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.
Posts Tagged ‘Greenwich Village’
This month Vanity Fair termed Greenwich Village the “GILDED GHETTO”: is this the appropriate description of the neighborhood everyone, including foreigners, Uptowners and Downtowner’s, agree is the ultimate New York living environment? The area’s unique combination of (guaranteed) low lying buildings that provide the best light in the city, charming tree lined cobbled streets with their eclectic mix of apartments, chic townhouses and mega-mansions, a superb mix of retail and restaurants, and it’s proximity to the Hudson River Park and Meatpacking District make it the kind of utopian ‘bubble’ that seems to be a trend around the globe.
Other cities all have their ‘gilded ghetto’s’ I guess, from Rome to London to Beijing, Cape Town, Sidney, Moscow and Rio. With the divide between wealthy and the rest of the world growing I see a growing trend: this is where the Village is possibly a bit unique in that it probably will always have some element of ‘West Side Story’-looking real estate mixed in….A Burberry store next to a store that’s very far from that price-point. The human scale of the Village is what makes it so very desirable: where else could a mega-mansion blend in so discreetly and not be a gilded limestone wedding cake? This is all very characteristic of the new, younger discreet wealth.
This is the new luxury. The un-luxury of the new-new global wealth that appears more drawn to the brassier, flashy versions of luxury that are beginning to look all alike.
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.
The 64 Perry Street house noted for its appearance on ‘Sex and the City’ has re-sold (after the original buyers won an intense bidding war 6 months earlier) for $ 9.85million. The house had traded above the asking price 6 months ago (and again it traded this time round above the $ 9.65m asking price. When it sold in November 2011 it was considered a record sale price: while the location, detailing, garden, etc are all truly magnificent, the house needs a complete, gut renovation. Now, 6 months later it indicates a market escalation of over 8%…..
The house measures roughly 4,100sf : so initially it sold for almost $ 2,200/sf…..now its re-sold for $2,400/sf. That is a record price for a house requiring a gut renovation: does it set the bar higher for what we should expect townhouses in the West Village to trade for in the future assuming most townhouse renovations of this caliber cost around $ 1,000/sf? Maybe in West Village townhouse valuations, $ 3,000/sf is the new $ 2,000/sf……
While the Occupy Wall Street movement exposed the deep divide between the 1% and the 99%, bonuses dropped sharply even for some of the wealthiest and President Obama announced a new budget that includes raised taxes on the wealthy, the super-wealthy have been building some exceptionally large houses around the country, including in Manhattan. In to-day’s Wall Street Journal, an article exposes some new additions to the mega-compound-class: an almost 50,000sf house in Los Angeles for the Pritzker family, a 70,000sf house for a Saudi Prince, an 18,000+ sf shack for Giselle and Tom Brady (who’s laughing last?), and many more…..
In Manhattan we are seeing a similar trend. There are several homes in New York either just completed or under construction that add to this class of mega-mansion that a few years ago was thought to be on the road to extinction. Wrong. The spectacular 20,000sf+ compound in Greenwich Village belonging to Noam Gottesman is estimated to have cost over $ 50million. Another mega-house designed by Annabelle Selldorf is being constructed just up the road on Greenwich Street. Talk about combining apartments? Several houses in the Village have been combined to create mega-homes. Madonna’s mega-mansion on East 81st Street is just completing a mega-face-lift (two for one?): With a width of 57 feet (almost as wide as Madonna’s new wide face) it measures well over 20,000sf. There are many more examples.
While the 99% must be outraged by this excessive consumption as we race towards a two class world, the 1% could argue quite well that these properties employ hundreds of people to build, landscape and decorate them, and then provide jobs for many to service and maintain them. Each of these properties generates a huge volume of real estate taxes too. And they generated lots of transfer taxes when they were purchased. There is sales tax on interior fittings and decoration, not to mention art….. and these homes are often re-decorated every 7-10 years…. So yes, its a tremendous level of indulgence for the owners, but those left staring from the curb should know that these mega-mansions benefit the entire community and economy too.
