Domestic buyers fill the void of overseas investment in NYC real estate

Comment

Domestic buyers fill the void of overseas investment in NYC real estate

Three years ago, real estate websites were filled with stories about foreign investments in New York City. These days, not so much.  According to The Real Deal, heavy hitting investors, such as sovereign wealth funds from Qatar, Norway, and China, have scaled back their buying bonanza. But that’s not necessarily a bad thing.

Speaking to TRD, Alex Foshay, a vice chair at foreign-capital firm Newmark Knight Frank, said, “There’s definitely been a shift in the last 12 months. A bunch of sovereign funds don’t want to be as active on the core investment side anymore,” he said.

Many real estate brokers and agents speak fondly about 2015 as a milestone year. That was the year that $96 billion flew into US real estate from foreign investment. By 2018, that number was at $61 billion, with sovereign wealth funds selling $945 million more in real estate than they purchased, according to research firm Real Capital Analytics.

However, the scale back isn’t all due to a softer Manhattan market. China has continued to impose regulations on offshore spending. Instead, domestic buyers have taken the initiative, banking on NYC to bounce back.

“Last year, it has really been the year of the domestic investor,” head of Tri-State investment sales at Avison Young James Nelson  was quoted as saying in Bisnow. “China always gets all the headlines, but Canada has been a consistent top three investor, easily for the last 10 years, probably for the last 20 years.”

While the flashy, big residential and commercial projects may not be generating the kind of deep pocketed overseas investments they once were, the Biznow article states that Chinese, Russian, and Singaporean investors are still buying lower priced properties. And the slowed investment on an overheated condo market has made room for domestic owner occupants, as reported in 6sqft.com, with price cuts giving buyers deep discounts to consider flips in the future.

If recent reports are anything to go by, that future could be sooner rather than later. According to     Forbes, the first quarter of 2019 has seen robust activity on properties priced to sell.  Mid-priced condos, particularly in Midtown Manhattan, have been moving as developers have cut prices and eaten closing costs. As Forbes states, “It may even be that by the end of 2019, absorption of the current inventory will have grown brisk enough that we see a shift in the balance of supply and demand. If demand once again exceeds supply (outside the ultra-luxury new condo market, where there will be an excess of supply for years) we could even see the market tolerate a few modest price increases.” Now wouldn’t that be something?

Comment

Pieds-à-Terre and “Ghost-Towers” prove the enduring allure of NYC Real Estate

Comment

Pieds-à-Terre and “Ghost-Towers” prove the enduring allure of NYC Real Estate

A proposed Pied-à-Terre tax would have been akin to placing a big “Not Welcome” sign over Manhattan. Following Amazon’s icy reception and subsequent departure from New York, the real estate industry lobbied hard to have the tax stopped in its tracks. Legislation was originally introduced by New York State Senator Brad Hoylman in 2014. It would have targeted New York City homes worth $5 million or more that are not their owners' primary residence. In New York that counts for a lot of property, possibly up to 43 percent of all investor purchases according to recent investigation by  The Real Deal.

Designed to funnel money back to an ailing transit system, there’s no doubt that the city’s infrastructure does need work. The subway system at times seems stuck in the ’70s, but conflating luxury real estate, which has been in rough seas for some time, with MTA repairs, would only deter more money from pouring in to the city.

Chicago hedge funder, Kenneth C. Griffin’s purchase of a $238 million apartment was one of the catalysts for increasing the P-a-T tax, but owning a second home in a thriving cosmopolitan city is hardly unique to New York. Imposing a tax would have only driven investors elsewhere.

"The recurring pied-à-terre tax proposal lost momentum," REBNY President John Banks said in a statement provided to Gothamist, "after people began to understand that it would reap far less than initially estimated and that the City had no ability to implement the tax. Most importantly, people realized that a recurring pied-à-terre tax would have a devastating impact on New York City's economy.”

That doesn’t mean Manhattan real estate tax is steering clear of luxury homes. The Mansion tax applies to homes over $3 million, affecting around a quarter of the housing sales in Manhattan, real estate appraiser Jonathan Miller or Miller Samuels stated in 2018, as reported by Gothamist.

Despite the short-term fluctuations, Manhattan real estate has always been a safe place for investors to park their cash. It’s also a great place to live and that’s why one can understand some of the complaints about the city’s “Ghost Towers” — high rise condos purchased by investors which sit vacant for months on end, their dark glass facades blending into night sky. This problem is most obvious along the 57th St corridor, often referred to a Billionaire’s Row, which houses several high-end, luxury residences.

“These buildings were targeting the Billionaires’ Club of the world,” attorney Pierre Debbas, the managing partner at the boutique real estate law firm Romer Debbas, told The Real Deal.  He has a view of One Beacon Court from his Midtown office. “Most nights, there are five lights on. It’s crazy.”

U.S. Rep. Carolyn Maloney concurred. “You can just ride through my district at night, the East Side of Manhattan, and you’ll pass complete buildings where there are no lights on. “They’re bank accounts.”

One of the reasons “Ghost Towers” and Pieds-à-Terre are so common is the glut of available properties currently on the market and the willingness of developers to do quick deals. If you can afford to buy in a down market, now is the time. By either using these properties on a part time basis, or renting them out, investors hope to weather the current real estate cycle and sell once it picks up again.

And, as we all know, it’s not a question of “if” New York real estate turns but “when”.

Comment

Lessons Learned: Amazon Quits NYC

Comment

Lessons Learned: Amazon Quits NYC

There’s little doubt that both Amazon and New York City will both do just fine without each other, but even for a city as resilient as New York, losing the massive online retailer hurts.

Regardless of where you fall on the issues that caused Amazon to pull out, their proposed presence in Long Island City galvanized real estate in the area like never before.

 

The good news for buyers who went into contract on condos in hopes of great appreciation is that Amazon didn’t hang around in announcing their decision to quit. Thus, for most, there is still time to cancel their contracts. But, of course, that’s very bad news for the brokers involved in the deals.

 

There was a 99-percent jump in signed contracts in Long Island City and neighboring Astoria for home purchases between September and February, according to building and listing information portal Online Residential, as relayed in the NY Post. The signed contracts also resulted in a huge spike in dollar value of the real estate, over 100-percent, again according to Online Residential. The 85-unit Corte condo at 21-30 44th Drive saw 39 contracts signed in the Nov. 13 to Feb. 13 period. And Bond, a 42-unit condo at 46-20 11th St., had 14 signed contracts during that time.

 

Overnight, Long Island City was transformed from a high-rise commuter zone into a major player in its own right. Buyers that may have perhaps been considering Brooklyn or elsewhere started to look at Queens. The infrastructure was also due to undergo a major facelift: a 600-seat school and 3.5 acres of public, open space along the waterfront at Anable Basin, to name but a few proposed changes. While Amazon was due to receive $3 billion in tax breaks abatements and grants, the state would have reportedly earned $14 billion in tax returns, and the city would have received more than $13.5 billion in tax revenue over a 25 year period according to NY Curbed.

 

But real estate and its knock-on effect is where the immediate hurt will be with other companies and business now rethinking plans to move to LIC with Amazon’s decision not to build.

Yes, New York still is one of the world’s major cities and real estate and business will continue to boom and grow here but Amazon and NYC were and are a great match, which is why Governor Cuomo is still working hard behind the scenes to try and get the company to rethink its plans.

 

A company like Amazon didn’t decide to move to New York without doing some research and numbers crunching. The fundamentals that almost brought Amazon to the Big Apple are still there for other companies. Now, perhaps, chastened by Amazon’s decision to eliminate 25,000 high paying jobs, and witnessing a real estate boom dissipate, politicians may choose to negotiate a little more tactfully next time.

