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

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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…

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

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$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."

 

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

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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.

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

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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?

 

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

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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.

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Treasures Beyond Tribeca: Three Manhattan Neighborhoods About to Heat Up

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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.”

 

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

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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.”

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

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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.

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

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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.”

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Wealthy buyers are snapping up luxury apartments in one of New York’s best kept secrets

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Wealthy buyers are snapping up luxury apartments in one of New York’s best kept secrets

Sometimes less is more. Case in point, the deluxe 520 Park Ave. No, the developer (Zeckendorf) and architect (Robert A.M. Stern) didn’t scrimp on the building itself, but the residence’s PR firm is keeping mum about recent sales, particularly who has been shelling out over $20 million for the condos inside. If there were any fears about the luxury market hitting the breaks, information leaked to the NY Post proves that the right building will find buyers. With each reported sale the hype about 520 Park Ave increases, apparently without any PR magic.

Fitting then that the latest 520 resident to be outed by the Post is PR big wig Ronn Torossian, who is in contract to buy a full-floor home at the 62-story, 33 unit building. Torossian is the founder of 5WPR. His clients include Microsoft, Coca-Cola and Anheuser-Bush. SteetEasy data shows that a 4,613 ft2, full floor apartment is listed at $20.5 million.

Elevator rides at 520 Park Avenue are guaranteed to never be dull as a slew of well-known business heavyweights have taken up residence. In August, Frank Fertitta, whose mixed martial arts company Ultimate Fighting Championship was sold to an investment group for $4 billion in 2016, splurged on a $70 million penthouse.

The developer has been cleaning up in more ways than one. James Dyson – the billionaire appliance wiz – recently laid out big bucks (in the $73 million to $83 million range) for a penthouse, while fellow Brit Bob Diamond purchased a simplex for around $20 to 40 million.

Architect Stern, whose company is called RAMSA, is credited with keeping old school glamor in New York. In the face of dozens of gleaming glass fronted buildings taking to the sky, Stern clads his in limestone. It’s expensive but timeless.

“[Limestone buildings] take the light in a beautiful way, and they look solid. They don’t look like buildings you can open with a can opener,” Stern told the Commercial Observer in 2016.

His buildings boast more celebrities than the Met Gala, or so it seems. One of his most recent is the nearly-finished 70 Vestry. Located in Tribeca, early buyers include power couple Tom Brady and Gisele Bündchen

Another of his buildings, 15 Central Park West, has been labeled the most powerful residence in the world. Filled with celebs and Wall Street high rollers – ranging from Goldman Sachs CEO Lloyd Blankfein to entertainers like Sting and Denzel Washington – the building is never out of the news with high priced comings and goings. Though it took three years and $1 billion to construct, it quickly rang up $2 billion in sales.

Stern’s star is hotter than ever. Despite being in the middle of a downward trending market, his buildings continue to increase in value and desirability. Mansion Global recently reported that the penthouse at the top of 20 East End Avenue is on the market at $39.5 million, a $4.5 million increase from when last listed in 2015.

Stern, whose company builds globally, is famously quoted as saying:

“The dialogue between client and architect is about as intimate as any conversation you can have, because when you're talking about building a house, you're talking about dreams.”



 

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What super-tall towers mean for luxury housing in NYC

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What super-tall towers mean for luxury housing in NYC

They’re tall, skinny, and very expensive. They are the super-models of real estate, but like their catwalk counterparts, Manhattan’s newest skyscrapers are seen by many as being the product of a heartless consumer culture that threatens to transform the city’s iconic skyline into a futuristic, sci-fi freakshow.

Currently under construction, when completed Central Park Tower at 225 West 57th Street will be the second-tallest skyscraper in the country.

Whatever your opinion, there’s no denying that the slew of new, gigantic buildings – officially classified as “super-tall” when exceeding 984 feet in height – are changing Manhattan for good. By far one of the most talked about of these new buildings is Central Park Tower, due to reach 1,550 feet.  Though sales have not yet commenced, rumor has it that several of the apartments will be asking for more than $20 million. Located at 217 West 57th Street, the building will be the jewel of Billionaire’s Row, which also includes nearby super-tall residences 220 Central Park South and One 57. Already topped out is the striking 53W53. Skyline neighbors also include 432 Park Avenue and 30 Hudson Yards. Permits were also filed this month for 12 West 57th Street, according to NY Yimby, though its 672 foot height makes it a mere sapling compared to its willowy neighbors.

