LISTING: 120 Eleventh Ave PH 6/7B
Posted by Leonard Steinberg on August 27th, 2014
I am currently comfortably settled in my hotel room at the tip of a peninsula overlooking the Mediterranean Sea and the famous Faraglioni rocks of Capri. Looking around this room I am reminded why so many buyers of luxury real estate around the world use the quality of hotel finishes as the baseline for the finish out of their homes. Once you have lived with ducted central air conditioning, heated bathroom floors and towel racks, beautifully appointed bathrooms, useful technology, not to mention services on call, it is easy to see how the consumer compares life in a high end hotel to life in a home. A great hotel room can spoil you quickly. Terraces with views. Super-comortable bed linens. Outstanding closets. The list goes on and should serve as a reminder to all that quality hotels around the world are forever changing the expectations of the consumer. Anything less than this level of finish out is considered a step down. Aside from finishes, the ease and convenience of a full array of services on call can spoil the consumer too and already we are seeing the effects on this with buildings such as One 57, 215 Chrystie, 50 Gramercy, Trump Soho, etc offering full hotel services to a consumer spoiled by hotel life.
The challenge for all developers and designers alike is how to make a home feel like a home and not a hotel, although we hear of many high end buyers who really WANT their home to feel like a super-luxe hotel. I am beginning to understand why….
I am happy to hear that Giselle, the ultimate super-model, earns $47 million per year…..she buys lots of real estate, pays lots of taxes and fuels lots of jobs. What I am not happy to hear is the automatic outrage one hears when a corporate titan earns half this…..maybe someone responsible for the livelihoods of thousands of employees, who studied for years to learn specific skills, who has worked spectacular hours to get into their position. If we are going to be outraged by those who earn lots of money, shouldn’t we keep it consistent?
To those who believe that corporate titans steal from the poor to pay their salaries, do you really believe the cost of a Giselle is not picked up by all of us in the cost of the goods she helps sell?
Posted by Leonard Steinberg on August 21st, 2014
I sit on the Board of my building, and sometimes (very seldom) a building can come into a windfall of money, a surprise revenue source that boosts its reserves unexpectedly and outside all budgetary expectations. New York State is experiencing this exact phenomena right now: It will realize a larger-than-previously-expected cash windfall of more than $5 billion in 2014 from settlements and fines squeezed from banks by regulators. The total includes the $4.4 billion in bank settlements already signed, plus more than $600 million coming from the mortgage-related settlement with Bank of America that could be signed today. The largest part comes from a $3 billion settlement with BNP Paribas, fined to end a money-laundering probe. Earlier this month it was estimated the Wall Street windfall at $4.2 billion — but that didn’t include the expected BofA settlement with the Justice Department, the largest-ever settlement between a bank and Washington, possibly more than the $613 million.
The Wall Street settlements and fines are about 18x the budgeted $275 million leaving New York with the largest budget surplus ever, according to Morris Peters with the state budget office: now comes the question, what to do with this money? It is always tempting for governments (and buildings) to SPEND that money on STUFF. Most times it is wasted, and at the end of the day there is very little to show for it. It is critical that this New York State windfall is used for the purpose it was intended: to benefit the people whose lives were impacted by the bad behavior. So this money should not be wasted on useless ‘projects’, ongoing budgetary needs or the like. It should be used for MONUMENTAL items, things that could actually have a permanent positive impact on the lives of the citizens of this state. So what could the State spend this money on? Infrastructure improvements? Better public transportation? A Solar farm to power Manhattan? Protection mechanisms for future storms and global warming related issues?
Building budgetary windfalls should be used for the same purpose: applying these funds to things that actually boost the value and well being of the entire building. A new gym? A bike room? Hallways that compete with brand new buildings? New windows? Solar panels on the roof to generate electricity and offset building costs for the future? Pay down debt? Buy out an apartment for a live-in Super? Renovate the street level so the first impression of the building is improved? Replace all light bulbs in the building with energy efficient ones and replace all stairwell lights with sensor lights that only come on once they detect movement? Band-aids that disguise mis-managed budgets are a disgrace and need to be avoided. Lets not forget most lottery winners go bankrupt.
