Archive for April, 2012
Saturday, April 21st, 2012
Posted by Leonard Steinberg on April 21st, 2012
As a large swath of very beautifully designed buildings head our way in New York City, a result of the re-awakening of new development construction that was dormant for several years, I want all ‘older/existing’ co-op’s and condo’s to acknowledge that soon they could be viewed as the ‘poorer cousins’ when compared to the newer buildings that will include exquisite common areas, lobbies and entrances. So if your building has not addressed the following yet, this is what I suggest should be the FIVE items no building should ignore:
1) FIRST IMPRESSIONS: By adding a touch of greenery to welcome you and your guests home, you are creating a good first drive-up-appeal impression, and you are benefitting your entire block. This is probably one of the most inexpensive upgrades for a building and worth every penny. In fact, if your building is too cheap or short-sighted to see the benefit of doing so, you or a small group may even want to pool together the $ 2,000.00 and but the two planters, potting soil and boxwoods. Remember to plant plants that are well suited to the light/shade/wind traffic conditions. Of course you can get more creative and group several planters, or more.
2) THE LOBBY: Whether you have a doorman or not, the lobby is the first interior impression of your building and sets the tone. A clean, renovated, up-to-date lobby is a wise investment. A gut renovation is not cheap. The alternative is minor fixes such as: painting or applying wallpaper to the walls in a chic coloration (surely someone in your building is, or knows a good interior designer to help with this selection?), changing out the lighting (no fluorecents!) or adding an appealing light fixture/chandelier, adding an orchid or fresh flowers. Maybe adding some artwork would help too: good, simple, not-too-taste-specific prints from such mass-but-tasteful stores such as Restoration Hardware or Room and Board will do the trick. Why not add an elegant bench or chairs with a side table and some books?
3) THE ELEVATORS: A tired elevator interior sends a message of tired apartments and their owners. Re-finishing an elevator interior is not cheap, but certainly well worth the $ 15k or so it takes.
4) THE HALLWAYS: When you step off the elevator, seeing some art on the walls is the quickest, easiest fix. Again, simple black and white photos are more than adequate. A good, clean carpet and clean painted or papered walls are better. Add some good, soft lighting: Fluorescent lights are always vile…..there are warmer, equally energy efficient LED lights these days. Make the hallways look like the elegantly designed hallway of a tasteful home and you have a winner.
5) GET OVER IT! Unless your building delivers on all fronts, don’t expect it to sell for some of the super-high prices of buildings that do. Upgrading your building common areas may indeed benefit those who are selling their homes: it benefits those who stay even more as they get to enjoy these elements longer AND benefit if indeed they ultimately sell. A higher sale price of your neighbor’s home makes your home worth more too whether selling, re-financing or simply knowing your home is improving in value. Building owners would work together quickly and simply to resolve the inevitable conflicts that arise from spending money. There are several ways to elegantly address those that simply cannot afford to contribute to building improvements. And to those that simply don’t want any change at all, put it to a vote: we live in a democracy after all.
Thursday, April 19th, 2012
Posted by Leonard Steinberg on April 19th, 2012
320 8th Ave @ 26th Street, a new 12-story building, will deliver 18,000 square feet of ground floor space, a loading dock for trucks, 200ft of wrap frontage + an 18,000 square foot basement…..perfect for a Target or Walmart? Next to FIT with 200 apartments will be above, ready by end 2012….
Wednesday, April 18th, 2012
Posted by Leonard Steinberg on April 18th, 2012
With 900+ million sq. ft. of rooftops in New York City, why not cover them all with solar panels now that they are cheaper? (The largest manufacturer of panels, First Solar just cut 1/3 of its workforce.) That’s approx. 80 TRILLION Watts of energy per day…..directly above our heads.
Tuesday, April 17th, 2012
Posted by Leonard Steinberg on April 17th, 2012
Housing starts dropped in March, but building permits rose quite sharply by 4,5%. This factor is mirrored by the vast number of new properties planned for Manhattan (and many have financing too). Home Depot stock (a good indicator too)has soared too.
The economy’s sleeping giant (housing) has awakened and indicators would say it is about to SOAR…..