One of the most famous of New York’s super-tall residences is One World Trade Center, which stands at 1,776 feet (3 World Trade Center – 1,079 feet – is due to open imminently). Other new properties include One Vanderbilt (1,401 feet), 432 Park Avenue (1,396 feet), 2 World Trade Center (1,340 feet) and of course, the granddaddy of them all, the Empire State Building (1,250 feet). There are many more throughout the city, including stalwarts like the Chrysler Building and the decade old New York Times Building (1,046 feet).

What does all this sky-high construction mean for Manhattan? Detractors argue that those on street level have been reduced to ants scurrying in the shadows, with natural sunlight reserved for only the tallest of buildings. Proponents state that all the new construction has been good for the city’s economy, bringing in money, residents, and – perhaps most importantly – jobs!

Currently the tallest residential building in the world, 432 Park Avenue tops out at 1,396 ft.

Sales from the super-tall residences will also inevitably drive up property values in Manhattan and the neighboring boroughs, which in turn will generate wealth. But for the middle-class wage earner, multi-million-dollar penthouses in the sky remain out of reach, and the availability of affordable housing may grow more elusive as millionaires make Manhattan their own.

But there are still opportunities in Manhattan for the thrifty and resourceful. A recent trend has seen older residences – particularly lofts and brownstones –  being repurposed for habitation, generally by shrewd millennials. These homes are oftentimes situated in neighborhoods boasting easy commuter access and colorful nightlife. The response to this by super-tall property developers has been to emphasize that living in luxury does not mean living in isolation. Danish architect Bjarke Ingels, whose many projects include 2 World Trade Center, told the New York Times:

“The tendency has been to create a hermetic experience, with floor-to-ceiling windows, so you’re incarcerated in a box,” he said. “Outdoor space used to be considered a nuisance, which didn’t contribute to the building’s value, but I believe that’s changing. I am starting to hear leasing people say they want outdoor space. That’s true in residential as well as commercial properties. I think the future at 800 feet is more likely to be engaged with the outside and less an escape from it.”

 

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A new soccer stadium ignites Harlem River Yards development & wider Bronx growth

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A new soccer stadium ignites Harlem River Yards development & wider Bronx growth

Soccer is coming to the Bronx! Major League Soccer team New York City Football Club (sister club of Premier League Champions Manchester City) has announced plans to build a 26,000 seat stadium as well as a waterfront retail and residential complex at the Bronx’s Harlem River Yards property.

                                  

The proposed project, first reported by NYYimby.com, will see the Harlem River Yards in the Bronx redeveloped by a consortium of investors, including Related Companies, Somerset Partners and the New York City Football Club itself.  They will form part of a larger Empire State Development corporation, which plans to cover over the 12.8 acre train yard with a mixed use development, set to include 550 affordable housing units and a waterfront park. The stadium is projected to cost about $75 million out of a $700 million overall budget, and will be designed by Rafael Viñoly, the architect behind iconic New York sites like 432 Park Avenue and Jazz at Lincoln Center.

 

The proposal, which anticipates a 2022 completion date, is still being finalized and is contingent on state selection and approval. If granted, the partnership would pay $500,000 per year for a 99-year ground lease.

 

The Bronx has been increasingly in the news as rapid gentrification has proved to be a contentious issue. In 2015 the NYU Firman Center named the Mott Haven/Hunts Point area one of the city’s top ten gentrifying neighborhoods.

 

Keith Rubenstein of Somerset Partners, one of the developers involved in the Harlem Yards project, has been instrumental in Bronx development. Two years ago he sparked the ire of locals by attempting to rebrand a part of the South Bronx as The Piano District. Since then he has tried to win back favor by funding different arts and quality of life type projects (coffee shops, museums, galleries, etc.).

 

However, before betting on the Bronx, he bought up offices and residential buildings

throughout New York, Chicago and DC. One of his most noteworthy properties is the $85 million Upper East Side townhouse he shares with his wife.

