Archive for March, 2011
Thursday, March 31st, 2011
Posted by Leonard Steinberg on March 31, 2011
Residential real estate sales in Downtown New York soared in the month of March, and as the first quarter of 2011 draws to a close, it is clearly evident that the market has recovered strongly from a year ago, and even from the last quarter of 2010. This week an interesting sale occured: the signing of a contract on the top five floors at 471 Washington Street, a building situated directly on Canal Street, once considered New York poison, location-wise, with its excessive traffic and activity, mostly headed towards the Holland Tunnel. This almost $ 20 million sale (just under $ 3,000/sf) for the penthouse located at the northern end of Tribeca with a swimming pool and rather wonderful, protected views towards the Hudson River represents the third mega sale on Canal Street in recent years.
The first two were at 1 York, another building that is essentially located on Canal Street: one was a combination of several apartments with the set back terrace (not the penthouse) bought by Michael Hirtenstein a few years ago that are still being renovated into a mega-mansion style apartment also including a swimming pool. Last year the 1 York penthouse sold for around $ 23 million, the record for Canal Street…..so far.
So what else lies in the future of Canal Street? Will these apartments hold their value? Will they soar in value? Only time will tell. Canal Street certainly benefits by its proximity to Tribeca and Soho. These sales are certainly a potent message on the power of a protected, big view……something all these apartments feature…..regardless of traffic, noise or perception.
Wednesday, March 30th, 2011
Posted by Leonard Steinberg on March 30th, 2011
OIl companies scream DRILL BABY DRILL, as it will be good for the USA, create jobs, generate tax revenues, yet Transocean denounces their USA ownership status, moves to Switzerland, and avoids $ 2 billion in taxes. 35% corporate tax rates are amongst the highest in the world, yet large corporations, flooded with enough cash to virtually wipe out the country’s debt, don’t pay anything close to that. Smaller companies on the other hand who do not have the means or wherewithall to create foreign tax shelters are the ones paying for all the things taxes pay for…..
While the super-wealthy complain about the USA’s tax rates, a strong majority of them have numerous tax savings schemes, off shore trusts, etc that take their effective tax rates to well below 50% of what they claim them to be.
As reported earlier this month, owners at 740 Park Avenue, arguably the most prestigious building in New York, housing some of the city’s very wealthiest, pay lower real estate taxes than similar sized, much less prestigious properties elsewhere in Manhattan. At 40 Fifth Avenue, the real estate taxes are about 25% lower than a building a few doors down on 11th Street, off 5th Avenue, without a doorman (reported earlier in 2010 by Leonard Steinberg in Luxuryletter).
One in four US corporations pay no taxes to the IRS. ZERO. GE and EXXON two of the largest corporations included.
So who are the ‘little people’? No they are not the poor, although they pay with diss-proportionally lower wages, fewer jobs, etc. It is the MASS WEALTHY that suffer the most (Those worth $ 1- 10 million). The middle to upper middle class and mass wealthy are the ones who will be footing the bills. They are the NOUVEAU LITTLE PEOPLE.
And now you ask why we have such a huge deficit? We certainly spend much too much. Often on things that qualify as horrible waste. But if we pay off this national debt, if we keep our roads and maintain our police and armed forces, know that Leona Helmsley will be proud: the NOUVEAU little people will be footing the biggest chunk of the bill.
Tuesday, March 29th, 2011
Posted by Leonard Steinberg on March 29, 2011
So train-wreck-du-jour Charlie Sheen is heading to New York for his VIOLENT TORPEDO OF TRUTH tour on April 8th. The New York Post reports that most of the high end hotels in town have removed the welcome matt after Charlie recently trashed his Plaza Hotel room though violent torpedo methodology. We hear he is now looking to rent an apartment for this trip. Would you rent your apartment to Charlie?
Joking aside, legally one has to wonder what the law allows in the way of discriminating against a self-admitted drug user and patron of porn and prostitution. We know of many owners who took months and years to evict this profile of tenant. Most buildings in Manhattan do not allow rentals of less than 6 months. Most require 12 month leases. Very, very few allow 1 month leases. All require a waiver of right of refusal by the building board if its a condominium, and (God forbid!) a co-op would require Board approval. So while an individual owner or shareholder of New York City real estate may wish to help Charlie in his quest to promote the VIOLENT TORPEDO message, chances are any sane board would nix the idea.
Joking aside, if you or I were ever to admit to the antics of this guy, wouldn’t we be behind bars?
So now its probably up to the townhouse owners of Manhattan to provide housing for our fearless crusader. Maybe a park bench in Central Park is an option?…..let’s face it, if this violent torpedo of truth keeps going, Charlie may want to get a taste of his future.
