperately trying to stress to this couple that if having a quintessential New York view, plus high ceilings and polished finishes, are apartment musts, they're going to have to raise their budget. Perhaps the couple would take him more seriously as the Senior Vice President of Core if he took those ridiculous bow-ties and scarves off and stopped dressing so much like Ronald McDonald on a job interview. Just a thought.
The next apartment Mickey shows Sue is at 400 Fifth Avenue, aka Midtown's Setai. It's a 1BR, 1.5BA listed at $1.715M. Hey, that's still way over her price range!
But wait, is that Madison Square Garden I see out the window? And these ceilings are sooo high. Time to get on the horn with the hubby to try to convince him to raise the budget!
They rouse Bruce from his sleep halfway around the world to tell him the news. Mickey jokes to Bruce that he's glad he's in Australia so he "can't bite his head off." Or the yellow tie he's rocking. Bruce suggests making an offer of $1.2M, and Mickey lets out an audible sigh as if to say: these guys are clueless. He knows a lowball offer like that won't get them the apartment, and they're just wasting time as Sue is only in the states for two more days. Not surprisingly, the offer is too low and they lose the bid. Even I could've told them that would happen.
In an effort to forget about their rejection, Mickey shows Sue a pad at 211 East 51st Street, a 2BR, 2BA listed at $1.475M.
So I guess we have just completely disregarded their initial budget at this point. Although I like Mickey's tactic: show them the best and most expensive right off the bat, so everything else pales in comparison. I hear that commission climbing, cha-ching! Hey, he didn't become an SVP without serious skills. While Sue says the apartment is "lovely," she just can't get the Setai crib out of her head. They decide to revisit the building with a swift stronger offer.
With 45 minutes left in the city, Mickey meets with Sue to share some news. He found another apartment at 400 Fifth Avenue, on a lower floor and at a slightly lower price ($1.25M), and the developer is willing to sell it to Sue. Hooray! Was it Mickey's voracious attitude that got them the apartment, or his poop-colored bow-tie? The world may never know.
The other brokers featured in this episode are Leslie Modell Rosenthal (hey, didn't we just see her last week?) and Deborah Lupard. When we're first introduced to them, they're sitting through what looks like a really boring staff meeting at Warburg.
Warburg President Fred Peters is telling the staff about his new apartment staging idea. Rather than the martinis, appetizers, and strategically placed Moroccan statues that have become the staging norm, they're going to partner with the New York Foundation for the Arts (NYFA) to license artwork and place it throughout different apartments on the market. Leslie and Deborah both have listings on 72nd Street, and they want to utilize the art idea to revitalize the apartments and invite potential buyers over for an art show.
Deborah Lupard goes to visit her client Debra Kent (related to Maggie?) at the Mayfair Towers to discuss the idea of an art installation in her $1.095M, 1BR, 1BA apartment.
She has a few fragile pieces of her own she'd rather not move, and a curious portrait of Mao Zedong hanging in her kitchen, but she's down with the idea. The ladies are excited about the concept of an art show, because as Deborah says, "It's not just cheese and crackers," and will hopefully spark more interest than an average staging.
From there, we're taken to our girl Leslie's 2BR, 2BA, $10,400/month exclusive at 442 East 72nd Street.
She's brought Michael Royce from NYFA so he can evaluate the space and figure out what pieces will work best. Immediately, he's taken aback by the beautiful view and finishes of the place: "Wow. Can I live here? This is terrific." Obviously NYFA isn't paying him enough. It seems like the perfect place to exhibit art, except one thing: the place has just been painted, and the owner doesn't want any art hung on the walls. Michael knows it will be a challenge, but says he can make it work.
This year is the year that I ask for a raise -- I swear!
When we next catch up with the ladies it's the Big Day of the art show. Michael Royce is working furiously to place (notice I'm saying "place" rather than "hang") all the art at the East 72nd Street property, which he's ingeniously decided to prop on easels throughout the digs. The apartment at West 72nd street proves to be less of a challenge, as there was already plenty of art there, but the team still manages to revitalize the crib and "contextualize" the artwork. They've used the word contextualize about five times when referring to these stagings, and I have no idea what it means. Is this some type of real estate buzzword? Whatever, it's not like I'm a writer or anything.
Even though the open houses haven't seen any results yet, Leslie and Deborah are still happy with their staging results. They visit with Michael to view some more artwork at NYFA and talk about future stagings, and make up more buzzwords about art.
"I love the way that the light is feeding through the stained glass. It's very interesting," says Leslie. So now she's some type of art connoisseur? Eight weeks later, Leslie's client has taken her apartment off the market. Deborah got two offers on her client's apartment, but neither was accepted. Maybe these brokers should consider a career change to curating?
Episode Review: I have a deep hatred, but even deeper respect, for a man not ashamed to wear a bow-tie. Plus, I like the cojones that it took for Mickey to continually show his client apartments way above her price range. Also, even though it didn't generate a sale, Warburg's idea to use an art show as a new way to stage a property is a welcome change from the drinks and appetizers we've become accustomed to. For this reason, and because my New Year's resolution is to be nicer, this episode gets 4 out of 5 cackling Kleiers.
Modern NYCJanuary 04, 2013
This two bedroom two bath home boasts a private 1,277 square foot terrace.
One Murray Park, Long Island City's newest condominium, is nestled on the
beautifully renovated Murray Playground. Steps away from MoMAs PS1 and
the E, M and 7 subway lines, One Murray Park features include a doorman,
indoor parking, gym, common roof deck, residents library and a bike room.
The Pricing Puzzle
The Real DealJanuary 04, 2013
How much is that Central Park view really worth?
In a year full of eye-popping luxury listings — in the second half of 2012, four homes hit the market asking at least $90 million — pricing a New York City apartment can seem increasingly subjective.
Right now, for example, a five-bedroom spread at 15 Central Park West is on the market for $95 million, even though it’s some 20 percent smaller than the $88 million penthouse in the building that set records when it sold last year.
What justifies the higher price? The smaller unit has better views, listing broker Emily Beare of residential brokerage CORE recently told the Wall Street Journal.