 

Luxury real estate is not usually associated with the Bronx, but the borough has a few plush properties in up-and-coming Riverdale. One notable building is the decade old Solaria which has 3 bedroom condos priced from $1,299,000 to $1,550,000 and a 5 bedroom, 5 bathroom condo at $3,100,000. A full floor 7 bedroom, 9 bathroom duplex is listed at $8,950.000. Also in Riverdale is Skyview, a more reasonably priced residence with condos ranging from $304,750 to $742,900.

 

The Real Deal suggested last year that it won’t be long before the luxury condos make their way to the once troubled South Bronx.

 

“The artists and the restaurants come in first,” said Andrew Gerringer, head of new business development at The Marketing Directors. “The apartment developers come in second, and the condo developers come in after them.” Leading the charge is Somerset Partners’ planned four-tower building at 101 Lincoln Avenue with market rate apartments.

 

An international soccer stadium nearby fits the bill nicely.

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The Upper East Side is hotter than ever. Here’s why.​​​​​​​

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The Upper East Side is hotter than ever. Here’s why.​​​​​​​

A couple of big deals on the Upper East Side have breathed life into Manhattan’s fitful luxury market, according to a recent report. Swanky downtown neighborhoods like Tribeca, Soho and the Flatiron have stolen the thunder in recent years from traditional upscale neighborhoods around Central Park. But not so fast. In the second week of  March, while icy winds chilled New Yorker’s to the bone, the real estate market heated up with the sale of a six-story townhouse on East 65th St., making it the most expensive transaction in the borough. Admittedly the $14 million sales price was significantly reduced from the original $22.5 million when it first went on the market in February 2016. The house spans 10,253 square feet and has been divided into five units.

Nearby, The Carlton House at Lenox Hill saw a 3,751 square foot, four-bedroom condo sell at an asking price of  $11.5 million. The building includes the customary high end amenities of a concierge, fitness center, pool and storage.

According the report, the top end real estate market has enjoyed a fairly robust time this month with 26 contracts signed in the second week of March, making it the seventh consecutive week with more than 20 luxury transactions. With a total dollar amount of $184.28 million in sales, the figure represented an increase of just over 7 percent from the previous week. Of the 26 contracts sold, 18 were condos, three were co-ops, four were townhouses and  one was a condop — a co-op which leases the land and has condo rules.

The Upper East Side has been one of the success stories in luxury Manhattan real estate amid a fairly mixed time over the last two years. This is due to the Second Avenue subway line which opened in January 2017, causing the New York Times to correctly predict a “new cachet to addresses on Second Avenue and eastward.”

Mansion Global reported that areas around the new subway station saw higher increases median sales price last year, based on data from StreetEasy. Yorkville — an Upper East Side neighborhood, extending from East 79th Street up to East 96th and from Third  Avenue to the East River hosts two of the three new subway stations and has been most affected by the new subway extension enjoying a steady growth year on year since 2013, according toe StreetEasy’s data.

Last month on the Upper East Side, a mansion that sold to a Chinese conglomerate for stunning $79.5 million less than a year ago sold again for even more money. According to The Real Deal, the limestone property at 19 East 64th St, traded hands for a humbling $90 million, after the Chinese owners ran into financial difficulties.

There are also a cluster of new apartments and condos which have flooded on the Upper East Side. These include The Robert A.M. Stern-designed 520 Park Avenue, the former rental 200 East 62nd Street, now converted to condos and retitled 200 E. 62, comprising 115 one-4 bedroom apartments and The Clare on East 61st St. Other projects in the works include a 15- story condo building at 27 E79th St., a 31-story condo development at 1299 3rd Ave., a 33-story condo building at 1361-1363 First Avenue, former home of the Irish pub Finnegan’s Wake and an 18-story mixed use building at 151 East 86th St, comprising a retail space and 61 condos.

Business Insider, recently dubbed East End Avenue on The Upper East Side, New York City’s hidden neighborhood, citing it as the home of some of the city’s richest and most famous, with rumors swirling that the Obama’s may soon be calling it home, too. A secret no more, then.

