Archive for February, 2012
Wednesday, February 29th, 2012
Posted by Leonard Steinberg on February 29th, 2012
Google it! A new Starbucks on the street corner used to be the most important signal of a gentrifying neighborhood. Well, Starbucks has been in West Chelsea for quite a while and there are several. So what could be the most important next signal of an even greater neighborhood escalation? Google it!
Lets face it we Google everything else, if its for the correct spelling of a word, or whether the news headlines announce whether Rick Santorum will be the GOP candidate…. Google’s expansion in New York, and especially in West Chelsea—once seen as too expensive for tech start-ups—has helped fuel a perception that the city is in the midst of a technology industry boom. Facebook, Hewlett-Packard and other companies have expanded their New York presences, and Cornell University will be building an engineering campus on Roosevelt Island. When Google bought the Port Authority building at 111 Eighth Avenue for $ 1,9billion, that was the ‘Starbucks-indicator’ to let us all know the neighborhood would continue upwards and not stop. Such a huge investment in the building was also a huge message about the neighborhood: Google’s young, educated workers would be happy in a neighborhood like Chelsea for all the reasons we love it.
Almost every part of the economy involves the tech sector these days: There is no industry in which New York is a world leader where technology doesn’t play an important role and won’t play an important role going forward. Google being centered in Chelsea is a boon for the neighborhood, now employing over 2,700 people. That is 2,700 new consumers in the area, seeking food, shelter, nightlife, entertainment, etc. And many are very well paid.
Google has cemented its status in New York since 2000, when a one-person ad-sales team began working out of a Starbucks on West 86th Street. Two years later, it had moved to an office in Times Square with around 70 employees before moving to its Chelsea offices at 111 Eighth Ave. in 2006. Although Google’s engineering efforts are still driven out of its California headquarters, the New York office is now a powerhouse for both its engineering and advertising work force. Thats a lot of highly paid people. And developers in the area have taken note. Several buildings are coming to the neighborhood that specifically address this audience, to add to the already strong mix including the Caledonia, 456 West 19th Street, 100 and 200 Eleventh Avenues, 520 West 19th Street, 245 Tenth Avenue, and so on. Google offices are notoriously energized, fun, stimulating spaces designed to keep happy employees working very long hours…..this should also be factored into how they would expect to live at home.
Developers of luxury New York real estate should recognize the impact of this sector on the buying and renting demographic. Too often their expectation is that Wall Streeters are the target market. West Chelsea is different.
Tuesday, February 28th, 2012
Posted by Leonard Steinberg on February 28th, 2012
While China re-invents the concept of capitalism, a new version of capitalism where much is not negotiated or discussed as in the West, but rather implemented by a controlling force with little debate, the USA has created a multi-billion dollar architecture of divide to keep the country polarized…..forever?
Both sides, fueled by extremism on the left and the right, have instituted a system (legally) that could possibly keep this country divided for decades to come, thereby limiting the USA from having the substantive ability to compete with countries like China. It is time for those on the extreme left and right to see the damage they are doing to the 80% of the country that sees extremism as a huge impairment to progress. Maybe its time for the 80% to fight back all these super-pacs and heavily funded shadow organizations that fuel the power of these destructive organizations. The laws that allow this extremism to flourish needs to be un-done. The USA is ready for the PRACTICAL PARTY.
It is time to have these mechanisms of divide dismantled and let the majority speak their voice. Surely those billions of dollars have better use? A political system designed to be able to get things done efficiently is good for the economy, for the people…..and for real estate, still the number one drag on the economy.
Saturday, February 25th, 2012
Posted by Leonard Steinberg on February 24th, 2012
Location, location, location, the first three most important rules for the best real estate and yes, this rule even applies in politics! Mitt Romney learned this painful lesson yesterday while delivering a speech in Detroit to a group of 1,000….in Ford Field, an arena that can hold 65,000 people. 64,000 empty seats never looks good for an event. Wrong location!
Yet again, the right location is everything. I hear this same message from other groups too:
RETAILERS: They always prefer being on the East side of a North-West flowing street….why? Shoppers tend to come out later in the day as the sun is overhead and heading west. That leaves the east side of the street sunny and cheerful….and more attractive to shoppers, especially for smaller retailers.