Shaun Osher, CORE’s CEO, said now more than ever, “pricing an apartment in New York City is an art, not a science. There are so many intangibles that create value.”
It’s well known that New Yorkers are willing to pay more for certain basic features, like a top-notch location, a condo over a co-op, or a doorman. A doorman, for example, can add up to 15 percent to an apartment’s value, industry veterans said, while condos are generally considered to be worth between 10 and 40 percent more than co-ops.
But from there, things get a little more complicated. Icing-on-the-cake features like fitness centers, prewar detailing, outdoor space and show-stopping views are harder to quantify, especially since their value changes over time along with consumers’ attitudes, the economy and other factors.
This month, The Real Deal asked New York City brokers and appraisers which of these extras fetch price premiums in today’s real estate market — and which ones don’t.
Central Park views
In Manhattan, Central Park views may be the single most valuable apartment amenity right now.
In the right circumstances, unobstructed park views can tack an additional 50 percent onto an apartment’s purchase price, according to real estate appraiser Jonathan Miller of Miller Samuel.
For example, at Extell Development’s 1,000-foot-tall new condo, One57 at 157 West 57th Street, a high-floor apartment is reportedly in contract for between $90 million and $100 million. Key to the building’s marketing are the panoramic, 360-degree views of the park and the city, which likely account for at least 50 percent of the value of the upper-floor units, Miller said.
Unlike most other cities, where waterfront property is the most coveted, Central Park views are considered preferable to river views in New York, Miller said.
New Yorkers “pay a premium for looking at Central Park,” he said. “In any other metro area, there’s a premium for facing the water.”
An unobstructed Central Park view is generally up to 10 to 15 percent more valuable than an unobstructed river view in a comparable apartment, said Neil Binder, who heads the Bellmarc Group.
That preference may be due in part to legendary and controversial urban planner Robert Moses, who built the city’s highways along the waterfront. Over time, the preference for park views has become a “self-fulfilling prophecy,” Miller said, explaining that the rich flocked to park-side residences deemed more exclusive because of their limited availability.
Miller noted, however, that views are among the hardest apartment features to price, since they’re so subjective.
The method appraisers use to value outdoor space — such as a balcony, terrace or garden — has changed dramatically in recent years.
In the 1980s and early 1990s, outdoor spaces were assigned a fixed dollar value based on their size, Miller explained. As such, terraces of the same size and shape were considered to have the same value, regardless of whether they were attached to a studio or a 12-room spread.
But that changed in the late 1990s, when price per square foot became a popular metric for measuring apartment values. Nowadays, outdoor space is valued at 25 to 50 percent of the price per square foot of the apartment’s interior, Miller said. For example, if an apartment is worth $2,000 per square foot, the terrace might be worth $500 to $1,000 per foot. The same formula works for balconies, grassy gardens and backyards, Miller said.
As a result, outdoor space is now worth more if it is attached to a larger or more impressive apartment. That makes sense, Binder said, because outdoor space is more desirable if it’s in proportion to the size of the apartment.
“I don’t want a terrace with an apartment,” he quipped. “I want an apartment with a terrace.”
Factors other than size also come into play when valuing outdoor space, like depth, shape and floor height, Miller said. A second-floor terrace overlooking a busy Manhattan street, for example, is likely to be less desirable than a 16th-floor terrace overlooking the park.
On average, apartments that have never been lived in fetch a price premium of 15 to 25 percent, Binder said.
“There’s just a thing about fresh and new that people find compelling,” he said.
Moreover, the sheer amount of marketing and advertising developers put into launching a new project helps drive up prices, Binder noted.
In recent years, that premium has increased, in part due to increasing interest in Manhattan real estate by international investors.
“Investors have a preference for new, because they don’t have to go through co-op or condo boards,” Binder said.
Another factor is the increasing quality of new construction, Miller said, as developers aim to attract über-wealthy buyers from all over the world.
“New development over the last 15 years has been continuing to move towards a higher luxury product,” he said. As a result, “the premium today between a 20-year-old [building] and new construction is larger than it was. The gap is widening.”
Just as New Yorkers are willing to pay more for brand-new construction, they’re also willing to fork over more cash for historic buildings. New York City homes built before World War II tend to be 10 to 15 percent more expensive than similar homes built in the decades after the war, Miller said.
The reason? Prewar buildings tend to have better soundproofing and higher ceilings than their postwar counterparts, along with hardwood floors and walls made of plaster rather than drywall, Miller said.
The quality difference is a result of the postwar housing shortage, Miller said. “The name of the game was to get things up quickly,” he said. “Lower-cost housing for the masses was the mantra of the day, so construction quality changed.”
(In fact, Miller said the two housing types are so different that when he does appraisals, he rarely uses postwar sales as a comparable for pricing prewar units.)
Prewar buildings are also more likely to have fireplaces and baseboard and crown moldings, features which many New York homebuyers consider charming and desirable, Osher said. And the limited availability of prewar homes also adds to their value.
“There’s a strong appeal to prewar property because it’s an irreplaceable asset, whereas there will be a lot of new buildings built,” Osher said.
Flashy fitness centers may help developers market new buildings, but the “jury is still out” on whether these amenities actually add any substantial value to a property, Miller said.
He estimated that the presence of a gym in the building adds less than 5 percent to an apartment’s total value. (He noted that gyms in new buildings usually come as a suite of amenities, which can include pools, sauna and spas.)
In fact, buyers in luxury new developments these days seem to expect gyms as a bare-minimum feature, rather than a sought-after extra.
“There are buildings [where] certain types of amenities are simply expected,” said Stephen Kliegerman of Terra Development Marketing.
“Once you start getting above $2,000 or certainly $2,500 a square foot, your amenity package is going to have to be very good in order to justify your pricing.”
But these health-oriented amenities don’t add as much value as some other features, Binder said, because many residents don’t use them, and they often mean additional costs for upkeep. That’s especially true for pools, he said.
“People don’t use the pools,” Binder said. “They look nice and people use them as a means of deciding between properties, but they don’t want to pay for them.”