 

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Prices have skyrocketed in these NYC neighborhoods

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Prices have skyrocketed in these NYC neighborhoods

Getting rich quickly in real estate may be the stuff of expensive seminars and reality TV.  A recent study, however, has shown that for patient buyers, New York City has been able to provide phenomenal wealth.

Rental listing website RentCafe analyzed US census data between the years 2000 and 2016, covering 11,000 zip codes across the country. What it discovered was that rapidly gentrifying New York neighborhoods scored big for price increases. The grit to glitz phenomenon, which has been a touchstone of controversy, has seen neighborhoods in Harlem and Brooklyn (in particular) rise dramatically in value. The displacement of older residents in favor of newer, usually more affluent ones – a consequence of gentrification – has proved contentious.

Coming in at No. 5 on the study was Northeast Harlem (zip code 10039) which is located directly across the Harlem River from Yankee Stadium. It saw its home values rise by 356 percent (from $89,572 to $408,654). Its median income also rose significantly, by 32 percent, along with its proportion of college educated residents, which increased by 168 percent.

Just north of Central Park, in East Harlem, there was a 219 percent increase in median home values, from $228,043 in 2000 to $727,542 in 2016.

In the hipster heavy Brooklyn neighborhood of Williamsburg (zip code 11211), median prices jumped from $330,977 to $882,277. In Greenpoint (11222) they went from $345,515 to $746,373, and in Crown Heights (11216) they catapulted from $285,310 to $839,900. Other notable increases in Brooklyn occurred in Bushwick (11237), which increased from $273,563 to $576,572, and in the shared Bushwick/Bed Stuy zip code of 11221, which saw home values skyrocket from $278,115 to $638,8222.

So, what does all this mean? Well, many brokers will tell you that it’s doubtful such increases will be seen in these neighborhoods again anytime soon. However, with similar properties in Manhattan costing many times the price of those in the outer boroughs and foreign buyers still coveting a piece of the Big Apple, investing in the city and holding on for the long haul should, sixteen years from now, still prove a phenomenal investment.

Last summer real estate investment platform Sharestates crunched numbers on the neighborhoods where it still made sense to buy rather than rent. This, of course, was assuming that excess cash to buy in perennially swanky neighborhoods like Tribeca and the Flatiron District was out of reach. Return on Investment (ROI) and After Repair Value (ARV) were all thrown into the mix and the results saw Richmond Hill come out on top with an ROI of 12 percent. Bed Stuy in Brooklyn was close behind with an 11 percent ROI. Next came Ocean Hill, Brooklyn (10 percent), Longwood in the Bronx (10 percent), and Flatbush (10 percent).

“For the areas experiencing the most development, it may make sense to buy rather than rent at this time (while development is still underway),” said Sharestates CEO Allen Shayanfekr. “Once those areas experience significantly less vacancy, the price points will change dramatically.” As they always do.

 

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Tech titan Michael Dell splashes out a record $100M on a condo.

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Tech titan Michael Dell splashes out a record $100M on a condo.

He’s not the first Silicon Valley heavyweight to trade chips for NYC bricks

Although quite a few homes in New York City have been listed for $100 million and over, only one of them has sold. The buyer is tech billionaire Michael Dell of Dell Technologies and the property in question in located in One57, a 1000 foot-tall glass tower on Billionaire’s Row on West 57th St. Details have only recently emerged in the Wall St Journal, despite the property actually selling at the peak of the market in 2014.

The duplex is 11,000 square feet with six bedrooms and six bathrooms, and the deal inked in 2012 when the tower was still under construction. That didn’t stop Dell bringing in his own architect, Juan Miró, to oversee extensive renovations on the place before the paint had dried.

Tech titans regularly invest their coffers in real estate – often in New York – though Dell also owns other high end properties in Boston, Hawaii and Austin. Amazon CEO Jeff Bezos owns homes across the US as well and for a man worth over $80 billion, you’d imagine he’d own something outrageously extravagant in Manhattan. However, in comparison to others’ Bezos NYC pads are relatively modest. But he does own three of them. What is interesting is that Bezos bought his three condos in the Century building at 25 Central Park West on the Upper West Side, way back in 1999, before Amazon became the colossus it is today. Back then, Bezos purchased his residences from former Sony Music head Tommy Mottola for $7.65 million in the 32 story art deco building. His properties have since proven to be great investments.