The opening of the Crystal Bridges Museum of Art in Bentonville Arkansas reminded me of the power a strong art museum has in attracting the crowds…. The Whitney Museum currently attracts 300,000 visitors annually to its uptown location. When the new Whitney opens on the West Side in the Meatpacking District, those 300,000 visitors will walk through the neighborhood…thats about 25,000 per months or over 800 new visitors a day. Is the area prepared for this? Certainly this will become a major tourist attraction, combining shopping in the Meatpacking District, a visit to the Whitney, followed by a stroll up the Highline Park to visit more of the contemporary galleries in West Chelsea. Maybe pop into the new Pier 57 too?
While what has happened on the West side to date is pretty revolutionary (The Highline, Hudson Parks, The Standard, Americano and Dream Hotels, the A-grade residential buildings such as 100, 200 Eleventh Avenue, the three Richard Meier Towers, The Superior Ink bulding, the 300+ art galleries), I feel what is coming over the next two to three years will make the West side of Manhattan, from Greenwich Village to northern West Chelsea truly the PLATINUM MILE, surpassing anyone’s expectations. It will represent a quality of life never seen before in Manhattan with a unique mix of culture, parks and architectural splendor this city has never known.
A dislocation between a few “super cities” is emerging, where international money moves markets, and national counterparts that are still closely linked to economic inertia. In to-day’s Financial Times it is reported that a separation has become marked over the past two years, with strong price growth in some major capitals belying modest gains or stagnation elsewhere within their countries. SUPER CITIES now merit comparison with each other rather than to their countries. This is particularly true when analyzing the upper ends of the property market, with buyers as happy to live in any one, and often in more than one, of the narrow sub-market of functioning city states. Manhattan is a prime example, defying the trends of the rest of the USA where this week sensationalist headlines spoke of a potential ‘double dip’ in the housing market. A school such as AVENUES, the world school is catering to this exact trend.
We are seeing a virtual global continent where billionaires move markets. The next property cycle has already started, and is seeing the emergence of a top tier of global city markets where the top addresses will become ever more fought over by wealthy buyers as stores of value and secure investments. We are seeing this in buildings such as 15 Central Park West, 40 Mercer Street, 200 Eleventh Avenue and 400 West 12th Street. Sluggish economic growth, along with the expiry of the stimulus packages designed to save western economies from recession, has slowed many housing markets in the past year – while some never really recovered from the crash in 2008. Crucially, the difference between the best and the worst markets generally comes down to a simple case of over-supply during the property boom. In Florida too great a percentage of the newly built inventory was built for pure speculation or vacation homes. A third of Spain’s housing market are vacation homes. Las Vegas’ huge speculative inventory is another example.
Tight supply constraints have met surprisingly resilient demand in international financial capitals such as Manhattan and an expanding wealthy population, which has helped accelerate this decoupling effect from national markets. All the factors sapping national housing markets – a malfunctioning mortgage market, the end of the quantitative easing programme that helped pump equity into economies, rising interest rates and unemployment – have less of an impact on prime cities where equity-rich overseas investors and domestic professional services are key. Lets face it, when HOME DEPOT fires 4 check-out employees per store during a recession and replaces them with self check-out machines, those jobs never return (2,200+ stores x 4employees = almost 9,000 jobs lost forever)….but those profits go to the bottom line that fuels the wealth of the company’s shareholders, the buyers of high end real estate. Those who lose their jobs cannot replace them and suffer, and so too does the real estate market that caters to them.
In the first quarter of 2010, according to Knight Frank, average annual price growth across these four cities stood at 54.6 per cent, but had fallen to 11.5 per cent by the first quarter of 2011. Knight Frank’s overall prime city index saw a decline in the past year because of cooling Asian prices, with the average annual price growth of 6.6 per cent across all cities in the first quarter about half what it was in the same period of the previous year. While most major cities saw growth over the year, some such as New York, Moscow and Singapore have been weaker in recent months. Transactions in Asia have slowed as speculators retreat following the Japanese crisis and rising local mortgage rates. In China, the volume of primary residential sales in most of the 10 major mainland cities fell between January and February 2011 owing to new government regulatory policies. In an effort to
curb speculation in Hong Kong, the government has launched a mortgage database that may mean that banks refuse more applications from investors. There has also been some slowdown in other, more mature, prime locations, with the risk of future tax changes in Switzerland slowing growth, for example.
