May 1st, 2013
Posted by Leonard Steinberg on May 1st, 2013
The illustrious LUKOIL site at 239 Tenth Avenue at the corner of 24th Street in the heart of the West Chelsea Arts District has supposedly gone to contract after multiple bids…..and it appears the price was several million dollars over the asking of $ 18,95million.
The site next to 245 Tenth Avenue (those owners must be celebrating!) has always been somewhat of a blight for a rather attractive block, filled with art galleries such as Gagosian, and residential buildings soon to be joined by 560 West 24th Street, the Adam Gordon/Tavros-developed building alongside 200 11th Avenue, and Cary Tamarkin’s 508 West 24th Street diagonally opposite this site. If this site, separated from the Highline Park by a sliver of 245 Tenth Avenue housing Bryce Wolkowitz’ gallery does indeed get developed as a condominium, it will boost the value of the entire area that has become most recently famous by the addition of AVENUE’S private school.
Is the CARWASH next?
April 29th, 2013
Posted by Leonard Steinberg on April 28th, 2013
With a slew of listings above the $50 million mark cropping up in the Manhattan real estate market, Sellers repeatedly refer back to the $ 88million sale of the penthouse at 15 Central Park West and the elusive Russian/Asian/SouthAmerican billionaire has become the most desired demographic for this type of property. Surely these buyers will pay much more than market rates the Sellers always ask?
The 15 CPW buyer was billionaire Dmitry Rybolovlev, Russia’s 14th-richest person: he and his maybe-not-so-soon-to-be-ex-wife, Elena Rybolovleva, have been fighting for almost 5 years in at least 7 countries over his $9.5 billion fortune. Rybolovleva accused her husband of using a “multitude of third- parties” to create a network of offshore holding companies and trusts to place assets — including about $500 million in art, $36 million in jewelry and an $80 million yacht — beyond her reach. She has brought legal action against Rybolovlev in the British Virgin Islands, England, Wales, the U.S., Cyprus, Singapore and Switzerland, and is seeking $6 billion.
The suits provide a window into the offshore structures and secrecy jurisdictions the world’s richest people use to manage, preserve and conceal their assets. According to Tax Justice Network, a U.K.-based organization that campaigns for transparency in the financial system, wealthy individuals were hiding as much as $32 trillion offshore at the end of 2010. Fewer than 100,000 people own $9.8 trillion of offshore assets, according to research compiled by former McKinsey & Co. economist James Henry.
More than 30 percent of the world’s 200 richest people, who have a $2.8 trillion collective net worth, control part of their personal fortune through an offshore holding company or other domestic entity where the assets are held indirectly. These structures often hide assets from tax authorities or provide legal protection from government seizure and lawsuits.
Rybolovlev, who lives in Monaco, made most of his fortune from the sale of two potash fertilizer companies for a combined $8 billion in 2010 and 2011. He held both companies — OAO Uralkali and OAO Silvinit — through Cyprus-based Madura Holding Ltd. Some of his art is now held in Xitrans Finance Ltd., a British Virgin Islands-based company, and stored in Singapore……Rybolovlev bought the 15 Central Park West apartment for $88 million in 2011 using a trust associated with his daughter, Ekaterina. The penthouse was purchased from the wife of former Citigroup Inc. chairman Sandy Weill. In the divorce Rybolovleva said the billionaire moved many of his assets, including jewels, furniture and the yacht, under the control of two trusts, Aries and Virgo, that he established in Cyprus in 2005, a few weeks after she refused to sign a post- nuptial agreement he offered her.
Since the onset of the global financial crisis in 2008, the laws and treaties that created and sustained the offshore tax- dodging industry and allowed for the kinds of maneuvers used by Rybolovlev have been undergoing a shift toward transparency: Liechtenstein, once fabled for its banking secrecy laws, began in 2009 to require its financial institutions to hold details about the beneficial owners of all accounts held there. Andorra and Switzerland made their own concessions within a day of Liechtenstein. Singapore, the heart of Asia’s banking and offshore industry, will make laundering of profits from tax evasion a crime under a law taking effect on July 1st. Luxembourg announced on April 10 that it would end its bank secrecy policy in 2015.
Cyprus was bailed out of its financial troubles in March by the European Union, which required the nation to impose a tax on bank deposits of more than 100,000 euros. That month, the country lost $2.4 billion in deposits. The shift toward transparency has led many of the world’s wealthiest to reassess how and where they hold their assets. One has to wonder if all these funds were made legally why would anyone be concerned about their transparency?
