LEADERS   Selling Advice and Expertise An Interview with Frederick Peters, President, Warburg Realty   Q. Warburg is known as a luxury player. Is your niche only the top tier or is it broader?…... Read more >

LEADERS
 
Selling Advice and Expertise
An Interview with Frederick Peters, President, Warburg Realty
 
Q. Warburg is known as a luxury player. Is your niche only the top tier or is it broader?
A. I hope it’s broader. I would like to think that we would be known for how we provide service rather than the particular level of property at which we’re providing that service. I want the studio buyer and the $50-million property buyer both to feel as if they’re getting attentive, knowledgeable service with an emphasis on transparency and integrity. I’m more focused on believing that the luxury element of our product is in the expertise and service we provide rather than the price of the property.
 
Q. Is it possible to really differentiate in this space and how do you get that message out?
A. It’s not easy to reach the consumer with profiles about what distinguishes one firm from another. In the end, we’re mostly dealing with consumer experience. So even though we do a lot of marketing, I’m dependent on my agents and myself to act as ambassadors for the values we embody.
 
However, by making the decision to keep the firm relatively small, I’ve made sure that I feel comfortable with every ambassador who is out there. You can do with that with 150 people in a way that you can’t with 1,500 people.
 
Q. What does it take today to become a successful agent?
A. The successful agents never treats the job as part time. This business was always a job for which, in theory, you make your own hours – in practice, that means you are on call all the time.
 
Agents were once gatekeepers of information – we had the listings. Buyers came to us for that reason. Now information is the most available commodity on earth – anybody with a computer has database access.
 
Today, what we’re selling is the equivalent of what an investment advisor is selling – advice and expertise. What that has meant is that a successful agent has to acquire a much broader base of knowledge than he did when people called us up because we had the listings and they didn’t.
 
Today, you need someone who is sophisticated with both technology and economics, and who knows the role that a property purchase is going to play in the overall portfolio of the purchaser or seller; you also need to be sophisticated with co-op sales about the strategy you use to make sure your client gets into the building. There are a series of specialized economic and strategic orientations that are required today to be successful as a real estate agent in New York city.
 
I look for people who are highly educated, who have very good people skills, who can close since this is a sales job, and who have a solid knowledge base and can contextualize the purchase for the client.
 
Q. How do you offer the technology clients demand, while making sure your people don’t lose the human contact?
A. Part of that challenge is generational. As you deal with younger agents, they’re likely to be texting; in some ways I’m training them and in some ways they’re training me, because the world is evolving . I still believe you have to negotiate voice-to-voice because there is so much nuance conveyed through a voice that you can’t pick up from a screen.
 
Our goal is to use the technology for what it is good at: marketing and giving prospective clients a good a sense of a property online. I write a weekly blog about real estate in both its smaller and larger contexts and technology and social media have been enormously helpful in building the blog’s circulation to the million-plus numbers it has reached today. So it is great for some things. However, we also make sure that Warburg agents understand that this is still a person-to-person business.
 
Q. Do you feel there is a broad understood in New York of the impact the real estate industry has on the city?
A. If you see the Occupy Wall Street protestors outside the annual REBNY banquet, that would lead you to suspect that there is an understanding of what a large role real estate plays in the economy of the city.
 
I believe our industry is the heartbeat of New York. The real estate industry is probably just as significant as the financial industry in its support for candidates, and the big developers and real estate owners are funding the tax base of the city. The industry is just less visible. It’s the most significant industry in the city philanthropically as well.
 
Q. Did you know early on you would be here 35 years later?
A. I loved the multiple tracks that this business required me to think on from day one. I liked that there was a strong interpersonal element and that we are helping people make decisions that have a real impact on their quality of life. So it always felt important to me.
 
Q. Are there opportunities elsewhere or is New York it for you?
A. There are opportunities, but I like to sell what I know. People fail because they get into businesses they don’t really understand. I don’t have a corporate parent that is driving me to maintain the stock price so I can decide whether or not something makes sense for me. My plan is to continue to expand in the markets where I feel like we know what we’re doing.
 
Editors’ Note
Frederick Peters is a graduate of Yale College with a Masters and extensive pre-doctoral work in music. He entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years, he acquired and renamed the 95-year old firm in 1991. Since that time, Peters has expanded the company from 60 to 130 agents and from one to three locations. His dedication to the industry is further expressed through his involvement on The Real Estate Board of New York's (REBNY) Board of Directors - Residential Division; as a member of REBNY's Board of Governors; and as the Vice President for Residential Brokerage on REBNY's Executive Committee. In January of 2010, Peters received the prestigious Kenneth R. Gerrety Humanitarian Award, which recognizes meritorious service to the community by a REBNY member. He was also a recipient of REBNY's 1996 Henry Forster Award.
 
Company Brief
Warburg Realty (www.warburgrealty.com) is one of the oldest and most respected luxury residential brokerage firms in Manhattan, having provided luxury real estate services since 1896. Warburg has distinguished itself in the vanguard of tech-savvy real estate companies with over 8,000,000 hits per month to their Web site and more than 90,000 hits to the Warburg Blog alone. As one of the city's few remaining privately owned firms, with minimal bureaucracy, clients have access to all the expertise represented by the Warburg Realty's management team. Each of Warburg Realty's three offices is overseen by a Sales Director who provides support to the agents and helps them manage every step of each transaction. All Sales Directors have been in the business 20 years or more and offer a breadth of experience in new development as well as re-sales throughout Manhattan, northwestern Brooklyn, and Long Island City.