Comment

As NYC stumbles gentrifying Brooklyn can’t slow down

Comment

As NYC stumbles gentrifying Brooklyn can’t slow down

Despite headline grabbing, record breaking condo sales , the general trajectory of  Manhattan’s real estate market since 2015 has been downwards. An overabundance of new condos and rising interest rates have turned much of The Big Apple into a buyers’ market. Up and coming Brooklyn, however, has been bucking the trend. While frothy Manhattan and trendier parts of BK hit stratospheric sales prices a few years ago, gentrifying neighborhoods, it seems, have only just gotten the memo.

Constatine Valhouli, co-founder of the real estate analytics firm Neighborhood X, told CNBC that Brooklyn has become its own ecosystem in terms of living and working. Residents no longer feel the need to live near Manhattan. Thus, traditionally blue collar or low-income neighborhoods such as Sheepshead Bay, Sunset Park, Crown Heights, Bay Park and Coney Island have seen major developers bring their bulldozers and excavators to town.

“Ten or fifteen years ago, Brooklyn was oriented towards jobs based in Manhattan," Valhouli said. "Today, that is no longer the whole picture, as there are significant employment clusters in Downtown Brooklyn and Sunset Park.”

In a Bisnow article entitled, Brooklyn Is Now The Real Estate Investment Darling Of The City, an Ariel Property Advisors sales executive recently stated, “What we’ve seen in the past year is people looking for simply stable cash flow. We’ve seen less development transactions … more stable, multifamily, affordable transactions, in-place cash flow. There’s still huge demand for rental housing, [and] within rental housing — affordable housing. And, frankly, if you look at the condo inventory in Brooklyn, there is still not a lot of supply.” Meridian Investment Sales Director Richard Velotta said in the same article: “I think people are betting on fringe areas [like Bushwick and Bedford-Stuyvesant] continuously getting better.”

No area in Brooklyn seems to be mentioned more frequently these days than Sunset Park. The $1 billion redevelopment of Industry City has sparked millennial energy throughout the neighborhood. Its proximity to Park Slope has had a knock-on effect with people priced out of the Slope now considering Sunset Park as a viable alternative.

Nearby Bay Ridge has also enjoyed the Sunset Park spill over. Known historically, along with neighboring Bensonhurst as an Italian neighborhood, the influx of Asians, Eastern Europeans and Central Americans has brought culture and food to the area as well as buyers and renters looking for deals on cheaper accommodation and a chance to be close to the water.

Flatbush and East Flatbush were always thrumming, heady havens for Caribbean culture and small businesses. Brooklyn College is one of the area’s most famous features, with an influx of students both local and international. Now developers, investors, and residents are taking note of the neighborhood’s potential. Cheaper rents are a big lure. According to ny.curbed.com, “The median rent in East Flatbush hovers around $2,100 and in Bed-Stuy around $2,499; that’s markedly less expensive than Brooklyn’s overall median rent of $2,539 and New York’s overall median rent of $2,677.”  The area is within striking distance of Prospect Park, has great subway access, and hordes of pre-existing townhouses. Add new condos to the mix and an increasingly diverse population, and one of Brooklyn’s best kept secrets is seemingly out of the bag.

So, while some of NYC’s more established neighborhoods wonder where the bottom of the market is, for many of Brooklyn’s former hard scrabble areas, the only way appears to be up.

 

 

Comment

Why 2019 Could Be An Amazing Year To Buy NYC Real Estate

Comment

Why 2019 Could Be An Amazing Year To Buy NYC Real Estate

New York real estate always rises. At least that has been the overwhelming trend since 1940. There’s no reason to think it will change. However, the combination of rising interest rates, the new tax law, wage stagnation, political uncertainty and over saturation of new condos means you might prefer to consult with your tea leaves rather than draw any firm conclusions about the NYC real estate market in 2019. Kidding aside, while difficult to predict market trends for the new year, here are a few strategies to keep in mind that will ensure you get as good a deal as you can.

Firstly, if you are thinking of buying a condo, the great news is that there are deals to be had. The glut of new construction means that developers will be open to offers and willing to negotiate. In Manhattan, according to The Real Deal , the inventory of new condos is expected to hit 7,900 units, double that of the last few years, according to appraisal firm Miller Samuel who predict a sales backlog of 4.5 years. A frenzy of permit filing occurred back in 2015, when there was a rush to get them in before the state’s 421-a tax abatement expired in January 2016. The effects are now being felt. The neighborhoods with the newest construction will be the Financial District, South Street Seaport, Lower East Side and East Village.

In Brooklyn, StreetEasy predicts the Downtown area will profit most from the L Train shutdown. Its abundance of luxury buildings, transportation and phenomenal rate of new construction (1000 new units came on the market in 2018) will make this comparable to Williamsburg and a great place to buy with developers again likely to cut deals. There are many Brooklyn areas seeing condos take to the skies with cranes dotting the once low-rise landscape. Crown Heights and Bed-Stuy are going through a phenomenal growth phase with new coffee shops and vegan eateries – harbingers of gentrification – on every thoroughfare.

Elsewhere, the Mott Haven section of the South Bronx is morphing at an alarming rate. Long Island City in Queens, buoyed since Amazon’s announcement to locate there, has seen condos selling at a phenomenal clip. Expect surrounding areas and those with an easy commute by subway to also be affected.

Amazon’s choice to pick NYC as one of its two new HQs highlights the city’s enduring allure and why it has continued to grow, despite fluctuating market conditions. It’s also why Google recently announced a major expansion in the city and why developments such as Hudson Yards and Essex Crossing continue to get funded. The Big Apple is the media and financial capital of the world and thus the jobs are here. Momentum breeds momentum.

CEOWORLD Magazine stated that all is not lost for sellers in 2019. Those that stand to gain the most will be owners who purchased their properties over five years ago, realizing a profit margin of 50 percent. They will have the equity to buffer any slowdowns and will be in a great position if they want to buy elsewhere. Taking this one step further, all cash buyers, as always, will stand to gain most from rising interest rates and the abundance of new construction. For investors, selling long held property by doing a 1031 Exchange (deferring tax payments) into new construction could be a savvy move, particularly when developers are so willing to negotiate.

So, don’t believe the hype — 2019 could be the best year ever to invest in New York City real estate.

Comment

Manhattan’s Ultra Luxury market is booming. But you need to be a billionaire to play.

Comment

Manhattan’s Ultra Luxury market is booming. But you need to be a billionaire to play.

Manhattan’s Ultra Luxury market is booming. But you need to be a billionaire to play.

 

While the luxury real estate market has had a turbulent year, high above the clouds, in the rarefied calm of the $25 million and up strata, deals are being done at a record clip.

This is according to a new report by London-based agency Knight Frank, as first reported by Bloomberg. The global head of research at the agency, Liam Bailey, noted that 17 geographical sales areas had the most activity in the ultra-luxury market. “There are a lot of people making a lot of money, and they’re willing to pay significantly more to access the right product,” Bailey stated. Of New York he said, “the story has been about the slowing market. But the background is that the market has actually grown in sales, but there’s just that much more property to purchase.”

The data supports his statement. The very top end of the NYC market has increased by 50 percent between 2015 and 2017. In the last twelve months alone, there were 39 recorded sales above $25 million, totaling $1.5 billion.

The Wall Street Journal dug deeper into some of the deals, unveiling tactics used by some brokers to stimulate interest. A six-bedroom penthouse at the iconic Robert A.M. Stern-designed 70 Vestry went into contract in July 2017. At the time it made history as the most expensive sale ever in Downtown Manhattan. It finally closed earlier this week at a reduced price of $55 million. In the time since, the 70 Vestry penthouse has ceded the record to a property near the High Line at the Getty in West Chelsea, which sold for $59 million.

All this talk of record sales and affluent buyers keeps the press clamoring to write stories about these hyped-up residences for the rich. For the uber wealthy, the idea of brinksmanship, of owning in an exclusive building and brushing shoulders with celebrities, is appealing. But it’s not just ego at work here. The buyers in this arena can play at this advanced level precisely because of their extreme business acumen. Both properties — at the Vestry and the Getty — underwent steep reductions in price only after lengthy negotiations. The fact remains that New York real estate is one of the safest places for high flyers to park their cash.