Microsoft co-founder Paul Allen is another real estate investor who appreciated the long term benefits of buying and holding in NYC. In 2011 he paid $25 million for the penthouse in a building on East 66th St. Fifteen years earlier, in 1996, he purchased the 11th floor apartment in the same building for a reported $13.5 million.

Facebook’s Mark Zuckerberg is rumored to have eschewed NYC condos in favor of a townhouse. In 2015 a property in the West Village sold for $22.3 million and the buyer, according to Business Insider, was either Mark Zuckerberg or his sister Randi Zuckerberg. The deed was signed by frequent Zuckerberg real estate representative Tom van Loben Sels, a partner at San Francisco-based Apercen Partners LLC.

Though fears of a recession have been bouncing around the higher end of the NYC market for a while, it’s still considered a safe haven for high rollers to park their cash.

“I don’t see any signs of a 2008 correction at all,” David Bistricer, the managing member of Clipper Equities told CommercialObserver.com last year. “I think the conditions of 2008 are not present in today’s market. There is an enormous amount of money chasing properties. What is going on in the rest of the world is scary, and people are coming to the United States to gateway cities. People are coming to New York because it’s a safe haven, and that is what is driving [prices].”

Which is why Silicon Valley’s elite continue leverage their shiny new wealth for NYC’s old school real estate every chance they get.

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How downtown Manhattan became to go to place for luxury buyers

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How downtown Manhattan became to go to place for luxury buyers

“The times they are a changin’” said Bob Dylan famously in the ‘60s. Where New York real estate is concerned, the times are always changin.’ Former no go areas in the outer boroughs are now becoming pricey hipster havens and the old money that once made the Upper East Side an exclusive lair to the privileged is now heading downtown to new luxury condos.

According to a recent brokerage report, the median price of a luxury condo — defined as $5-million-plus, fell 27 percent in 2017 with uptown co-ops falling 15 percent since mid 2016. Conversely, the majority of condo sales in 2017, around 57 percent were downtown.

Part of the reason is because the Upper East Side has always been an enclave of exclusive co-ops with a notoriously picky approval process. Condos, though traditionally more expensive, have done away from that inconvenience and so younger, wealthier buyers, fueled by the arts, restaurants and shopping have been flocking to areas like Tribeca, Soho and the Flatiron District turning them into some of the most expensive real estate in the city.

The rate of construction downtown has been alarming with gleaming glass towers racing skyward as cranes cloud the landscape and city blocks are covered in hoardings and work permit signs. Nowhere has the rate of change been more dramatic than in Tribeca with Leonard Street front and center. Known at the “Jenga building,: 56 Leonard currently has a Penthouse priced at the humbling $55,600,000, which rivals the exclusive properties clustered around Central Park  (One57, 15 Central Park West). The building also has several other penthouses listed from $17.75 million and up with many now sold. Nearby, 91 Leonard St by the Toll Brothers is bringing 111 condos to the market. The 19-story building features studios up to four-bedroom apartments with prices starting at $795,000 and going up to $10.49 million. Another at 108 Leonard, known at The Clocktower Building, is converting a landmark building into 151 condos. The property was once the HQ for New York Life Insurance Company and more recently The New York City Criminal Court.

Neighboring areas are also benefitting from the building boom downtown. The Noho condo with interiors by Ryan Korban at 40 Bleeker recently launched sales on its 61 apartments, ranging in price from $1.775 million for a one bedroom, one bathroom apartment, going up to $6.31 million for a three-bedroom, three bathroom apartment. Amenities include a 57-foot swimming pool, gym, concierge and bike storage.

Fueled by a celebrity buying frenzy that has seen Beyoncé and Jay-Z, Taylor Swift, and in one particular building — at 443 Greenwich St., Justin Timberlake. Jennifer Lawrence, Harry Styles and Jake Gyllenhaal, all neighbors —  prices and appeal downtown continues to soar.

“When you start reading about the recent purchases with more than a couple of household names, the attention that the building attracts accelerates,” said Jonathan Miller, president and CEO of Miller Samuel, a real estate and consulting firm. Along with a slew of top notch amenities a gated paparazzi proof parking garage 443 Greenwich St is a big draw for celebs. Must be nice.

