LuxuryBlurb
Posts Tagged ‘manhattan real estate’
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.
Thursday, May 26th, 2011
 Posted by Leonard Steinberg on May 26th, 2011
I just went over the stats analysis and noticed an interesting factoid: The vast majority of studios that have traded in Manhattan in the past months are co-ops not condos, which leads me to believe developers are avoiding building them.
I don’t think the day of the studio has ended, and I believe there is a potent market for the LUXE STUDIO, that exquisitely engineered space that caters to all the needs a larger apartment delivers, often rather inefficiently. We have not seen well designed studios, and I firmly believe this is unwise. With many homeowners becoming increasingly nomadic, and even the less wealthy desiring a weekend house (now with many more affordable options) I think the need for small, super-efficient apartments with uncompromised esthetics and quality is alive and well and largely ignored… and I have a very clear vision of an innovative, magnificent version that I truly believe the market would LOVE.
Hello there developers and bankers, not everyone is looking for those 3-4 bedroom apartments everyone seems so focused on right now….we need both!
Saturday, April 9th, 2011
 Posted by Leonard Steinberg on April 9, 2011
Cabs in New York City have become expensive. Still they are not nearly as expensive as those in London or some other cities. I don’t particularly mind paying for this service as it is one that I find extremely convenient and efficient.
I had thought of getting a car and driver many years ago, and several colleagues in the Manhattan real estate industry have done so since. Sharon Baum is the most famous for her Rolls Royce. I opted otherwise as I prefer the convenience of stepping into the street, raising my arm and opening a door to the closest cab. I rent a car and driver when working with clients schlepping them around to see properties, and sometimes use one uptown, connecting downtonw with another via subway to avoid the traffic slowdown. Using cabs is far more environmentally conscious than owning a car + drive full time that is often left in front of a building idling while waiting, spewing pollution and making the Saudi’s richer. The problem starts when stepping into the cab itself….
Why is it that in the past 15 years, New York City is incapable of specifying a cab that is inhabitable? Why should I pay the same for one cab where the seat is comfortable, the interior clean, and the driver sane as I do for the filthy cab where the seat is so tight you slice the tips of your shoes off and have to do Cirque du Soleil contortions to position yourself in the seat? It is a thorough disgrace that a world center in a first world country has such outrageously bad cabs.
If Mayor Bloomberg really wants to make his mark, PLEASE apply as much effort into upgrading our cab service as you do creating bike lanes (oh, and don’t get me started on those lawless bikers!).
Saturday, April 9th, 2011
 Posted by Leonard Steinberg on April 9, 2011
This week, Amercan Idol fans were shocked when one of the shows biggest talents, Pia, was voted off the show…..it was another reminder of the dangers of mass tastes dictating. Without Simon Cowell, the judges superficial, uneducated, Jenny-from-the-block evaluation failed us all. I feel the same way about real estate reporting these days: so much of real estate reporting about New York real estate relies much too heaviuly on celebrity. This week I had a very interesting conversation with a top reporter of a major newspaper on the subject.
It amazed me how restricted this reporter was by how competitive the press has become to get the latest scoop on the latest celebrity spotting/purchase/appearance…..real-estate wise! This very intelligent reporter agreed that there was a need for an organization or two to stop this insanity and become a bit more educational, and dare I say intellectual/smart, about understanding what does and does not happen in the world of real estate. Surely, when the quarterly reports are distributed, the consumer deserves some more detailed analysis/reporting on what all those figures mean, rather than just spewing them out verbatum, cicling round eventually to the one huge sale of a billionaire or celebrity?
Certainly the New York Times, New York Post, Wall Street Journal, Observer, Curbed, The Real Deal, etc have all produced some well written, well researched articles. We hope they focus more on these well researched and analysed pieces. The Paris Hilton-esque stuff is becoming annoying.