According to research published by Curbed, Manhattan property prices started to climb in the mid-1940’s and have never stopped their ascent. Excepting the 2008 financial crisis, it’s been a predictable market of non-stop growth, with the last ten years especially seeing exceptional growth: condos and co-ops up by 27.9 percent and townhouses by an amazing 58.3 percent between 2007 and 2017.

Keeping the sales at the Vestry and Getty in mind, the recent spate of ultra-luxury transactions could be down to a simple idea: the very wealthy want bargains too and there has never been a better time to buy property. Many high net worth individuals buy property all cash, which gives them wiggle room in a negotiation. It’s something most billionaires are well accustomed to – if only that were true for everyone else.

 

 

Comment

Hudson Yards Is Changing The Face Of New York Real Estate

Comment

Hudson Yards Is Changing The Face Of New York Real Estate

Before Amazon announced their Long Island City HQ, before Google announced an expansion and when Brooklyn townhouses were still being bought by Brooklynites, the Hudson Yards Project was already in the works. In fact, an early proposal dates back to 1996 when the area was being touted as a possible site for the 2012 Olympics. A rezoning effort in 2005 led to its current incarnation with other developers since crashing the party. The largest ever private real estate development in the United State, let alone Manhattan (it runs from 30th Street to 41st Street between 11th and Eighth Avenues), is no mere mixed use collection of high rises. It is a city within a city.  Gleaming facades of structures, many nearing completion, shimmer like liquid mercury off the Hudson. Elsewhere, other multi angled towers take shape, amid scaffolding, cranes  and layer upon layer of concrete. The project is a testament to enduring might and perseverance of the Big Apple. If recent sales are anything to go by, despite fluctuations, it is proof that luxury real estate will always be in demand.


When complete, the site will hold 18 million square feet of office, retail and residential space. All will benefit from one another with workers keen to forgo the commute and live within walking distance to their jobs. It is already proving a boon to residential real estate sales in the city. Here are some of the key condo developments at Hudson Yards.


15 Hudson Yards

The first residential building in the development is nearing completion and launched sales of its 285 apartments in September 2016. Since then, the most of condos in the 88 story building have already been sold. Designed by Diller Scofidio + Renfro in collaboration with the Rockwell Group, the development includes  a Neiman Marcus’ fashion director, Ken Downing designed and styled model home. All the interiors in the home can be purchased at the nearby Neiman Marcus store at Hudson Yards. In fact a Neiman Marcus microsite has been launched for that express purpose.


35 Hudson Yards

This mixed use, building will include 143 residential units, rising to super-tall status at just over 1000 feet. The building was designed by SOM’s David Childs and will be completed within the next 12 months. The building will also contain an Equinox club and spa and an Equinox hotel, so the attraction for residents to live there is clear. Condos are expected to start at around $5 million.

541-545 West 37th Street

Plans were filed by developers, The Chetrit Group in September 2016 with CetraRuddy as the architect. Last year a rendering was revealed for the 622-ft building which will consist of a 421 room hotel with 131 condos above that. This is nowhere near completion but as other condo developments sell out expect the newer projects to follow suite.


470 11th Avenue

Known as Hudson Rise, this 400 Unit condo development by Siras DevelopmentBlackhouse and Kuafu Properties recently released renderings. In additional to residential spaces it will include a full service hotel and retail spaces. Located directly across from the Javitz Center and immediately west of the new Hudson Boulevard in the heart if Hudson Yards. 


Other Residential Developments

The Port Authority revealed plans to build a nine-story building on land it owns at 431 West 33rd St back in 2014 but as yet a developer has no been named and the project remains in limbo. A large number of rental developments will also occupy the area (445 West 35th St530 W. 30th St., ) with some projects still in the planning stages while others are near completion.


The key to predicting the success of Hudson Yards condo developments may not be in seeing how quickly buyers sign on during construction but rather, how quickly financial firms relocate from Wall St and Midtown to lease commercial space. After all, it’s their execs who can afford the development’s luxury condos. If recent announcements are anything to go by the future looks good. Giant Private Equity firm KKR & Co. kick started the movement back in 2015.

“KKR’s decision to move to the west side was a pivotal moment,”  Stephen Winter, vice president of commercial leasing at Related, a major developer of Hudson yards told the Wall St. Journal “and we have seen great momentum with other marquee financial firms now making the move as well.”

A new era of New York real estate beckons.

Comment

Tech’s Heavy Hitters Choose New York, Signaling A New Era Of Real Estate Growth   

Comment

Tech’s Heavy Hitters Choose New York, Signaling A New Era Of Real Estate Growth  

Never doubt New York. Just when the real estate industry appeared soaked from downpours of pessimism, two pieces of news brought out the sunshine. Any notions that the current malaise could be long term were dispelled when Amazon chose Long Island City, Queens as one half of its new headquarters and Google announced they will significantly increase their Manhattan footprint.

 The moment Amazon’s news was revealed, the condo gold rush was on, with brokers selling units sight unseen via text message and other’s packing client’s into vans for buying trips across the East River. With an expected 25,000 new jobs to be created in the condo heavy enclave, a short subway ride ride away from Manhattan, LIC has changed from a buyer’s to a seller’s market in an instant. It’s done for condo sales what the fictitious Willy Wonka announcing tickets to tour his factory did for chocolate bar sales.

The Wall St. Journal, told of scores of buyers being turned away after agents were overwhelmed. 

“Buyers are hoping it will become the next Silicon Valley and want to be in on that,” a broker for a condo building in the area said. “Clients I hadn’t spoken to in seven or eight years started texting me,” Eric Benaim, president and founder of an LIC brokerage enthused. “I sold 20 apartments via text.”

Amazon’s news is only likely to encourage other companies to consider LIC home.

“The same thing happened in Midtown South and the Meatpacking District. Tech behemoths like Facebook and Twitter made those submarkets their homes. And then the mid-tier and smaller tech companies followed suit,” the in demand Benaim told The Real Deal.

The knock on effect for neighboring Queens neighborhoods could also be immense. Though condo prices in Long Island City are generally higher than the rest of Queens, well paid employees who don’t mind a train stop or two could buy single family homes with yards, basements and attics and start to transform neighborhoods like Sunnyside, and Astoria. Even Brooklyn and parts of Manhattan could benefit from the new residents.

It’s worth taking a deep breath before rushing out and buying condos in LIC, though. In the short term house prices are bound to increase but Amazon said it plans to build its headquarters in phases, with the first $5 billion spread out over a period of 15 to 17 years. That’s time to go house hunting in neighboring areas with trees and parks and spend cash on renovations.

Google seem set to add almost half as many new jobs as Amazon in Manhattan’s pricey West Village. Parent company Alphabet Inc is close to leasing or buy a 1.3 million square-foot office building at St. John’s Terminal, the Wall St. Journal reported. It would mean that both Silicon Valley juggernauts would employ a combined number of around 50,000 workers, an adrenalin shot in the arm for the real estate industry. Jeff Bezoz announced that employees will be paid an average wage of $150,000 which, is probably enough for a single person and definitely a couple to get on the real estate ladder in some fashion.

What Amazon and Google’s announcement does for New York, other than give it a short term confidence boost, as if it needed one, is continue the narrative of rebranding. Known once as a rough and ready city, where crime and poverty ran rampant, it’s becoming tech centric. Of, course, many would argue that gentrification and the increasing cost of living has come at a huge price socially and culturally. However, if it is to compete with other cities attracting Silicon Valley’s big shots and scores of newer start-ups, announcements like the ones from Amazon and Google are essential for its growth.