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Wanna make money in NYC real estate? Plan your investments around the subway system

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Wanna make money in NYC real estate? Plan your investments around the subway system

Ask any agent in New York what single factor helps to sell real estate and the subway will be near or at the top of the list. In a city where condos regularly top $2 million, the convenience of being close to transit ride can add or subtract hundreds of thousands of dollars. A Jan 29th NY Times article voiced the argument of New York’s Governor Cuomo, that the subway should benefit financially from the effect it has on property prices, adding $3.85 per square foot to the value of commercial property, according to NYU economists.

A Streeteasy survey, showing the best and worst neighborhood’s for subway access, underlined the importance of being located near to a transit hub. There was little surprise in many of their findings. Manhattan was the best connected borough and thus one of the priciest with glitzy neighborhoods downtown (Tribeca, Soho, Flatiron) and Midtown all close to transport. However, even neighborhoods with longer walking distances (0.3 miles for Battery Park City), are still up there in price compared to other boroughs because they abut areas that have plenty of underground access (Financial District).

Brooklyn, one of the fastest rising boroughs in the city, is well served downtown and around Prospect Park and the rapidly gentrifying neighborhoods or BedStuy and Crown Heights. However, out in South Brooklyn, near Mill Basin, it’s a case of catching a bus to the subway, as a three mile distance separates stops.  House prices here are amongst the lowest in the borough.

Things get interesting in Queens where real estate prices have been dramatically influenced by the subway. The development and increasing prices around the overcrowded 7 Train in areas such as Long Island City, Sunnyside, Astoria, Woodside and Jackson Heights has been dramatic. The line through the heart of Midtown Manhattan and on to its most recent addition, the Hudson Yards stop at 34th St and 11th Avenue. A 2016 report from Ariel Property Advisors predicted continued growth that could replicate the L train’s dominance in hipster-fied Brooklyn, with Queens still considerably more affordable. Property owners looking to cash in on the boom and sell may do well to hold off until Hudson Yards is fully finished and up and running and a go to destination for jobs and entertainment in the city.

Elsewhere in Queens the redevelopment of LaGuardia Airport with an AirTrain Transportation  from the Willets Point 7 train station will decrease travel times and further spur on the 7 Train’s gentrifying effect.

The advent of the 2nd Avenue subway station has also electrified development on the Upper East Side. With an extended Q line running through Yorkville, numerous rentals and condos are planned with existing buildings between First and Third Avenues noticing marked value hikes. With development and tertiary businesses sprouting, some sellers may want to hold off until the area is in full boom, though for buyers there only seems to be an upside to getting while the subway is still young and development is in progress. 

Coupled with this is the East Side Access project, which will bring Long Island Road Service to the East Side of Manhattan. The rail line will link Queens to Grand Central Terminal. Expect completion around 2023.

With the NY subway system in financial crisis (it owes $40 billion) as real estate values around the city continue to soar, there is some logic behind Governor Cuomo’s proposal, known as value capture, which would tax properties close to subway. The same thing has been implemented in Hong Kong. Mayor De Blasio, however, is in opposition.

A Pratt Center study in 2013, quoted in the NY Times in December laid out the conundrum of commuting in stark relief: “Skyrocketing housing costs push low- and moderate-income families farther from Manhattan and the well-connected communities that surround it,” it said. For those involved in buying and selling real estate in New York, the rule is simple. A single Metro card subway ride may only cost $2.75 but its effect on real estate is priceless.

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Millennials are changing the housing market throughout the country — here’s how are they affecting New York

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Millennials are changing the housing market throughout the country — here’s how are they affecting New York

Millennials and home buying in NYC seems like an oxymoron. With the average price of a Manhattan condo hovering around the $2 million mark and other boroughs such as The Bronx, Brooklyn and Queens seeing high increases over the last two years, having enough for a downpayment seems almost impossible. Sure, there are those who have parents with deep pockets or who are banking big Wall St checks but for the majority, with wages stagnating and student loans increasing, being locked in the vicious cycle of renting seems to be the norm. Rents are so high that, according to Trulia’s latest housing report, many millennials in 2018 will eschew New York on mass, in search for more affordable housing in the Mid-West and the South, in states such as Texas, Ohio, Tennessee, Wisconsin and Michigan.

