Archive for July, 2011
Sunday, July 31st, 2011
Posted by Leonard Steinberg on July 30th, 2011
We have covered this subject before in LUXURYLETTER: Manhattan and New York City sidewalks are constantly covered with hideous, unsightly construction sheds and scaffolding. Always dark, somewhat sketchy, and often covered with graffiti, the sheds leave much to be desired, which is why the Department of Buildings hosted the UrbanSHED Competition, asking designers to create a more aesthetically pleasing design for these sidewalk canopies. A prototype of the winning design has just been unveiled: the arched steel structure with a transparent top is a breath of fresh air. Designed by winner Young-Hwan Choi with architect Andrés Cortés and engineer Sarrah Khan of New York-based Agencie Group, the new canopy is a huge improvement from the standard pipe and plywood shed.
It is time to really evaluate this ugly scaffolding once and for all: While I love the concept of re-designing the scaffolding and making it more attractive, personally I see permanent sidewalk covers as the solution. The cost to building owners to rent these structures is prohibitive. With the sun a lot less desirable these days, why not cover sidewalks (a la Meatpacking District and Tribeca) with permanent canopies. These (attractive) canopies could be made of solar panels to generate power and also transmit light. Something needs to change.
Saturday, July 23rd, 2011
Posted by Leonard Steinberg on July 23rd, 2011
Are we all too quick to pass judgement without taking a long hard look in the mirror?
This week saw two amazing instances of mass judgement: Firstly, everyone everywhere, especially in the press, voiced their OUTRAGE at Rupert Murdoch and his organization’s hacking misdeeds….of course, NONE of these organizations passing judgement have participated in any form of ‘questionable practices’ to obtain their stories, and of course NONE of the people who read (and often believe the trash) these newspapers are in any way complicit by having supported these papers for so long by buying and reading them….hmmmm…..
Last night fair and balanced FOX’s Bill O’ Reilly highlighted what most people were thinking: that the Norwegian extremist who killed dozens yesterday in Oslo was a Muslim or Muslim sympathizer. Bill automatically assumed something as heinous as this crime against society could only be perpetrated by a Muslim. Well, he was wrong, and so were many (most?)of us who assumed the same thing. We had all forgotten the Oklahoma bombing. We had all forgotten just how violent all religious fanatics are, or have been, throughout history. Hopefully this horrible incident reminds us all that we as a society need to fight off all extremists, on the left and on the right: Muslim, Christian, Jewish, Aetheist, whatever. Extremists are the cancer of our planet.
Here are some other ironic, often stupid, examples I have been pondering of our natural leaning towards passing judgement on others:
The LEFT is keen on raising taxes on the rich. They have classified the rich as those earning above $ 250,000.00 without any regard of where they live and the cost of living in that city. Wait till these same judges see the effects of these “rich people” losing their mortgage tax deduction which looks like it will either be removed or sharply reduced.
The RIGHT runs on fiscal conservatism, yet operates like the most disfunctional corporation on the planet: Would a good CEO only focus on cutting costs without raising income? Would any smart CEO continue to allow some corporations to benefit by huge tax breaks that don’t need them? If the right was so outraged about the ‘bailing out of Wall Street’, why are they not as concerned about the add-huge-profits-to-the-bottom-line for the most profitable companies on the planet such as EXXON and GE?
On GOOD MORNING AMERICA on Wednesday, a segment showcased twins wearing very similar outfits, one inexpensive, and the other the ‘designer’, expenisve version….we had to guess which was which…..everyone cheered loudly for the inexpensive version: why would anyone not want those $ 30 jeans? …..the ones made in China…..the ones that took a job away from an American….the profit from those jeans will stay outside of the US so they will not get taxed….the tax dollars that may have helped pay down our debt….
New York liberals complain bitterly about the rising costs of renting in the City. These are often the same people that demand more benefits from the City and State, earlier retirement ages, etc. So real estate taxes are raised to pay for these benefits on those who own the real estate…. who are then compelled to raise the rents. How DARE they?