Just like American Idol, are we all doomed to be overwhelmed by the masses desire for shallow, superficial ‘news’ without any form of analysis or depth? I think there are enough people out there who want and expect more. Maybe what we are experiencing right now is a fashion for the ultra-superficial: hopefully the next fashion will be INTELLIGENCE, a well designed Burberry coat, not Jeggings, and hopefully it lasts?
Wednesday, April 6th, 2011
 Posted by Leonard Steinberg on April 6, 2011
The Wall Street Journal just reported on that small segment of society that thrives on very, very little sleep. However, out of every 100 people who believe they only need five or six hours of sleep a night, only about five people really do. The rest end up chronically sleep deprived, part of the one-third of U.S. adults who get less than the recommended seven hours of sleep per night, according to a report last month by the Centers for Disease Control and Prevention.
Sometimes it amazes me as I tour the homes of New Yorkers and see how badly designed their bedrooms are, certainly not the kind of environment to encourage good sleep habits. If we spend 7 hours a day asleep, that is almost a third of our lives in one place…..surely that should inspire us to create the best possible environment, maybe more so than any other living space?
So these are the things I believe make my bedroom function well for a third of my life:
1) THE BED: I spent 6 months getting my bed just right: No, I do not own one of those $ 20,000 mattresses, although I hear they are amazing. I do have a quality king sized mattress with box springs: the top is layered with a memory foam pad, an organic wool fleece cover (wool is cool in summer and warm in winter), an all cotton pad over that, and then super-quality high thread count cotton sheets. Restoration Hardware does a great quality if you are more budget conscious (I am not a fan of Frette….). I have an A-grade down comforter, covered with a cotton cover….medium weight. There are three firmness levels of pillows. And of course in winter, an Hermes wool blanket adds warmth. I have a cashmere throw too because some fabulous interior design magazine said I need one.
2) LIGHTING: I have no overhead lights, just a task light on either side of the bed to allow easy reading. All lights have dimmers to provide soft lighting at all times.
3) SOUND: My windows are very sound-proofed. I require a quiet bedroom to sleep well, and yes I also wear ear plugs too. Fabric curtains absorb sound too. The more fabric the better. I also have ducted central air conditioning, which is something of a dream come true after living with noisy, inefficient wall units for decades.
4) LIGHT: Blackout is essential to me. I have one layer of roller solar shades to soften the outside light. The heavy linen curtains have a black-out lining.
5) TECHNOLOGY: Yes there is a television…..but it is turned off at least an hour before sleep time. Although watching any reality TV (besides the Real Housewives of New Jersey) puts me to sleep. The only technology thats allowed is my I-pad to read or music…..I play soft classical music through the built in system before sleep while reading. My cellphone is turned off by 11pm.
6) COLOR: I love a monochromatic bedroom. For me it encourages a calming environment. So the linen curtains almost match the color of the walls, a neutral greyish beige.
7) A VIEW: I am very fortunate in that I have a view of my terrace that is planted with evergreens so that its green all year round. I also have a yummy chaise lounger covered in a soft aqua green velvet and mid century floorlamp to look at…..the point is, some kind of pleasing ‘view’ is essential to my sleep. And if I did not have this terrace, I would place a piece of art, a great photo, SOMETHING that provides a calming exposure to see as you drift into sleep, or wake up to.
FOOD: No food in or near the bed…..only a good cup of tea in the morning, or some Camomile before bedtime. AND: No meals just before sleep time…..a lighter meal (not easy for me) should be completed at least three hours before sleep time.
And I am militant about having a minimum of 7 hours of good sleep per night. Without that, I could not survive the craziness that is Manhattan real estate.
Sunday, April 3rd, 2011
Posted by Leonard Steinberg on April 3rd, 2011
In 1980, the average CEO earned 42 times the average worker, according to the Institute for Policy Studies. In 2009, the multiplier had skyrocketed to 263. Has the disparity in wealth and incomes between the very rich and the working classes become a global hot button issue that will come back to haunt us? Would it be imaginable 30 years ago that Snooki would earn more than a Nobel prize winner ($ 32,000) for giving a speech at Rutgers University? Have the levels of greed spiraled upwards in recent years to the point of tipping?