A small part of the $15.3 billion fortune controlled by Texas billionaire Elaine T. Marshall, 70, is based in Liechtenstein, where her late husband, E. Pierce Marshall, started a foundation for their grandchildren, according to his will. The Dallas resident controls almost 15 percent of Koch Industries Inc., the second-largest closely held company in the U.S., after inheriting the stake in 2006.
Many of today’s wealthy remain focused on finding places to minimize their taxes and avoid double taxation. Russian billionaires create entities in the British Virgin Islands because they find its legal system, which is based on British law, more attractive than their own. The Cayman Islands are popular among billionaires because they don’t impose any type of income or investment taxes on funds organized in the Caribbean country.
Delaware is the legal home to more than half of the corporate entities in the U.S. The state’s favorable tax laws cuts companies’ tax burdens by an average of 40 percent, according to a 2011 study by Jacob Thornock at the University of Washington Foster School of Business. Delaware also doesn’t require officers and directors to be U.S. citizens, and allows them to remain anonymous, according to its business code.
So why is Monaco real estate so expensive? Monaco is the original tax-free haven and attracts the wealthiest from around the globe. Texas and other states with low or zero state taxes are faring quite well these days too, attracting the wealthy from around the country.
A bigger question is when super wealthy individuals withdraw large sums of money from their country’s economy due to too-high taxation, are those that remain left with a greater share of the tax burden? Surely if those funds remained within those economies the need for excessive taxation would decline…..or would it, knowing how greedy, inefficient and corrupt most governments are when it comes to money? Do we live in a world where you only have two choices: play by the rules of the country you live in, or get out if you don’t want to play by the rules? Tax legislators take note.
So the answer may just be YES: there may be enough super-wealthy individuals willing to buy real estate at pricing above market rates to park funds they feel their country (or ex-wife) is not entitled to.
April 24th, 2013
Posted by Leonard Steinberg on April 24th, 2013
This is an actual story from a commentator on line that I thought was worth re-printing as it is a story I hear so many times from those at retirement age:
“One way or another, try to buy a place, especially if you expect to stay a long time (at least 5-10 years). My wife and I stretched and got our co-op apartment–a 2-bedroom, 1 bath on the upper west side–in 1989 for about $2000 (mortgage and maintenance combined). 22 years later, we’re still there. Now costs are closer to $2500 (we get to deduct about $700 a month) and the value has gone up over 4 times.
It was hard to do, and I admit that had we found a decent/cheap apartment, we probably would have gone that route, but we kept coming up empty, and at least there were a lot of apartments for sale to look at. In contrast, we know several couples who got great deals like $1500 a month for a rental, but they never moved and now have no equity; and their apartments feel pretty outdated.
That aside, one big advantage to living in New York is that you don’t need a car. I lived in Los Angeles for two years and loved how much cheaper everything (food, rent, going out) was, but car expenses more than made up for that, so in the end I was just as broke.”
The big picture message is that renting is at times cheaper than owning for sure, that buying does take pain (especially now, but it has always been a bit painful in the beginning), but by owning you are building equity over time, taking that tax deduction, capitalizing on low interest rates that come along very rarely, and holding on for a long time pays dividends. And yes, the cost of buying in New York is prohibitive, but add in the cultural amenities and conveniences such as not needing a car, and comparatively the costs are not too far off other large US cities…..and certainly cheaper still than other major world centers. I have met so many older New Yorkers who told me how they sacrificed so much to buy their home, and now by selling it have the bulk of their retirement under the roof that housed them over the years.
April 22nd, 2013
Posted by Leonard Steinberg on April 22nd, 2013
Uber-luxury goods conglomerate Hermes posted its slowest pace of quarterly growth since 2009 as currency headwinds weighed on revenues, reporting a 10% rise in sales to 856.8 million euros. Last year, growth for a number of high-end names cooled as shoppers, notably in China, moved away from more mass market luxury products and splashed out on pricier, more exclusive goods. Sameness on the very high end is a growing problem for a market seeking ultra-exclusivity in a world where the volume of extreme wealth is spreading. This trend seems to be replicating itself in New York real estate where the very high end is performing better than anything and the demand for ultra-ultra luxury remains very strong.
Hermes has been hit in recent months by unfavorable currency effects after receiving a boost from a weaker euro last year. LVMH Moet Hennessy Louis Vuitton Chief Executive Bernard Arnault raised a red flag earlier this year warning that “currency wars and competitive devaluation” could pose a risk. LVMH, which does more than 70% of its business outside of Europe, saw currency variations trim underlying sales’ growth in the first quarter, according to numbers released last week.
