Archive for April, 2011
Wednesday, April 27th, 2011
Posted by Leonard Steinberg on April 26, 2011
It appears Sullivan Street Bakery is coming to West Chelsea….a sign popped up recently just a few doors down from their restaurant venture COMPANY on Ninth Avenue between 24th and 25th Streets. This bakery, known for its exceptional baked products especially its breads and pizza’s will be a welcome addition to the neighborhood for sure!
We think anyone positioning themselves close to the 23rd Street access point to the Highline Park scheduled to open in a month will be handsomely rewarded not only by the throngs of visitors and tourists, but also by the thousands of new residents that have moved in and are still moving in to the area.
Saturday, April 23rd, 2011
Posted by Leonard Steinberg on April 22, 2011
I have noticed all around us a distinct trend: fat is being trimmed in the biggest way in all arenas of our lives, including real estate. Here are my observations:
1) The New York Times reported yesterday how the desire for less bloated homes across the country has caught most builders a bit off guard. The need for a double height entry is waning, as is the need for rooms never or hardly ever used. The old addage of ‘bigger is better’ is fading, and being replaced by more usable, energy efficient, user friendly, humanly scaled homes. The costs of building, maintaining and operating larger homes is also a consideration. The cost and availability of land requiring a shorter commute will also dictate this trend. Not only are long commutes expensive with rising energy costs, they are also life-vampires, stealing valuable time from already overworked families. While there will always be a desire in Manhattan luxury real estate for large homes, even here in the land of excess and mega-wealth, larger homes are becoming more efficient, mostly from a new awareness of each individuals role in conserving energy.
2) Cars expanded in size dramatically over the past 10 years: A perfect example is the Toyota Corolla that was once a small car and over the years expanded into a medium sized car. In the past 24 months we have witnessed a dramatic influx of small, efficient cars, the kind that the rest of the world has been driving for years. Even Rolls Royce introduced a smaller car, The Ghost, as an alternative to The Phantom, that ultimate symbol of bloated motoring excess outside of the SUV arena. SUV’s now have competition from SUV-like cars, offering all the advantages of the SUV while shrinking, cutting the fat.
3) The global recession has forecd most companies to trim fat, mostly driven by their desire for profit. Businesses are often the most effective at trimming fat as most are pretty emotionless, and also have to act quickly before drowning or being unseated by more efficient competition. The stock market’s hourly monitoring and quarterly score card system fuels the speed.
4) Even governments are trimming fat, although reluctantly and slowly. The culture of fat in government is difficult to break, although with States at the brink of bankruptsy, the urgency has become accute. New Jersey Governor Chrystie has become the poster boy for fat trimming, albeit only budget-wise. Even disfunctional New York State was able to slash its budgets pretty dramatically, and on time.
5) Humans are cutting the fat too: Never before has there been a greater awareness of the food we consume and what it contains, especially fat-wise. In food we are learning about good fats and bad fats, and there is even regulation now to govern this. The First Lady talks about cutting fat and healthy diets….thats a first!
6) Energy is becoming much more expensive and the supply chain does not meet the demand. The USA has not had an energy policy for decades….a disgrace. But common sense industry and human intuition are already defining an ‘un-official’ energy policy: Solar power is growing, incandescent lighting is being replaced, hybrid cars are becoming common, buildings and homes are being retrofitted with energy efficient windows and better insulation. Real estate has awakened to the value of energy efficiency not only for the planet, but for the BOTTOM LINE too, a much more effective driving force in the USA.
7) Interior design: We are seeing more efficiently designed interior design products. There are sofa’s that used to take up 20-30% more room because of thick arm rests…..skinnier versions provide as much comfort and seating space, but trim the excess square inches that are not usable.
8) Technology: The computer we used to need to do our daily business had a hard drive below our desks, a keyboard and a monitor…..all this is now condensed into a tablet the size of a book. Remember those huge screen televisions the size of an SUV? Now they are a bit over an inch thick and sit on the wall, thereby eliminating the need for several square feet.
9) Retail: Even WALMART, the king of excessive retail space, is launching smaller more efficient stores, more focused on the needs of consumers.