Outside the pricey New York market, though Millennials are buying in New Jersey, Upstate NY, Westchester and even in Pennsylvania where home prices are significantly less. Some are choosing to commute into the city, others are working remotely and others are finding less high paying jobs closer to home. One thing that most Millennials appear to have in common is that they don’t want to put sweat equity into their homes to build value. They want houses that are already done. That means a boom in fix and flips in the outer boroughs and  neighboring states. According to Inc., 68 percent of Millennials plan to sell their starter home, keeping it on average for six years.

While popular thinking seems to imply that Millennials can’t wait to leave their suburban upbringing and move into the city, the hard facts contradict this. Inc states that half of Millennials live in the suburbs with only 25 percent in urban areas nationally.

For Millennials without trust funds who wish to buy properties in New York the chance finding enough cash for a downpayment seems grim. "That's the differential between the renter and the buyer: the down payment," Miller Samuel appraiser Jonathan Miller told brickunderground.com. "Millennials have been subjected to static wage growth until very recently.”

With New York’s real estate market slowing, negotiating lower down payments, such as 10 percent instead of the usual 20 percent could be an option, along with state programs such as SONYMA loans which may allow qualified buyers to put as little as 3 percent down (if you make under $98,000 are are buying a place for under $665,000).

The reality of buying a property in NYC means that many Millennials may have to consider living in areas they never would have rented in, in order get a foothold on the property ladder. Co-ops in the outer boroughs of Brooklyn and Queens may have a Millennial’s name written on them. Sure, it may not be a fashionable and funky Crown Heights brownstone but it’s a chance to build equity and one day move on to loftier climbs. And in New York, buying right could reap huge rewards particularly if home improvements are in a Millennial’s wheelhouse.

"A lot of younger buyers I talk to want to be flexible and nimble," Ace Watanasuparp of Citizens Bank told Brick Underground. "They want home ownership, but they want to be in a place where they can re-sell quickly if they need to. So they think about what other young buyers are looking for if they want to re-sell.”

But before they sell, they have to figure out a way to buy.

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An Upper East Side townhouse could be be NYC’s most expensive at $80 million

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An Upper East Side townhouse could be be NYC’s most expensive at $80 million

An Upper East Side townhouse could be be NYC’s most expensive at $80 million

An Upper East Side townhouse could be New York’s most expensive. The mansion is officially under contract at a price believed to be around $80 million. Considering it was purchased for $20 million twelve years earlier, it’s proven to be some investment. Numerous upgrades were made to the property by the owner, billionaire Vincent Viola. These, according to the NY Post, include a swimming pool, velvet-lined movie theater and a panic room. In addition there are 7 bedrooms, an Italian granite staircase and onyx elevator. There’s also a recording studio and library.

The property is located at 12 E. 69th St and includes a total of 20,000 square feet of luxury living. Though the asking price was $80 million, the final sales price has not been revealed.

Viola’s, rags to riches story is almost as dramatic as the appreciation of his real estate holdings. The son of a Brooklyn truck driver,  he worked his way up from stock broker to head of the New York Mercantile Exchange. In addition to real estate, he and his wife Theresa, own the Florida Panther’s hockey team. The deep pocketed buyer for the property, who hasn’t been named,  also purchased a $50.5 million penthouse — at 15 Central Park West — from Barclay’s CEO Bob Diamond, which was reported in the Wall St Journal.

Nearby, a property at 19 East 64th Street made news last year when it sold for $79.5 million. That property also had just over 20,000 square feet. It was owned by billionaire art dealers, the Wildenstein family, whose gallery was housed in the property for over 80 years. Originally the Wildensteins had agreed to sell the limestone building to the consulate of Qatar. When the Qataris pulled out of deal the day before closing, the property was re-listed for $100 million. That triggered a lawsuit from Len Blavatnik’s Access Industries LLC who claimed that the Wildensteins had a verbal agreement with him to sell for $79 million.

