Among brokers, a resurgence of the old guard High-end pendulum swings back toward co-op deals and white-shoe brokers December 01, 2009 07:00AM By Candace Taylor Fascination with Manhattan high society…... Read more >

Among brokers, a resurgence of the old guard
High-end pendulum swings back toward co-op deals and white-shoe brokers December 01, 2009 07:00AM By Candace Taylor

Fascination with Manhattan high society has reached a fever pitch lately. The TV show "Gossip Girl" glamorizes the lives of pampered Upper East Side teenagers, complete with references to catered co-op board meetings and the Colony Club, while real-life New York socialites Amanda Hearst and Olivia Palermo are now feted as celebrities.

A similar phenomenon appears to be occurring in the world of Manhattan real estate. Suddenly, the priciest and most attention-grabbling listings in town are in the hands of well-heeled brokers like Southern belle Leighton Candler, Stribling's Kirk Henckels and the Clintons' broker Kathy Sloane, names heard less frequently during the boom years, as brash brokers like Dolly Lenz and Michael Shvo dominated the headlines.

But it's not just pop culture that's bringing about this shift.

Thanks to the real estate downturn, the current moment in New York City real estate is reminiscent of the days when a small, exclusive cabal of Upper East Side co-op brokers dominated the city's high-end market.

The Lehman Brothers crash largely halted sales of flashy new condos, while resales have continued to trade hands, albeit at lower prices. These days, many of the highest-priced sales are co-ops rather than condos, drawing attention to the small group of elite brokers who specialize in them.

"The loud, bling brokers of the condo era have been cut down a little bit, and the quiet, solid, I-didn't-make-my-money-in-the-last-five-minutes brokers have been enhanced by all of this," said Michael Gross, author of "740 Park: The Story of the World's Richest Apartment Building."

The importance of co-ops in the current market isn't just academic: The shift has palpable consequences for real estate agents trying to make a living in 2010.

Brokers accustomed to dealing in multimillion-dollar condos are finding that similarly priced co-op deals require considerably more skill, while the world of co-ops is less transparent and more dependent on social connections.

"Unless they went to school with someone who has an apartment on the market, or they're related to someone, or their parents live in a building where you're never usually given access, it's more difficult [to do deals] in the very fine buildings," said longtime broker A. Laurence Kaiser IV, the president of Park Avenue-based Key-Ventures Realty, who last month brokered the sale of a penthouse at 110 Central Park South for $10.5 million.

Still, there have been some significant changes since the days when legendary brokers like Edward Lee Cave and Alice Mason were the undisputed king and queen of Manhattan home sales. Real estate is now a big business, and huge, corporate firms like the Corcoran Group and Prudential Douglas Elliman have replaced the white-glove firms of old. These days, hard work and smarts trump everything -- even top-notch breeding.

"If you're brilliant and knowledgeable and people respect you, I don't care if your father was a cobbler,'" Kaiser said.

Selling via social status

Paul Purcell, head of the brokerage Charles Rutenberg Realty, recently founded a new Web site called Top

AgentGuide.com, which maintains a list of what it considers to be the city's best brokers.

He said he recently encountered a group of rookie agents who had never heard of Elliman's Lenz, the undeniable star of the real estate condo boom.

"I was talking to some young brokers, and I threw Dolly's name out, and they didn't know [her]," said Purcell. "The world is changing."

Though golden-blonde Lenz is still often in the public eye with regular appearances on CNBC, she has often made the headlines this year for losing listings (including mega-projects Manhattan House and Miraval Living) rather than selling them.

It's likely, however, that these young agents would have heard the names of two other blonde brokers: Corcoran's Candler and Sotheby's Serena Boardman (see "Park Avenue princess now top broker on Park").

Candler -- who made headlines for winning the listing of the late Brooke Astor's duplex at 778 Park Avenue -- is now listing penthouse co-ops at 1020 Fifth Avenue and 1040 Fifth Avenue, both priced north of $30 million. In August, Candler, the great-great-granddaughter of Coca-Cola Company founder Asa Candler, sold former Lehman Brothers chairman Dick Fuld's co-op at 640 Park for $25.87 million, one of the biggest sales of the year.

Boardman, meanwhile, was picked to sell Bernie Madoff's co-op at 133 East 64th Street.

Part of the reason these two brokers have been so successful recently, sources say, is their impeccable connections to polite Manhattan society.

Other society brokers who have made headlines recently include Brown Harris Stevens' Sloane, who's listing a co-op unit at 998 Fifth Avenue for $34 million; and Meredyth Smith, a senior vice president at Sotheby's International Realty, who, along with Boardman, has the city's most expensive listing, a townhouse at 22 East 71st Street. Henckels, who is married to socialite Fernanda Kellogg, recently took over the Astor apartment from Candler, and is also marketing an apartment once owned by Nelson Rockefeller at 810 Fifth Avenue for $27.5 million.

These brokers are similar in social status to the high-end brokers of the pre-condo era, when the world of Manhattan real estate was much smaller, and much more prim and proper. Back then, choosing a broker "was a very white-glove thing, where you chose a friend," Purcell said.