CurbedJanuary 04, 2013
Welcome back to Curbed Comparisons, a column that explores what one can rent for a set dollar amount in various New York City neighborhoods. Is one man's studio another man's townhouse? Let's find out! Today's price: $4,400/month.
In Clinton Hill, this 1,650-square-foot 3BR, 2BA duplex seamlessly blends original details with new additions, and is going for $4,350/month. Highlights include the staircase, the floors, the large living room, and kind of just everything.
The Real DealJanuary 04, 2013
Meet New York City’s top real estate listings photographers.
In recent years, a new niche industry has exploded within the real estate industry: listing photography. With the advent of digital photography and growing international interest in New York City real estate, more and more brokers have turned to professionals to shoot their listings rather than taking the photos themselves.
Photographer Michael Weinstein, who has shot real estate listings for 16 years, recalled being worried that digital photos would ruin his business. Instead, he said, they’ve benefitted him in ways he never could have foreseen: Now that digital images can easily be viewed on the web, buyers come from Russia and China to purchase homes in New York based solely on his photographs.
“Photography has become more important in terms of the international market,” Weinstein said. “I feel my work now has become more valuable than ever.”
Whether it’s a Park Avenue penthouse or a Downtown studio, brokers said, listing photographs can make — or break — a deal.
Most brokers “are visual people,” said Emily Beare, managing director and associate broker at the brokerage Core. “We’ll look at the pictures, then look at the floor plan and then look at the description. So the photography has to be enticing.”
Beare said she usually tries to get photographers Richard Caplan or Nico Arellano to shoot her higher-end listings, believing that their work helps generate sales.
Agents said they will pay a premium — often out of their own pockets — for the right photographer. Most city real estate brokerages maintain a list of approved photographers, and a marketing budget that agents can tap into when hiring from that list. But many brokers said they will often seek out their favorites, even if they’re not on the list or cost extra money.
Here’s a look at some of the most sought-after real estate photographers in New York.
Many top brokers said when they have a seven- or eight-figure listing, they seek out Evan Joseph.
Joseph, who is one of around 10 approved photographers at Douglas Elliman, did the photography for the CitySpire penthouse currently listed by Elliman’s Raphael De Niro for $100 million; in fact, Joseph said he does all of De Niro’s listings priced above $10 million. He also shot the photos for Elliman broker Dolly Lenz’s $95 million listing at the Sherry-Netherland, a $75 million duplex at Trump Place at 240 Riverside Boulevard and a $65 million mansion in Alpine, N.J., listed by Elliman’s Oren Alexander.
Joseph said he also frequently works with Carrie Chiang of the Corcoran Group, and recently shot her listing for Derek Jeter’s penthouse, which sold for $15.5 million in October.
“Evan is the best. He’s amazing,” said Camilla Papale, Elliman’s chief marketing officer. “The quality is so high.”
That’s important, she noted, because “the better the image, the better the space is represented.”
Joseph began shooting real estate listings during the Dot-com era of the 1990s, when he began taking photos for some early real estate websites. He quickly mastered the craft of interior photography for marketing purposes, he said.
When shooting a listing, he said, “I want people to feel like, ‘Wow, I have got to live there,’ not just, ‘Oh, that’s a nice space.’”
In recent years, though, Joseph has expanded into lifestyle photography for artsy magazines. He has also co-authored the photography books “New York City at Night” and “New York Then and Now.”
Listings now comprise about a quarter of Joseph’s overall business, and he has a business partner, Travis Dubreuil, who helps him maintain his crowded schedule.
He declined to discuss his pricing, but said he’s proud that so many leaders in the industry keep coming back to him.
“I work hard to cultivate these relationships,” he said.
Photographer Nico Arellano has earned a reputation among brokers for his unique photo-processing style: He shoots an inte rior space with a variety of exposures and then blends the different shades of light into the final image, giving it a warm and inviting feel. Most photographers merge images with a computer program, but Arellano said he prefers to do it manually, even though it takes much longer.
“The difference is enormous,” said Arellano, who is originally from Miami and has also worked in fashion photography. “The photos are so much more beautiful. You want to walk into the room and sit down.”
Arellano’s photos “can direct your eye to a certain point in the room,” Beare said. “He hits it every time.”
Arellano typically charges about $150 for the first photo, and then reduced amounts for each subsequent image. He charges less for bulk deals with firms like Halstead Property, Elliman and Core, he said, because he benefits from the consistent work a large brokerage can provide.
Once he’s on a firm’s list of approved photographers, it acts “like my agent, in a way,” he said. “If a company has 1,000 brokers and 25 photographers on the list, they’ll call regularly.”
Unlike the many independent real estate photographers in the city, John Porcheddu doesn’t have to worry about finding work.
As one of the go-to guys on staff at Gotham Photo Company, a leading New York City real estate photography provider, Porcheddu is guaranteed a steady flow of clients.
Gotham — which specializes in doing listing photos, headshots, video and floor plans for real estate brokers — was founded in 2005. Porcheddu is one of its most-requested photographers, according to Gotham president Vince Collura.
“Clients request their favorite photographers, and John gets a lot of calls,” Collura said. “Many of our guys have specialties that could make them a good fit for a particular [listing], but John does it all.”
Porcheddu, who started taking photos as a hobby in high school, said working for Gotham allows him to focus on shooting rather than logistics.
“Instead of spending half of my time on advertising and stuff, I can just go and take pictures,” he said.
Through Gotham, Porcheddu charges $175 for a six-photo standard shoot, while larger, time-consuming packages can run over $300.
When Town Residential broker Ginger Brokaw has an important listing, she said, she’s willing to wait for veteran photographer Michael Weinstein, one of several photographers on Town’s list of approved vendors.
“I would wait a week for Michael … especially if it was something unique or challenging,” Brokaw said. “I return to him time and time again.”
Weinstein was working in fashion about 16 years ago when he approached one of the marketing executives at Halstead about taking headshots of the firm’s brokers. The executive responded by asking if he’d ever shot properties.
“I said, ‘I never got paid for it, but I’ll certainly try,’” Weinstein recalled.
