LuxuryBlurb
Posts Tagged ‘manhattan real estate’
Friday, January 6th, 2012
 Posted by Leonard Steinberg on January 6th, 2012
The Chinese government announced to-day that they will start to report pollution levles more accurately: if you thought Los Angeles or Denver were bad, you should see Beijing! The explosive 10%+ per year growth combined with 20 million inhabitants and antiquated technologies is producing one of the world’s worst large City health hazzards. We know about pollution all too well in New York.
The GOOD NEWS: By 2030, pollution levels in New York will be vastly improved, and they have improved noticeably over the past few years already. Here are TEN reasons why we can expect an even cleaner City in our future:
1) There is more awareness now than ever before about the health risks of pollution. That usually fuels change.
2) One of the worst polluters in New York is…..oil fired boilers, especially the old kind burning # 6 oil. By 2030, all will have to be converted to # 2 oil by law. Already many buildings have converted to clean-burning natural gas. And many more are planning to do so.
3) Electric and Hybrid vehicles: the growth of this classification of transportation will not only improve air pollution, but also noise pollution. Most busses run on
4) Public transportation will improve: Every day, each person who chooses to travel by bus or train contributes to a cleaner environment. That translates into approximately 700,000 cars kept out of New York City’s central business district daily. It also means 400 million fewer pounds of soot, carbon monoxide, hydrocarbons, and other toxic substances released each year into the city’s air. NYC Transit is a leader in the field of alternative fuel sources and new technologies for cleaner buses.
5) New building codes: LEED certification has become a status symbol in New York new construction. Cook + Fox have won global accolades for their hugely successful (and green) One Bryant Park commercial building. Not only are these buildings good for the city: more importantly they are also good for profits, thereby motivating developers to think beyond the pennies. Many buildings are retro-fitting to make them more efficient: new windows, added insulation and energy management systems add up to huge pollution improvements collectively.
6) Bicycles have taken off and soon the new Paris-style bike sharing program will fuel this trend. The new Nissan NV 200 cabs will also be significantly more fuel efficient (25mpg) and lighter on pollutants. The number of hybrid cabs has grown from 375 in 2007 to over 4,000 to-day.
7) New York’s MILLION TREES program is the ultimate air cleanser: Even NASA has said the most effective air cleanser is a live plant. While Central Park has been the official LUNGS OF MANHATTAN, multiple newly planted parks have added significantly to the power of plants.
 SOLAR and WIND power are two areas that are slowly gaining popularity in New York: With newer technologies that are more easily and cost-effectively applied to buildings, we will see more of this clean energy source.
9) FEWER SMOKERS: now if only we could clear them off the streets altogether! I propose fully enlcosed bubble helmets to fully contain the smoke: Maybe if smokers experienced what their lungs are experiencing (not to mention the rest of us who have to breath in the 80% of smoke they are not inhaling) they may re-consider this filthy, very un-fashionable habit.
10) FEWER GAS STATIONS: yes, the convenience factor is a bit of a nightmare: then again, maybe all new buildings should have electrical charging stations and bicycle racks to compensate?
Tuesday, December 20th, 2011
Posted by Leonard Steinberg on December 21st, 2011
Has anyone noticed how many ex Wall Streeters are turning to the markets to create new ventures and businesses? I have heard some who have lost jobs hopeless about their chances of re-creating their past positions or income and others who were just tired of the rat-race. Some have expressed interest in creating something tangible, creating industry, product or purpose.
Have you heard any of these stories?
I do believe business-owners to be one of the quickest future growth segments of the luxury real estate market, especially in New York.
Sunday, November 13th, 2011
 Posted by Leonard Steinberg on November 13th, 2011
In today’s real estate section of the New York Times, the cover article addresses the subject of expiring tax abatements that result in monthly taxes on new buildings that are super-high. In my opinion, this article does not get the story right and misses some very important points:
- Real estate tax abatements, specifically the most popular 421-A, allows reducing real estate taxes by fazing in the full rate incrementally every 2 years over a 10 year period. Monthly taxes start out extremely low. The abatement (that has ended) was designed to stimulate building and encourage buying. At the end of this 10 year period people are ‘discovering’ that the taxes for new buildings are rather high. The article identifies this fact showing how at the time of purchase, buyers should have noted the taxes at the beginning and at the end of the abatement, but fails to mention that most of these taxes have been increased (often dramatically) well beyond their original estimations as assessed values have been raised across the city.