Cave and Mason (the latter known for her dinner parties) catered to the buyers of expensive real estate along Park and Fifth avenues, operating primarily through personal connections, with little need for advertising or self-promotion.

"We either know them socially, we went to school with them or we once were married to them," Cave once said of his clientele.

The new crowd

This clubby atmosphere began to change when condos came along, and the change accelerated during the recent building boom.

Suddenly, brokers could get rich quickly and easily, without having to worry about pleasing a co-op board.

As a result, there was "a rush of thousands of new brokers who came into the business at that time, who did not necessarily have the family ties to the 'right' co-op customers," said Michele Conte, sales director at the new Midtown condo Centurion, who previously worked at Brown Harris Stevens. "They just had great business and networking skills. A new breed of elite broker became recognized for hard work, not because of a prestigious family background."

Lenz is perhaps the best-known of this new breed of broker, building an empire of new condo sales and appearing in BlackBerry commercials. Then there is Corcoran's Dennis Mangone, who famously erected a billboard of himself above new condo 505 Greenwich Street, and Tel Aviv native Ilan Bracha, who by age 33 was the head of his own group at Elliman and founder of the development company B+B. Shvo became Elliman's top-grossing broker -- with over $300 million in sales -- while still in his late 20s, before forming his self-titled new development marketing firm.

The defining characteristic of that era was that "someone [could] come from a foreign country, knowing no one in New York, and be successful," Purcell said. "Shvo didn't know anybody, and he created a viable business. There was room for new brokers, upstarts, people who wanted to work hard. Prior to that, it was very hard for them to get a leg up in the industry."

Small, boutique firms began to fall by the wayside.

Edward Lee Cave was absorbed into Brown Harris Stevens, Mason closed her office after losing several of her top agents, and the industry was largely dominated by giant firms with well-maintained Web sites and large marketing budgets.

Around that time, Shvo told the writer Steven Gaines: "Do you think a 38-year-old partner in Goldman Sachs who makes $8 million a year knows who Alice Mason or Edward Lee Cave is? You know what? They're all going to drop dead soon. I'm the new generation of real estate broker."

Many of these new brokers didn't bother with co-ops, and likely would have found those doors closed to them if they tried. But with so much business to go around, it didn't matter.

Condos fall out of fashion

When the credit crisis hit, buyers did an about-face. Suddenly co-ops were more in vogue as new development condos fell out of favor, in part because obtaining mortgages in partially sold buildings became all but impossible.

Co-ops' requirements for large down payments and post-closing liquid assets, viewed as hindrances during the boom, are now widely credited with helping to insulate New York from the high foreclosure rates that are dogging the rest of the country.

Moreover, the boom had seen the sellout of some very expensive new luxury condominiums, including 15 Central Park West and the Plaza. Now those deals have closed, and there are very few new developments coming online; that means more of the attention-grabbing new listings are townhouses or co-ops.

"Basically, you're not seeing as many of those huge, high-[priced] condo deals," said one broker. "There is more focus on the high-end co-ops, just because a lot of the condos have sold."

There are still some very expensive condo sales occurring, of course, but many of them are deeply discounted resales, like the June sale of a $37.5 million apartment at the Time Warner Center, down from its original asking price of $49 million.

The co-op club

The same factors that have buoyed high-society brokers to their current level of prominence are now making it harder for the Mangones and Brachas of the world -- and their lesser-known colleagues -- to succeed.

"The kind of people who sell new condos are not necessarily going to be the kind of people who know the ins and outs of the most exclusive co-ops," Gross said. "Those two products couldn't be further apart. It's not even apples and oranges, it's raspberries and watermelons."

It's not easy for agents who previously specialized in new condos to transition to co-ops. For one thing, it's simply harder to buy and sell co-ops, thanks to their gatekeepers: notoriously fussy co-op boards.

"It has always been harder for brokers to learn, and to play, the co-op game," said Centurion's Conte. "The co-op broker must decide which co-ops to show the buyer, and which ones to avoid, based on knowledge of the buyer and the board. That takes a great deal of finesse."

Frederick Warburg Peters, president of Warburg Realty Partnership, said managers at his firm carefully train new agents in the art of crafting board packages.

"In terms of boards, there's no substitute for experience," Peters said.

Moreover, top co-op brokers tend to be a tightly knit group who prefer to work together, making it harder for outsiders to do deals with them.

"If a broker calls me and says they want to show at 834 Fifth or 960 [Fifth Avenue] or whatever else, in one minute I know by the broker if I have to ask them for the qualifications of the customer," Kaiser said. "With [some] people, you certainly do, because [they] don't know what's going on."

It's not impossible for a new agent to break in, but it's "certainly easier" if that agent already has co-op contacts, he said.

"There's always room for a newcomer, but they'd better have access to the club," Kaiser said, only half-jokingly.

Another difference is that co-op boards and customers prefer their brokers to be discreet, keeping deals out of the newspaper whenever possible. That runs contrary to the way many of the top condo brokers made names for themselves during the boom.

"The aggressive condo broker is going to want his name in the papers all the time," Gross said. "The subtle, social broker is going to operate in a very different way."