As I am real estate focused, I see a great future for clever, engineered design in homes. The designer/architect of a luxury Manhattan home will now come equipped with the mindset of a yacht designer, designing homes that accomodate all the needs and wants of a very demanding client, in the best of tastes, but with an eye towards being chic AND efficient in the use of space. A bathroom wall cabinet set into a wall that becomes the wall, takes up much less space than a sheetrock wall with a cabinet set on the outside…..these small efficiencies add up and collectively shrink the size of homes without compromising quality of life.
Our diets are probably the best way to understand fat: Fat is not healthy. It slows you down. It stops your organs and internal systems from functioning well. It can cause depression. It is not terribly attractive (especially as we approach Summer swimsuit season). In dieting we have also learned about good fats and bad fats….a little good fat is necessary to be happy and healthy, no? A good trainer will teach you that excessive fat trimming can cause muscle loss, so we have to be careful that the fat we trim from all the areas of our lives is done so prudently, efficiently, and most of all…..intelligently, without pandering to politics, the biggest curse of our time.
Thursday, April 21st, 2011
Posted by Leonard Steinberg on April 21, 2011
We have heard through the grapevine that a non-penthouse, full floor unit at HL-23, the Neil Denari designed building that hovers over the Highline Park at 23rd Street in West Chelsea, just went to contract for over $ 2,600/sf without any outdoor space…..that would have to be a record for the area for sure, if not all of New York real estate pricing. It is further proof that the area soon to be connected to the West Village and Meatpacking District via the Highline Park, surrounded by the world’s leading contemporary art galleries and soon to have one of the city’s top private schools (AVENUES) has arrived.
Monday, April 18th, 2011
Posted by Leonard Steinberg on April17, 2011
New York City is a city large enough to showcase how smart business, common sense and critical mass can impact huge shifts in our daily lives: and now the focus turns to energy savings.
While the world waits for ‘government’ to come up with some new invention to save energy, New York City is showcasing many ways to reduce consumption of energy through its own initiatives combined with government initiatives: The Empire State building just completed a large retro-fit to make the building more energy efficient…..it has reduced its energy consumption by almost 40%. Building codes require low-flush toilets and faucets…..thereby reducing water consumption significantly. Hybrid cabs use on average 20% less fuel than the older cabs. Many buildings are converting from oil to gas to heat. Old buildings are replacing old, leaky windows with new, more energy efficient ones.
In an apartment, here are some ways to make an impact:
1) Make sure your windows are energy efficient: if not, rally the troops in your building and instigate a building-wide program to replace old, leaky windows.
2) Window unit AC units are hyper-inefficient: ducted, central air is about 25% more energy efficient.
3) Replace incandescent light bulbs with LED’s….yes, the bulbs are super-expensive, but they last about 7 years and the quality of light is so much better than fluorescent.
4) Get motion sensor lights for fire stairwells in your building that are hardly every used: leaving a light on 24/7 is extremely wasteful. 2 lights is not a big deal…..but go and count how many are in a 12 story building. Hundreds!
5) Install dimmer switches: dimmed lights look better, make you look better, and use less energy.
6) Don’t leave unused appliances on, and unplug them when not in use.
7) If you want to reduce electrical costs, run the laundry overnight….electricity is cheaper then.
8) Call your local authorities when you see park lights on when there is bright daylight…..have them turned off.
Individually the savings are not that great, but collectively the savings and reduction of energy consumption is HUGE. Join in…..its happening already, and there are some government incentives to encourage this shift in thinking.
Sunday, April 17th, 2011
Posted by Leonard Steinberg on April 17, 2011
This week I was again shocked and amused by the power of a Reality TV show over the mind of a seller: Does a TV appearance really double the value of an apartment?
I had met with an owner several months ago after a meeting a year earlier where I had told him to hold off on selling because of the shaky financial markets. When we met, I gave him a price range within which I felt his property could sell, based on recent comparable sales, other similar apartments currently available on the market, and his building’s history. Last week I saw that he had listed the property with another agent in another firm at DOUBLE the price……of course with the promise of a TV show appearance that this broker hosts.