At constant currencies Hermes revenue climbed 13%, marking a slightly less stellar pace than in recent quarters though the figure is above the company’s medium-term target for annual sales growth of 10%, excluding exchange rate effects. Sales through the group’s own stores expanded briskly, rising 14% at constant exchange rates. Revenues from wholesale channels delivered “satisfactory” 10% growth, the company said.
Last week, U.K.-based Burberry showed signs of renewed health after a difficult 2012, as it said demand for higher-priced trench coats and leather bags had supported sales in recent months while LVMH reiterated plans to nudge its products further upmarket after it reported a 0.4% increase in sales at its fashion & leather goods division, home to its signature Louis Vuitton brand.
April 20th, 2013
Posted by Leonard Steinberg on April 20th, 2013
Has a new pricing insanity set into the New York uber-luxury market with 33 official listings (with many more un-official ones!)above $ 30 million and three over $ 100 million: Is $ 100 million the new $ 50 million just within a matter of months? It appears so, and I call that hyper-luxoflation!
In this morning’s New York Times an entire article is dedicated to a developers quest to create a massive apartment on top of a rather mediocre building by buying up all the owners of the top floor units. The Times wrote a similar article a few months ago about another $ 100m listing……is this reporting or simply excessive Kardashian-style publicity-seeking? There are other examples of ’trophy’ apartments for sale on top of mediocre buildings……and they are not selling. There are too many mediocre properties priced into the stratosphere that simply do not warrant their asking prices, no matter how crazy-active this market is. Yes, there certainly are some outstanding properties asking very high prices……but those prices can be justified. Satisfying the ego of a seller is a dangerous precedent that seems to have found a place in our manic society: just how many Russian oligarch’s are there to buy these properties?
With gold’s plummeting pricing explained by lesser concerns about inflation, why exactly is the very top end of pricing in Manhattan inflating at a pace that is simply outside the realm of reality?
April 19th, 2013
Posted by Leonard Steinberg on April 19th, 2013
Last night was another one of those nights where trying to turn on the television was the usual annoyance. The salesperson at BOSE had told me the system was SUPER-SIMPLE……even an idiot could use it. Well, I must be a thorough idiot, because its still not easy. Calling BOSE is a joke: their tech support may be good for tech-savvy guys, but not me.
Now I hear that Apple wants to get into the living room by making its own TV set, and there have been plenty of rumors and reports about how and when it’s going to happen. An analyst says he’s learned that the set will go on sale late this year, for $1,500 to $2,500. If APPLE can do to the TV what it did to the computer and music, I am in! Brian White of Topeka Capital Markets says the “iTV” will be 60 inches on the diagonal, but could also come in 50- and 55-inch versions. Apple will also release a small “iRing” that fits on the viewer’s finger, allowing the user to control the screen by pointing, White says. The death of the antiquated, impossible-to-read-without-a-magnifying-glass remote? That could signal a revolution!
In addition, the set will come with tablet-like “mini iTVs” with 9.7-inch screens, the same as the full-size iPad, White said. The “iTV” will be able to send video to the smaller screens wirelessly around the house. The concept is similar to the way in which cable and satellite TV companies are starting to let their set-top boxes send video to iPads and other tablets. White says his report is based on gleanings from visits with unnamed Chinese and Taiwanese companies that supply Apple with components.
Apple doesn’t comment on future products before its launch events, but late company co-founder Steve Jobs told biographer Walter Isaacson that he wanted to remake the TV and had figured out a way to do it. Last year, there were numerous analyst reports that said Apple would launch a TV set in 2012. Apple does sell an “Apple TV,” but it’s small box that connects to a TV to display movies and shows from iTunes. The i-TV may come in time to set Apple stock back on track after its painful plunge over the past 6 months. Simplifying the television experience could indeed be as big a revolution to the home as the i-pod was to music…….and I imagine owners of luxury New York real estate will clamber for this product.
April 18th, 2013
Posted by Leonard Steinberg on April 18th, 2013
Corporate results are showing an eerily similar trend: profits are growing, but revenues are not. Is this mostly related to the fact that companies are not hiring while demand grows very slowly, thereby deriding profits mostly from reduced labor costs and low interest rates? Are existing workers forced to work harder and more efficiently to avoid hiring? The Great Depression has interrupted a decades-long trend of jobs steadily moving to the suburbs and hollowing out urban business districts across the U.S., a study finds.