Another townhouse hovering around the $80M mark has been in the news recently. Business Insider reported that real estate developer Keith Rubenstein (he of the Bronx, “Piano District” notoriety) has had a hard time moving his restored Manhattan home, a block from Central Park, for $79.5 million. His Upper East Side mansion has 14,700 square feet and includes a rooftop terrace and basement level gym and spa.

Rubenstein originally listed the property in early 2016 for $84.5 million after a many years of renovation. Don’t call it a flip, though. The property which has six levels, 14 bathrooms and six bedrooms may have been purchased in 2007 for $35 million, but for Rubenstein, buying and selling his personal properties is par for the course. “We like to move every now and then,” he told the Wall St. Journal. “We like projects.” The developer said that he was selling up partly because his youngest child was due to leave for college.

It’s doubtful, though, that the developer needed the cash to pay for school fees.

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Tribeca: still the place to be along with other downtown neighborhoods

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Tribeca: still the place to be along with other downtown neighborhoods

Tribeca is still #1 in NYC and other downtown neighborhoods dominate the city’s top spots in new survey

PropertyShark.com has revealed it’s price trend survey for NYC in 2017 and it’s good news for Tribeca residents. The chic downtown district retains the title as the city’s most expensive neighborhood, enjoying an annual increase of 12 percent. The median sales price is $4,683,950. A total for 417 homes sold this year, which was a little down from 2016’s 482 but up in price. Considering the general malaise that has huge over the luxury market in 2017, Tribeca’s continued robust numbers are as resplendent as some of the glamorous condos which have taken to the skies of late and contributed to its stats.

So what is it about Tribeca, once a gritty, industrial wasteland of a neighborhood, filled with artists and junkies in the 1970’s, that keeps buyers shelling out big bucks to live there? Part of it can be traced back to those industrial roots. Large, hulking buildings meant that it was somewhat divorced from the rest of Manhattan. When these warehouses became glamorous lofts, the area look on the guise of exclusivity, devoid from the infernal traffic and congestion in much of the rest of the city. With well appointed restaurants, bars and celebrity residents such as Robert DeNiro, Jay-Z & Beyonce, a famous film festival and more recently, high profile luxury developments such as 70 Vestry, with waterfront views, the neighborhood spiraled up into its own orbit.

Nearby, Soho clocked in as the second most expensive neighborhood with a median sales price of $2.997,500 which was down 13 percent to $2,997,500. Property Shark also notes that 44 of 2016’s sales took place at 10 Sullivan Street and 180 Avenue of Americas, two pricey new developments, which may skew the numbers a little.

 

Though Manhattan boasted 7 of the city’s 10 most expensive neighborhoods, none were as prolific as Tribeca. There was little price growth in neighboring Little Italy and Hudson Square saw marginal gains on the previous year. The only real exception was the Financial District, #4 on Property Shark’s lists. It enjoyed a  19 percent year-over-year expansion of the median sale price. Including Brooklyn and Queens, which saw some mighty price increases, the Financial District also enjoyed a staggering median price growth of 53 percent year-over-year. This is due in part to extensive retail and residential development in the area along with a new school. Another reason for TFD’s increase is because of its relative affordable prices compared to its more fashionable neighbors, Tribeca and Soho.

One more downtown Manhattan neighborhood making headlining is the Flatiron District, the 4th most expensive NYC neighborhood. It’s hot on the heels of the #3 area, Hudson Square, in fact just $5,000 behind. It registered 460 sales in 2017 with a mighty 19 percent yearly increase in sales prices to a median of $2.3 million, thanks in part to sales at Madison Square Park Tower and 55 W. 17th Street.  Always known for shopping and restaurants with close proximity to both midtown and Union Square, the new developments have helped that neighborhood add an high end residential element bolstered by the presence of Madison Square Park, which has been made over into a verdant, family friendly oasis, away the chaos of the city that surrounds it.

Though there’s little disputing the the draw for the wealthy to downtown Manhattan, a clear trend has continued this year. Buyers who feel Manhattan costs too much are flocking to upscale Brooklyn, brimming with new condos. It’s the only way to explain Boerum Hill’s 54 percent growth and Fort Green’s meteoric 95 percent increase in property prices. DUMBO, however, retains top spot in Kings County for the most expensive Brooklyn neighborhood. For all those priced out of Brooklyn, the Bronx may have a condo with your name on it.

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