- The article does not address the gross inequality between assessed values: a weak government official attributes it to the fact that assessed values are based on potential rental valuations: this is an antiquated method that should be abolished immediately. Just because 740 Park Avenue does not allow sub-leasing, thereby eliminating any data for rental valuations for the building, should not entitle the bulding to lower taxes than neighboring buildings: should another condo close by be penalized because it does allow rentals? The system is thoroughly unfair, ridiculous and corrupted.
- The article does not address the most important issue of all: Most buildings that have increased assessments are compelled to hire an attorney to file a tax grievance on behalf of the building…..most times these grievances are successful in reducing the assessed value of the building and these attorneys subsequently bill 10% of the reduced taxes. This happens every year. Its a system designed to keep lawyers in business doing something that should not happen in the first place. Who writes the laws? Is this a racket?
The real estate tax assessment situation in Manhattan is a disgrace. It is also un-constitutional if we assume we are all to be treated equally. Yet the Times made this a sensationalist story about the shock of expiring abatements rather than the ridiculous valuations some buildings are assessed at when compared with similar neighboring buildings. This is a huge dis-service to the Times’ readership and the article should be corrected immediately. It’s also time for a major class action suit against the City as (unfortunately) government only wakes up when its voters use the legal system to make the point. Manhattan and New York need to be re-assessed across the board. This is long overdue.
Wednesday, September 28th, 2011
 Posted by Leonard Steinberg on September 28th, 2011
With the development of new high end residential buildings such as Extel’s One 57, 150 Charles Street, the Rudin’s St. Vincent’s buildings, One Madison Park, 212 West 18th Street, etc roaring back to life in Manhattan, the question always arises at the marketing meetings: what is the next great amenity?
In the past ten years we have seen sleek gyms with swimming pools, rock climbing walls, playrooms, guest suites, En Suite Sky garages, pet spa’s, concierge’s…..so what could be the next big amenity? Maybe its high security……and here is why:
1) The financial crisis has not ended for many, and there is a strong argument to be made that for some it has only just begun. This inevitably results in lay-off’s. Wall Street banks are talking of TENS of thousands of lay-offs. BUt most of those people have safety nets. What about those kitchen staff who lose their jobs because there are not enough bankers frequenting the restaurants?
2) Politically, there is a much greater awareness than ever before at the vast and growing inequality between the rich and the poor, with the middle class eroding daily. Politicians will continue to broadcast this message loudly: On the right they will say how divisive the left is being and on the left they will say how unfair the system is. Both may be right, but the result will be division.
3) Most of our political and religious systems thrive on division: this drive towards anger is supposed to create loyalty to ‘the brand’. Anger is manageable when expressed in words, but it becomes a much greater threat when it heads to the streets.
4) Our ‘system’ has created an entire generation reliant on government support: take away any medicaid, social security, government jobs, unemployment benefits, etc and you could have a large chunk of people become very angry as we have witnessed in Greece where the culture is about wealthy people who do not want to pay taxes and another class that simply don’t want to work. That leaves everyone inbetween paying the bills…..and very angry. Now because of a crisis, raise and enforce taxation on the rich and reduce state-sponsord benefits and you have THREE very angry groups of people.
5) Many of the jobs lost over the past 3 years (and coming years) will simply never return. Machines, technology and longer work hours for remaining employees have replaced those jobs forever……and corporations LOVE the benefit to the bottom line. This leaves many unemployed for long periods of time and is possibly the most damaging consequence of a bad economy. With our education system ranking amongst the lowest of first world countries, re-educating these people for new careers does not seem to be the priority of any political movement, even though it should be.
6) Over the next 10 years almost 50% of all school kids will be minorities: Minorities do not have the culture of highly disciplined education and governments have neglected their education dreadfully. Culturally kids are encouraged to grow up to be a reality TV star, rapper or sports star, even though there are less than a handful of those positions available. We should learn from the Chinese about discipline: they too are a minority yet no-one talks about their incredible achievements in this country in spite of the traditional hardships associated with being a minority immigrant. Worse, many young college graduates are not finding jobs….these are the people who went nuts in Egypt and Spain.
7) Our immigration policies do not create the best environment to attract the best of the world. Those immigrating legally are tortured by the process and those who run across the border illegally often do not add much to the economy and are often a drain on federal and state resources.