Christian Conservatives are outraged by abortion (and often any form of birth control)…..yet they seem quite comfortable with wars. Who chooses what life is precious and what life is not? These same Christian conservatives know well that once you ban abortions, the least educated, poorest will produce even more welfare recipients……the benefits the Christian conservatives want to cut the most…..
Many Sellers who earn millions of dollars each year are outraged by brokers fees. Why can’t brokers work for free?
Condominiums pride themselves at being the ‘un-co-op’, the sane alternative to revelaing your life to your neighbors, yet now demand disclosure from buyers on a very similar level to that of the craziest co-op boards.
New York City cyclists DEMANDED respect from the awful car-driving masses, so they were given miles of biker lanes…..have you noticed how many of them (the vast majority?) disobey any form of the law? Running lights, going up streets the wrong way…..and avoiding the bike lanes?
Last week all applauded (myself included)the new computer-system to control mid-town traffic in New York. That computer will replace the need for several low skilled workers with a few high-skilled workers, thus eliminating more jobs. Yes, technology is wonderful, but it does eliminate jobs. And if we do not educate the unemployed to thrive in the new high-tech world, they will remain unemployed…..and cost the States and Federal governement lots….and they won’t produce any tax revenues….and they won’t be in a position to consume in the same manner as if they were employed. Thankfully Mayor Bloomberg announced in the same week plans for bidding on a new high-tech college campus: We need more Bloomberg’s in government. Smart. (not perfect either, who is?)
And lasty, the poor consumer. For the last two years everyone has been deriding them for their irresposible, evil and wreckless spending habits, charging up those credit cards (that benefit the bankers and all their shareholders most with those crazy interest rates), getting mortgages they could not afford on homes they did not need, spending out of control, landing us in the GREAT RECESSION. Now those same fiscal conservatives are stunned by the slow growth in GDP, realizing (what a shock!) that the USA’s economy is driven by the consumer….who is being so much more responsible now…..but it is their fault the economy is not growing, because they are not spending as extravegantly.
My verdict: we are all guilty. There is only one way to clean up the mess, and that is to start in our own back yards.
Tuesday, July 19th, 2011
Posted by Leonard Steinberg on July 19, 2011
In another strong attempt to spur business growth in the New York area, forward thinking (not-focused-on-re-election) Mayor Michael Bloomberg announced details today of a request for “universities near and far” to submit proposals to build or expand a science and engineering campus in the city—a project he called “one of the most promising economic development initiatives in the city’s long history.”
The mayor said a 1 million-square-foot applied science campus could spin off some 400 new companies and create more than 7,000 construction jobs and 22,000 permanent jobs in its first 35 years. Some $6 billion in economic activity could be generated, resulting in roughly $1.2 billion in new tax revenues added to city coffers. Not to mention what it could do for real estate values…..think Silicon Valley….
“During the 1980s and 90s, Silicon Valley—not New York—became the world capital of technology startups, and that is still true today,” Mr. Bloomberg said. “But if I am right, and we succeed in this mission, it won’t be true forever.”
The city is offering real estate on Governors Island, Roosevelt Island or at the Brooklyn Navy Yard at virtually zero cost, and is pledging up to $100 million in infrastructure upgrades. It expects that contribution to be “matched several times over” by the winner or winners. Sources say the city could end up selecting two separate projects, and that Roosevelt Island is attracting the most interest, followed by the Navy Yard.
All politicians should learn from this: while the plan may not be perfect, this is a perfect example of government actually working. If this dream pans out it could truly revolutionize the city, drawing some of the most talented techies to the City, boosting employment, spurring business, and most importantly, help create some new tech-billionaires to buy all the amazing apartments coming to the market over the next few years. Strong tech companies love to position themselves close to the best tech universities producing the freshest talent….. this will certainly boost attendance at the new Mathematics Museum coming to Madison Square Park.