RESTAURANTS: Most restaurants rely surprisngly heavily on walk-in traffic: No walk in traffic, and the chances of paying sky-high rents and making a profit are tough.
ART GALLERIES: While there are a few that like to exist on their own, separated, the majority like to be clustered. This makes life for art buyers, critics and viewers more convenient, and it also maximizes exposure, especially if you are aq newer gallery with less of a following.
FOOD STORES: If you want to know where neighborhoods are gentrifying with almost certainty, look out for a Whole Foods. They spend big bucks analyzing trends, building permits, transportation, street traffic, pedestrian traffic, etc to locate their stores in the most prominent up-and-coming neighborhoods……anaylisis you don’t have to pay for! Remember Houston and the Bowery before Whole Foods came along? Or how south of Chambers Street in Tribeca was poo-pooed….till that Whole Foods opened at 101 Warren Street….and all of a sudden that location became prime! So will a Whole Foods go into the West Chelsea 28th Street and Eleventh Avenue site? It certainly makes sense with the Highline Park, Hudson Yards, The Americano Hotel, a new subway stop at 34th Street and 11th Avenue, not to mention the thousands of new homeowners and renters that have moved there recently…. I used to live at 225 Fifth Avenue and every morning and evening I would see hundreds of tourists at Madison Square Park wondering around staring at the Flatiron and Empire State buildings…..the owners of EATALY must have seen what I saw!
Super-cool boutique hotels and restaurants can have the same effect….think the ACE HOTEL. Around the corner a new Starbucks just opened….
Leonard Steinberg says: Good location has everything to do with simple, common sense and nature: Have you ever tried planting sun-loving flowers in a shady spot?
Wednesday, February 22nd, 2012
Posted by Leonard Steinberg on February 22nd, 2012
Is unseasonable good weather fueling this strong market? Home resales rose to a 1-1/2-year high in January, pushing the supply of properties on the market to the lowest level in almost seven years in a hopeful sign for the housing sector.
The NAR said today existing home sales increased 4.3 percent to an annual rate of 4.57 million units last month, the fastest pace since May 2010. This is the latest indication the housing market may be fully deflated and rising. Even some economists attributed some of the rise to the warmer winter weather, but also said it signaled genuine improvement. The jobs market has improved. Sales at HOME DEPOT are up. Builders are digging again.
Sales were up across all four regions of the country, with the West recording the biggest gain — an 8.8 percent increase. Sales in New York are very strong this month, and if our theory is correct to-day’s glorious weather should boost Manhattan sales for the month of February for sure.
Tuesday, February 21st, 2012
Posted by Leonard Steinberg on February 21st, 2012
Yes, the $ 173 billion Greek bailout has been approved, and while this is important, what is the one indicator we need to watch most for the health of the economy and the real estate market? The oil price. And the oil price is soaring again even though demand in the US is dropping, surging economies in emerging markets continue to increase the world’s demand.
Was it not just a few years ago (2006)that George Bush uttered the un-thinkable words ‘We are addicted to oil’? Yes, a Republican president, from Texas, said these words years ago, and to-day with a Democratic President in office for over 3 years, we still do not have an energy policy in place to fully address the longterm mess in the making. The subject made headlines around the globe (the Economist cover is proof). While the US is indeed addicted to oil, the rest of the world is consuming more and more of the stuff. China alone will add over 10 million NEW car drivers this year. The oil price is the most damaging of all taxes on the US consumer…..when they have to pay more at the pump, consumers have less disposable money to spend in the economy: rising transportation costs for all products boost their cost on the shelves….even less disposable consumer money. Now throw in reduced corporate profits (except of course for energy companies!) and you can expect hiring freezes, layoffs and rising unemployment…..
So the biggest threat to our economy right now is the price of oil. The lack of a comprehensive, longterm energy policy is a disgrace. And we may all be sent back to re-hab when this neglectful political ineffectiveness takes its toll. The only upside is that with rising oil prices comes a higher prospect for inflation. And real estate is a great hedge against inflation.
Monday, February 20th, 2012
Posted by Leonard Steinberg on February 20, 2012
The BRIC BUYERS, those luxury New York real estate buyers who originate from emerging economies Brazil, Russia, India and China, are being joined by a new group: African buyers. The economy of Africa (second only to Asia in size and population) continues growing at a strong pace: with high levels of political instability and corruption, withdrawing money and placing it in a first world economy is highly desirable.
