Archive for June, 2012
Saturday, June 30th, 2012
Posted by Leonard Steinberg on June 30th, 2012
One of the most glaring facts about the healthcare problem is:
1) Too many un-insured go to emergency rooms for medical assistance: the cost of treating these ailments in an emergency room is significantly greater than if they were treated in a regular doctor’s office visit.
2) 15% (YES, FIFTEEN PERCENT) of hospital/medical bills are not being paid currently.
3) Medical malpractice insurance is prohibitive and lawyers abuse the system.
4) The paperwork/information system is antiquated and needs major streamlining.
So, knowing that the 15% of unpaid medical bills are already being paid for by those paying, surely a system where all who use medical services are required to pay towards it makes sense? Another thought is if this 15% loss was wiped off the table, hospitals could lower their charges, no? So why have ALL the politicians screwed this up so badly?
The same stupidity is applied to real estate taxes where a small group of people under-pay and a small group over pay……if we all paid the same, those two minority groups would dissapear. It would be easy to do this, yet……
Mass stupidity is when we are all aware of this stupidity and cannot (or will not)change it. Usually its corrupted politicians protecting some of their beneficiaries who are to blame. Time to get involved and vocal!
Sunday, June 24th, 2012
Posted by Leonard Steinberg on June 24th, 2012
Did you know that life expectancy has risen by over 10 years in New York since 1987? That is more than any other city in the USA. The average Manhattan based New Yorker is expected to live 82 years….that beats Hawaii!
A lot of this dramatic increase is as a result of sharply lower murder rates and the treatment of AIDS, almost eliminating the inevitable death sentence AIDS delivered 20+ years ago. Mayor Bloomberg’s efforts (he is 70 years old, by the way….) to reduce sugar intake, trans fats, smoking, install more parks, improve quality of life should not be ignored either…..does this make him the most pro-life Mayor? We have been witnessing a dramatic trend in Manhattan where especially wealthy older people are moving to New York to ‘retire’……the retirement I refer to is not the traditional retirement, but a more contemporary version of one designed to address the needs of the “nouvelle elderly” (the NOUVELDERLY?)……those young-thinking, cosmetically preserved, fit, educated, wealthy older folks who view age purely as a number….. This group wants to be around younger people, go to the latest, greatest restaurants, attend theater and other shows within a cab ride, shop the best stores in the world….in their neighborhood…..oh and yes, they want the very best healthcare too. The thought of a Florida retirement home has never been an option.
The reality is real estate has to cater better to this market. Obvious pandering to the elderly would be foolish, as this is a very sophisticated crowd. But there is a good checklist of subtle items that could address this strong demographic’s needs better. And lots of it lies in high tech and services.
We are entering an entirely new phase in Manhattan real estate where this powerful demographic are returning to the City and staying in the City as they age. How do we address them better in real estate land?
Wednesday, June 20th, 2012
Posted by Leonard Steinberg on June 20th, 2012
We can now all agree on one thing about the economy: housing has been the # 1 driving force behind the meltdown. Too many people bought over-priced houses that they could not afford. There was a massive over-supply. And there were too many speculators driving pricing up artificially. The government encouraged bad behavior. The banks behaved badly, partly encouraged to do so by the government and were not watched closely enough. And many consumers behaved badly using their homes as ATMS….encouraged by the banks. Blame can be shared by all……it worked in South Africa in the TRUTH AND CONCILIATION process that ‘outed’ all the crimes by all the players.
Flash forward to June 2012: Several markets are rebounding while others are stagnating. The high end of the market is performing best. Along come the politicians…….Marco Rubio says that the American Dream is not home ownership…..really? So the man who claims he can fix the economy thinks that RESPONSIBLE home ownership should not be part of the AMERICAN DREAM when our economy is so largely dependent on the housing market? This is the same conservative guy who is saying that government should be smaller, yet he is living proof of the American Dream……by working for the government, getting paid with tax dollars. HUH? I guess the meaning of the word conservative has changed…..