Tuesday, March 29th, 2011
Posted by Leonard Steinberg on March 29, 2011
Living on the river’s edge has exposed me to how much wind New York City experiences: The other day as I turned the corner onto the West Side Highway, I leaned my full body weight into the wind to propel myself forwards. Thats quite a lot of energy considering the masses of deserts I’ve consumed recently.
It made me realize how much energy surrounds us every day that we simply don’t tap into at all. We have huge flags flying around the city, mostly on rooftops, but not a single windmill or wind turbine. Imagine every building in Manhattan had a windmill or turbine generating electricity? A single 1MW turbine operating at a 45% production rate will generate about 3.9 milion kW of electricity in a year. This would be enough to meet the needs of about 500 households per year. Imagine we had many more, smaller, less obtrusive windmills each producing enough power for 100 households?
New York City is the perfect environment to achieve notable results through numbers because of its scale: For example, by addressing leaks, waste and lower flow shower heads and toilets, New York City reduced its water consumption by 28% from 1979 to 2006. Now imagine 50% of buildings were to install a simple wind turbine on their roofs. Or a set of solar panels. I stare every day at the US Post Office building on 11th Avenue and 24th Street and wonder how much energy the building could produce if it replaced the 12 or so light posts and flag posts with wind turbines on its roof.
We all need to take a long, hard look at the viability of Nuclear energy in the shadow of the recent Japanese disaster. Yes, nuclear energy is extremely efficient and extremely safe. Unfortunately, when things go bad, the level of bad is so awful and destructive we have to ask ourselves whether there is an alternative? Yes, nuclear energy may be much cheaper, but what will be the price of un-doing the damage in Japan: that cost has to be added to the bottom line.
Saturday, March 26th, 2011
Posted by Leonard Steinberg on March 26, 2011
This is our first critique of a building…..Last week Jamestown Properties made a presentation to Community Board 4 showcasing the proposed addition to the rooftop of Chelsea Market which involved an additional 90,000sf for a boutique hotel and about 250,000sf for office space. While I think it is generally unfair to critique anything till it is fully built, this building design caught my attention and I could not remain silent.
It is obvious that the developer has asked for much more square footage than he expects to get (a tactic used by most developers) as this procedure was part of requesting additional buildiable square footage not currently allowable in the FAR and zoning. While most will think I am writing this because of the scale of the building alone, let me stop you immediately. It is true that an addition this size is probably inappropriate for this location, and that yes, it will block the views of some apartments at The Caledonia that are currently getting record-breaking pricing because of their views (although the building and location are so strong, I would doubt they de-value much). I believe in change, and building big buildings in a city like New York, even in West Chelsea, even close to the Highline Park. I want to address the lousy design.
Studios Architecture came up with this mess, and what a mess it is: In its horrific attempts at being contextual, the end result is a design so vulgar that it rates as one of the worst messes we have seen in a long time. The combination of 101 Warren-esque facade intertwined with a flat glass Trump-Soho-esque growth atop a somewhat-Hearst-esque base all piled on top of a classic brick warehouse has to be one of the worst ‘designer’ attempts I have seen in quite a while. So instead of arguing how to improve this design, I suggest starting from scratch. This is a mess, pure and simple.
My suggestion to the developers: Take another look at the neighborhood and see what works and what does not. If you want to be bold and daring and modernist, that could work, but only if its done the right way. With authorative style and conviction. If you want to be contextual, maybe its time for a walk around the neighborhood to understand what it really looks like.
The lousy design of additions on top of beautiful buildings (although the base building here does not really qualify….its just OK at best)is a bad tradition in Manhattan real estate that has to end. Think of all the hideous stucco/plasticy/bad-glassy penthouses built on top of beautiful buildings around the city, when if removed from the building and placed in a suburban setting would qualify as trailer-park architecture at best. This building’s addition is not the first culprit. Good design can add value not only to the neighborhood, but also to the development itself.
Back to the drawing boards!
Wednesday, March 23rd, 2011
Posted by Leonard Steinberg on March 23, 2011
Overheard tonight at a little gathering in a swell penthouse overlooking all of Manhattan, amidst dramatic lightening and ice/hail….A 3-unit combination apartment st THE PLAZA has gone to contract for around $ 48million….and a rather swell pad at TIME WARNER has gone to contract for around $ 33million: The luxury, BILLIONAIRE BUYER is back in town! These prices are headline grabbing indeed even for the New York luxury real estate market.
Sunday, March 20th, 2011
Posted by Leonard Steinberg on March 20, 2011
For years I said the upscale Manhattan crowd would never travel ALL THE WAY to Brooklyn to live in what are arguably neighborhoods as refined and desirable as the West Village, Tribeca and the Upper East Side: I was wrong. About 3 years ago, a friend of mine (and now fellow broker) Aimee Scher moved to DUMBO. I dreaded the thought of traveling ALL THE WAY over to visit…..until of course I did so. I was wrong. It took less time to get there from my Flatiron office than it does to get to the Upper East Side. I was shocked. I’d always loved the Brooklyn neighborhoods and thought they had huge potential, but I never thought of them as being this accessible.