 

 

 

 

 

 

Comment

The Lower East Side is booming, bringing buyers from the rest of Manhattan and beyond

Comment

The Lower East Side is booming, bringing buyers from the rest of Manhattan and beyond

Someone clearly forgot to tell the Lower East Side that Manhattan real estate is experiencing a slow down. As thousands of new condos near completion in the once gritty neighborhood, in a project known as Essex Crossing, investors and owner occupants alike have been snapping them up. Prices have risen recently too with in some developments close to $2000/sq. ft. Once a bastion for impoverished immigrants and then, in the 1970’s and ’80’s, punk rock, drugs and chaos, glimmering buildings such as the 94 unit, 196 Orchard and the 45 unit 150 Rivington St. have entirely changed the complexion of the once desolate neighborhood. A number of rental projects and commercial spaces (retail, a movie theater etc) have already been completed. In total, over 20 developments,to be completed by 2024, will take to the skies. Some will be simple 4-10 unit buildings while other will be glassy condos in the heavens.

The first residents moved moved in almost a year ago. “The response has been so positive,” Isaac Henderson, the project manager for Essex Crossing, told Curbed NY. He referred to the fact that the Rollins, (named after saxophonist Sonny Rollins),the first market-rate rental, is “fully leased up,” as well as the crowds at the recently-unveiled Target, as proof. “The demand has been tremendous, and people are super-excited.”

Cited by industry professionals as “The next destination”, what makes the Lower East Side so appealing is that “It is the only neighborhood in New York that has yet to see a wave of development,” with an entirely new infrastructure arriving almost at once. The summer months saw a frenzy of activity, with a number of high priced condos going into contract. A unit at One Manhattan Square sold for around $13 million, according to developer Extell Development. A penthouse at 215 Chrystie Street asking $23.5 million also went into contract for "close to the asking price," according to the director of sales. He said two other penthouses in the building asking over $18 million are also in contract.

“This is the cool spot to be,” Mayor De Blasio said recently of the LES “Sure you can get more value uptown, but good luck trying to convince your friends to come that way on the weekends. You’ll save a ton of money on Ubers and cabs by living in the midst of the action. Having the best that New York City has to offer in your front yard—who wouldn’t want that?”

It’s not just the young and hip with parental wealth or Wall St. jobs who are flocking to the neighborhood, either. Older established investors, with an eye for a deal and a desire to live somewhere vibrant have also been buying. The walkability factor of the new community is a big draw. The developer, Charles Bendit, co-chief executive office of Taconic Investment Partners LLC, the firm behind 242 Broome Street, said a number of buyers came from the Upper East and Upper West sides and the suburbs, and were looking for a place with history and a “neighborhoody” feel. One such buyer, according to the Wall St Journal, is Dr. Randall Wiston, an oral surgeon from White Plains, and his wife Dana, two empty nesters who purchased a three-bedroom penthouse listed for more than $3.7 million at 150 Rivington.

“It is a vibrant, young, fun, cool, hip place,” said Dr. Wiston, who is 56 years old and thinking ahead to retirement. Appraiser Jonathan Miller of Miller Samuel feels that while other areas of Manhattan may be sluggish, the smart money is heading downtown.

“It shows that the Lower East Side is one of the last value plays left in Manhattan,” he said.

Comment

It Now Costs An Average Of $1 Million To Live In Brooklyn

Comment

It Now Costs An Average Of $1 Million To Live In Brooklyn

New third quarter market reports from several brokerages all appear to be saying the same thing — the average home price in Brooklyn is now over $1 million. High quality new developments have been pushing prices up in the borough for several years. Brokers have continually tested the waters with ever increasing prices only to find willing  buyers. The mix of condos and townhouses in upscale neighborhoods has driven the Brooklyn market to such an extent — $1.052 million was the average price in Q3 2018 —  that now all neighborhoods may be out of reach for many Americans.

"Both of these overall markets have enjoyed record-setting top-line price numbers for the last two years, but now both of them, like Manhattan, are seeing sliding sales as a function of affordability," said Jonathan Miller, president of appraisal firm Miller Samuel who authored the reports.

In Brooklyn sales of luxury homes at $2.5 million were flat for the last quarter, implying that traditionally less expensive neighborhoods saw increased sales prices. This is borne out by the data which shows Bed-Stuy, Crown Heights and Lefferts Gardens showing sales up by 13 percent and the average price Per Square Foot up four percent (now its $772 PSF).

Bed-Stuy and Crown Heights in particular has seen a number of new developments on its western side, towards Prospect Park. Franklin Avenue, a lively thoroughfare of restaurants and bars. It  has been the hub of development activity. 627 Dekalb Condominiums is a new seven-story 35-unit building on the corner of Dekalb Ave and Nostrand Ave., which has both market and below market purchase opportunities. The starting price point at $610k for a 1 bedroom is below where the current market demands. Renderings for another Crown Heights rental nearby have just been released. The two red brick rentals on Saint John’s Place have a total of 200 apartments and that are being marketed separately, despite sharing a lobby and amenities. Twenty percent of the units are affordable. The fact that so many higher end rentals are being built is an indication of the how in demand the once gritty neighborhood is. 

This is reflected in the increased sales prices in the area’s traditional stock - townhouses. In neighboring Bed-Stuy, a home just shattered the sales records for the area. The John C. Kelley mansion at 247 Hancock Street, recently sold for $6.3 million, almost doubling the previously held sales record for the area of $3.3. million set in 2017.

A scan of the NY Times real estate section shows numerous Crown Heights townhouses listed north of $2 million. A fixer-upper at 1187 Dean St is on the market for $2.290 million. Another at 762 Lincoln is asking $2.195 million and 1228 Dean St, perhaps ambitiously, is asking $2.6 million.

On the upper end of the spectrum, a Brooklyn townhouse at the 30-story Quay Tower at Brooklyn Bridge, is in contract for over $20 million. If the deal closes, it will be the borough’s most expensive home sale as reported by the Wall Street Journal.  The current holder of that accolade is a Cobble Hill townhouse which sold for $15.5 million in 2015. Actor Matt Damon is in contract to buy Brooklyn Heights townhouse which was asking $16.64 million.

Must be nice.

 

Comment

Millennial Mania: The Upper West Side and Battery Park

Comment

Millennial Mania: The Upper West Side and Battery Park

Millennials, often thought as impoverished freelancers, have managed to infiltrate some of the most expensive areas in Manhattan. They are, according to a recent report by RentCafe, setting down roots en masse in Battery Park City, which saw a massive 54.5 percent increase in millennial residents over 5 years with many transitioning into homebuyers. The neighborhood is currently of the most expensive zip codes (10282) for renters in the US.

 Once a deserted wasteland, which was built on a landfill, the area now is buzzing with a marina, stores, restaurants (centered around the sprawling Brookfield Place) parks and dozens of new rental apartments and condos. It’s particularly lively in the summer. Chances are that the millennials invading BPC have little to do with the clichéd avocado on toast and man bun sporting hipsters, tapping away on lap tops in coffee shops in other parts of the city. The neighborhood is expensive but its proximity to Wall St makes it a perfect location for those working in the financial sector. According to the NY Times the average sale price of a one-bedroom in 2013 was $665,475. In 2017 it was $814,278, and this year, through July, it was $865,170. The cheapest rentals start at around $3000/month for a studio, going up to $35,000 a month for a four bedroom penthouse.

 Open spaces and child friendly activities make it a perfect location for young families but new developments are limited, with the area hemmed in by the West Side Highway and The Hudson. Instead, older buildings such as The Liberty Residences — three condos and apartment buildings  located on Rector Place, have been completely renovated to modern standards.

 The city’s largest catchment of Millennials however is at the nearby Financial District where a mighty 71 percent fall into 19-35 year old demographic.

 The city’s is reinvention from middle aged to millennial has continued in neighborhoods which any self respecting person under the age of 40 wouldn’t have been caught dead in years ago. The Upper West Side is a case in point where the millennial population has jumped by nearly 48 percent.