Wednesday, June 20th, 2012
Posted by Leonard Steinberg on June 20th, 2012
As the “Great Greek Tragedy” unfolds, there are so many lessons to be learned. This is what I am seeing:
1) It is clearly evident that salaried people are those carrying the brunt of the tax burden in Greece: that burden will more than quadruple now to pay for those who don’t want to pay taxes. We scorn this, but the system isn’t all that different in the USA: the bulk of those EVIL Wall Streeters also earn their incomes via salaries, so they also do not have the numerous tax deductions that the self employed or corporations have….or the super-rich who pay lower rates. Why does Madonna not disclose her tax returns for all to see? So many laughed when Wall Street bonuses were cut dramatically only to discover that the coffers in Albany had much less income because of that….
2) The Greeks have come up with a REAL ESTATE SOLUTION for collecting taxes……by cutting off electricity to those not paying! Imagine if all the electricity was cut to APPLE because they paid under 10% in corporate taxes while the bulk of small businesses around the country had to pay more than triple?
3) The most important Greek lesson I learned: Talk of reducing the tax rates has made the number of tax filings GROW. AH-HAH: SO if you were to be certain to collect all taxes uniformly and fairly at the same rate, you could actually lower the rates for ALL and collect MORE? Now throw in less spending abuses….
Maybe in housing lies the answer to tax collecting: cut off basic services to those who abuse the system?
Friday, June 15th, 2012
Posted by Leonard Steinberg on June 15th, 2012
While we await the outcome of the Greek elections this weekend, the world seems fixated on a country whose GDP is the size of Indiana, Maryland or Minnesota….if we are to put things into perspective. If Indiana’s economy went bust would America crumble?
Lots of the blame for Greek’s woes is being heaped on their citizen’s reluctance to pay taxes. In fact, a good chunk of the wealthier citizens simply refuse to pay taxes. there are over 100,000 swimming pools in Athens, but only a few thousand owners pay the required taxes on these pools. that translates to a few thousand people paying for everybody else who refuses to pay! This corrupt system has resulted in the lowering of the minimum income requirement for taxation to kick in…unsurprisingly those with small incomes, especially salaried individuals who have no means to avoid paying taxes are feeling the pinch and have to carry the weight of those who are self-employed who have much better opportunities to skirt taxes.
While we can all laugh at the Greeks, lets not laugh too loud: Remember that US darling company APPLE paid corporate federal taxes at an effective rate that was below 10% in 2011……while the rest of the smaller corporations pay double and triple?
It ceases to amaze me how a select few are always able to avoid their responsibility at the expense of the majority: surely if the likes of Apple paid 20% in taxes, the rates could be lowered for all and result in a booming economy the likes of which we have never known?
Surely if the 20% of over-taxed buildings in New York had their tax assessments reduced to match those of the 80%, the 80% would pay a fraction more and the 20% would pay a significantly less (but equally to all)….all based on the clear principles of the Constitution of the United States of America, by the way.
So next time you frown at the Greek ‘system’, know that similar abuses are happening in your own back yard. And are equally disturbing and damaging.
Thursday, June 14th, 2012
Posted by Leonard Steinberg on June 14th, 2012
While I am thrilled that the Rudin’s have started construction on the old St. Vincent’s Hospital site in Greenwich Village, converting and re-building to create high end condominiums, I am somewhat outraged that their builder thinks its OK to stop all the traffic on Seventh Avenue so that their trucks can back up into what is a very tight access point. They stop all the traffic on Seventh Avenue, and then the trucks maneuver back and forth till they can squeeze into a poorly designed access point. It needs to be re-designed. Urgently!
It is a reminder to all that while construction awakens in the City, so too do all the nightmares associated with badly run construction sites. We have enough selfish, bad drivers and pedestrians to make traffic dreadful….we don’t need poorly managed construction sites to add to our misery. It’s easy with better planning.
Wednesday, June 13th, 2012
Posted on June 13th, 2012
Matt Amico reports that another apartment has sold for a record price at The Caledonia, located at 450 West 17th Street, the full service, Taconic/Related-developed building in West Chelsea abutting the Highline Park.