Western mass culture is more obsessed with the glorification of the super wealthy and the famous than ever…. The press is mostly interested in celebrity, even when it comes to reporting on real estate. Celebrity trumps all. Then come the super high priced items bought by the super-wealthy, non celebrities. Most CEO’s have a responsibilities that impact the livelihoods of hundreds if not thousands: the world becomes angered however when their compensation is paid regardless of performance. Many celebrities on the other hand are paid huge sums of money for doing rather simple tasks, regardless of how brilliantly they do them.
Manhattan real estate has been a huge beneficiary of this intense wealth disparity. While many may argue that should this disparity shrink, pricing of high end real estate would be negatively impacted. I doubt this: Most of the very wealthy would still be extremely rich if their incomes and assets were half. Clear evidence of this is the volume of dollars donated by the super rich. Think Warren Buffet, Bill Gates, Mike Bloomberg….these guys understand that age old philosophy: you cannot take it with you. And to those that have left huge fortunes to their kids, the lesson has mostly been painful as those kids lives are often destroyed if they have not been fully prepared for the role.
There will always be a huge disparity between the very rich and the very poor, however right now the levels are rather astronomical. Imagine taking the disparity down by 20%, and paying those dollars to the masses who would actually spend those dollars and pay taxes on those dollars (remember, the very wealthy know how to avoid paying taxes and save LOTS amassing fortunes that are mostly never spent)……Some may call this re-distribution of wealth or worse: socialism/communism. I don’t think that would be accurate at all. I think cutting someone’s income who earns $ 20million annually right now, to $16million would not qualify as either, and those $ 4 million dollars paid to stock holders in a dividend or to other or more employees would benefit this planet. It would certainly not stop them from paying for a prize apartment. And it certainly would raise the volume of tax payers. I’d bet we would reduce the national debt dramatically, and the economy would boom. But hey, that would benefit everybody and lots of lobbyists and politicians would be out of work….
Friday, April 1st, 2011
Posted by Leonard Steinberg on April 1, 2011
No, this is not an April Fool’s joke: All of us in New York have either heard of or experienced first hand the outrageous behavior of a co-op board, and yes, even a CONDO board.
This morning the New York Times reports that a bill now before the Connecticut legislature would establish an ombudsman within the Department of Consumer Protection, in the Attorney General’s office to oversee the actions of Boards and address disputes between boards and owners of condomiums. The agency would be financed through an annual $4 fee on all condominiums. Connecticut has between 240,000 and 250,000 condo units. Manhattan has many more, and of course even more co-ops
The bill would require condominium associations to set up internal procedures to resolve disputes. Condo owners would be required to go through that process before filing a complaint with the ombudsman, for which they would pay a $35 fee. The ombudsman’s office would investigate and resolve complaints, and could impose a penalty of up to $200 for knowing violations of state statutes.
I think this would be a great idea for Manhattan. Right now, the only recourse an owner has against a runaway Board is to sue. That is absurd. It is time to make the actions of Boards much more transparent….board members have a fiduciary responsibility to the owners who elected them.
Saturday, March 26th, 2011
 Posted by Leonard Steinberg on March 26, 2011
This is our first critique of a building…..Last week Jamestown Properties made a presentation to Community Board 4 showcasing the proposed addition to the rooftop of Chelsea Market which involved an additional 90,000sf for a boutique hotel and about 250,000sf for office space. While I think it is generally unfair to critique anything till it is fully built, this building design caught my attention and I could not remain silent.