He discovered he had a knack for it, and his business took off. “I got busy really quickly,” he said.
Weinstein said he usually charges a flat rate, but sometimes negotiates prices with individual brokers, depending on the number of photos needed for a listing. He recently did the photos for a co-op at 828 Fifth Avenue listed for $72 million.
Dennis Cusack, director of sales at Town, said Weinstein’s photographs helped draw a huge buyer turnout for a listing at 225 West 95th Street.
“The first open house I think there were 45 people, and the second one was in the high 30s,” Cusack said. “Probably one of the most important things about the listing is the photography, and that’s why we go to Michael.”
Former Wall Street trader Richard Caplan became a professional photographer only five years ago, but has already shot over $2 billion worth of real estate, including a penthouse asking $48 million at 145 Hudson Street.
Caplan said he decided to move into photography so he could spend more time with his family. The career change made sense, he said, since “I’ve had a camera in my hands since I was seven years old.”
High-profile Elliman agent Fredrik Eklund said he’s worked with Caplan for years, and has even paid to fly Caplan to Sweden (where Eklund runs a brokerage) for real estate shoots.
“I’ve grown to trust him,” Eklund said. “I don’t even go to the shoots anymore.”
Eklund said Caplan instinctively shoots details within an apartment that convey a desirable way of life.
“We not only sell property, we sell a lifestyle,” Eklund said. “The photos need to be perfect.”
“Whether it’s a beautiful flight of stairs or an open floor plan, I’m looking for that sweet spot in the room,” said Caplan, who has an assistant and an editing team.
But he noted that there isn’t a lot of room for ego in real estate photography.
“As much as I like to see myself as an artist, I am here to help a salesperson,” he said. “The job is going to be what they want it to be.”
AM NYJanuary 02, 2013
Does your building have a name? How did it get it and what does it mean?
Assigning names to New York City apartment buildings began in the late 1800's and was meant to give this radically new way of living a feeling of respectability and permanence. Think Dakota. Think Apthorp. Now, names are an integral piece of the marketing plan for new projects. Branding is key.
According to Jenifer Steig of the real estate investment company the Cheshire Group, a "bad name won't kill a project, but a good name helps a building succeed."
The Philip House
Here's how Steig's company decided on a "good name" for its latest project, a 1927 building at 141 E. 88th St. that they are converting from rental to condo.
Steig says that "the building had great bones, a great location, a great pre-war feel" and the plan was to give it a "contemporary feel while making the best of the old."
The original name, The Rhinelander, paid homage to Philip Rhinelander, the patriarch of the family that developed huge parcels of the Upper East Side in the early 1900s.
"But, Rhinelander just doesn't roll off the tongue. We wanted something softer, more inviting, stylish," she said.
COOP, Cheshire's marketing agency, conducted focus groups and presented the developers with some choices: Shortening it to The Lander; going for something homey like The Hearth; something referring to its Carnegie Hill location like Hill House or Hill Court ; or something conjuring a sense of style like The Lexington or The Kensington."
In the end, they chose The Philip House, retaining the historical feel but streamlining it for the a new century.
One Museum Mile
When the developers of a new building at 109th Street and Fifth Avenue hired CORE to give their one-year-old building a marketing shot in the arm, Tom Postilio, managing director of CORE, said that one of the first items on the to-do list was a name change.
Originally known by its address, 1280 Fifth, CORE decided to jump on the fact that the city extended the length of Museum Mile up to 110th Street.
Since the building is set to house the Museum of African American Art (once the museum raises enough funds to make the move), Postilio and staff decided on One Museum Mile.
"This seemed to be the perfect way to identify our building. Traveling south, our building is the first."
Postilio is bullish on the name change: "We believe that the name change has increased traffic and deals."
The Gotham Organization's 1238 unit building on the far west side is the largest new development in the city right now, almost an entire city block, 10th to 11th avenues, West 44th to West 45th streets.
According to Melissa Pianko, EVP of Gotham, the naming process for her company is "an integral part of the marketing plan, the result of the work of a collaborative team of designers, marketing agency, and owners."
Gotham considered names with a Dutch origin, "earthy" names like Courtyard, but in the end they settled on Gotham West.
"After all, we've been Gotham since 1931 -- even before Batman. It seemed like a perfect choice."
Some buildings are given a name that reflects their look. The LeFrak Organization's first residential rental project in Queens in almost 40 years, a renovation of a commercial building that was once known as LeFrak Tower, at 97-45 Queens Blvd., is re-christened "The Contour."
It's being marketed as the "building with all the curves you've been looking for."
Douglas MacLaury, SVP of the Mottone Group, says that usually advertising agencies generate names that reflect the "architectural envelope and the type of residences that are being built."
That's how his company's building Azure, on the Upper East Side, got its name.
"It's a glass structure, higher than the other buildings in the neighborhood, and on a sunny day the silvery building takes on a blue tint. Tower units have a river view, more blue."
The folks at Alchemy Properties don't rely on focus groups or marketing agencies to find a name for their projects.
When it's time to name a building "we have fun in the office. We let everyone, and I mean everyone, who works for Alchemy get in on the act. And no, sometimes the choice is not the one I suggest," says Kenneth S. Horn, president and founder of the organization.
His new development at 303 E. 77th St., is dubbed The Isis.
"Isis is the Egyptian goddess of hearth and home. It seemed just right since we want to attract families with our spacious apartments with a classical feel," he said. "The hued pattern of the building gives it a mosaic quality, another good reason for the name."
Finding just the right name means a lot to Horn: "I founded this company in 1990 during a down market in the industry-my goal was to 'turn clay into gold.'"
‘The Year of the Penthouse’ - In the top 10 deals of 2012, residential sales broke records
The Real DealJanuary 01, 2013
Town Residential founder Andrew Heiberger recently dubbed 2012 the “Year of the Penthouse,” due to the recent stream of record-breaking deals. The year started with the now-famous $88 million sale of a penthouse at 15 Central Park West, and before 2012 was done, city-wide records for condo, co-op and townhouse sales had all been broken — some more than once.