 The lure of the UWS has long been established. Leafy brownstones and a close proximity the Central Park and Lincoln Center but for the young and hip the bigger  (and more affordable) draws are places such as the dessert eaterie Milk Bar, the brunch haven, Jacob’s Pickles. There’s also an abundance of dormitory type/extended stay residences housing students from Columbia University and Fordham University as well as out of town visitors and those looking for a crash pad in the city.

 If you really want to put down roots though in the neighborhood and have the money, all roads point to one building, Robert A.M Stern’s Architect-designed condo condo building — Two Fifty West 81st St near the restaurant Zabar’s which is near completion. Clad in his trademark limestone, the building is a statement of upscale elegance with light filled living rooms, bay windows and Juliet balconies looking out over the city. There are a slew of amenities (music room, sports court, gym, roof top terrace). At the time of writing the 31 condos are mostly sold out. A three bedroom apartment priced at $5.25 million and a two bedroom for $3.875 million remain.

 “Finding sites on the Upper West Side is nearly impossible,” Kenneth Horn, the president and founder of Alchemy, the developers of the building told the NY Times, because broad swaths of the area are under landmark protection.

 Unlike gleaming glass towers downtown, the classic feel of the building suits the environment which is filled with classic New York architecture. “We wanted to blend into the fabric” of the neighborhood,” he said.

 Closer to the water, however, Waterline Square, a triumvirate of starchitect, amenity rich glassy towers is now complete. Let’s not forget that the  ultra luxury boom on the UWS was kicked off with another Stern designed building, 15 Central Park West, completed a decade ago and still commanding the highest prices per square foot in the city. Of his latest development the outspoken architect said, “I don’t think this building is being designed for Russian oligarchs to come jazzing in for two nights and picking up a little smoked salmon,” A former dean of the Yale School of Architecture, Stern is confident that his buyers will actually occupy their residences on a full time basis and is proud of his old school ethos.

 “You can tell your readers and tell the developers, no glass. They’re safe with me if they want a masonry building,” he told the Times.

Comment

Manhattan’s luxury market records its best post-Labor Day week in over a decade. What does it mean?

Comment

Manhattan’s luxury market records its best post-Labor Day week in over a decade. What does it mean?

The market’s up. No, it’s down. It’s rebounding. No, its crashing, The confounding reports about the state of Manhattan’s luxury market, at $4 million and above, are enough to send many folks to a fortune teller to try and get some clarity. What cannot be denied are the facts. One in particular will surely stop people from looking for a crystal ball.

According to a recent weekly market report, highlighted in The Real Deal,  Manhattan’s luxury residential market recorded 20 contracts during the week after Labor Day, the best post holiday week since 2006.

The priciest deal of the week was the $15 million sale of  a Tribeca warehouse at 71 Laight Street. The building’s duplex penthouse had been converted by by Taconic Investment Partners. The same market report last week, however, showed only 13 signed contracts but it was largely due to the Jewish holiday on Monday and Tuesday. Last week the the priciest property was also sold for $15 million, a brownstone located at 18 West 75th St. It was initially listed for $19.5 million in October 2016.

It’s wise to remain level headed about the latest figures. The steady sales show signs of optimism but the overall trend, according to a recent report for second quarter of 2018 shows sales falling to the tune of 17 percent compared to the previous year,  while inventory is on the rise. Average sales price also fell 5 percent to 2.1.million. The massive stockpile of new condos and hesitant foreign buyers, along with the new tax code, has, it seems, stymied sales.

“The market is resetting to a lower, more long-term level of activity,” Jonathan Miller, CEO of the appraisal firm Miller Samuel, told CNBC , referring to the post Labor Day report. Surging inventory will, no doubt be a major factor moving forward. There is currently a 16 month supply of luxury units according to the report conducted by Miller Samuel. Many industry experts feel the tax code also has a lot to answer for.

“Everyone is just dancing around the impacts right now,” Miller said. “I don’t think it will really be clear to people until they write that (tax) check next April.”

With available condos overflowing and sales slumping, the general thinking would be that houses prices would also be in the toilet. Not so fast. As of August Manhattan real estate was the most expensive in the US per square foot beating out Silicon Valley. Some city properties even topped $10,000 per square foot, according to a report profiled in CNBC. The report by data analytics firm NeighborhoodX, shows that real estate in New York City's central borough is more than twice as expensive as any other city in the US when measured on a per square foot basis. According to NeighborhoodX, Manhattan homes average of $1,773 per square foot.

So how can the Manhattan market be in free fall on one hand but super expensive on the other? The answer lies somewhere in the middle. Yes, there is a lot of supply of properties which has slowed down the market but demand to live in Manhattan is still there. It’s just that buyers are spoiled for choice and aren’t buying at the same clip as in 2014 or 2015. As recent sales show, though, they are still buying. Jonathan Miller is right, the Manhattan market is not frothy currently but it’s still alive.

With inventory high, now is probably a good time buyers to look and negotiate. To prove the point, Mansion Global highlighted two such cases. A penthouse unit at Manhattan’s prestigious 432 Park Avenue sold for $30.79 million, a 24 percent discount from its original $40.75 million asking price. Further downtown, a penthouse at 160 Leroy sold for $43.5 million, a 14 percent discount from the $51 million for which it was first listed. Between Jan 1 and May 31st of this year, 58.6 percent of luxury homes (priced at $4 million and over) were discounted between first being listed and closing, according to StreetEasy data. The median discount was just shy of $1 million.

Sellers, especially those selling older homes, need to have their properties in immaculate condition in order to compete with the glut of shiny new condos.  When inventory eventually drops, which it will, the market will pick up steam again and the same deals will not exist. My guess is that there’ll probably be a lot of people kicking their heels, saying, If only…

Comment

$40M Cash Sale & What it Means for Upper East Side Real Estate

Comment

$40M Cash Sale & What it Means for Upper East Side Real Estate

An Upper East Side town house just sold for $40 million. Here’s what it means for the neighborhood

An Upper East Side townhouse has just exchanged hands for over $40 million cash amid a shroud of secrecy. The deal, as reported by The Wall Street Journal, and NY Post,  is one of the year’s priciest deals at a period where NY Real Estate has been against the ropes with surging inventory and falling prices. The buyer had gone to great lengths to keep their name private (though several news sources have outed him as David Koch).

“It was one of the most concealed transactions I’ve ever seen — all through a trustee in Delaware,” someone familiar with the deal told The Post.

What hasn't been a secret is the seller’s identity. The property is a parcel of six landmarked row houses purchased by developer Joseph Chetrit in 2007 for $26 million. He combined them into three, skirting the Landmarks Preservation Commission by maintaining the properties facades while dramatically altering the interiors. As investments go, they turned out to be incredible, earning almost 5 times their original purchase price in a decade. The house in question is located at 110-112 E.76th St. A second mansion is located at 118-120 E.76th St and is on the market for $39 million while the third at 118-120 E.76th St. is not yet listed.

The sold house is 36 feet wide and has 15,000 square feet, spanning seven levels with eight bedrooms, ten bathrooms and four half bathrooms. Despite updates and contemporary furnishings, the property is old school New York luxury with marble, onyx and brass finishes. A wall of glass on the ground floor overlooks a limestone clad courtyard.

The buyer, apparently fell in love with the home while visiting it as part of the 2018 Kips Bay Decorator Show House, with the interior designs kept on, with the designers permission,  from the event.

The sale marks another piece of positive news for the Upper East Side, following Street Easy’s Q2 Mark Report in July which showed the UES the only buoyant neighborhood in Manhattan. According to the report, The Upper East Side was the only submarket where prices rose. Home prices in the neighborhood which includes the UES submarkets of Lenox Hill, Yorkville, Carnegie Hill, Upper Carnegie Hill as well as UES neighborhoods, increased 3 percent to $1,058,121. Prices dropped in every other submarket; in Midtown, they dipped to 2016 levels, falling 3.3 percent from last year to $1,206,268. Earlier this year a mansion at 19 64th St sold for $90 million after selling the previous year for $79.5 million after the Chinese conglomerate that purchased ran into financial difficulty.