Only time will tell whether this TV appearance will truly add value to the property. But will it double the value? That seems like a stretch. And one has to wonder whether the world, especially educated New York real estate buyers, has become numb to the realities of markets purely for the sake of 15 minutes of “fame”. Maybe we are witnessing reality change before our own eyes, where because of a camera, we re-invent reality with ratings in mind. I met with another Seller client months ago who very seriously addressed changing brokers because another broker had offered to feature this property on a reality TV show he was was hosting. He was being dead serious: thankfully sanity prevailed and a few weeks later we had sold this apartment, without a reality tv show as the guiding force.
Do you follow the fashion suggestions of POSCHE, the boutique those horrific housewife’s of New Jersey frequent? And would you pay double for the same merchandise because of that appearance? Do you have dinner at Le Caprice just because those frightening, cosmetically disfigured New York housewife’s went there in the most recent episode….and would you offer to pay double for your meal?
Maybe I’m taking this all too seriously. And I do believe having your property featured on TV can help sell it (especially if the show airs close to shooting, which usually is not the case). Maybe its all fun. But how much fun is it when your property, often one of the largest investments in your life, becomes FUNNY?
Wednesday, April 13th, 2011
Posted by Leonard Steinberg on April 13, 2011
The world is learning the painful reliance we have on one another where because of Japan’s horrible disaster, many components manufactured there are slowing down the production of products made elsewhere around the globe. These supply disruptions affect pricing in a meaningful way.
A similar supply disruption has happened in New York real estate with the virtual halt to the construction of new apartments in 2009 and 2010. The first major shock was the first quarter results of 2011 that showed a huge shift towards the sale of co-ops versus condo’s. Sadly, no-one really went further than creating a dazzling headline to realize that the main cause for this was the lack of inventory of new condos, the largest component of condo sales. Hence these figures were badly skewered and the report was rather mis-leading. The demand for new condos has not waned. The supply has. And this supply disruption will take many, many months to cure. It is also possible that there will be a time when there is too much inventory again.
To all developers out there I caution you about this HUGE demand for large apartments. Yes, this is certainly true, there is a shortage right now of large apartments. But if every developer and banker beats the exact same drum, we could end up with an over-supply of these larger units. When large apartments cost more than $ 10million, the audience is limited. And I constantly hear developers pro forma’s that sound a little frothy…..unless you are developing something really special, be warned.
Supply disruptions always cause price escalations, but that can be short lived.
Monday, April 11th, 2011
Posted by Leonard Steinberg on April 11, 2011
Many buildings seeking to re-finance their debt to take advantage of the still historically low rates, come across a little problem …..pre-payment penalties. With the potential for rising interest rates increasing daily, those wishing to re-finance now cannot do so as the pre-payment penalties are often severe.
Winter & Company, a New york based firm specializing in commercial real estate finance, have come up with a solution that I think is rather brilliant: a FORWARD COMMITMENT, whereby a rate is locked now with a closing date set well into the future to allow for avoiding an early loan pay-off of an existing mortgage with pre-payment penalties. Buildings with debt should take heed now, before rates rise.
Unlike larger banks, I have found Gregg Winter and his team of creative bankers to be highly efficient problem solvers. For the sake of full discloure, I do invest in a Winter Fund: that should not take away from the company’s history for strong, solid performance, even through the roughest times. And no, this financial institution did not require a Federally funded bailout in the recent meltdown.
Sunday, April 10th, 2011
Posted by Leonard Steinberg on April 10, 2011
I have repeatedly heard the refrain “I am not working with a broker!” in the fifteen plus years I have been a broker. The words are said by some buyers almost with a sense of pride and accomplishment. And they are often heard by listing brokers who relish the thought of collecting double the commission.