In 2012, there were 10 sales over $30 million, compared to six in 2011, according to data from the listings website StreetEasy. And at $88 million, 2012’s most expensive sale dwarfs 2011’s $48 million record and 2007’s $50 million top deal.
Brokers attributed 2012’s jaw-dropping prices to limited inventory and a seemingly insatiable appetite for high-end product.
Shaun Osher, CEO of the residential brokerage CORE, said mammoth sales such as the one at 15 Central Park West are seen as less and less of an anomaly.
“They’re not run-of-the-mill, but they’re definitely becoming a lot more frequent,” Osher said.
Read on for a closer look at the priciest closed sales of 2012 as of press time.
15 Central Park West, PH20
Closing date: Feb. 15, 2012
Price: $88 million
In a deal that set the stage for a year of mammoth residential sales, former Citigroup Chairman and CEO Sanford Weill closed on the sale of his 15 Central Park West apartment in February for a record-breaking $88 million. The closing price, almost double the $43.7 million Weill paid for the apartment in 2007, made international headlines and sent shockwaves through the residential market for the rest of the year. The deal was the priciest residential property ever sold in the city, a record previously held by J. Christopher Flowers’ 2006 purchase of the Harkness Mansion at 4 East 75th Street.
The 6,744-square-foot penthouse spread was purchased by Russian billionaire Dmitry Rybolovlev, a philanthropist and the owner of AS Monaco Football Club. Kyle Blackmon of Brown Harris Stevens represented the seller in the deal, while BHS’s Maria Torresy brought the buyer. BHS declined to comment on the deal.
It was first reported that Rybolovlev bought the apartment for his equestrian daughter Ekaterina. But his wife, Elena, with whom he was engaged in a tumultuous divorce battle at the time, later alleged in a lawsuit that the billionaire had purchased the apartment in his daughter’s name in order to hide assets in anticipation of their divorce proceedings.
Weill has reportedly since moved to a sixth-floor apartment in the same building.
Rybolovlev’s record, however, is already set to be broken, with the expected closing of a $95 million deal reportedly in contract at Extell Development’s One57 at 157 West 57th Street. Closings at One57 are set to commence in the summer of 2013.
50 Central Park South, #30/31
Closing date: June 11, 2012
Price: $70 million
In June, casino mogul Steve Wynn paid $70 million for a duplex at the Ritz-Carlton at 50 Central Park South listed by Blackmon of Brown Harris Stevens. Wynn bought the apartment from Christopher Jeffries, the founding partner of Millennium Partners, which had developed the condominium portion of the 35-story hotel in 2002. Jeffries reportedly paid $22 million for the apartment upon its completion.
The 10,882-square-foot duplex, on the 30th and 31st floors, previously served as the hotel’s ballroom. The upper floor has a library, media room, dining room and kitchen, while four bedrooms are on the lower floor.
Serena Boardman of Sotheby’s International Realty represented Wynn in the deal. Neither broker responded to a request for comment.
For Wynn, the purchase was the end of a long search for Manhattan digs. In late 2010, he changed his mind about his penthouse at the Plaza, flipping it for $24.4 million after owning it for just six months. Wynn, who was not available for comment, reportedly then spent close to two years touring trophy listings all over the city before settling on the Ritz spread.
785 Fifth Avenue, #PH
Closing date: Nov. 8, 2012
Price: $54 million
Music industry legend David Geffen broke records in November when he paid $54 million for the duplex penthouse above his existing apartment at 785 Fifth Avenue. The seller was singer and socialite Denise Rich. The deal beat out the sale of Courtney Sale Ross’s apartment at 740 Park Avenue earlier in the year (see below) to become the highest-priced co-op sale in the city’s history.
The 12,000-square-foot, seven-bedroom apartment, which includes a full recording studio, had been listed for $65 million by the Corcoran Group’s Noble Black, Chazz Levi and Bonnie Pfeifer Evans. Before being picked up by Geffen, the spread was reportedly eyed by the prime minister of Qatar.
Black declined to comment on the identity of the buyer or seller but said: “What was remarkable about the apartment was just its sheer size. The huge entertaining spaces upstairs were just fantastic.”
He added: “The buyer was already very familiar with the building but liked the fact that this apartment had the high ceilings and a tremendous amount of outdoor space. He definitely had his eye on it for a while.”
Geffen reportedly has no plans to combine the unit with his own apartment downstairs. The New York Post said he would likely complete an extensive renovation of Rich’s former digs before moving in and selling his other apartment.
Deborah Grubman and David Dubin of Corcoran, who represented Geffen in the deal, declined to comment.
740 Park Avenue, #12/13
Closing date: May 4, 2012
Price: $52.5 million
In the second priciest co-op deal of the year, billionaire investor Howard Marks, chairman of the global asset management firm Oaktree Capital, paid $52.5 million for a 30-room spread at 740 Park Avenue owned by Courtney Ross, the widow of the late Time Warner CEO Steve Ross.
The eight-bedroom pad — actually a combination of two apartments — has 10 bathrooms, two libraries and two dining rooms, according to the listing. Six exterior terraces overlook Central Park. Ross reportedly bought the two apartments in the 1980s for a total of $8 million. He passed away in 1992.
The 740 Park Avenue spread was quietly shopped around in 2009 before officially hitting the market in 2011 for $60 million with Kathy Sloane of Brown Harris Stevens.
“It’s a totally unique space,” said Sloane, who noted that she got the listing through a mutual friend. “This was an opportunity to have over 12,000 square feet in one of the best buildings in the world.”
When the deal closed in May, it broke the record set by the 2008 sale of a spread at 2 East 67th Street to Loews Hotels CEO Jonathan Tisch for $48 million.
Other high-profile residents of 740 Park include billionaire Stephen Schwarzman, co-founder of the Blackstone Group, and fashion designer Vera Wang.
Roberta Golubuck of Sotheby’s represented the buyer, but was not available for comment. The deal came just one month after Marks took Oaktree public with $79 billion in assets.