Monday, April 16th, 2012
Posted by Leonard Steinberg on April 16th, 2012
As politicians blabber about the Buffet Rule and taxation fairness, I thought a recent Wall Street Journal article outlined the ‘non-soundbite’ version of what is really going on tax-wise in the USA. The only conclusion I can draw is that the system is much too complicated. Here are some facts to ponder:
- Some multi-millionaires do pay a lower effective income-tax rate than some middle-income taxpayers; receiving a chunk of your income via long-term capital gains rather than a paycheck is just one reason that happens.
- The top 20% of income earners paid 70% of federal taxes in 2007, according to the most recent data available from the Congressional Budget Office. That group also pulled in 60% of total pretax income.
- 46% of taxpayers don’t pay any federal income tax, but they often pay a hefty portion of their income to levies at the federal, state and local level. Those include payroll taxes for Social Security and Medicare; state and local sales taxes on groceries, clothing and other purchases; and federal and state excise taxes on things such as gas, cigarettes, alcohol and airline tickets.
- The payroll tax for Medicare is paid by all workers, but the Social Security tax isn’t levied on income over $110,100 (in 2012). So people with bigger six-figure salaries pay a lower portion of their income to Social Security taxes than those earning less.
- In 2011, federal corporate income taxes ate up an estimated 7.7% of income for the top 1% of income earners, compared with a 0.4% bite for taxpayers in the lowest fifth of the income ladder, according to the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
- The top 1% of earners saw a smaller share of their income go to payroll taxes.
- State and local taxes: People in the lowest 20% of income earners paid about 17% of their income to federal, state and local taxes in 2011, versus about a 30% effective rate for the top earners, according to an estimate from the Institute on Taxation and Economic Policy. But the share of total taxes paid roughly matches the share of total income for each of the income groups.
- Sales taxes can have an outsize effect on lower-income people. A wealthier family is “more likely to have a portion of their income that they can put to savings or investments that will never be subject to sales taxes.”
- What about those 46% who don’t pay federal income tax?
- 46% of Americans pay no Federal taxes at all. 23% of U.S. taxpayers don’t make enough money to owe that tax once they take their personal exemption and standard deduction. Another 23% qualify for tax breaks that bring their bill to zero or provide a refund.
- Wealthier people face a tax rate as high as 35% on earnings but they get the biggest tax breaks. They start off with such a high tax that the biggest tax breaks don’t bring them down to zero. They’re benefiting hugely from tax breaks—much more than the poor people—but because they start off at the high level, their tax bills stay positive.
- 1,470 millionaires were among those who paid no federal income tax in 2009.
Saturday, April 14th, 2012
Posted by Leonard Steinberg on April 14th, 2012
After we reported for several months on the extremely busy New York real estate market, this morning the New York Times featured this story…..on the front cover! You know it serious if its on the front cover….
They talked about the lines of people outside 422 West 20th Street…..about 4 weeks after we reported it here (with a photo!). They talked about the return of many multiple bids on strong properties, about 6 weeks after we reported this in LUXURYLETTER, our monthly market report. I could continue to badger The Times for not being as on top of the market as it should be, but I think they have redeemed themselves by placing the story on the front cover. That certainly indicates a level of certainty that should erase any doubts in the minds of all that we are now in a very, very active, strong market.
For the first time in years we are selling un-built condo units off floorplans (WITHOUT A SALES OFFICE) with only a raw concrete shell of a building (482 Greenwich Street, THE ARMAN), and several contracts are out with 3 units already spoken for. Having a reputable developer and builder (and broker!) helps.
Again the subject of how long this will last arose, and the answer is definite: just like really bad markets, really good markets never last forever. We are in a lower inventory period, with super-low interest rates, few new buildings that are deliverable soon, and lots of new global cash seeking a refuge from uncertainty as well as fears of inflation. These factors combined always fuel robust activity.
Any smart buyer to-day would know that buying now with interest rates as low as they are would cover a dip in pricing, although that seems highly unlikely. In fact, the opposite is ture: we see price escalation. I spoke about this a few weeks ago……read it in the Times soon!
Friday, April 13th, 2012
Posted by Leonard Steinberg on Friday, April 13th, 2012
Brazil is revising its currency laws to allow more money to flow out of the country. The strength of the Brazillian economy which is the only energy self-sufficient country also has one of the fastest-growing middle classes on the planet. A strong and stable currency, coupled with a new Central Bank rule that doubled the amount of cash Brazilians can send overseas through brokerage firms and banks has more locals sending money abroad than ever before…..now Brazillians can send out $ 100,000.00 although the hope is to double that figure soon.