The reasons for the Upper East Side’s growth can be squarely attributed to the opening of the Second Avenue subway. Fairly affordable neighborhoods, such as Yorkville, were primed for gains. In addition, numerous condos and apartments have flooded the area.

There is a chance that after a long wait, the rest of Manhattan may soon be able to catch up.

“The dynamics of the city's real estate market have favored renting over buying for some time now, though the tide may be starting to turn," says StreetEasy Senior Economist Grant Long in the report. “New Yorkers with the means for a down payment now have more options to choose from than at any point in the past seven years — and this trend isn't just contained at the high-end, where we've been seeing rising inventory for several years now. Heading into the fall, buyers are in a strong position to strike a deal and can afford to shop around, wait for the right home, and negotiate aggressively."

 

Comment

Don’t expect Bed-Stuy real estate to slow down, a new report predicts

Comment

Don’t expect Bed-Stuy real estate to slow down, a new report predicts

If you’re wondering if there is any more appreciation to squeeze out of Brooklyn, the answer is yes. But you will have to choose your neighborhood carefully. According to Zillow Bedford Stuyvesant, tops the list. The brownstone heavy neighborhood appreciated over 10 percent last year and is forecasted to continue its assent skywards with a further 7.5 percent appreciation in 2019.

With median home values currently standing around $816,000 and the median square footage approaching $900, continued in investment in up and coming residential development, as well as commercial development (Starbucks, the harbinger of appreciation just announced its first foray into the neighborhood), means that that Bed-Stuy’s value will continue to grow.

Also spurring the growth is the fact that the neighborhood, which has been predominantly African American and Caribbean for the last fifty years, is surrounded by higher priced areas that have already undergone rapid gentrification. To the north of Bed-Stuy is Williamsburg, one of Brooklyn’s priciest neighborhoods and to the west is Prospect Heights which neighbors Park Slope, one of the Borough’s most affluent neighborhoods.

For years Bed-Stuy has been notoriously poverty and crime ridden, earning to moniker “Do Or Die Bed-Stuy” The onset of gentrification has slashed crime in New York as a whole, Bed-Stuy being no exception. Bloomberg reported earlier this year that Tompkins Houses in Bed-Stuy along with the city’s 325 other public-housing developments showed a 22 percent drop in murders, robberies and shootings since 2013. At Tomkins, the article reported, crime is down 45 percent since 2013, with no murders and just two shootings in each of the last two years. New York has  outperformed Chicago and Philadelphia, both of which have larger populations than the Big Apple.

However, a report a year ago, still showed that despite soaring housing costs, Bed-Stuy residents, had a  higher poverty rate than the rest of the city. It actually grew by about 13 percent between 2009 and 2015.

"It's all about gentrification," resident Meca Killiebrew, 35, a long term resident, told the New York Daily News "People come in with large incomes and landlords are getting tenants who will pay anything.” Her analysis is born out by statistics. According to a report in 2017 entitled, “An Economic Snapshot of the Bedford Stuyvesant Neighborhood,” newer residents who are largely white and younger have median household income is $50,200 while long-time residents it is only $28,000. As this trend continues, along with a booming business growth — up 73 percent since 2000,  and 77 percent between 2009-2017 — expect house prices to continue to rise.

Real estate development has both spurred and benefitted from gentrification. Notable residential multi- family buildings about to open include 335-341 Nostrand Avenue, a 24 unit project recently completed between Gates Avenue and Quincy Street. The development will consist of four identical four story buildings. 

Elsewhere, a seven-story residential property is being constructed at 376-378 Flushing Avenue containing 78 apartment units.

Coupled with these are the rapidly rising prices for brownstones which are tipping towards the $3 million mark in some places. In fact, the sale last year of 1 Verona Place for a record breaking $3.3 million changed the complexion of pricing in the neighborhood. A scan of the New York Times shows another property 6 Spencer Place currently priced at at $2,999,000 with several others around $2.5 million. Do-Die-Bed-Stuy? Perhaps Buy-Or-Cry Bed-Stuy is more apt.

Comment

Why NYC continues to be a “safe haven” for global real estate investors

Comment

Why NYC continues to be a “safe haven” for global real estate investors

Why NYC continues to be a “safe haven” for global real estate investors

Where real estate is concerned New York has always been a world unto itself. When the crash of 2008 hit, New York was far less effected than the rest of the country and bounced back quickly. Now, while other parts of the country have been registering double digit increases over the last couple of year, Manhattan, particularly on the luxury side, have seen drops. And while Manhattan has dropped large swathes of Brooklyn, the Bronx and Queens have seen dramatic gains. Now, if the the latest numbers are anything to go by, Manhattan’s correction of the last 2-3 years could be on the wane.

The July 4th sales last month in Manhattan’s luxury market remained relatively strong at a time when they are usually sluggish with the week seeing 20 contracts signed at $4 million, extending the market’s 23-week run with more than 20 luxury deals in the borough. A recent report from sales and research firm, Ariel Property Advisors showed that NYC apartment sales increased 64 percent in the first half of 2018, with six properties trading for $100 million or more.

Coupled with this, multi-family units in NYC began their recovery in Q2 2017 with research indicating a 14 percent increase over the previous Q2.  Indeed, multi unit properties in New York are considered something of a sure bet by institutional investors.

While it might be overly optimistic to say that these are green shoots and the NYC real estate roller coaster is about to take us on another upward trajectory, it goes to show that even while it has undoubtedly been a challenging time, the market is resilient. It’s why Forbes recently used the term “safe haven” for a reason why investors, both globally and domestically look at New York as one of the most secure markets in which to plant their cash.

There are many factors at play which could be pushing New York towards recovery. Multi family, certainly seems to be gaining momentum. This could be due to millennials preferring to rent rather than own, baling at the prospect of a long term mortgage requiring a sizable down payment. Also, with a tax bill favoring landlords over homeowners, there’s a greater appetite for multi family owners to invest.

Proof that the luxury market is still alive and ticking came from high end purchases in Brooklyn last week (ending August 4th) where 16 contracts were signed, split between 11 houses and five condominiums with an average price of about $3 million.  The highest was for a multi unit townhouse in Park Slope at 934 President St. which sold for $4.95 million. These sales are an increase from the week before when 12 contracts were signed worth about $39.3 million.

As a recent Street Easy report stated, however, a surge in inventory, which is expected to go on through the fall could see house price increases stagnate in NYC. However, the lower numbers could as Forbes predicted, spur an increase in sales activity, spurring a recovery. One thing appears to be certain: while domestically, a malaise may still linger over Manhattan, international investors continue to buy huge chunks of prime commercial property. Surely residential cannot be too far behind?

 

Comment

From corporations to couples: One Wall Street announces plans for luxury condos as millennials swarm downtown Manhattan

Comment

From corporations to couples: One Wall Street announces plans for luxury condos as millennials swarm downtown Manhattan

To look at the rendering for One Wall Street, a new luxury condo building being developed by Macklowe Properties from the shell of the old BNY Mellon and Irving Trust building, you may have a feeling of déjà vu. That’s because the high-rise, which is due for completion in 2020, was originally being designed by Architect Robert A.M. Stern (SLCE has since taken over the project). It looks uncannily like his other limestone clad buildings: 15 Central Park West, 30 Park Place and 70 Vestry.

 

Macklowe Properties and the sales team associated with the ambitious project are hoping that the same pixie dust that seems so liberally sprinkled over Stern’s recent projects will also bless One Wall Street. In fact, it seems to be part of a larger trend. A recent article in Bloomberg, noted the way other developers continually want Stern to repeat the successful formula he first laid down in 2008 with 15 Central Park West.

 

“Fifteen Central Park West changed real estate,” said Donna Olshan, president of Olshan Realty, Inc. and publisher of the Olshan Luxury Market Report, in the Bloomberg article. “All of a sudden it became extremely cool and elitist to live in that building, and it set the tone for condominiums that came after.”