With all this said, combined with Mayor Bloomberg’s recent warning’s of impending potential social unrest, I believe tight security will become one of the most desirable amenities in any high end residential building. A doorman alone will not cut it. And security that makes a home feel like a prison won’t cut it either. With many rather dubious characters with very new (substantial)wealth from foreign nations buying in these buildings, security will be even more critical. One Hyde Park in London is an example of a building that has fully recognized this new security threat. Some Russian oligarch’s employ their own personal security staff (one has reportedly 200!) for protection. These are the buyers of tomorrow of these super-luxe apartments, and buildings had better be prepared for their arrival; They’re here already.
Monday, September 26th, 2011
 Posted by Leonard Steinberg on September 26th, 2011
Yesterday while on the treadmill I came across the Joel Osteen show…..yes that perennially grinning Joel Osteen preacher from Houston who broadcasts weekly from his Houston arena-sized mega-church….and I actually think a lot of his message is really quite good. It’s not too judgmental, angry or dark.
He was telling the story about how he and his wife were searching for a home many years ago, found the perfect one, but it was priced much beyond than their then very limited budget. A friend suggested they place a really low offer, 50% off the asking price…..of course the offer was rejected. But several weeks later, the Seller who was desperate and supposedly decided to take the loss called and made a deal with them not very far from their low offer. The message of this story was that miracles do indeed happen if you truly believe……yes, even real estate miracles. The audience/congregation applauded and cheered enthusiastically.
So I had to ask: were they applauding this miracle? Were they applauding the Osteen’s great fortune? Or were they applauding the Seller’s horrible loss? Does a great win have to come at the expense of someone else’s great loss? And why does no-one in Manhattan real estate get that 50% discount? Are Manhattanites bad people?
As you can tell, I ask too many questions…..
Monday, September 19th, 2011
 Posted by Leonard Steinberg on September 19, 2011
The Euro has dropped from its $ 1.46 average to closer to $ 1.36, certainly a result of the ongoing financial turmoil in Greece, Italy, Spain and even France. European buyers have been a small but strong component of the Manhattan market in the past few years…..will this change now?
In my opinion, I don’t think so, at least not for the next few months. The fear of the Euro dropping further (which is highly plausible) combined with many European countries increasing focus on going after the wealthy for tax dollars should fuel this segment of the market for at least the next few months: Surely if you lived in Italy and felt the Euro would drop further you’d want to park your money in a ‘safe haven’……and yes, the USA, especially Manhattan. is still considered that in many circles.
I just finished reading the updated edition of AFTERSHOCK the horrific doomsday book that details the slow but certain collapse of the entire world’s economies based on the theory that EVERYTHING is and was indeed a bubble that started inflating many years ago. Regarding real estate, the book does endorse real estate ownership especially if you can capitalize on a long term fixed rate mortgage, and the property is your primary residence…. The next two years is when they predict the unravelling of the entire world financial system fueled mostly by rampant inflation. This combined with Harold Camping’s predictions of the imminent end of the world certainly make for a great mood-booster entering the Fall season….
Thursday, July 14th, 2011
 Posted by Leonard Steinberg on July 14th, 2011
The spectacularly grotesquely, almost tasteful 56,000sf limestone mansion belonging to deceased Hollywood producer Aaron Spelling, creator of 90210, Melrose Place and Dynasty to name a few of his famous shows, has sold and closed for the equally spectacular price of $ 85million, making it the most expensive residential sale in United States history. The buyer is 22 year old Petra Ecclestone, heiress to the Formula One racing empire and daughter of British billionaire Bernie Ecclestone.
The Spelling Mansion, originally named L’Oiseau, is situated on almost 5 acres in the West Coast’s answer to Alpine New Jersey, Holmby Hills, an exclusive Los Angeles neighborhood. The three-story, seven bedroom estate boasts every ridiculous feature a celebrity or celebrity wannabee could imagine. Among the offerings are a dog grooming room, five bars, a wine cellar and tasting room, a China room, TWO “gift-wrapping” rooms, a flower-cutting hall with a professional florist fridge, a screening room/cinema, game and billiards rooms, a bowling alley, and a beauty salon. Of course there is an elevator too. The lavish grounds combine expansive gardens, an orangery, a koi pond, lamp posts imported from Paris, a pool complex and tennis courts. The fountain-studded motor court holds up to 100 cars.
The mansion was home to Aaron’s wife Candy for a few years…she has subsequantly down-sized to about 20,000sf in a highrise.