Is it possible two breeds of tech nerds will emerge? The hip ones in New York and the geeky ones in California? New York has transformed many, so why not tech-nerds too?
We love it!
Tuesday, July 19th, 2011
Posted by Leonard Steinberg on July 19, 2011
The traffic clogged heart of Manhattan is getting a state-of-the-art bypass operation — with city engineers now directing Midtown traffic flow by typing a few keys in a Queens control room. Mayor Bloomberg yesterday launched the first-of-its-kind, real-time, congestion-busting system, which allows the engineers to control traffic lights remotely.
He hailed it as the greatest traffic innovation since the city’s grid system, saying engineers with the city Department of Transportation will use data from live street feeds to battle gridlock at the very moment motorists are leaning on their horns and giving each other the one-fingered salute.
I agree this is an amazing addition to the City and of course only time will tell how effective the system is. The bigger message about this system is how it impacts employment: again we witness how high tech jobs are created at the expense of low-tech jobs…..here, the jobs of many traffic police will be replaced by technology and a few tech-savvy employees. We have seen this with self check-out at Home Depot, self check-in at the airports, and the list goes on. Indifferent, inefficient human beings are being replaced by machines that are 100% focused on the task at hand. The human touch is vanishing. And its making companies (and even governments) more efficient…..and profitable! The bigger message is that the key to unlocking the high unemployment rate may lie in our ability to train and educate the unemployed in new careers, equipping them with the skills our changing world truly needs instead of whining about which party or president is to blame. Lets face it, sooner or later we will all be directly linked to technology in our jobs…..we may be there already.
The next wave may be how to re-introduce the human touch to technology, after acknowledging that us humans became spoiled and complacent, and now have to embrace technology. We see this in real estate: at first many scorned the web, e-mails, websites, cellphones: the Streeteasy’s, Curbed’s and Zillow’s of this world changed that forever. Now there is an over-supply of information and technology and (highly informed and educated) humans have to step in to become the editors.
Read more: http://www.nypost.com/p/news/local/manhattan/city_gets_street_smart_gmTC2PaRgJdmjZFSwpv9EI#ixzz1SYEUu13g
Friday, July 15th, 2011
Posted by Leonard Steinberg on July 15, 2011
The question arose this week (and many times before) about the future of West Chelsea as an Arts Center: will West Chelsea go the way of Soho? Will Gagosian become the Gap? Will Prada replace Paula Cooper? Chanel replace Cheim & Reid?
“The biggest difference between Soho’s evolution into a high fashion retail environment and West Chelsea to-day is the fact that now most galleries own their space and don’t rent,” says Matt Amico, a West Chelsea resident and a Prudential Douglas Elliman broker. “When I moved into the Caledonia (450 West 17th Street)it was a brand new construction building: Alternatively, had I moved into Soho years ago, I probably would have replaced an artist.”
Soho artists did own many of the lofts that they moved from, mostly because they had bought them for next to nothing years ago: subsequently they have left behind a huge mess with the AIR program and walked away with huge, often retirement-fund-sized profits (well deserved, as they pioneered the area and transformed many derelict buildings into habitable homes and studios). West Chelsea is very different as the focus is not so much artists as it is galleries….and these (often highly profitable) galleries own their space this time: In Soho most were renting their retail/commercial space.
Another huge value to anyone in commerce is the high concentration of an industry: With about 350 art galleries concentrated within just a few blocks, the ability to lure potential art buyers is so much greater than being spread around the city, or worse, outside of the City removed from easy access. “The experience of visiting West Chelsea is now further enhanced by the fact that the recently opened Highline Park extension acts as a connector between West Chelsea’s arts district and the Meatpacking District, a thriving retail environment: so the area combines everything that Soho was 15 years ago with what it is to-day.”