Closed for $ 5,35 million (that’s over $ 2,400/sf) this sale proves yet again how the high-floor mega-view units at The Caledonia trade at a premium, setting pricing records even when compared to more ‘big-name’ buildings with river and park frontage and more daring architecture. Why is this? Is it the true full services delivered? Is it the West Chelsea location that also benefits from close proximity to subways, the Meat-packing District, Chelsea market and the Hudson River Park? Is it the parking? It’s walking distance to the GOOGLE offices?
“Maybe it’s all of the above,” says Matt Amico, a Vice President of Prudential Douglas Elliman, Luxuryloft team member and building specialist who also is a building resident. “Views, location and quality of services always produce a premium: this apartment had it all.”
Saturday, June 9th, 2012
Posted by Leonard Steinberg on June 9th, 2012
In this morning’s Financial Times an article addresses how the Danish believe that good design improves lives. I see this trend more and more in New York real estate: the growth of consumer’s esthetic awareness has literally exploded in the past 10 years and their understanding of the benefits of good design keeps improving and accelerating.
While some may argue that the appreciation for good design is something only for the very wealthy, they are wrong: a revolution is taking place in the democratization of design, and great, well designed products can be found at almost any price point.
I do think we have a long way to go in Manhattan residential real estate, but it amazes me how enthused and captivated people are when they witness or visit well designed properties. And there are a few in New york for sure. I have seen this so many times at 200 Eleventh Avenue, the Annabelle Selldorf designed building known by many as the Sky Garage building. While it is true most of the buyers were excited by the ability to park alongside your apartment in a garage accessed by a car elevator, I have found the bulk of buyers were really captivated by the exceptionally designed spaces, with their soaring ceilings, large windows, well proportioned rooms and no hideous mechanical intake grills that litter so many so-called high end properties.
I have seen first hand how a beautifully designed apartment sells for more (and quicker) than an identical, but poorly designed apartment…..even if the poorly designed unit was on a higher floor with better light and views! It’s almost unbelievable, but yes, people’s senses are highly impacted by the feel and mood (and design) of a living space. At 130 West 12th Street, gorgeous design, furnishings and art masked low ceilings that would otherwise have de-valued the entire building. I have seen ‘ugly basements’ transformed to great living spaces (without windows), view-less apartmnents that felt good because the cleverly designed window treatments made the lack of a view not an issue. And while some may not have the budget for a world class interior designer or architect, HGTV and a host of other magazines show how you can practically embrace good design on a shoestring budget.
In Denmark, this year marks the 10th anniversary of Index: Design to Improve Life, a non-profit organisation that promotes the idea that interior design as a decisive factor in creating a better world. Now internationally recognised it offers the world’s largest monetary prize for design at about $650,000.00. There are 400 furniture companies in Denmark producing about $ 2 billion worth of goods: 80% are exported, making homewares the country’s fifth most important export industry. Much of this furniture is still influenced by those original designers such as Arne Jacobsen, Hans Wegner, Verner Panton and Poul Henningsen, items seen regularly in Manhattan apartments.
In New York, Danish born super-star acrhitect, Thomas Juul Hansen, has become most famous recently for his exceptional, thoughtful interior design of Extell’s One57, New York’s tallest resdiential tower. His work is best known in the Jean Georges restaurants as well as One York, HL23 and One Madison Park, which is planned to re-launch this Fall. His sleek, modernist design is especially loved by those who have lived with it, a style of design that doesn’t compete with your life, yet compliments it and allows individuality too.
At 54 Bond Street and several other propeties since, I have learned the genius of Steven Harris, whose spaces enthuse, calm and inspire all those that visit it. And those who live in a Steven Harris designed property will espouse on the value good design has had on their lives.