There can be no doubt that technology has become a key driving force and growth sector for the New York economy (and the world in general). A city that was once almost entirely reliant on the financial sector for high paying jobs is seeing tech catch up and play a significant role in revenue generation for New York. Our company, URBAN COMPASS, a real estate brokerage driven by intelligent, innovative and effective technology is a perfect example of this phenomena having added over 100 jobs in a year, and signed on almost 30,000sf of office space. Many ask what is the ‘tech magic’ at the company: My answer is thing about UBER. There have been limo services in New York for decades. There have been cell phones, computers, reservation desks, etc. Then along comes UBER and streamlines and simplifies the entire process through technology. A perfect example of technology revolutionizing an existing industry. Similar effects can and will happen in real estate. Here are some interesting points that emerged from a recently release report:
- New York City is catching up to Silicon Valley as a TECH CENTER, the boosting the city’s economy. Over the past decade Tech firms directly generated almost 300,000 jobs.
- Tech is a growing sector in New York as it continues to develop AN INNOVATION ECONOMY. Part of the success of technology in New York are some areas and buildings that provide relatively affordable office rents for startups. Silicon Valley is feeling the heat and some firms believe they should have a presence here.
- The New York tech ecosystem is larger than that of San Francisco and fell only 56,000 jobs short of Silicon Valley.
- The “tech ecosystem,” (jobs that are produced by technology or use technology) has become a major component. urban Compass could be considered one of those companies.
- Tech now rivals the city’s other major employment sectors — health care, retail, legal and finance.
- Between 2003 to 2013, the New York City tech ecosystem added 45,000 jobs, growing faster than both total New York City employment and total US employment.
- The New York City tech ecosystem grew from 246,000 jobs, to 291,000, an increase of 18%, (Employment increased by 12% overall in New York City and 4% nationally), generating 541,000 out of the city’s some 4.27 million jobs….about 12.6%.
- The tech sector has become essential to the city’s economy for meaningful middle-class salary — earning an average of $40 an hour or 49% more than the average hourly rate. Tech may just save the middle class!
- The tech sector is also paying for more of the city’s basic services, generating over $5.6 billion in annual tax revenues, or about 12.3% of the city’s 2013 tax revenue.
I am certainly not a tech geek, and my personal tech abilities are somewhat limited. One thing I am certain of: the future of real estate lies in technology and any professional in real estate needs to embrace this change quickly to stay abreast in a rapidly changing world.
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Posted by Leonard Steinberg of URBAN COMPASS on August 14th, 2014
The volume of New York residential construction planned over the course of the next three years keeps growing: We are now approaching $50 BILLION worth of new rental and condominium buildings. Here are some recently released statistics:
- Spending on residential construction will hit a new record high in 2014 of $10.2 billion, up 50% from 2013. 2013′s total was $6.8 billion. When adjusted for inflation, the value of construction in 2013 was about 13% below the peak of 2007.
- Construction will yield fewer units—20,000—than the 30,000 per annum pace that was hit several times in the last real estate cycles much more money will be spent on luxury properties designed for the wealthy.
- With so much concentration on super-luxury properties, is it possible this area may experience an over-supply of too-similar properties? Those that are diversifying the product mix will be rewarded for going against the grain.
- A rise in construction costs contributed to the decline in the number of new residential units built compared to the last boom.
- New York City is trailing behind most other growing cities in terms of the percent change in total housing units between 2000 and 2012, with a gain of under 10% in that 12-year span. New York City came in 19th out of 22 large cities in the country. More limited supply will keep pricing high.
- The good news is the current boom in residential construction has created thousands of new construction industry jobs and increased economic activity and tax revenues. The residential sector will lift total construction spending across all sectors by 10% this year over 2013. More revenue for the City means a healthier balance sheet, fewer unemployed and fewer reliant on government assistance.
- Total construction spending is estimated to increase from $28.5 billion in 2013 to $31.5 billion by the end of 2014 and increase of over 10% in one year.
- Spending on commercial buildings is expected to dip slightly from 2013′s $8 billion figure. Hudson Yards and World Trade Center area construction should boost these figures dramatically in 2015.