834 Fifth Avenue, #12B
Closing date: Jan. 31, 2012
Price: $42 million
The year started out with a bang when Robert Bass, the founder of investment firm Oak Hill Capital Partners, paid $42 million for a 12th-floor unit at the exclusive co-op, 834 Fifth Avenue.
Bass, said to be worth close to $3 billion, ranked 88th on the 2011 Forbes list of the 400 richest Americans. He bought the apartment from fellow financier Damon Mezzacappa, head of the now-defunct private investment firm Mezzacappa Management and former vice chairman of financial advisory firm Lazard Frères & Co.
Mezzacappa was represented by his wife, Katherine Bryan of Sotheby’s. Elsie Nelson of Brown Harris Stevens represented Bass.
Mezzacappa told The Real Deal he sold the apartment because he moved to Florida after winding down Mezzacappa Management.
The white-glove co-op was constructed in 1930 and designed by architect Rosario Candela. News Corp. Chairman Rupert Murdoch and Charles Schwab, head of the eponymous brokerage and banking firm, are also residents of the building.
The Stanford White Mansion, 973 Fifth Avenue
Closing date: June 21, 2012
Price: $42 million
In June, a mansion at 973 Fifth Avenue designed by famed architect Stanford White sold for the same price as Mezzacappa’s unit. The 15,225-square-foot house, located between East 78th and 79th streets, had been listed for $49 million by Brown Harris Stevens broker Paula Del Nunzio.
The deal marked the priciest sale of a Manhattan townhouse in 2012, though the overall record for the city’s most-expensive townhouse sale is still held by the Harkness Mansion.
Del Nunzio, who declined to identify the buyer or seller, said 973 Fifth “was one of the last two mansions designed by the illustrious Stanford White. It contained not only all the original interior detail of its famed architect, but also his original floor plan. … The view from the roof of Central Park was pure perfection.”
According to public records, the seller of the Stanford White Mansion was an entity called OBE Holdings, and the buyer was 973 Fifth LLC. Plans were recently filed to renovate the property, according to data provider PropertyShark.
The home was designed in the early 1900s for banker and railroad tycoon Henry Cook. Prior to Del Nunzio’s listing, it had not been on the market in more than 30 years.
2 East 70th Street, #PH13A
Closing date: June 11, 2012
Price: $40.06 million
The stringent co-op board at 2 East 70th Street this spring approved Laure Sudreau-Rippe — an attorney and a minority owner of the agricultural commodities conglomerate Louis Dreyfus Holding BV — to purchase an apartment owned by the late private equity giant Ted Forstmann.
Sudreau-Rippe paid approximately $40 million — 11 percent above the asking price — for the 4,000-square-foot home. Forstmann’s estate was represented by Meredyth Smith and Serena Boardman of Sotheby’s. Sudreau-Rippe was represented by Brown Harris Stevens broker Dominic Paolillo.
The three-bedroom unit was never formally listed for sale, but reportedly has a wraparound terrace with views of Central Park.
Forstmann, who famously dated actress Elizabeth Hurley and “Top Chef” host Padma Lakshmi, died in 2011 of brain cancer. He was the chairman and CEO of IMG Worldwide, a sports and fashion-marketing company.
Smith told TRD the apartment was subject to a bidding war. “It’s one of the most extraordinary penthouses on Fifth Avenue,” she said.
730 Park Avenue, PH
Closing Date: Oct. 24, 2012
Price: $39 million
Another “whisper listing” that sold this year was the 12-room duplex at 730 Park Avenue, which traded for $39 million in October.
Daniel Benton, co-founder of technology-based hedge fund Andor Capital Management, bought the unit from a seller named Joann Walker, public records show. The listing was a co-exclusive between Stribling and the Sotheby’s team of Smith and Boardman.
The four-bedroom penthouse reportedly features five terraces, a solarium, a greenhouse breakfast room and a 37-foot-wide living area.
Benton and his wife, Anne, reportedly own another unit in the building, which they purchased for $21 million in 2007.
Whisper listings are challenging to market, but “at the upper, upper end of the market, the buyers and sellers really prize discretion,” Smith said. To unload the property, “we quietly reached out to brokers we know who work with appropriate types of buyer.”
15 West 63rd Street, #29A
Closing date: Nov. 19, 2012
Price: $33.5 million
Riza Aziz, a Hollywood producer and the son of former Malaysian Prime Minister Tun Abdul Razak, paid $33.5 million for a seven-bedroom condo at the Park Laurel on 63rd Street in November.
Aziz, whose company is currently producing the Martin Scorsese film “The Wolf of Wall Street,” bought the unit from Peter Edward Chadney and Simone Cecile Von Graffenried Simperl, both residents of Switzerland, public records show.
The unit was not publicly listed, and a spokesperson for Aziz told TRD that no brokers were involved in the deal.
The sellers purchased the apartment for almost $24 million in 2010, according to public records. The 15-room duplex has 7,728 square feet of interior space and a terrace. Aziz most recently produced the movie “Friends with Kids.”
1030 Fifth Avenue, #9W
Closing date: April 17, 2012
Price: $31.5 million
Tech mogul George Blumenthal closed on the $31.5 million sale of his six-bedroom, prewar co-op in April, just three months after listing it with Warburg Realty’s Bonnie Chajet and Ronnie Lane. The 6,000-square-foot unit at 1030 Fifth Avenue, a white-glove building on the corner of 84th Street, closed for $3.5 million less than the initial asking price.
The ninth-floor unit was purchased by hedge funder Zachary Jared Schreiber and wife Lori, who were represented by Brown Harris Stevens’ Blackmon.
The Schreibers also own a three-bedroom apartment at 15 Central Park West, which they listed briefly with Blackmon in 2011. The unit is no longer on the market, according to StreetEasy.
Their new apartment at 1030 Fifth Avenue has a library, a formal dining room with a fireplace, a gym and two maid’s rooms, according to the listing.
Chajet declined to name the seller, but said she sold the apartment to him more than 20 years ago. When he was ready to sell, “he came back to me,” she said. “He was an empty nester ready to change his lifestyle.”
Chajet said he has since moved into a smaller apartment in a more modern building on the West Side.