Flash forward, and last Fall, the owner of a recently renovated house in Brooklyn Heights invited me over to see his property on Hicks Street. Again, I dreaded the trip ALL THE WAY to Brooklyn. I left my apartment in West Chelsea and 11 minutes later I was at the front door. Un-believeable! I had been transported in a few minutes to what has to be one of New York’s most beautiful neighborhoods. I walked on gorgeous tree lined streets reminiscent of the West Village, by charming cafe’s brimming with Saturday ‘bruncher’s’ (a good-looking bunch I may add!) taking in the beautiful Fall weather.
We chatted with the owner and my fellow broker and after a tour of this magnificent house I was convinced: Brooklyn Heights has to be one of THE neighborhoods of New York, if not Manhattan. It is an area anyone wanting a strong quality of life should seriously consider. And this house that we recently listed is a prize: 25,5 feet wide, exquisitely renovated (seriously, world-class) and pretty from inside and outside with a picturesque garden too. And minutes from Manhattan. Minutes.
With pricing of similar houses in Manhattan in the teen’s, 74 Hicks Street in Brooklyn Heights priced at $ 6,5million is an eye-opener. Certainly a wake-up call to me, the sometimes jaded Manhattan broker.
Saturday, March 19th, 2011
Posted by Leonard Steinberg on March 19, 2011
As we witness fighter jets over Libya, again we are asked why are we so horribly dependent on foreign oil? What forces exist that bind us to this commodity that allows monster-thugs like Gaddafi to affect the welfare of the entire globe? Lets face it, if Gaddafi did not have oil, no-one, least of all the French or British would care about their domestic squabbles.
I have regrettably concluded that individually we will never be able to change the world, but we can certainly start by looking into our own back yards. In New York City, far too many buildings use oil to provide energy to heat. Not only is our oil supply heavily reliant on the atrocities of foreign thug governments/countries, but it is extremely dirty too. Have you ever noticed those thick plumes of dark black smoke billowing out of the roofs of New york buildings? It is alarming that more buildings do not use natural gas, a resource with seemingly limitless supply in our very own country. Add to the mix solar, wind, geothermal, etc, and one has to conclude that some ‘evil organization’ has to be behind this ridiculous addiction to oil. Nuclear energy has a history of being very safe, although when safety lapses, the price seems to far outweigh the benefits as we are witnessing in Japan right now.
Instead of trying to figure out the players (it is obvious who the beneficiaries of this system are), why not start in our back yards by eliminating as much oil usage as possible by replacing systems. Lets convert our cars and trucks to electric, hybrid and even diesel to reduce oil consumption. Sooner or later market forces will go to where the demand (and money) is, and hopefully OPEC will not take charge of the distribution. Speaking of OPEC: Does anyone who reads this blog have an organization such as OPEC protecting their industry, controlling pricing, supply, distribution, etc all at the mercy of the planet….. legally?
I know in the real estate industry, if brokers were to have an ‘OPEC’, controlling what properties are brought to market and when, what commission will be paid by all, pricing, etc, all brokers would be in jail. There are laws protecting us from this kind of collusion and price fixing. Not for the oil industry. Hmmmmmm……..
Saturday, March 19th, 2011
Posted by Leonard Steinberg on March 19, 2011
A new survey reveals that 70 percent of Americans would advise friends and family to buy a house, Thomas Wilson, CEO and chairman of the insurance company Allstate Corporation, told CNBC Friday.
“The underlying demand for houses has not changed, despite the fact that consumers are more conservative and want to save more,” said Wilson, who is also vice-chairman of the Chicago Fed.
“By a factor of 4 to 1, they think investing in a home is a better deal than investing in the stock market,” he said.
The survey, called the Heartland Monitor, released quarterly, is a joint project of Allstate and the National Journal. The respondents, 66 percent of whom are homeowners, are geographically located across the country.
Highlights of the survey are:
- 63 percent think the current housing crisis is temporary
- 59 percent say they are living the American dream
- 58 percent believe that achieving the American dream is tied to their own skills and hard work rather than the state of the economy.
So we have to ask why some areas are performing so well and other so poorly? The answer across the board seems to reflect the reality that the wealthy markets are recovering soonest and strongest. The New York real estate market is performing very well in the first quarter of 2011. Cyclically, it may be true that after a recession hits, interest rates drop to fuel activity, and industry cuts costs, mostly through lay-offs. Once companies show signs of becoming profitable, they start to hire again and the trickle down effect takes effect. While this is happening, the rich are investing their cash reserves to make big money. (Imagine you had invested $ 1 million into the DOW in March 2009……that would be worth almost double to-day.)