Condo brokers have reacted to the new climate in different ways. Some have been able to adapt; Lenz told The Real Deal that about 50 percent of her deals are now co-ops, and she still has a number of new development condo projects, like the Apthorp on the Upper West Side.

"She built such a thriving business on that side that everybody wanted her on the other side," Purcell said.

Others have stepped away from traditional brokerage. Elliman brokers Meir "Mickey" Roth and Lenny Sporn, former members of the Bracha Group, left last month to start a new real estate company that specializes in purchase groups of international buyers.

Still, brokers say all is not lost for newer agents, if they are hard-working and skilled.

"In the end, you can know an awful lot of people, but if you don't look like you're going to do a good job for them, they aren't going to hire you," said Peters.

Board packages in particular are "a question of being thorough and precise," said Amanda Brainerd, an executive managing director at Warburg Realty, who went to the Upper East Side's Nightingale-Bamford School and then to Harvard. She said she views society connections as "a nonissue."

"I've seen some very famous brokers do terrible packages," she said.

 

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BIG DEAL Gilt-Edged Vacancy By JOSH BARBANEL Published: October 9, 2009 EVERYONE has to sacrifice in these difficult economic times, even those fortunate enough to have the cash available to pick up distressed…... Read more >

BIG DEAL
Gilt-Edged Vacancy
By JOSH BARBANEL
Published: October 9, 2009

EVERYONE has to sacrifice in these difficult economic times, even those fortunate enough to have the cash available to pick up distressed assets.
And so, brokers say, Steven Mnuchin, a former executive vice president at Goldman Sachs, is giving up the comfort and lordly status of his five-bedroom duplex co-op at 740 Park Avenue, one of the most prestigious addresses in New York, for the suburban wilds of Pasadena, Calif.
  
Mr. Mnuchin is a founder of Dune Capital, a hedge fund, and part of group that bought the remains of IndyMac Bank, based in Pasadena, after its collapse last year under the weight of a huge portfolio of risky mortgages, many given to buyers who were not required to fully document income or assets. IndyMac was the fourth largest failed bank when it was seized by the Federal Deposit Insurance Corporation.

Now Mr. Mnuchin, 46, has stepped in to become the chief executive of the holding company for the bank, which has been renamed OneWest Bank, and he has an office at the Pasadena headquarters.

In the last few days, Amanda Brainerd of Warburg Realty has begun quietly showing Mr. Mnuchin’s Park Avenue co-op, which has 6,500 square feet, three maids’ room, a library and a grand foyer. The place is on the eighth and ninth floors and, being in the A line, has the most desirable view, facing Park Avenue, brokers say. The asking price is $37.5 million, or $5,769 a square foot. If you need a mortgage, don’t even think about it.

The 1930 building, designed by Rosario Candela, on the corner of West 71st Street, has been home to some of America’s wealthiest families, including the Vanderbilts and the Rockefellers, and the new crop of bankers and hedge fund billionaires. In 2006 John A. Thain, the last head of Merrill Lynch before its merger with Bank of America, paid $27.5 million for a duplex on the 17th and 18th floors. The apartment had been owned by Enid A. Haupt, the late philanthropist and a daughter of Moses L. Annenberg, the publishing magnate.

Tamara Winn, a daughter of Ira Rennert, an investor in distressed assets, paid $32 million for a lower-floor A-line apartment, on the third and fourth floors, overlooking the treetops and the streams of taxis headed downtown. But that was in January 2008, near the top of the Manhattan luxury market. The seller was the estate of Janet Coleman, an heiress to a fortune created from the manufacture of safes.

If Mr. Mnuchin sells the apartment on the open market, it will be its first sale outside the family since the 1960s, according to “740 Park: The Story of the World’s Richest Apartment Building” by Michael Gross (Broadway Books, 2005).

It was purchased in the early 1960s by Emanuel Terner, a manufacturer of beer and soda bottles who sold out to what is now Kraft Foods and then created another bottle company. He sold the apartment to his daughter Carol Lederman and her husband, Mark, who in turn sold it in 2000 to Mr. Mnuchin, a nephew, for $10.5 million.

Mr. Mnuchin got his start at Goldman Sachs after graduating from Yale, following in the footsteps of his father, Robert Mnuchin, who retired as a managing partner in Goldman Sachs and went on to found an art gallery, L&M Arts. The younger Mr. Mnuchin left Goldman Sachs when he was 39 with a fortune reportedly worth $46 million.

It is unclear how much such an apartment can fetch; the asking prices of luxury apartments are down sharply. But Richard Steinberg, a broker at Warburg Realty, says the mystique of 740 Park Avenue may transcend the uncertain market.

“It is a beautiful line, extremely grand and gracious,” Mr. Steinberg said, “and there are people who will pay anything to get into 740 Park.”