The Highline Park, the new Avenue’s School, new restaurants, amenities and services combined with the Hudson River Park to the West add fuel to West Chelsea’s fire. When the subway stop is added to Eleventh Avenue and 34th Street, the northern end of the Arts District will be connected to Times Square via a 5 minute subway ride. Add to this a substantial volume of construction planned for the Hudson Yards area, diminishes the urgency to vacate current art gallery spaces to convert them or tear them down for residential use. There are still many vacant/commercial, non-art gallery building sites in West Chelsea to satisfy developers for several years. Walking on the Highline Park the other night amongst a very civilized group of calmer, more elegantly dispositioned New Yorkers, you actually saw the realization of this amazing neighborhood transformation: illuminated landscaping bracketed by exceptional new buildings that arch over the park such as the two stainless steel clad HL23 and 245 Tenth Avenue …..and in the distance a host of interesting new building mixed in with the older residential and commercial structures….and one day soon all this will terminate at a brand new Whitney Museum….
So my conclusion is that the unique flavor that has been created in West Chelsea is here to stay, for at least the next 10 years, and possibly much longer. Remember the entire area was re-zoned too to prevent a big mess, so maybe this is one area that will serve as a textbook case study for responsible development?
Thursday, July 14th, 2011
Posted by Leonard Steinberg on July 14th, 2011
The spectacularly grotesquely, almost tasteful 56,000sf limestone mansion belonging to deceased Hollywood producer Aaron Spelling, creator of 90210, Melrose Place and Dynasty to name a few of his famous shows, has sold and closed for the equally spectacular price of $ 85million, making it the most expensive residential sale in United States history. The buyer is 22 year old Petra Ecclestone, heiress to the Formula One racing empire and daughter of British billionaire Bernie Ecclestone.
The Spelling Mansion, originally named L’Oiseau, is situated on almost 5 acres in the West Coast’s answer to Alpine New Jersey, Holmby Hills, an exclusive Los Angeles neighborhood. The three-story, seven bedroom estate boasts every ridiculous feature a celebrity or celebrity wannabee could imagine. Among the offerings are a dog grooming room, five bars, a wine cellar and tasting room, a China room, TWO “gift-wrapping” rooms, a flower-cutting hall with a professional florist fridge, a screening room/cinema, game and billiards rooms, a bowling alley, and a beauty salon. Of course there is an elevator too. The lavish grounds combine expansive gardens, an orangery, a koi pond, lamp posts imported from Paris, a pool complex and tennis courts. The fountain-studded motor court holds up to 100 cars.
The mansion was home to Aaron’s wife Candy for a few years…she has subsequantly down-sized to about 20,000sf in a highrise.
Ecclestone is said to be moving here after her August wedding to James Stunt, a businessman and London nightclub fixture. It’s been reported that the couple will split their time between London and and their new Nouveau Riche shrine.
And we thought New York was expensive? Well, this house translates to about $ 1,500/sf, or about a quarter of the cost of an apartment at 15 Central Park West, so it qualifies as mid-level luxury in Manhattan. The same size of property at 15 CPW would cost over $ 336 Million…..unless of course you got some discounted square footage in the basement for those gift wrapping rooms.
Friday, July 8th, 2011
Posted by Leonard Steinberg on July 8th, 2011
The past few weeks have been a hive of activity with developers snapping up development sites throughout the city: yes, the new development market is waking up and it is waking up with a LOUD BANG.
These are some of the projects in the pipeline: The Drake Hotel site, One 57, 150 Charles Street, One Madison Park, 1107 Broadway, The Seminary building, The Hudson Yards multiple buildings, 508 West 24th Street, 212 West 18th Street, The St.Vincent’s site, 130 West 12th Street, One Abington Square, 220 Park Avenue South…..and the list goes on. What all this amounts to is a HUGE, unprecedented, simultaneous demand on the construction industry. Break that down further and look out for increased labor costs, lower unemployment, increased costs for commodities, increased costs for fixtures and finishes, additional traffic and congestion, over-worked lawyers, engineers, architects, ad agencies, brokers…..