Ecclestone is said to be moving here after her August wedding to James Stunt, a businessman and London nightclub fixture. It’s been reported that the couple will split their time between London and and their new Nouveau Riche shrine.
And we thought New York was expensive? Well, this house translates to about $ 1,500/sf, or about a quarter of the cost of an apartment at 15 Central Park West, so it qualifies as mid-level luxury in Manhattan. The same size of property at 15 CPW would cost over $ 336 Million…..unless of course you got some discounted square footage in the basement for those gift wrapping rooms.
Wednesday, June 29th, 2011
Posted by Leonard Steinberg on June 29th, 2011
Some banks are being like governments right now: stupid. When banks do not want to lend to highly qualified, super-reliable, well educated, credit worthy clients, we should conclude that we have a MAJOR problem. When these same banks make everything in the application process so difficult, cumbersome, illogical and painful, they cease being real banks in my opinion.
When banks willfully hire inept appraisors that appraise property stupidly (without a detailed understanding of the market, often citing comparable sales that have little or no bearing on the property at hand) we all lose. The economy loses. The taxpayer loses. Governments lose. Job growth stalls. The process grinds. Transfer tax revenue slows. Income tax revenue slows. Home improvement and renovation stalls. The list goes on.
Another bank stupidity: Why would banks wait endlessly (in the hopes of a default that would lead to foreclosure?)and not renegotiate the rate of a loan to make the monthly payment manageable for a property owner experiencing difficulty?
When you hear about some banks reliance on excessive punitive fees to create the bulk of their profits, one cannot be surprised at their inability to create smart profits through real banking practices.
Obviously this stupidity does not apply to all banks: there are exceptions. One has to hope that banks that are acting prudently now destroy those banks that are not and rid our society of this dirty, stupid element of society.
Friday, June 10th, 2011
 Posted by Leonard Steinberg on June 10, 2011
What may be good news for New York, could be bad news for Stamford Connecticut: It appears UBS will be moving a sizeable chunk of its workforce from Stamford back to Manhattan, possibly to 3 World Trade Center.
UBS says the company is considering moving its trading floor, and thousands of employees, back to Manhattan in part because it has found it more difficult to recruit talented people in their 20s to work in the suburbs. Stamford is about 35 miles out of Manhattan. For many Manhattanites who work there, an end to the 45 minute plus commute will come as a huge relief, adding about 200 hours back to their lives per year if their commute time is cut by 50% (assuming they still will have to commute from somewhere)…..that’s the equivalent of a 8 day vacation! Much more if they choose to live in Tribeca, Wall Street or Battery Park within walking distance….
UBS would maintain offices in Stamford, although they would be smaller. The number of Stamford employees had already dropped to 3,000, from 4,000 two years ago.
This move would re-emphasize trends we identified starting some time ago: people want shorter commutes as they rob them of precious time they can spend with friends, family or simply rest. Another trend we continue to see is younger people want to live in big cities: they are drawn to them, not only for employment opportunities and ‘career climbers’ but also because its easier to meet other people in a large city, and a city like New York certainly draws a diversified crowd not only from around the country, but the entire world. This trend is not exclusively confined to the young, as a vast number of empty nesters return annually to Manhattan for its excitement and cultural variety.
With Conde Nast and now UBS heading to the Wall Street area, we should expect the real estate market in the area to continue its path of gentrification. Prime beneficiaries should be larger apartments that house families used to Connecticut-sized homes and small, slick rental apartments.
Monday, May 30th, 2011
Posted by Leonard Steinberg on May 30th, 2011
Bloomberg reports that homes priced at $10 million and above are accumulating on the market in Greenwich, Connecticut, a town about 30 miles (48 kilometers) north of Manhattan that’s known as the U.S. hedge fund capital. They’re moving so slowly that it would take more than four years to sell them all, the biggest backlog since at least 2004, according to Mark Pruner, an agent with Prudential Connecticut Realty. Wall Street’s greater emphasis on deferred compensation, in which a portion of an annual bonus will be paid in the future, has stifled demand, he said. I think that’s only part of the problem.
“Our market moves very closely with the financial markets,” Pruner, based in Greenwich, said in an interview. “Deferred compensation has totally hammered the over-$10 million market because people just aren’t getting large amounts of cash, and that market has traditionally been a cash market.”