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REAL ESTATE SHOWCASE: FASHIONABLE ADDRESS LEGEND HAS IT Here’s a chance to purchase a 3-BR, 17th-floor residence amid 2,841 square feet at the Plaza Hotel Residences.  Brilliantly located at Fifth…... Read more >

REAL ESTATE SHOWCASE: FASHIONABLE ADDRESS

LEGEND HAS IT

Here’s a chance to purchase a 3-BR, 17th-floor residence amid 2,841 square feet at the Plaza Hotel Residences.  Brilliantly located at Fifth Avenue and Central Park South, this one-of-a-kind opportunity to enjoy living about Central Park where an enormous great room is filled with sweeping views of the park and Grand Army Plaza. No less than sprawling, it features a section of the landmark hotel’s famous curved turret. The master suite also serves up million-dollar park views. The windowed kitchen overlooking Grand Army Plaza comes with custom cabinetry with glass-fronted accents, Nero Marquina stone worktops and a slew of top-of-the-line appliances. The Lefroy Brooks bathrooms boast floors designed from original mosaic patterns found in the Plaza’s grand lobbies. Some of the hotel amenities include pampering spa treatments and the finest in-home dining services. $18 million.  IMMEDIATE. (Amanda Brainerd 212 439 4547)

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Jazzing Up an Uninspired Layout   DOWN TO BUSINESS BYRON BELL strode into the apartment, an architect with a mission. Sticking out of his bulging black nylon bag on rollers - was he thinking of moving…... Read more >

Jazzing Up an Uninspired Layout
 
DOWN TO BUSINESS

BYRON BELL strode into the apartment, an architect with a mission. Sticking out of his bulging black nylon bag on rollers - was he thinking of moving in? - were several rolls of yellow tracing paper, one of which he would unfurl and place over a floor plan of the eight-room West Side apartment that he had enlarged from an online real estate listing.

But first he took a lightning-fast tour, during which he spent most of his time peering out windows, and checking out which walls were structurally vital. He then got down on his hands and knees in the living room and started making bold lines in ink on the tissue paper.

"The way it is now, it's really a glorified railroad apartment," he said, gesturing to the long line of rooms stretching toward the back. Actually better than the usual New York City railroad flat, which has one long string of rooms, this one had two parallel lines of rooms opening from a long narrow corridor: better, but still uninspiring. "That's got to change," he said.

Mr. Bell, a Greenwich Village architect who, among other things, designed the Rare Book and Manuscript Library at Columbia University, was given the chance to do whatever he wanted - on paper - to make this nondescript apartment, now for sale for $1.695 million, into something spectacular.

It didn't take him long to figure out a plan, and in the end, his renderings showed he had followed his initial leanings toward a "not screamingly contemporary" design.

He had rejected the idea of tearing out a lot of the walls and making a large loft, or reducing the number of bedrooms to make bigger spaces. "I'm going on the premise that if somebody buys a four-bedroom apartment, it probably means that they want four bedrooms," he said. "Another assumption is that while nobody wants a kitchen way off down the hall, where the people who prepare the food are never seen, neither do they want to be on display, giving cooking exhibitions. We'll need someplace where the person cooking is connected, but not necessarily in the midst of things.

"Another thing is that if you can afford an apartment like this, you may not need a separate formal dining room, but you want somewhere to entertain several times a week," he continued. "And, then, obviously, we're going to need some closets."

Sketch Pad encourages its architects to be whimsical - within limits - and the reader can decide if Mr. Bell's next suggestion strained those limits. "This apartment building is interesting because it has a courtyard in the middle." He paused. "I envision a huge mural on the courtyard walls, stretching from the bottom to the top, all six stories."

"Like a Rousseau?" asked Amanda Brainerd, a sales associate for Warburg Realty Partnership, referring to the artist Henri Rousseau. Ms. Brainerd listed the apartment about three months ago and was really getting into the spirit of the re-envisioning.

"Exactly," Mr. Bell said. "A sort of big jungle, and each floor could have its own species." He then picked up his cellphone and called his wife, Susan Bell, a vertebrate paleontologist at the American Museum of Natural History. After a certain amount of back-and-forthing, a decision was made. "On the forest floor, you could have turtles and crocodiles," he said, "then monkeys and tapirs, then quetzals and toucans at the top."

Well, one never knows: this apartment is on the fifth floor of a six-story building at 251 West 95th Street, a grand 1899 Beaux-Arts edifice at the corner of Broadway. The building is in the process of becoming a cooperative.

Some whimsy may be possible; there is certainly a better chance to be adventurous now than in a more established co-op, where the rules are set in stone. While an old-line board of directors might have a problem with painting the courtyard with a lot of fauve colors, a new one might not.

Mr. Bell also can be practical. "The plumbing is pretty much where it has to stay," he said, feverishly marking sight lines and highlighting plumbing fixtures.

"Apartments start right at the elevator," he said, rising and going back into the mosaic-tiled hallway, which has a gutsy turn-of-the-previous-century iron staircase running through it. "This is a nice, wide hallway, which has this wonderful big double window overlooking the mural," he said, reverting to the whimsical.

The front hall of the apartment is mundane, with what looks like a newly constructed Sheetrock closet with two Home-Depot-style paneled doors on the left side. The hall leads to a warren of doors and doorways, and, ahead of them, the one window overlooking a brick wall. The visitor can go more or less straight into the two big front rooms - "and perhaps a fireplace here?" Mr. Bell asked, to no one in particular - or turn right, down that narrow dark hall to the kitchen, the two unrenovated bathrooms and the bedrooms.