The strength of Hong Kong’s market has been driven by Chinese mainland investors looking for a safe haven for their emerging wealth. Prices were higher by some 80 per cent from the low point of 2008 by the end of last year. There is also a link between Chinese wealth and London or Paris, as Asian residents look for a base in Europe, and investors look for a safe haven to invest in mature and high-performing markets. There is an “insatiable demand” from investors in Asia and the Middle East for prime property to act as a store of wealth, with London top of the list followed by Paris and New York….Manhattan is also seeing a strong demand from South America. All of this is very understandable considering the profiles of the governments of these countries.
Foreign nationals accounted for 60 per cent of all buyers in the prime central London market, according to Savills, and 70 per cent of houses valued at more than £10m in 2010. Moreover, prime housing in London has a correlation with the price of gold and equities as much as any underlying national economic outlook, as house price growth is stoked by the growth in the wealth of the world’s richest people.
It is already possible to spot the correlation between the oil prices and the value of real estate in Moscow. An increase in the price of oil by $1 per barrel triggers an increase in the price of a square metre of prime Moscow real estate by $200, according to Savills. When global demand for energy resources dropped off in 2008 and 2009, the value of properties fell by around 40 per cent from the 2007 peak. The average price of real estate in Moscow was $5,700 per sq m in the first quarter of this year – more than three times the Russian average – even if the end of the rebound has meant some price declines over the past year.
Moscow is to Russia and Manhattan is to the USA what London is to the rest of the world, given the significant influx of buyers from the rest of the country seeking real estate as an investment. However, as wealthy Russians feel even wealthier with the increase of both their business and housing interests, they are also turning to the south of France and luxe resort locations in Italy. Home owners in Monaco could do as well looking at the price of gold or oil as at the economic growth of the principality. Bicycle-riding locals in Forte Dei Marmi decry the invasion of chauffer driven Maybach’s shuttling Russian trophy wives to the local Prada store.
Compared with provincial cities, the bigger, more international cities have seen bigger rises in housing prices, especially over a five-year period. London prices rose 26 per cent, against a national average of 6 per cent; Hong Kong by 95 per cent, against a Chinese market growth of 59 per cent, and a flat market in New York against a 26 per cent decline around the rest of the US. Some buildings in Manhattan have seen distinct pricing escalations in the past 2 years, and even in the past month some pricing records have been broken.
There is a widening divergence between key cities and their domestic markets based on this supply and demand imbalance. This is particularly true of prime property in Paris, London, Manhattan, Zurich, Geneva, Hong Kong and Helsinki. The top end of these markets appeal to global buyers as much as to domestic wealth, which means that their prices are capped not by national factors but by global trends. Those markets do not necessarily move as one but are aligned on a similar curve.
Nationality does play a part when it comes to currency, particularly where people are buying properties more as investments than as places to live. Pricing in London has been boosted by an additional currency advantage, given the value of sterling – something that has held back the Manhattan and wider US prime market. Overseas buyers account for only 15 per cent of the prime market in Manhattan, for example, and this is in part why it has not seen the same sort of growth as in the UK, yet the influx of the international super-wealthy seems to be growing.
Wealthy cities are not immune to the global economy and there are risks from any economic shock and fall in stock markets or commodities. There have been some falls already as houses have come off their rebound highs and reacted to localised events such as the earthquake in Japan. The financial troubles in Greece, Portugal and Spain weigh heavily on European centers.
The decoupling effect appears to be true as long as the upper levels of the international wealthy remain so. Even cash-rich investors like to use debt where possible, and the mortgage constraints and interest rate rises remain a broad impediment to housing growth. There are specific dangers in the sovereign debt in the west as well as the potential for deflation following a housing bubble in the east.