Predicting the 2013 Market
The Real DealJanuary 01, 2013
Although the European debt crisis seems to be further from investors’ minds today than it was a year ago, fresh hurdles like the fiscal cliff standoff in Washington, prospective tax changes and a New York City mayoral election loom. And those are not the only questions that industry pros are pondering as 2013 gets underway. Also on their minds: Will the tech sector continue to prop up commercial leasing? What kinds of housing stock will move — and what will languish on the market? Where will the next wave of retail condo sales take place? And which overall sectors of the market will investors gravitate towards?
This month, The Real Deal talked to New York City real estate insiders from several different sectors of the market to get their industry predictions for 2013.
Greater threshold for risk
Those who follow Manhattan’s commercial sales market predict that investors will shift their attention this year — and the result could be more new development projects.
“Because existing assets have gotten so expensive, I think you will see investors go further out into the risk spectrum and decide it may make sense to develop or redevelop property instead of buying [existing assets],” said Dan Fasulo, managing director at Manhattan-based research firm Real Capital Analytics. “We are at the point in the [recovery] cycle where the spread between buying and building will tempt investors to build.”
Indeed, when it comes to buying existing properties, challenges remain: There is too much capital for the number of buildings being sold. And, analysts say, owners are reluctant to sell because they aren’t sure where to invest their funds next.
“It’s clear owners prefer owning well-located bricks to owning paper,” said Peter Hauspurg, chairman and CEO of the investment sales brokerage Eastern Consolidated.
Still, as investors’ worries about inflation foment, many are scrambling to get capital into the real estate market, and to get projects started with financing at today’s low interest rates, experts said.
In 2013, Hauspurg said, the most active sector for investors seeking “high-powered yields” will be condominium development, particularly in the outer boroughs — a shift from the post-Lehman years, when investors rushed to buy up multi-family properties and trophy office assets.
The tech sector question mark
While 2012 saw deal volume plummet, industry pros say that commercial leasing could have fared far worse, given that the financial services sector — the motor behind New York City’s office market — shed jobs last year.
“There is not a lot of velocity, but at the same time there has not been this great increase in vacancy” in 2012, said Eastern’s Hauspurg, adding that the much-ballyhooed technology sector has picked up the slack.
But the major question mark for this year is whether the tech sector will be a lasting economic force. “Is the start-up dynamic going to continue? It all feels very Internet circa 1998,” said Nat Rockett, Executive Vice President at Cushman & Wakefield, of the tech industry’s recent New York leasing spree.
He pointed to the fleeting success of some tech companies as cause for continued uncertainty in the leasing market.
“I remember six months ago everybody who had space in Soho said, ‘Zynga will take it.’ Now it’s like — ‘Guess what? Zynga doesn’t look like it will survive 2013,’” he said of the online game developer. And while some tech firms have ventured from their preferred Midtown South market (because of the lack of inventory and increased prices there) to find cheaper space Downtown, not all areas are benefiting from the spillover. Rockett, for example, said the tight market in Midtown South has done nothing for submarkets that are suffering, such as the Plaza District.
Pricing nears tipping point
The Manhattan rental market has been white hot for some time. And the high end of the rental market will continue to fare well, thanks to international renters looking for New York City homes.
“Tight credit is definitely helping drive the upper end of the rental market,” said Larry Friedman, principal at brokerage AC Lawrence.
But at the middle and bottom of the market, renters are increasingly resisting rising rents.
“There will be a tipping point where you start pricing people out of the marketplace,” predicted Gary Malin, president of brokerage Citi Habitats.
Indeed, the middle and low segments of the rental market are also seeing an increasing number of renters take the plunge and purchasing, given the record-low interest rates. And, as TRD reported last month, Citi Habitats found that rental prices in Manhattan dropped across all apartment types between October and November, and that overall Manhattan rents slid $76 to $3,368 during that time.
“The pace of increase [in rents] has slowed in the last two months, year over year,” Jonathan Miller, president of Miller Samuel, the real estate data firm, told TRD at the time. “We could be reaching some sort of threshold; we’re getting more resistance to the rising rental market.”
With a lack of large-scale new rental developments in Manhattan, Malin said he expected new, amenity-rich buildings in the outer boroughs to continue to see strong activity, and noted that there may be more development of that sort as well.
“There are nice amenities at a significant discount to Manhattan,” Malin said, pointing to new rental construction in Brooklyn and Queens.
But, generally, expect more of the same in the rental market next year, real estate executives said. “I think the vacancy rate will hover right around where it is, and concessions will continue to play the same role they’ve been playing” — that of a marketing tool for new buildings — not a financial incentive landlords feel they must provide, Malin said.
More One57-type condos on horizon
Some sectors of the residential sales market could falter next year as foreign and domestic buyers seek different products from one another, sources say. That desire for different types of housing will intensify a growing chasm between the market for new construction — which often appeals most to foreign buyers — and for townhomes and co-ops, said Frederick Peters, president of Warburg Realty.
In 2013, expect tonier co-ops to sit on the market, as sellers emboldened by headlines about rising prices in New York City list their homes for ever-higher sums, Peters said.
“We’ve seen a lot of major inventory sit … because buyers are not willing to throw money at it unless they think it’s spectacular,” he said.
CORE broker Michael Graves said he expected inventory to increase. But in the wake of the Presidential election and once the fiscal cliff is resolved — no deal had been reached at press time — sellers will be more likely to pull the trigger, he said.
“We will see a healthier dose of inventory in the first and second quarters [first],” Graves predicted.
Not everyone agreed with that assessment, however.
Miller predicted that supply will likely remain constrained, which will lead to modest price appreciation. International buyers are not going anywhere either, Miller said, which could also buoy prices.
“For all our problems [New York City’s market is] the lesser of all evils, and I see that continuing in 2013 because what’s driving [buyers here] doesn’t have a short-term solution — a softening economy in China and an economic bubble in South America,” he said.
Given those factors, additional super-luxury developments are rising, as the development community salivates over moneyed foreigners.