All in all, the apartment is about 1,900 square feet, which is a substantial amount of space, but right now, it doesn't look it. The myriad doorframes and a confusing layout make it look a bit cramped, despite the big windows and the wealth of details, like the period wrought iron grilles - vaguely Art Nouveau leaf forms and cartouches - on some of the living room windows facing 95th Street.

In his rendition of what the apartment could be, Mr. Bell has basically realigned the whole apartment, moving walls to make more dramatic - and, he says, more practical - use of the space. The first change and perhaps the most dramatic of all is in the entrance hall, where a jam-up of doors has morphed into an elegant Grecian foyer, complete with four Ionic columns. The columns echo those in the spacious but boring lobby five floors below. That way, "you own the lobby down below; it becomes part of your apartment, and you don't even have to pay maintenance on it," Mr. Bell said.

A center fireplace between the living room and what has become a family room is flanked by two French doors. How to put a fireplace in a building with no fireplaces? "If you're on the next to the top floor, and there's only one guy above you," the architect said, "convince him you'll give him a free fireplace so he'll go along with the plan." Mr. Bell's rendering includes coffered ceilings in both the entrance hall and the living room, and the fireplace flue might be encased inside one of those beams, he says.

Toward the back of the apartment, Mr. Bell has moved the small kitchen across the hallway and created a wall of glass, see-through but removed from the day-to-day traffic. The old kitchen space has become part of a newer, bigger bedroom. The bathroom has been moved to the northern end of the apartment, accessible from the two northern bedrooms.

One of the most clever changes has been to carve out what Mr. Bell called "a gorgeous little room" at the end of the now-shortened hallway. This domestic foyer does several things: by placing a sculpture on the end wall, a focal point is created. And instead of bedrooms opening off a long, oppressive corridor, the bedrooms now are linked to this miniature space, which might be painted a bold color like sienna red or ocher.

While this rendition contains a lot of surprises, the cost for the entire renovation - all new floors, kitchen, new bathroom, walls - is the biggest one of all.

Toward the back of the apartment, Mr. Bell has moved the small kitchen across the hallway and created a wall of glass, see-through but removed from the day-to-day traffic. The old kitchen space has become part of a newer, bigger bedroom. The bathroom has been moved to the northern end of the apartment, accessible from the two northern bedrooms.

One of the most clever changes has been to carve out what Mr. Bell called "a gorgeous little room" at the end of the now-shortened hallway. This domestic foyer does several things: by placing a sculpture on the end wall, a focal point is created. And instead of bedrooms opening off a long, oppressive corridor, the bedrooms now are linked to this miniature space, which might be painted a bold color like sienna red or ocher.

While this rendition contains a lot of surprises, the cost for the entire renovation - all new floors, kitchen, new bathroom, walls - is the biggest one of all.

Mr. Bell, who has been an architect for several decades, estimates that all this work could be done for about $300,000, which does not sound bad for a four-bedroom apartment with a dining room and an entertainment room. "That's budgeting $25,000 apiece for the bathrooms, $50,000 for the kitchen and $200,000 for the rest," he said. "It's doable unless people go crazy with rare marbles, woods and 14-karat gold faucets."

If you want him to do it for you, he added, there's only one nonnegotiable item. "I don't work for people who don't have a piano," he said.

Was he kidding?

"Well," he replied, adjusting his striped bow tie. "Almost never."

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Living with Temptation By NADINE BROZAN Some people in the real estate business never know, when they get up in the morning, whether the  uncontrollable urge to buy an apartment will strike during…... Read more >

Living with Temptation
By NADINE BROZAN

Some people in the real estate business never know, when they get up in the morning, whether the  uncontrollable urge to buy an apartment will strike during the course of the workday.

"Sometimes when I walk into a place for business, the hair on the back of my neck stands up," said Diane M. Ramirez, the president of Halstead Property. "I can see the finished product, the pearl, and I feel the creative juice of knowing what it could be if I just got my hands on it."

Dolly Lenz, a broker who is executive vice president and managing director of Prudential Douglas Elliman Real Estate, often has the same reaction to properties she is scouting. The yen hit most recently when she sold Andrew Lloyd Webber's apartment in Trump Tower. "I was incredibly tempted to buy it myself but decided that was inappropriate," she said.

Ms. Lenz, who has moved 35 times in 29 years, buying mainly sponsor apartments, may well be outdone in the pace of her purchases by Michael Shvo, president of the Shvo Group.

"I cannot count the number of apartments I have bought," he said. "It could be as many as 30 or 40 over three years. I buy an apartment in every new development I handle, and it is very easy to become addicted. I am a real estate junkie."

Real estate executives, brokers, sales agents and marketers are constantly subject to temptation. "It is literally like loving chocolate and being locked into a chocolate factory," said Leonard Steinberg, a senior vice president at Douglas Elliman.

Amanda Brainerd, a broker with Warburg Realty Partnership, used a more romantic analogy. "I have seen many wonderful apartments, and every once in a while my heart starts pounding and I get that falling-in-love feeling," she said. "If I had a larger budget, I would be in big trouble."