If you were Brazillian and had lived through its historically corrupt and volatile past, wouldn’t you want to get more money out of the country…..just in case?
Brazillian buyers are a fast growing segment of the foreign buyer market in Manhattan at all price-points: like all BRICA countries (we add an ‘A’ for Africa as its wealth is growing strongly too) economic growth and wealth creation is exciting, but political instability and corruption has always encouraged those with the means to stash some away in a more first world environment. And New York real estate is a good place to put that money.
Friday, April 13th, 2012
Posted by Leonard Steinberg on 4/13/2013
Twitter provides just 140 characters for posts: makes billboard mentality seems like deep discussion?
Wednesday, April 11th, 2012
Posted by Leonard Steinberg on April 11th, 2012
Some things take time, unfortunately, especially economic cycles. We are currently witnessing the emergence of the housing market from a very deep recession (border-line depression) and if history matters, the slow recovery we are experiencing appears to be in line.
Housing bulls point to a stabilization of prices in many metro areas, overall sales at a 5-year high, a decline in the inventory of homes for sale, fewer foreclosures and record levels of affordability — thanks to rising rental prices, low mortgage rates and the steep drop in prices since the peak. Bears say national home prices are still falling, albeit at a slower pace, while buying a home is unthinkable for millions of Americans suffering from bad credit, tougher lending standards and high unemployment. In addition, many experts predict a massive “shadow inventory” of homes will come on the market at the first sign of a sustained bottom and believe foreclosures will spike again now that the $26 billion settlement with big banks has been finalized.
U.S. Housing and Urban Development Secretary Shaun Donovan, concedes there is no “silver bullet” to cure the housing market’s woes, but is optimistic about the outlook for housing and the government’s action to reverse the market’s downward spiral.
“There’s a broader sense we are poised for a stronger, consistent recovery,” he says. “If we can continue to see stronger sales, cut the number of folks falling into foreclosure [and] make sure adequate credit is available, then we’ve set the stage for a more sustained recovery starting this year.”
Housing skeptics will certainly disagree and note myriad predictions for a “bottom” in housing have all proven premature in recent years.
But Donovan sees “positive momentum” in the market for non-distressed homes and says President Obama is “doing all the right things” to help housing, citing, among others, the Home Affordable Refinance Program (HARP) and Home Affordable Modification on Program (HAMP), which have helped nearly 2 million families to date.
New incentives for Fannie Mae and Freddie Mac, among other lenders, to do principal reductions is another White House effort that could help the housing market. But the regulator for Fannie and Freddie, Edward DeMarco, continues to resist such proposals, citing the potential for moral hazard.
“This is not about some huge difference-making program that will rescue the housing market,” DeMarco said Tuesday at the Brookings Institution.
It appears the instant gratification we seek in all areas of our lives will not and has not happened for housing, and just like the past, a long, slow, but steady recovery is what is happening. But it appears we are at the tail end of the bad.
Monday, April 9th, 2012
Posted by Leonard Steinberg on April 9th, 2012
New York’s famed Plaza Hotel built in 1907 is for sale again by current owner Elad Properties: the landmark property that recently underwent a significant renovation and was partially converted to condominium residences has traded hands several times over the past decade. Sahara India Pariwar Ltd from India is the reported buyer. The cash offer is for the hotel “as is” and debt free. Fairmont Hotels & Resorts Inc. manages the hotel, which overlooks Central Park and the Plaza in front of Bergdorf Goodman across from the APPLE store, for Elad. The Sahara Group would terminate the contract with Fairmont Hotels. The estimated price is $ 575-600 million, a relative bargain considering individual apartments have sold in the building for almost $ 50million. Sahara Group has supposedly already made a down payment for the Plaza Hotel, and is conducting due diligence. It says that the hotel part of the property, which has 100 condominiums and 130 large condominium rooms, is being valued at $400 million, and its premium retail space is being valued at around $200 million. It also says that a condition of a deal is for Elad to first terminate the management agreement with Canada’s Fairmont Hotels with immediate effect.
I’ve always felt the retail segment of the hotel was a bit of a flop: I think New Yorkers are simply not used to entering a mall-like setting and don’t particularly like it…..especially when above or below street level. Time Warner seems to be doing much better although the other night I spotted several vacancies above street grade. I also felt the service and quality of the hotel was a bit disappointing and hopefully this sale will improve things. Remember when Ivana Trump and the Donald were in charge? Those were the days….