Fifty-two houses in that price range were listed for sale as of May 19, according to Pruner. Four have sold this year and two are in contract. At that pace, it would take 52 months to sell the inventory, he said. If that backlog remains through the end of the year, it would be the biggest in his data going back to 2004.
I think another component thats driving this market trend is the large number of wealthy homeowners in Greenwich moving back to Manhattan: Now there is definitely a shortage of large apartments in Manhattan, with many developers scrambling to cater to this need. Many who moved out to Greenwich to escape New York are learning that a good volume of business still remains focused in Manhattan, requiring lengthy, time-consuming commutes. Owners of super-large homes (lets face it, if you want to look rich in Greenwich, you need a 10,000sf+ home!) are finding many rooms un-used, and the cost and aggravation of maintaining them more than they had bargained for. Couple that with the fact that most of these homeowners usually own a second or third home. We constantly hear Greenwich homeowners looking in Manhattan griping about:
1) SUBURBAN BOREDOM….they miss the stimulation and variety of options for entertainment and socializing in the City.
2) LENGTHY COMMUTES/CAR CULTURE…..there is something infinitely appealing to take an elevator ride down to the street to buy pint of Ice Cream, walk 2 blocks to your favorite restaurant, or take a 5 minute cab ride to see a movie or a play. All these activities require at least a 20-30 minute drive.
3) SUBURBAN CULTURE….Social living in Greenwich is different: not better or worse, but certainly more insular. The peace and tranquility of suburban life can be achieved at a weekend home in the Hampton’s or Upstate, combined with the stimulation of big city living during the week.
4) EMPTY NESTERS…..a huge garden and lots of rooms is wonderful with kids and their friends using them. Not so wonderful when they move on to college.
5) ENVIRONMENTAL RESPONSIBILITY….we all have to share in our efforts to conserve energy and cut back on needless energy consumption. A large house in Greenwich leaves an enormous carbon footprint in its wake. City living is significantly less damaging to this planet, even in very large apartments or townhouses.
6) CONVENIENCE: Owning a large home presents large maintenance issues. Living in a condo in the City requires a call to the Super to get those pesky lightbulbs changed: That $ 100 tip is a bargain next to the cost and aggravation of full time maintenance staffing.
7) SIMPLIFICATION: There is a large trend right now towards efficiencies. More compacted, efficient and engineered spaces are just easier to live with. A well designed 4,000sf apartment can deliver most of the needs of a 10,000sf house.
COST: The suburbs really aren’t that much cheaper. Yes, you get lots more house for your money, and it looks more impressive when your peers drive by. Now throw in the cost of 2 or more cars, yard, pool and house maintenance/staffing, additional energy costs, infrastructure re-building (eg roof, facade, windows, etc). Yes, all these items are required for a swell City existence, but many of these costs are shared. One roof shared by 50 owners….
Financial-Industry Buyers
“Previously, if you got a $10 million bonus, buying a $5 million house wasn’t that big a deal” said Pruner, who estimates that about half of all homebuyers in Greenwich work in the financial industry.
“If you get $20 million — $3 million in cash and 17 in deferred compensation — are you going to borrow another $2 million in cash to buy a house? I don’t think so,” he said.
Cash bonuses on Wall Street declined 8 percent last year as financial firms raised base salaries and deferred some earnings, New York State Comptroller Thomas DiNapoli said on Feb. 23. Companies disbursed $20.8 billion in 2010, down from $22.5 billion a year earlier.
The average Wall Street employee took home a cash bonus of $128,530 in 2010, a drop of 9 percent that was greater than the total decline because the pool was shared among more workers, DiNapoli’s office calculated in a report based on personal income-tax collections.
Less Liquidity
The smaller payouts reflect changes adopted by the industry after the credit crisis, in response to criticism that soaring incentives pushed traders to disregard risk. About 56 percent of financial firms incorporated risk management into performance measures for top executives by the end of 2010, and 37 percent have also done so for lower-level staff, according to a February study by Deloitte Touche Tohmatsu Ltd.
“Pay for performance and incorporating risk measures is making its way through more and more of the ranks of Wall Street, and that is going to have an impact because people have less liquidity at bonus time than they used to,” said Constance Melrose, managing director ofeFinancialCareers North America, a network of websites for finance industry professionals.
A smaller cash component of bonuses may translate to fewer high-dollar property sales in Greenwich, where the median household income was about $122,000 in 2009, more than twice the national average, according to the U.S. Census Bureau. The town is home to about 90hedge funds, data compiled by Bloomberg show.
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