 

Recent sales seem to support the Stern success formula. Amid a sales slump in downtown Manhattan, 70 Vestry has been one of the fastest-selling new condo buildings in the city with just a handful of condos remaining. According to StreetEasy, the ones available range in price from $7.95 million to $23.5 million. Two heavy-hitting condos priced at $50 million and a $65 million penthouse are in contract. The latter – if it closes near the initial asking price – could shatter the downtown Manhattan record held by the three-story penthouse at the High Line’s Getty condo.

 

Stern’s properties are known for their celebrity and high-profile clientele. Tom Brady and Giselle Bündchen were one of the first buyers to commit to 70 Vestry, getting the ball rolling on a wildly successful project. It is proof indeed that despite a saturated market and sluggish sales, if the right property comes along, people will buy.

 

On the other hand, One Wall Street faces some challenges if it’s to compete with its luxury limestone competitors downtown. Firstly, there’s the sheer size of the property. Of the 566 units, 304 will be studios and one-bedrooms, which are generally intended for single people and couples. These are not traditionally the most stable of buyers. Families have researched school districts, communities, children’s activities and aren’t likely to decide to move elsewhere in a hurry. Singles and couples often prefer to rent, giving them the leverage to move at the drop of a hat or at least at a lease’s end.

 

Also, with an average apartment price of $3 million, in line with the price of new condos for the area, finding single people who can either buy with cash or qualify for a mortgage in a down market could prove challenging. Many similar concerns, however, had been leveled at both 70 Vestry and 30 Park Place, and sales defied the skeptics.

 

In One Wall Street’s defense, its plush building perks are commensurate with what's offered by comparable downtown luxury residences. There are 100,000 square feet of amenities spread across multiple floors, including an enclosed pool and a 39th-floor roof deck. The building’s street-level commercial space will be inhabited by a brand-new Whole Foods.

 

And then there is the transformation happening downtown: a millennial invasion, as evidenced by the variety of new hotels, residences, restaurants and clubs. It’s all a far cry from the desolate nightlife and deserted weekends that typified the Financial District in the 80s, 90s, and in the immediate aftermath of 9/11. Stimulus packages after the attack attracted businesses and led to the reinvention of the South Street Seaport. The Howard Hughes Corporation controls 400,000 square feet in the district and is nearing completion of its replacement for the seaport’s Pier 17, an entertainment complex designed by SHoP Architects.

 

“We’re trying to eliminate the snow globes and ‘I Love New York’ T-shirts,” Saul Scherl, The Hughes Corporation’s president for the New York metropolitan region, told the New York Times. It looks like he’s achieved his goal. The population of Lower Manhattan has trebled from its 2001 numbers to 61,000 residents, according to the Alliance for Downtown New York, a business improvement coalition.

 

And crucially for One Wall Street’s mix of condo and one-bedroom units, the median age of residents in the area has declined to 32, with more than 62 percent of them between the ages of 18 and 44. When asked about their fears of selling condos in a sluggish market, the sales team for One Wall Street were bullish. “It’s a concern, but not for this building, which pretty much checks every box,” they told the NY Times. They may have a point.

Comment

Treasures Beyond Tribeca: Three Manhattan Neighborhoods About to Heat Up

Comment

Treasures Beyond Tribeca: Three Manhattan Neighborhoods About to Heat Up

One of the best things about living in Manhattan is the sense of discovery. There’s seemingly always something new to do or place to explore. Maybe it’s that chic café that opened down the block from your apartment that you’ve been dying to try? Or maybe it’s that antique bookstore across the street from your work that you finally visit during your lunch hour? Or maybe, best of all, it’s an entire neighborhood you stumble across that’s filled with luxury residences at reasonable prices? Sounds too good to be true? Think again – we have three such neighborhoods that are still ripe for the picking! So, read on to get the jump on these locales before they become trendier than Tribeca!

 

Yorkville

In 2016, StreetEasy predicted that Yorkville would become Manhattan’s “Hottest” neighborhood the following year. The reason? The Second Avenue subway station. Yorkville stretches from East 79th to 97th streets and from Third Avenue to FDR Drive, and was the only Manhattan neighborhood to make it onto the listing company’s Top 10 list. The appeal of Yorkville has always been its mom and pop feel. Part time resident, writer Jonathan Franzen, called it the “last middle-class neighborhood in Manhattan” recently in The New York Times. Yorkville is characterized by its eclectic mix of brownstones, tenements, and newer luxury high-rise apartment buildings. A StreetEasy search pulled up 14 condos for sale between $900,000 and $1 million. A smattering of new luxury buildings have sprouted up around the new subway line, one of them being Vitre at 302 E. 96th St, where prices range from $915,000 for a 1 bedroom, 1 bathroom unit to $3,795,000 for a 3 bedroom, 3 bathroom condo. Old time residents may decry the arrival of towering new glass fronted buildings to the neighborhood, but most of them know that prices here are only likely to go the in the same direction as the new luxury towers.

 

Hell’s Kitchen

The New York Times recently described the western edge of Hell’s Kitchen as “New York’s latest industrial district to reinvent itself.” Once known as a characterless wilderness of shipping offices and garages, as well as more salacious night time activities, developers have been betting big on the area between 10th Avenue and the West Side Highway, in the West 40s and West 50s. A StreetEasy search pulled up 18 condos for sale between $900,000 and $1 million. One of the most affordable buildings in the area is NINE52 which has two condos on the list. Unlike other new glass walled condo towers, this has a warmer feel as the building was part of Saint Clare’s Hospital and was developed by The Chetrit Group.

 

Battery Park City

Living in Lower Manhattan for under $1 million and within walking distance to Wall Street is not an easy feat. As neighborhoods go, you could do a lot worse than Battery Park City. It has views of the Hudson and access to running/bike paths. Almost a third of its 92 acres are dedicated to park space. With an influx of new restaurants, it’s almost suburban – excepting the fact that suburbs don’t usually sit next to Manhattan’s most expensive neighborhood, Tribeca!

 

A StreetEasy search pulled up 17 such condos which fall below the million-dollar price tag. Some are at One Rector Park, a new condominium conversion with modern interiors, full-service amenities, and a waterside location. Others are at 225 Rector Place, which was originally built as a rental in 1985 and completely redeveloped as a condo building in 2008. It’s 24 stories tall and comprises 285 residences. More possibilities can be found at Liberty “Rector Place” Residences, which actually comprises three renovated separate locations: Liberty Court, Liberty House and Liberty Terrace.

 

“For many years Battery Park City was like the frontier — a bunch of buildings with no services and nothing to do,” Karen Quinones, a historian with Patriot Tours and an expert on Manhattan below Chambers Street told AM New York. “It’s amazing walking there now. It’s like a totally separate city.”

 

Comment

NYC’s roster of priciest neighborhoods has a surprising newcomer: Bushwick

Comment

NYC’s roster of priciest neighborhoods has a surprising newcomer: Bushwick

If you had invested in Bushwick, Brooklyn, a decade ago, you would have almost doubled your money by now. Its 84 percent mean price increase outpaces any other New York City neighborhood, and the hipster-heavy enclave has zoomed up the list of NYC’s priciest neighborhoods nearly a hundredfold, from being No. 189 in 2008 to No. 90 today, according to a new report by real estate data provider Trulia.

Of course, the once gritty area, notorious for drugs and crime, still has a long way to go before it encroaches on Manhattan’s hallowed turf, with a pad in Soho –  No.1 on the same list – costing around four times that of Bushwick’s median price of $788,700. However, its increase is testament to the rapidly rising values of New York real estate generally. Manhattan and the gentrified areas of Brooklyn became far too costly for many (and especially millennials), so those willing to pioneer and move to less desirable neighborhoods are reaping the rewards. Geographically Bushwick was at a distinct advantage over other areas. It neighbors Williamsburg, the epicenter of the borough’s hipster revolution, and Bedford-Stuyvesant, another neighborhood undergoing gentrification. It also has great subway accessibility with a commute to Manhattan taking about 30 minutes on the L train.