“You may see more One57s and 432 Park [Avenues],” Miller said, referring to Extell Development’s under-construction tower on West 57th Street and to the residential project that the CIM Group and developer Harry Macklowe just broke ground on.
Side-street spillover effect
Last year was a strong year for Manhattan retail with big retail condo sales and rising rents. And some say that momentum is not likely to let up this year.
“[This year] is only going to get better,” said Kelly Gedinsky, a broker with Winick Realty, noting that rents climbed by as much as 30 percent quarter over quarter on certain retail strips in 2012’s third quarter, the most recent data available at press time.
Prices surged mostly in prime locations like Madison and Fifth avenues as well as in Times Square, Herald Square, the Meatpacking District and Soho. And Gedinsky predicted that those high rents will spill over to nearby side streets.
In the Meatpacking District, more tenant interest has already been focused on Little West 12th and West 13th streets as retailers have moved beyond 14th Street. The same is true in Soho for Mercer, Greene and Wooster streets, where activity has been boosted because there are so few vacancies along Spring and Prince streets, she said. But Gedinsky said she expected to see more side streets adjacent to busy retail strips benefit from this spillover trend this year.
But even as rents and activity rise in certain areas, others — notably along Second Avenue on the East Side, where the construction of the subway has killed activity for some time now — are stagnant or dropping, brokers said.
Areas where revenues are not driven by tourism could suffer from ongoing depressed rents, said Jedd Nero, a retail broker with the CBRE Group. “When there is a blip, it’s the local players who bleed faster,” he said.
Meanwhile, on pricey Fifth Avenue, a number of large blocks of space are coming to market next year. At Thor Equities’ 520 Fifth, about 77,000 square feet is due to come online, and at Crown Acquisitions’ 530 Fifth, about 42,000 square feet should be available, Nero said. He predicted that retailers might end up sharing the spaces in unconventional arrangements, since there aren’t that many tenants interested in such large blocks of space.
A Day in the Life of: Shaun Osher
The Real DealJanuary 01, 2013
The CORE CEO walks TRD through a typical day, as he bikes up to 75 miles, juggles pricey listings and plays the sax
6:30 a.m. I usually wake up at 6:30. Half the week I stay in Port Washington, on Long Island. That’s where my two beautiful daughters live. The days when I don’t have my girls, I’m on West 9th Street, where I share a townhouse with my girlfriend, Brittley Jarrell, who is the chief operating officer of Core. I’ve always been very active — I work out about four or five times a week. It’s usually a bike ride, between 20 to 75 miles [before work], and it’s usually loops in Central Park. Today, I ran seven miles along the Hudson. I also try to meet with my trainer once a week, to do push-ups, pull-ups, the rowing machine and rope-climbing, like back in my army days in South Africa. I was in the army for two years. There was six months of basic training, which was brutal. I was living in the bush, crazy stuff.
7:30 a.m. When I stay on Long Island, I take my daughters to school. Then I go home and start checking emails on my iPhone. There’s a 9:11 train that I usually take into the city. When I’m here, I will help Brittley take her boys to school. Then I will hop in the shower and do my emails from the apartment.
10:00 a.m. to noon Most mornings, I’m in the office by 10. Today, I had a conference call with the sales team at 93 Worth, a 92-unit condo conversion in Tribeca. Sales started in early December, and more than a dozen contracts have been signed already. Whenever you open a building, you have nearly constant engagement with the sales team and the developer. The first two weeks are very intense.
But it’s a good problem to have. I spend about 15 to 20 percent of my time working on new business, which means meeting with new agents. We have about 70 employees, and we have two offices. We’re opening a third one, on the Upper East Side [at 673 Madison Avenue], in mid-February. It will be a showroom and will house 30 agents.
Noon I don’t really do lunch meetings because they’re long, and I only have so many hours in the day. So, I usually eat on the run or get something in the office. A turkey sandwich, that’s usually my go-to, but I pretty much eat anything. Last Wednesday I had a meeting at noon with Michael Stern, managing partner of JDS Development Group, which is building Walker Tower, a 53-unit condo. We met at the sales office in Chelsea. The project is going well. We’ve sold a significant amount. [StreetEasy shows that 40 percent of the building has sold.]
2:00 p.m. to 5:00 p.m. Sometimes I will drop by our office on Seventh Avenue to check in, and an agent will pull me aside to ask about a deal. For example, Emily Beare needed advice on a $95 million listing she has at 15 Central Park West. We have property lists of people who are really affluent, so we reach out and let them know the unit is available. Emily also represented the seller, Leroy Schecter, in his purchase of the Rothschild Mansion on the Upper East Side for $25 million. I pulled some comps together and helped with the negotiation.
5:00 p.m. If I have my girls, I’m heading home to be with them. I am very involved with their after-school activities, so I will take Ava [who is 11] to tennis and pick up Ella [who is 6] from dancing. I love to cook — maybe some chicken, or pasta, though my recipes are expanding. And Ava likes to bake, so once a week after dinner, we’re baking.
6:00 p.m. to 8:00 p.m. If I’m in the city, I will go home and play sax for a while. I keep a tenor sax in Manhattan; my two altos are on Long Island. I keep my soprano sax here [at Core’s headquarters, at Fifth Avenue and 16th Street] and sometimes I play at night when nobody is around. The acoustics are really good in here. I played the sax in jazz bands — I played at the Blue Note, the Cupping Room Café and the Village Gate before it became a CVS. Every once in a while I will still go to see jazz, like at the Village Vanguard.
8:00 p.m. to 10:00 p.m. I skip the charity events; I usually just write a check. So we will have dinner in the apartment or go out to Tertulia, on Sixth Avenue, or Alta, on 10th Street. I don’t watch much TV — maybe Monday Night Football, or the Tour de France, or some cricket if it’s on. I also read a lot. I just finished “King Leopold’s Ghost,” about North Africa and the Belgian Congo. I also like GQ and Vanity Fair. And Seth Godin’s blog, about marketing, but I don’t really focus on real estate too much.
10 p.m. onward I’m in bed between 11:30 and 1, depending on how many emails I have. I like to start my day with a clean slate.
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