Still, whatever the budget, real estate professionals are restricted by ethical constraints that curtail the ways they can jump into the market, and conflicts of interest can arise if they become personally interested in buying properties.

Though there is nothing specific written into state law that governs the licensing of real estate agents, "under common law, the broker has the responsibility to tell the seller the maximum they can get for the property," said Peter Constantakes, a spokesman for the New York Department of State. "Trying to get it at a lower price for themselves is a breach of fiduciary duty, so they would be liable for damages from the seller and the loss of license."

There are also proscriptions against entering bidding wars against clients seeking to buy. That does not mean brokers cannot buy for themselves. After all, they must live somewhere and have the right to buy and sell - so long as their actions do not conflict with the interests of the sellers or buyers they represent.

But, as Adrienne Albert, president of the Marketing Directors, which specializes in marketing new construction, put it: "If you're telling someone how to price a product, you should be telling them how to do it for their own good, not so you can jump in and grab a hot deal. By law, the broker must put the interest of the client first."

Agents are not supposed to compete with clients. "I can't say I want an apartment more than a client does; that would be an extreme breach of ethics," said Patricia Warburg Cliff, a senior vice president at the Corcoran Group.

That was not a problem for Mr. Steinberg when he and Hervé Senequier, his companion and business partner who is also a vice president at Douglas Elliman, signed a contract for a loft in Chelsea last month. "It came through our listing system, but we didn't show it to any clients," said Mr. Steinberg, who used to move at least once a year. The listing was placed by the sponsor, and not by any real estate firm. "I ran to see it at night in the pitch dark and liked what I could see in the dark," he said. "I put in an offering at full price and got it."

Some people in the business act on impulse far more readily than others.

Ms. Lenz, for example, who buys mostly sponsor apartments, gets restless after she has been in a home for more than a few months.

About six months ago, she moved into a condo on the 61st floor of the Park Imperial, at Broadway and 56th Street. "Now I am looking to buy again," she said. "I have moved 35 times in 29 years because there is always a better or more interesting neighborhood I want to try, a better view, higher ceilings or it's closer to school or work - whenever there is something that psychologically interests me," she said. "That's why I went into the business to begin with. I do such a good job with selling clients that I sell myself."

If she takes the plunge this time, it will probably be for a town house, and her children, Jennifer, 15, and Joseph, 16, have been on the lookout for her. "They are very precocious," she said. "They know more about the market than I do. My son just called about the status of a house he knows about, asking have I gone to see it yet. They like moving; they get to decorate new rooms."

Her husband, Aaron Lenz, a C.P.A., takes a bit more convincing. "He's a homebody and nester; we are gypsies who like the thrill of the hunt," she said.

Others are more cautious. Louise Sunshine, the marketing strategist, had never bought anything in the many buildings she has helped shape in her 35 years in the industry - until now. "I have recently fallen in love with three buildings and bought there," she said, explaining that she was drawn by "the gloss, views, technology, quality of finishes and proportions."

The apartments are at One Beacon Court, the luxury tower nearing completion between Lexington and Third Avenues and 58th and 59th Streets; the Windsor Park, by Gwathmey Siegel, at 58th Street and the Avenue of the Americas, which she bought as a pied-à-terre for her son, Paul Sunshine, a San Francisco lawyer; and Highgrove, a luxury condominium complex in Stamford, Conn.

Darren Sukenik, a senior vice president for luxury residential sales at Douglas Elliman, who recently moved into one of the three units he bought at Morton Square in the West Village, believes it enhances his performance on the job to be in the market himself.

"Cardiologists should get on a treadmill four times a week to practice what they preach," he said. "I feel we have to be in the market ourselves, otherwise we are being hypocritical. How can we have insight and foresight if we don't take our own advice?"

Mr. Sukenik sold his two units "the minute I closed," he said, almost doubling the price he paid when he went into contract about 18 months ago.

For other people in the business, the desire to acquire wanes with time and experience.

"You get jaded," Ms. Cliff said. "When you go to parties, everyone says, 'Isn't this gorgeous?' I say, 'Yes, it's nice,' but very few really excite me. Every once in a while, there is great architecture or great views."

On the other hand, she said, "Brokers ought to be required to move every three years so they can identify with the pain, understand the colossal complications that can arise."

Still, those complications seem not to be deterring Ms. Cliff. She and her husband, Karl von Frieling, are in the midst of their second move in three years, going from the Solita building on Grand Street to a loft in the meatpacking district, with a stop-off in a rental to allow for renovation.

Frederick W. Peters, president of Warburg Realty, long ago gave up the idea of moving. "In the beginning I would go home at least once a week and talk to my wife about some fabulous thing I had seen and how we needed to move," he said. "As things turned out, we lived in the same apartment for 27 years, and property started to look like inventory to me. For many experienced brokers it ceases to be 'I'd love to own this' and becomes 'I'd love to sell it.' " Mr. Peters still lives in the co-op he bought in the White House on Central Park West in 1977.

Brokers who do buy tend to go for wrecks requiring serious restoration. "What I look for is that little lost puppy that I know has potential most people can't see, so it is usually not a property that sells quickly," Ms. Ramirez said.