Accelerating Bushwick’s rise was the city’s move to rezone Williamsburg in 2005 to protect it from overdevelopment. Part of Bushwick’s charm has been its varied housing stock — from industrial loft spaces to brownstones and now brand-new condos laden with amenities. New residents beckoned a wave of coffee shops, restaurants, street art and bars, further fueling the migration from more expensive areas. According to census data, the number of residents ages 20 to 34 grew by around 28 percent, to 34,227, from 2000 to 2010.

Such a sudden change has brought about resentment due to displacement. Affluent newcomers moved in while long-time residents moved out according to the most recent data.

According to StreetEasy there are currently 42 condos for sale in Bushwick. At the top end is 318 Knickerbocker Avenue (#4L) priced at $1.1 million (2 bedroom, 2 baths, 1,221 sq ft) and 267 Evergreen Avenue (#2C) priced at $945,000 (2 bedroom, 2 baths, 1,061 sq ft).

One of the most contentious projects has been the massive ODA-designed Rheingold Brewery rental development. It’s viewed by some as a hipster playground, which will do little to uplift the poorer areas of the community. Amenities in one of the project’s residences – the seven-story, 392-unit building at 10 Montieth Street – include a climbing wall, laundry room, interior courtyard, game room, bike storage, children’s playroom, and art studio. A lottery started in April for 100 affordable units for New Yorkers earning 60 percent of the area median income. The second project of the development is located at 123 Melrose Street, known as Evergreen Gardens. Comprising 900 apartments, an 18,000-square-foot park, and a 60,000-square-foot rooftop (boasting urban farm and pool), it also includes 183 affordable units.

“As Williamsburg flourished, Bushwick was discovered,” Mitchell L. Moss, an urban-planning professor at New York University, told crainsnewyork.com. “My students have been priced out of the East Village, and they’re priced out of Williamsburg, so now they’re living in Bushwick, and they may buy in Ridgewood.”

Comment

Manhattan’s luxury market continues to defy the odds by remaining steady. Here’s why.

Comment

Manhattan’s luxury market continues to defy the odds by remaining steady. Here’s why.

Author Mark Twain once famously said, “Reports of my death are greatly exaggerated.” The same could be said of Manhattan’s luxury real estate market, which last week saw 24 contracts signed at $4 million and up, according to a recent weekly luxury market report. This despite ongoing gloom which has hovered over NYC’s top-tier market for most of the year. Yet the numbers defy the malaise.

A co-op at 640 Park Avenue blasted all of the other deals out of the water with an asking price of   $21 million, down from $25 million. The 14-room property with three fireplaces overlooks Park Avenue. The second most expensive contract was a lofty $15.5 million for a four-bedroom duplex at 565 Broome SoHo, a new development designed by Renzo Piano. One of the building’s luxury condos has gone into contract four out of the last five weeks. Amenities for the most recent sale include a 2,200 square foot outdoor terrace with a saltwater pool and outdoor shower.

The first week of June’s sales follows an explosive May which saw a penthouse at the Getty, a new boutique condo next to Chelsea’s High Line, set a Manhattan downtown record when it closed at $59.06 million. Last month also saw an apartment on the 85th floor of One57 in Midtown, sell for $53.97 million.

So why, after a few admittedly bad winter months, has the luxury market continued to grind out sales? The most obvious reason is the weather. Even town car-riding multi-millionaires prefer to stay home when the wind chill bites, and last winter was a particularly bad one with one Nor’easter after another blasting Manhattan. Another factor must be the economy, which is enjoying growth. Jobs, the stock market, and even oil seem to be doing well. Along with these factors is the trend of sellers becoming more realistic regarding pricing. The first quarter of 2018 was particularly bad with listing numbers down 8 percent on the previous year. Once prices dropped, the sun came out, and the economy started to smile, houses went under contract.

The enduring appeal of Manhattan, which has always proven to be a rock solid, long term investment, was summed up in a report earlier this year, which placed The Big Apple top of all US cities where the wealthy invest their cash.

“Typically, these areas are destinations in their own right, offering high-net-worth individuals a range of lifestyle opportunities, cultural experiences, and educational opportunities," the report said referring to these cities as “power markets”. Its definition of the term is a place where the top 5 percent of single family home sales by price are highest. In the top 17 markets, the median list price for the top 5 percent of the sales is at least $3.5 million.

Additional unease about the Federal Tax law may have also been a contributing factor in the winter for buyers staying on the sidelines. 

It “makes the market feel weaker than it actually is,” Johnathan Miller of Miller Samuel Real Estate Appraisers and Consultants said in April, foreshadowing a reckoning and eventual rebounding, once buyers and sellers “get reacquainted [with] what the right values are.”

And those values will, inevitably, always go up.

Comment

It’s official: High-end NYC apartments are a better investment than the stock market

Comment

It’s official: High-end NYC apartments are a better investment than the stock market

Every time a luxury condo building takes to the Manhattan skies it seems like there are always a slew of high profile celebrities and business tycoons ready to snap it up. Some ultra-expensive buildings, such as the decade old Robert A.M. Stern-designed 15 Central Park West, resemble an Oscars after-party with scores of famous names on the list of owners. I say owners as opposed to residents because most buyers have an extensive property portfolio. What they and their financial advisors have realized is that luxury New York real estate is the best investment they can make. Yes, even better than the stock market according a recent report by CityRealty and an article in Forbes.

Recently Manhattan has been awash with luxury towers and trendy conversions like The Greenwich Lane and 443 Greenwich St., both of which transformed from their industrial roots to luxury residences. Yet 15 Central Park West still sits atop all other recent developments when it comes to price paid per square foot, according to the CityRealty report. Its appreciation outstrips stocks and gold. The building has enjoyed an annual compound growth rate of 6.84 percent since it opened in 2008. The S&P 500 has grown at an annual rate of negative 2 percent and oil has fallen at an annual rate of 5.1 percent. Gold has fared better, growing at an annual rate of 3.2 percent in that time, according to the number crunchers at CityRealty.

The report states: “The buildings in the CityRealty 100 can be judged as a better, and more stable, investment than many other markets over the past decade.”

The report generally predicts stability as opposed to overheated growth in the next 12 months in the Manhattan market, which is bound to please conservative investors, wary of boom and bust cycles.

StreetEasy dived into specific returns on New York condos last year and found that they made up 11 percent of Manhattan listings during the first half of 2017 with many investors renting them out to seek both equity appreciation and rental income. They concluded that owners of newly purchased condos collected 2.5 percent of their purchase price in rents in the second quarter of 2017, with Upper Manhattan condos delivering most bang for bucks invested — a median earnings of 3.5 percent. Factor in a median 2.5 percent in appreciation, as well as tax deductions, and investing in a NY condo seems like a safe bet.

Those who favor real estate over the stock market often prefer it because it’s a tangible asset. Nowadays, with a volatile President, impending war, and ongoing scandals, stock holdings can be precarious investments, with a crash wiping out pensions and savings in an instant. Conversely, real estate, if purchased wisely, tends to weather most storms, particularly in Manhattan where there is a finite amount of space to build.

For foreign investors, New York real estate has been particularly popular. Many of their condos have remained noticeably empty. Data from the National Association of Realtors estimated that foreigners, led by the Chinese, invested $153 billion in housing in the quarter ending in March 2017, up 49 percent from the previous year. It’s a source of concern for many locals, with the vacant apartments stripping neighborhoods of a community atmosphere and driving up prices. According to data obtained by CoreLogic more than one in ten purchases in Manhattan now includes an absentee or “out-of-town” buyer.

Forbes summarizes the ongoing draw: “New York City real estate is based on an undeniable fact: The significant size of capital is only second to Tokyo, globally, and is the country’s largest market, domestically. Many investors, both institutional and local, are drawn to the city’s comparatively stable prices, land appreciation and liquidity.”

Comment