City centers gained a greater share of employment than their outer rings between 2007 and 2010, according to a report from the Brookings Institute. Big suburban job losses, not large downtown gains — drove the shift and metropolitan economies are more decentralized than they were in 2000. The shift slowed during the downturn: The report follows up on a 2009 study that found a continuous migration of jobs from downtown to the suburbs between 1998 and 2006.
Urban revitalization and the notion of smart growth, which seeks to cluster housing and jobs near transit and entertainment, has had only limited success restoring downtowns. Now, faced with tight budgets wrought by the housing collapse, some metropolitan leaders say they’re redoubling efforts to nudge employers and workers toward locations that maximize the use of transit and existing infrastructure, cut pollution and improve quality of life. Maybe this explains the growth New York is experiencing? We are certainly seeing the results of heightened demand for luxury real estate: pricing on the high end is experiencing HYPER inflation in some areas…..we call it hyper-luxoflation as inflation on the lower end is significantly weaker.
When jobs are near housing and public transportation, commuting times, household expenses and government costs are cut. Not to mention quality of life if the large urban center actually addresses quality of life: yes, those parks and trees and bike lanes actually do make life better for most in New York. Now we are able to see the fruits of Mayor Bloomberg’s labors. With New York now providing so much better park space, trees, cultural centers, etc, the city keeps growing in its desirability for families to stay and not move to the suburbs. Bored suburbanites, or those who have lost their lives to lengthy commutes are moving back. And the jobs are here too.
New companies are moving here as they want to be right in the heart of that activity. Entrepreneurs start ventures that improve their communities: The entrepreneurial vibe necessitates density — density of ideas, people, culture. New York is an accessible place for these startups to get connected. And they are hiring and minting new millionaires weekly……the kind who buy high end real estate.
April 16th, 2013
Posted by Leonard Steinberg on April 16th, 2013
Is Manhattan luxury real estate experiencing hyper-inflation? It appears so. Whereas 4 months ago every developer (and their bankers) was talking about $ 2,000/sf for the entry level to the downtown luxury new development market, now it appears, just a few months later, that this figure has jumped significantly…..by as much as 25%? Is this a brief moment or a continued trend? With the depth of the buyer pool, I think this new normal could be here to stay….
March 18th, 2013
Posted by Leonard Steinberg on March 18th, 2013
SE2 LABS think that high-end custom Audio Visual installations are getting much too complicated: we agree! Who wants that huge ‘brain/rack’ of components in a closet when closet space is needed. If you go it alone you’ve got a bewildering array of choices when it comes to amplifiers, video processors, projectors, sound sources etc and that’s before you’ve tried to make them all talk to each other.
So they’ve done the hard work for you. Take a large box that wouldn’t be out of place in a high-tech computer room. Fill it full of best-of-breed technology (Bryston amplifiers, high def TiVo etc). Make a customised interface to control it all and Voila, you get “The One”.
The full list of toys is too long to repeat and includes mechanical as well as electronic devices. Think power conditioners, cable management, anti-vibration systems, your choice of game console, media center PC… the list is endless.
It looks great, it costs $24K and it has a space for you to plug in your iPod. Simplicity is the new fashion in technology.
March 16th, 2013
Posted by Leonard Steinberg on March 16th, 2013
The New York Times ran an article for this weekend’s REAL ESTATE section talking about the ‘Downtown Spring awakening’: 150 Charles Street, the Witkoff Group developed, CookFox-designed building in the West Village achieved over HALF A BILLION in sales in 4 weeks, certainly a record for New York real estate, and possibly globally. Unlike any other building, the buyer dedication to the West Village has been rather astounding with about 1 in 5 buyers opting to buy, where traditionally its 1 in 20-25 buyers/appointments who actually buy in new developments. Aside from the super-desirable location, separated from the West Side highway by a buffer zone of townhouses, buyers have resonated unlike any other time because of the beautiful, contextual design, the host of amenities including parking, a drive-through drop off, almost 40,000sf of pre-planted landscaping that is maintained by the building (a first), a 75ft swimming pool, 3,000sf gym, playroom, lounge, juice bar, service elevators…..and the list goes on. Add to this the fact that there are about 80 different floorplans (out of 91 units)so each apartment represents its own unique experience within the building, sensational views of charming Village street-scapes, the Hudson River and park and panoramic Southern and Northern skylines. The finishes are highly customized by Alan Wanzenberg and of a caliber never seen before in the West Village: they are elegant, classically contemporary in style and designed to transcend fashions and of-the-moment trends. A building of this caliber can never be reproduced ever again in a location of this stature, making the building a true collectors item.