During her 25 years in the city, she has moved nine times and has lived in a five-room apartment, a 17-room apartment, a loft and a town house. "I have my husband keep his toothbrush in his pocket so we can move quickly," she said.

In addition, during her 37 years of marriage, she has owned more than 30 other homes, in New Jersey, upstate New York and Florida, some of them primary residences and some weekend or vacation getaways.

"I love the renovation process with all its pimples," she said. "It is my creative outlet. I love working with plans and I have a good sense of how to work a floor plan. Often contractors tell me they can't believe I saw any redeeming factor in a property."

At one time, she had three renovations going on simultaneously. "I had to ask which residence the contractors were calling about," she said.

John Wollberg, an executive vice president and managing partner at the Atco Residential Group, said: "Brokers have the vision and ability to see past obstacles and into real value. You may not be able to sell that vision to your customer or any other customer, so maybe you have the opportunity to take action, whether it is to occupy or for investment purposes. We may not be going to move into it, but maybe we could do something with it."

When brokers buy for investment, they buy condos, because co-op boards generally do not permit shareholders to rent out their units.

Often they gravitate to sites not yet built, or get in early in the construction process, when developers deliberately set prices lower than what they seek at completion.

"It is a really great way to begin to develop a real estate portfolio," said Kathy Sloane, a vice president at Brown Harris Stevens.

"You have a developer who needs to sell, a good project at a good address, and you can go in and put down 15 percent and not pay the rest until the closing," she said. "In that situation, a one-bedroom could be $900,000. By the time the building closes, it could be worth $1.2 million. You could close and immediately sell at a profit, close and live in it or close and rent it for substantial rent. This is one area where we have a tremendous advantage because we learn about things before anyone else and can be in a position to say this is something we ought to own."

And then there are the brokers who, no matter how many multimillion-dollar sales they have under their belts, continue to rent year after year. Wendy J. Sarasohn, a senior vice president at Corcoran, is one of them. "We're like cobblers' children with no shoes," she said.

It's gotten so bad, she said, that she has been experiencing a role reversal. "I'm now in a situation where my clients are coming in from Bedford and Greenwich with their drivers and listings they have pulled off Web sites to take me, their broker, around," she said. "They can't believe I am throwing away $8,000 a month on rent."

She lost money in her one foray into the market: a co-op in a building whose shareholders did not own the land. She sold it in 1999 after having lived there for 13 years. "I was one of the few people I know who did not make any money," she said. "Then I went into a rental with the notion I would stay a year or two until I found something. That was six years ago." But she said: "I move vicariously with my clients into their $15- to $25-million apartments. They are higher end than my pocketbook."

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The New York Times House & Home Section January 15, 2004 ONE BEDROOM, MANY BIDS By: Mitoko Rich FOR around $470,000, recent listings show, you could buy a four-bedroom, four-bathroom traditional house…... Read more >

The New York Times
House & Home Section
January 15, 2004

ONE BEDROOM, MANY BIDS
By: Mitoko Rich

FOR around $470,000, recent listings show, you could buy a four-bedroom, four-bathroom traditional house in Dallas with granite kitchen countertops and vaulted living room ceilings. In Columbus, Ohio, you could buy a sprawling four-bedroom house with two fireplaces, a whirlpool and a ravine outside your front door.

Or you could buy a one-bedroom apartment in Manhattan.
Buyers paid an average of $469,960 in the final quarter of 2003 for one-bedroom apartments in Manhattan below 96th Street on the East Side and below 112th Street on the West Side, according to the Douglas Elliman Manhattan Market Overview, one of the most comprehensive surveys of the real estate market in that area.

Despite such high prices, demand heated up: though two-bedrooms still represented the highest proportion of sales — 43 percent — one-bedrooms grew from 32 percent of all sales in the last quarter of 2002 to 39 percent in 2003, according to Miller Samuel Inc., the real estate appraisal company that compiles the report.

The average price of one-bedroom co-ops vaulted, to an average of $444,373, up 7.2 percent from the previous quarter.

"There's just not enough inventory out there," said Sheila Lokitz, an agent with the Corcoran Group in Manhattan. "And what comes on just absolutely flies off the market." Condos, a much smaller part of the one-bedroom market, fell to $536,634, from $574,580 in the third quarter.

Buyers could take some relief from the fact that the average price of all co-ops and condos — a measure strongly affected by extremes at either the high or the low end — was down 1.5 percent, to $903,259, compared with $916,959 in the previous quarter. But the third-quarter figure was inflated by the record-setting $45 million sale of a penthouse at the Time Warner Center.

Basically, said Jonathan Miller, president of Miller Samuel, "all the indicators are up," as low interest rates, a rebound on Wall Street and a growth of confidence in the economy prompted more New Yorkers to pour money into a dwindling supply of apartments.

The number of apartments on the market dropped 7.3 percent, to 4,843 at the end of the fourth quarter, from 5,224 at the end of the third — the first time in seven quarters that inventories fell below 5,000. "All of our brokers are scrounging around and fighting over the same number of listings," said Steven James, director of sales at Douglas Elliman, one of the city's largest brokerage firms.