It is obvious that the developer has asked for much more square footage than he expects to get (a tactic used by most developers) as this procedure was part of requesting additional buildiable square footage not currently allowable in the FAR and zoning. While most will think I am writing this because of the scale of the building alone, let me stop you immediately. It is true that an addition this size is probably inappropriate for this location, and that yes, it will block the views of some apartments at The Caledonia that are currently getting record-breaking pricing because of their views (although the building and location are so strong, I would doubt they de-value much). I believe in change, and building big buildings in a city like New York, even in West Chelsea, even close to the Highline Park. I want to address the lousy design.
Studios Architecture came up with this mess, and what a mess it is: In its horrific attempts at being contextual, the end result is a design so vulgar that it rates as one of the worst messes we have seen in a long time. The combination of 101 Warren-esque facade intertwined with a flat glass Trump-Soho-esque growth atop a somewhat-Hearst-esque base all piled on top of a classic brick warehouse has to be one of the worst ‘designer’ attempts I have seen in quite a while. So instead of arguing how to improve this design, I suggest starting from scratch. This is a mess, pure and simple.
My suggestion to the developers: Take another look at the neighborhood and see what works and what does not. If you want to be bold and daring and modernist, that could work, but only if its done the right way. With authorative style and conviction. If you want to be contextual, maybe its time for a walk around the neighborhood to understand what it really looks like.
The lousy design of additions on top of beautiful buildings (although the base building here does not really qualify….its just OK at best)is a bad tradition in Manhattan real estate that has to end. Think of all the hideous stucco/plasticy/bad-glassy penthouses built on top of beautiful buildings around the city, when if removed from the building and placed in a suburban setting would qualify as trailer-park architecture at best. This building’s addition is not the first culprit. Good design can add value not only to the neighborhood, but also to the development itself.
Back to the drawing boards!
Wednesday, March 23rd, 2011
Posted by Leonard Steinberg on March 23, 2011
Overheard tonight at a little gathering in a swell penthouse overlooking all of Manhattan, amidst dramatic lightening and ice/hail….A 3-unit combination apartment st THE PLAZA has gone to contract for around $ 48million….and a rather swell pad at TIME WARNER has gone to contract for around $ 33million: The luxury, BILLIONAIRE BUYER is back in town! These prices are headline grabbing indeed even for the New York luxury real estate market.
Tuesday, March 8th, 2011
 Posted by Leonard Steinberg on March 7, 2011
While not every listing is producing multiple bids, the volume of multiple bids on good properties is back in a BIG way in New York City real estate, both in the residential and commercial sectors. (It has also returned to the art world and many other markets) While these multiple bids do not necessarily produce bids over the asking prices, the fact that there are multiple bidders is causing many properties to reduce their level of negotiability…..often to zero. AND, this is happening only on correctly priced, highly desirable properties. But it is happening across the board and we suspect the results of the first quarter of 2011 will indicate price escalation and a jump in volume.
We see it first had in the residential market, but we hear of the same thing in the commercial market, where very large leases are being signed, often as a result of multiple bidders. Business is definitely growing in Manhattan. Unemployment is shrinking, more so than was originally estimated.
What does this mean? Most importantly, it means there are more buyers than there are sellers of the best properties, hence an inventory shortage in certain segments. This may take 18 months to cure: While new development planning has roared back to life, actual product that can be moved into is not going to help the current situation. With businesses growing and hiring, the demand for property will continue to grow, possibly out-pacing supply. Big cities continue to become more and more desirable to a wider audience than ever before…..including retirees, young families, and foreign buyers.
How to win a bidding war? Know your facts and figures well. Too many buyers are focused on closed sales from the past 12 months, blinding themselves to the fact that the market has recovered since then. A listing that closed in September 2010, probably is a reflection of the market in June 2010. That information may be out-dated. Try to tap into what is selling for what right now…..the kind of information no website is delivering. And more importantly, focus on the alternatives: if the competition for this specific property is in very limited supply, be certain it may be correctly, or under-priced.
New York real estate buyers definitely have herd mentality, so do not be fooled into thinking that just because a property has multiple bids it is the best one…..then again, its nice to know more than one person likes what you like.
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