I have heard of several sales happening recently with African country buyers, and some are at the high end of the spectrum as Africa slowly emerges as a major economic force, mostly driven by its un-parallelled mineral wealth in times of inflationary fears. When gold, platinum and silver prices soar, so too does African wealth.
Sunday, February 19th, 2012
Posted by Leonard Steinberg on February 19th, 2012
Many un-informed people are sometimes outraged by the commissions brokers earn for a real estate transaction in New York: its usually 6% and sometimes 5% for more expensive listing. This commission is split between buyer and seller brokers 50-50, so the average transaction leaves the broker between 2,5-3% of the sale price……often for doing many months of pretty intense work, often requiring years of experience to facilitate. And then the broker has to share a good percentage of that commission with the company they are affiliated with….and then they pay taxes on that income.
Granted, on a $ 2million sale that is quite a bit of money. Well, now comes the zinger: the taxman, who performs NO work of any kind during the transactional process, collects several taxes because, well, why not? It’s the taxman and it needs your money for all kinds of really useful endeavors…right? And the rich aren’t taxed, remember? On a $ 2million financed transaction, the taxman collects almost SIX PERCENT of the transaction between 1,825% transfer taxes, 1% MANSION taxes (yes, a 2 bedroom 1,600sf is a MANSION!) and 2,8% mortgage recording taxes. That’s well over $ 100k to the taxman, and yet relatively middle class New York luxury real estate buyers are told they do not pay enough in taxes?
So now Obama wants to take away the one important tax deduction to homeowners, the mortgage interest tax deduction…..the one thing that rewards buyers for investing in real estate, one of the very largest job creators in the US economy. I think this is simply STUPID!
Buyers of $ 2million homes in New York are NOT rich. That’s a severe distortion that needs to end.
Friday, February 17th, 2012
Posted by Leonard Steinberg on February 17th, 2012
Now there is no excuse for using those hideous fluorescent lightbulbs that emit the vulgar light better associated with surgery chambers: A LED lightbulb thats affordable! The PHAROX lightbulb is an LED that uses about as much energy as a fluorescent bulb, and a fraction of the energy of a incandescent bulb. Multiply it by 20 bulbs in your apartment, and multiply that by thousands of apartments and its easy to see how this can have the quickest impact on energy savings in New York City……or anywhere.
Available online through the Pharox website, the new bulbs were designed to encourage first time LED users to try out the benefits of the long lasting bulbs. Feeling that many consumers were intimidated by the average $20-$50 price tag for LED efficient bulbs, Pharox created the affordable 200 and 300 BLU as an introductory bulb.
The U.S. Department of Energy has said they expect energy efficient LEDs to replace 76% of lighting needs by 2030, but with this new lower cost option, that date could be even earlier. The Pharox BLU bulbs pay for themselves in as little as 6 months, so they predict consumers will be ecstatic about the savings to be had over the 10 year lifespan of the bulbs.
But the new affordable line are no frills — they cannot be used in dimmers and only come two models. But they do cast the warm white light of soft white traditional incandescent bulbs. The bulbs also generate virtually no heat, unlike traditional bulbs that get hot and add unwanted heat to your living space in summer time. Good for 15,000-35,000 hours of usage, the bulbs are even recyclable once they’ve been exhausted.
NO FLUORESCENT LIGHTBULBS, EVER!!!!
Wednesday, February 15th, 2012
Posted by Leonard Steinberg on February 15th, 2012
New York is the 47th most expensive city in the world…huh? Zurich took over from Tokyo as the world’s most expensive city to live in: that is what the Economist Intelligence Unit’s most recent world-wide cost-of-living survey says, even though it is somewhat difficult to believe. Of course the survey does not include real estate prices, but it may be one of the many reasons why New York real estate sales are so brisk these days with global buyers…..
After a trip to London, Tokyo or Zurich one cerainly feels richer going out to dinner, filling up a tank of gas or shopping for clothes in New York. So maybe its time for all us New Yorkers to stop whining about how expensive our city is…..the list says we are even cheaper than Los Angeles!