All this could give a tremendous boost to the New York economy, but this boost will have a down-side too.
Monday, July 4th, 2011
Posted by Leonard Steinberg on July 4th, 2011
Bank of America Corp and JPMorgan Chase & Co have started modifying tens of thousands of mortgages where the banks deem the loans especially risky, even if the borrowers have not asked, the New York Times reported yesterday.
In some cases, the banks are slashing the amount borrowers owe, citing one case in Florida where a woman’s principal balance was cut in half. The paper said the banks are targeting holders of pay option adjustable-rate mortgages, a type of loan where borrowers have the option of skipping some principal and interest payments and having the amount added back onto the loan.
Such “option ARM” loans were seen as especially high risk in the wake of the financial crisis; the two banks collectively still have tens of billions of dollars of such loans in their portfolios. One law professor quoted by the Times said the banks were behaving in contradictory ways, modifying some loans that should not be and not modifying some loans that should be.
Would it not be smarter for banks to evaluate each mortgage on a case-by-case basis, and make adjustments to that mortgage in the hopes of the borrower being in a better position to continue paying down that mortgage without defaulting? Surely much more time and cost is incurred when a foreclosure takes place, and surely those foreclosures further de-value surrounding properties thereby making the owners of those properties more at risk to default?
Maybe I am over-simplifying this, but a few years ago I provided a 2nd mortgage to a friend. He only needed the ‘loan’ for a few months. The loan was at a high rate of 12%. Then the financial storm hit and he could not pay down the loan. I recently halved the interest to 6%, thereby allowing my friend to have the additional money he would have paid to me to do repairs to the property. Now apply this same philosophy to banks and it becomes clearly evident that money forced into the hands of banks and corporations does not necessarily fuel the economy (It certainly has not fueled job growth!). Putting the cash into the hands of the (responsible) consumer fuels spending, the ultimate driving force of this economy.
Saturday, July 2nd, 2011
Posted by Leonard Steinberg on July 4th weekend, 2011
As we pause in the middle of the year I reflect on what is great about the USA, and specifically what is so great about American real estate. Here is my list:
1) You don’t have to know the royals to build something: Unlike most countries, in the USA you could be an immigrant fresh off the boat (as we witness regularly in New York), and if you have the imagination, conviction and most importantly access to the means, you can build.
2) While governments are making it increasingly more challenging for building, the good news is the new laws being imposed are designed to improve quality, safety and esthetic appeal…..well, not maybe everywhere….yet!
3) The USA, unlike many other countries has a built in SCAVENGER SYSTEM that eats up distressed, abandoned property slowly but surely in times of trouble. Sometimes slower than we’d like, but the sight of urban decay lasting for 100 years is tough to find in the USA.
4) USA real estate is incredibly diverse: sometimes awfully so, yet it reminds us of freedoms that simply do not exist elsewhere. From those vulgar Mc Mansions, to those painfully tasteful New England shingle abodes, to mountain lodges, contemporary glass skyscrapers, trailer parks with those oh-so-uniquely-American stacked tire planters, to bland strip malls, lavish suburban malls, stop-n-go supermarkets/gas stations: the variety is ceaseless.
5) USA real estate employs LOTS of people: real estate brokers, appraisers, lawyers, title companies, builders, developers, renovators, the awful TV shows that cover real estate ‘reality’, maintenance staff, management agencies, repair industries…..one could conclude that real estate is the single most important driving force in the entire economy.
6) USA real estate is a beneficiary of Americans love for owning a home: where else is there such a passion for a double height entry, circular driveway and a formal (unused) dining room?
7) Real estate in the USA has limitless boundaries: the combination of wealth, growing population (the biggest recipient of immigrants both legal and illegal) and an endless supply of land and resources, not to mention talent and creativity makes this country unique.