One of his firm's chief rivals, Corcoran, will also release figures today, showing that the average price of condos and co-ops rose nearly 9 percent, to $854,000 in the fourth quarter, compared with $784,000 the quarter before. Corcoran's figures cover Manhattan sales below West 125th Street and East 96th Street.
"I think the story of the year was coulda, shoulda, woulda," said Pamela Liebman, chief executive of the Corcoran Group. "If you didn't buy in the first half of the year, you spent a lot more money in the second half for the same type of apartment."

Buyers of one-bedroom co-ops certainly were learning that lesson all year. With mortgage rates low, the monthly cost of buying an apartment was often close to the cost of renting one, or even lower, even though rents dropped by nearly 30 percent, said Neil Binder, a principal at the Bellmarc Companies, a real estate firm in Manhattan.

"Based on the monthly carrying costs, for the one-bedroom buyer it became a very exciting alternative," Mr. Binder said.

Then, toward the end of the year, apartment buyers started to panic at the prospect that interest rates might increase or that the improving economy would draw out even more buyers. As a result, bidding wars were common, and those who hesitated or made lowball offers suddenly found themselves priced out of the market.

For sellers, who just a few years ago were worrying that one-bedrooms were not a good investment, the buying boom has turned into a boon. In September, when MaryJo Palumbo, an agent at Douglas Elliman, took on a listing for a one-bedroom co-op apartment in Chelsea, she advised the seller to price it at $399,000. But the seller decided to ask $425,000.

At first, offers trickled in: $385,000, $395,000, $400,000. The seller turned them all down.

Then, in the first week of December, Ms. Palumbo said, four buyers offered the asking price, and one raised it by $11,000. The seller accepted an offer at the asking price, Ms. Palumbo said.

"People who have been on the fence about buying one-bedrooms are looking at the economy improving and believe that prices and interest rates are going to go up this spring," Ms. Palumbo said. "So they're buying right this second, before anything happens."

The trend appears to be continuing. Ms. Lokitz of Corcoran said she was supposed to take a client to an open house for a "charming and quaint" co-op on the Upper West Side on Sunday. But with the temperatures icy, the client, who was feeling ill, decided to wait. When Ms. Lokitz called the seller's broker on Monday to arrange a visit, "they already had four offers," she said.

According to the Elliman Market Overview, the average size of an apartment sold in Manhattan last quarter shrank to 1,280 square feet, from 1,302 in the third quarter and 1,437 square feet in the fourth quarter of 2000.

"People realize they have to be more receptive to things that normally they might not have been able to accept before," Ms. Lokitz said. "A few years ago, if you said to somebody that you had a one-bedroom for 600 square feet, they were appalled and said, `I can't live in that amount of space.' "

At the other end of the market, the shrinking supply of two- and three-bedroom apartments hurt buyers hoping to upgrade from their one- or two-bedroom homes.

The average price of a two-bedroom rose 9 percent in the fourth quarter, to $1,140,377, from $1,045,648 a year earlier.

In the condo market, the price increases for larger places were even more striking. The average for a two-bedroom apartment rose 7.2 percent, to $1,450,640 in the fourth quarter, from $1,353,520 in the third quarter. A three-bedroom condo averaged $3,278,823 in the fourth quarter, up 13.2 percent from $2,895,705 in the quarter before.

Amanda Brainerd, an agent at Warburg Realty, said condo prices were driven in part by the fact that the supply was limited, but also by an increase in demand from relatively young buyers who were finding it difficult to meet the financial requirements of co-op boards.

"Let's say there's some 38-year-old guy on Wall Street who makes $1.2 million a year in salary, has three kids and wants to buy a $5 million condo," Ms. Brainerd said. To qualify for a co-op, she said, the buyer would probably have to show that he had $10 million to $15 million in liquid assets. "He hasn't had enough time to sock away $10 million or $15 million in cash," she said. "But if you're buying a condo, you just need enough money for a down payment and to be able to pay your monthly mortgage. The higher the prices get, the higher the stakes are with the co-op boards."

Sales of two- and three-bedroom condos picked up in the last quarter of the year. For example, Robert E. Doernberg, director of condominium sales at Warburg Realty, said that at Bridge Tower Place, a 38-story skyscraper at 401 East 60th Street, five three-bedroom apartments sold in the fourth quarter, with price rises of more than 10 percent within just three months.

"Some of them were languishing on the market, and all of a sudden — boom, boom, boom! — they sold in the fourth quarter," Mr. Doernberg said. He said one sold for $1.85 million at the beginning of the quarter, and an identical unit on a different floor sold for $2.1 million in December.

Although brokers have been exchanging hyperbolic anecdotes about the return of the "super luxury" category — above $3 million — the Elliman Market Overview showed that in the fourth quarter the average sale price of luxury apartments fell 7.8 percent, to $3.19 million, from the prior quarter. But that might have been in part because buyers were having to make do with slightly smaller apartments: the average square footage of a luxury apartment dropped to 2,516 square feet, from 2,702.

That's almost an incentive to move to Dallas. That four-bedroom, four-bathroom house with granite countertops and vaulted ceilings, for $470,000? It's 3,189 square feet.

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