All these factors have subdued growth, rather than reversed it, and fundamentally strong demand will continue to lift prices. It is predicted that the $15,000 per sq ft barrier will be breached at some point this decade, having reached $9,000 per sq ft last year in London and Hong Kong. Manhattan’s record is closer to $ 7,000/sf, although that is an unusual number, the average being much lower. This bodes well for Manhattan where the highest end of real estate could be viewed globally as a ‘good buy’. The “virtual continent” of the wealthy is unlikely to falter too much: The creation of wealth in emerging markets over the next decade will ensure that they grow – regardless of domestic market conditions.
Manhattan is getting ready to launch some super-luxe buildings over the next few months catering specifically to this market including The Drake building on Park Avenue, One 57, the Extell building on West 57th Street, and 150 Charles in Greenwich Village. The performance of these buildings will be the next test for a market that has a short supply of full service ultra-luxe exclusive buildings.
For years I said the upscale Manhattan crowd would never travel ALL THE WAY to Brooklyn to live in what are arguably neighborhoods as refined and desirable as the West Village, Tribeca and the Upper East Side: I was wrong. About 3 years ago, a friend of mine (and now fellow broker) Aimee Scher moved to DUMBO. I dreaded the thought of traveling ALL THE WAY over to visit…..until of course I did so. I was wrong. It took less time to get there from my Flatiron office than it does to get to the Upper East Side. I was shocked. I’d always loved the Brooklyn neighborhoods and thought they had huge potential, but I never thought of them as being this accessible.
Flash forward, and last Fall, the owner of a recently renovated house in Brooklyn Heights invited me over to see his property on Hicks Street. Again, I dreaded the trip ALL THE WAY to Brooklyn. I left my apartment in West Chelsea and 11 minutes later I was at the front door. Un-believeable! I had been transported in a few minutes to what has to be one of New York’s most beautiful neighborhoods. I walked on gorgeous tree lined streets reminiscent of the West Village, by charming cafe’s brimming with Saturday ‘bruncher’s’ (a good-looking bunch I may add!) taking in the beautiful Fall weather.
We chatted with the owner and my fellow broker and after a tour of this magnificent house I was convinced: Brooklyn Heights has to be one of THE neighborhoods of New York, if not Manhattan. It is an area anyone wanting a strong quality of life should seriously consider. And this house that we recently listed is a prize: 25,5 feet wide, exquisitely renovated (seriously, world-class) and pretty from inside and outside with a picturesque garden too. And minutes from Manhattan. Minutes.
With pricing of similar houses in Manhattan in the teen’s, 74 Hicks Street in Brooklyn Heights priced at $ 6,5million is an eye-opener. Certainly a wake-up call to me, the sometimes jaded Manhattan broker.
Downtown New York residential real estate inventories are now approaching the levels of 2005…..does this equate to the beginnings of a shortage? With new construction having ground to a virtual halt over the past 2 years, we should not expect any brand new DELIVERABLE quality ultra-luxury apartments for at least 2 years. This may result in two scenarios:
1) Sellers who have been waiting for pricing to recover to sell their homes may list now, thus producing the quantity of inventory to keep the markets balanced.
2) Because rebounding new construction will only be able to deliver product in about 2 years, pricing on ultra-luxe buildings could escalate, possibly dramatically. Ultra-luxe is in pretty limited supply regardless with only a handful of buildings that qualify. New ones are on the way.
In the past weeks we have seen numerous prize apartments sell at premium prices: Wendy Maitland just sold a prize unit at 40 Mercer in Soho for over $ 3,200/sf. Raphael De Niro just sold the penthouse at 166 Perry Street in Greenwich Village, and this is on top of units at Superior Ink, 200 Eleventh Avenue (West Chelsea) and 100 Eleventh Avenue (a non-top-floor penthouse was recently sold by Holly Parker for a premium price, $ 2,700/sf, although the press focused exclusively on the discount off the asking price). With these units gone, sold at premium pricing, and not that many left of this caliber, the next few months could prove to be very interesting indeed. Are we entering an era of LUXE HYPER-INFLATION?