Some buyers these days come equipped with a knowledge base that is often impressive: Streeteasy, Curbed and a whole host of websites have helped them become well informed. They come armed, and more importantly, they come with the intent of getting a discount. But for most, it is a painful process when the reality sets in. For the buyer, they learn that if there is any discount at all, it is often marginal. For the broker, they learn that their work is often more than doubled. Smart sellers also know to be weary of bargain hunters. Representing both sides of a transaction can be tricky when neither side trusts you have their best interests at heart. Most importantly, buyer may have good knowledge, but a really good broker may have more knowledge, the kind that is not detailed on websites, and certainly not revealed by a listing broker. 1% of $ 2million is certainly not to be sneezed at, yet for the wrong apartment, or for a property that may have issues that will cost significantly more than $ 20,000.00 to cure, buyers without brokers should take heed.
For buyer’s brokers the message is clear: unless you bring real value to the process, you won’t be replaced by technology sometime in the future…..YOU HAVE ALREADY BEEN REPLACED. It’s time to re-structure the role of buyers broker as a buyer’s consutant, a problem solver, issue identifier and resolver, editor and mediater/negotiater. A buyers broker needs to be as informed as their customers PLUS have information and knowledge their clients do not have. They must learn to deliver real, intrinsic value to the process.
At the end of the day, great buyer’s brokers will thrive, and their customers will benefit tremendously.
Saturday, April 9th, 2011
Posted by Leonard Steinberg on April 9, 2011
Cabs in New York City have become expensive. Still they are not nearly as expensive as those in London or some other cities. I don’t particularly mind paying for this service as it is one that I find extremely convenient and efficient.
I had thought of getting a car and driver many years ago, and several colleagues in the Manhattan real estate industry have done so since. Sharon Baum is the most famous for her Rolls Royce. I opted otherwise as I prefer the convenience of stepping into the street, raising my arm and opening a door to the closest cab. I rent a car and driver when working with clients schlepping them around to see properties, and sometimes use one uptown, connecting downtonw with another via subway to avoid the traffic slowdown. Using cabs is far more environmentally conscious than owning a car + drive full time that is often left in front of a building idling while waiting, spewing pollution and making the Saudi’s richer. The problem starts when stepping into the cab itself….
Why is it that in the past 15 years, New York City is incapable of specifying a cab that is inhabitable? Why should I pay the same for one cab where the seat is comfortable, the interior clean, and the driver sane as I do for the filthy cab where the seat is so tight you slice the tips of your shoes off and have to do Cirque du Soleil contortions to position yourself in the seat? It is a thorough disgrace that a world center in a first world country has such outrageously bad cabs.
If Mayor Bloomberg really wants to make his mark, PLEASE apply as much effort into upgrading our cab service as you do creating bike lanes (oh, and don’t get me started on those lawless bikers!).
Saturday, April 9th, 2011
Posted by Leonard Steinberg on April 9, 2011
This week, Amercan Idol fans were shocked when one of the shows biggest talents, Pia, was voted off the show…..it was another reminder of the dangers of mass tastes dictating. Without Simon Cowell, the judges superficial, uneducated, Jenny-from-the-block evaluation failed us all. I feel the same way about real estate reporting these days: so much of real estate reporting about New York real estate relies much too heaviuly on celebrity. This week I had a very interesting conversation with a top reporter of a major newspaper on the subject.
It amazed me how restricted this reporter was by how competitive the press has become to get the latest scoop on the latest celebrity spotting/purchase/appearance…..real-estate wise! This very intelligent reporter agreed that there was a need for an organization or two to stop this insanity and become a bit more educational, and dare I say intellectual/smart, about understanding what does and does not happen in the world of real estate. Surely, when the quarterly reports are distributed, the consumer deserves some more detailed analysis/reporting on what all those figures mean, rather than just spewing them out verbatum, cicling round eventually to the one huge sale of a billionaire or celebrity?
Certainly the New York Times, New York Post, Wall Street Journal, Observer, Curbed, The Real Deal, etc have all produced some well written, well researched articles. We hope they focus more on these well researched and analysed pieces. The Paris Hilton-esque stuff is becoming annoying.
Just like American Idol, are we all doomed to be overwhelmed by the masses desire for shallow, superficial ‘news’ without any form of analysis or depth? I think there are enough people out there who want and expect more. Maybe what we are experiencing right now is a fashion for the ultra-superficial: hopefully the next fashion will be INTELLIGENCE, a well designed Burberry coat, not Jeggings, and hopefully it lasts?