I have lived in a Selldorf designed apartment for the past 2 years, and I have to say the sophistication in each of the decisions made, the balance, the proportion, have all truly impacted my quality of life. Esthetics please everyone it seems, and its a potent message to developers not to underestimate its power in the value of a new building. As a large stream of new buildings comes to market over the course of the next 18 months, I strongly believe the esthetic bar in New York real estate will have been raised quite notably…..and about time too!
Tuesday, June 5th, 2012
Posted by Leonard Steinberg on June 4th, 2012
Have we entered a new market, possibly more of a buyer’s market again? The bad economic news on Friday seems to be compounded by worsening news from Europe and the world is learning just how inter-connected the world economies truly are. When retail sales slow in Europe, it affects everyone, everywhere……maybe just a little in actual tangible ways, but very much so psychologically.
New York City real estate has experienced many ‘MOMENTS’ and I think we may be entering one right now, where a pause in the economic future, a pause in the political future and the approach of Summer could allow some buyers the opportunity to ‘make deals’……I am not talking about huge discounts or bargains, but I am seeing the very wealthy buyer stepping in right now with a surprising aggression to buy, and I think its because they do see this small window of opportunity to buy what they like while some stall.
I remember working with a couple a few years ago who are extremely successful and powerful financial types…..they told me their story how they learned the very hard (and very expensive) way that New York City experiences moments when the market pauses for a while…..but then it continues again on its upward trend. They had mistakenly guessed that they could time the market, buy at a low, and reap the rewards. Around the time of the ‘Asian flu’, they waited about 12 months in the hopes of prices dropping …..they estimate that cost them about $ 2 million. Not only did pricing really not drop that much (it did on the lesser quality properties) but worse, the properties they would have wanted to buy were removed from the market. And then when the market rebounded, they were more expensive than before. The lesson is a lesson about timing market lows and highs, when your life keeps marching on. When viewed purely from an investment perspective it makes all the sense in the world to try and time the markets: when it comes to a home, the considerations should be very different.
Looking back now, they bought their current home (about 6 years ago)at a time when the market was very, very strong. Since then it’s value has improved by at least 30-40%. And their kids have had a place to call home. Could they have bought it for less at a moment some time between then and now, maybe during the Lehman crisis? Possibly, but even then its doubtful the asking price combined with the interest rates would have saved them much in the big picture. There is not much discounting when it comes to life’s worst enemy: time.
Sunday, June 3rd, 2012
Posted by Leonard Steinberg on June 3rd, 2012
I had lunch the other day with a REALLY successful, wealthy guy who pretty much has his pulse on the planet, especially financially. Out of this conversation I extruded good news for the luxury market in Manhattan. His belief, as is the belief of many, is that the high end real estate market will continue to grow, more so than we could even anticipate. With technologies making commerce much more efficient, the concentration of wealth into the hands of the wealthier ‘controllers’ seems inevitable. These efficiencies allow for much smaller companies to make sizable profits, without the need for large, costly staffing and physical infrastructure.
My clients big complaint was how the sense of pride in so many workers seems to continue to fade, and the sense of entitlement without it being tied to performance is sometimes astounding.
Unions have done a great deal of good for sure, but they have also fueled some really bad attitudes amongst many workers that encourage ownership and management to replace them with machines. Or send their jobs to other states and countries. How many cars are being manufactured in North Carolina and other states besides Michigan? Did Michigan’s unions become so extreme that they self-destructed the industry they were protecting?
In a global economy that is instantly inter-connected, some things can be easily shifted and replaced that in the past were unthinkable. More efficient companies, with a growing global economy will lead to much larger profits.
While the economic figures released last week were disappointing, the chances of gas prices dropping as Iraq starts pumping more oil may be the only good news for the short term and could help significantly for the average American trying to make ends meet. Second quarter earnings are certain to disappoint too, but who measures an economy only quarterly to get the big picture?
The system is a bit cruel, but it is what it is and it will only be modified slightly over the near future. The concentration of wealth is here to stay for a while, and the wealthy sector will grow significantly over the next 10 years. Their demands on quality in real estate will grow significantly too……so those developers who actually deliver A-grade quality will be handsomely rewarded.