 

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Warburg Realty Relocates to New, State-of-the-Art Offices at 654 Madison Avenue in Manhattan Warburg Realty, one of Manhattan’s oldest and most respected residential real estate companies, has officially…... Read more >

Warburg Realty Relocates to New, State-of-the-Art Offices at 654 Madison Avenue in Manhattan

Warburg Realty, one of Manhattan’s oldest and most respected residential real estate companies, has officially moved its headquarters to the state-of-the-art offices at 654 Madison Avenue in Manhattan. The new, cutting-edge location supports the company’s commitment to providing its clients with an exceptional sales experience.

Designed by architect Chandler Pierce, the new 7,000 square-foot, full-floor office provides an elegant and sophisticated aesthetic, with a warmth that makes clients feel right at home during the sales process. Conveniently located in the highly-trafficked Madison Avenue corridor between East 60th and 61st Streets, the new headquarters provides easy access for customers from a number of transportation points in the area.

All of the firms’ agents previously located at 969 Madison Avenue will relocate to the new space, which will also house Warburg U, a brand new training center. Warburg U is part of the firm’s commitment to professionalism and excellence by providing its agents with ongoing training and market insight sessions for new and experienced brokers. 

In addition to its new space, Warburg Realty customers also benefit from the firm’s ongoing branding efforts and role as a thought leader through the integration of social media to market real estate. As the first firm to implement an iPhone app, through the widely popular AroundMe platform, it regularly incorporates Facebook, Twitter and blogging as part of its daily business. The brokerage has also garnered national notoriety for its starring role on the hit HGTV show, Selling New York, where the firm’s agents and exclusive listings are regularly featured in the storylines.

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THE REAL DEAL NEW YORK CITY REAL ESTATE NEWS   Who really owns NYC’s real estate firms? In city brokerages, a look at who controls the purse strings, from family firms to corporate parents To outsiders,…... Read more >

THE REAL DEAL
NEW YORK CITY REAL ESTATE NEWS
 
Who really owns NYC’s real estate firms?
In city brokerages, a look at who controls the purse strings, from family firms to corporate parents

To outsiders, it may be hard to distinguish between New York City’s big real estate firms. But behind the scenes, even firms of similar sizes and reputations can have vastly different ownership structures.

Many of the city’s residential brokerages, for example, have long been privately owned by families. Others have large, publicly traded corporate parents. Still other owners have silent parents, or offer their brokers the opportunity to own a piece of the firm.

These structures dictate, to a large extent, how firms operate, make decisions and divvy up the profits. Individual owners, for example, tend to have more control over the company but less cash-flow, while firms with large corporate parents may have the opposite.

This month, The Real Deal looked at New York City firms with a variety of different ownership structures to see who controls the purse strings and what that means for getting deals done.

Warburg Realty

Madison Avenue–based brokerage Warburg Realty, meanwhile, has a somewhat unusual ownership structure, explained CEO Frederick Peters.

In 1991, as Peters was contemplating purchasing a brokerage called Albert B. Ashforth, he approached several of the firm’s star brokers and invited them to become part-owners along with him.

“I felt that there would be no better way to permanently connect my top people to the organization than to give them a share in it,” he said.

As a result of this unique genesis, Peters now owns a 51 percent stake in the company, and the rest is owned by brokers Jane Bayard, Linda Reiner, Lisa Deslauriers, Bonnie Chajet, Ronnie Lane, Wendy Greenbaum, Jane Andrews and Judith Thorn. (All but Deslauriers and Bayard were Ashforth agents.)

“Every shareholder is a working member of the Warburg team,” Peters said.

As the majority owner, Peters has the final word on all of the company’s strategic decisions, but all those with a piece of the company are kept up to speed on the day-to-day operations of the firm and their advice is frequently sought out. And since these broker-owners share in the company’s profits, they have an added incentive to work hard.

Another advantage to this structure, Peters said, is “that I don’t have a boss. I can figure things out in consultation with my management team and implement them quickly. All my agents have access to me. If there’s something they think is or isn’t working, [they can tell me].”

 

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The New York Times   Dear Owner: Please Sell Faced With Apartment Shortage, Brokers Get Creative   A shortage of New York City apartments for sale is forcing real estate agents to take extreme,…... Read more >

The New York Times
 
Dear Owner: Please Sell
Faced With Apartment Shortage, Brokers Get Creative
 
A shortage of New York City apartments for sale is forcing real estate agents to take extreme, if not desperate, measures in order to conjure up listings.

One tactic is sending letters to all the two-bedrooms, say, in choice buildings to try to persuade their owners to sell. Another is buttering up the doorman for information on who might be inclined to move — a couple with a baby on the way, perhaps, or newly empty nesters.

Some brokers are trolling through expired listings in the hopes of reviving a dead deal. Others are digging through rental agreements to see when leases in coveted buildings might be coming due. And at least one broker has found that her years of volunteering at nursing homes have helped her find leads (more on that later).

Working the phone, the Rolodex and even the memory, brokers say, is all part of the game now that listings have hit a record low. Just 5,160 apartments and town houses were on the market in Manhattan at the end of last year, according to the appraisal firm Miller Samuel. That’s the lowest number since comprehensive tracking began about 12 years ago.

“If you are a shoe salesman, you need shoes to sell,” said Linette Semino, an associate broker at Warburg Realty. “Otherwise you’re not a shoe salesman.” To stock her shelves, she has been scouring expired listings, contacting landlords to see if they will sell, and soliciting owners by letter on her buyers’ behalf. With listings so scarce, “you have to think outside of the box,” she said.

Sure, most of these off-market exploits don’t result in deals. But in some cases, they have produced the keys to a new home. Following are six strategies for creating inventory in a tight market.

Go Canvassing

That’s what brokers call sending letters to owners to see if they will sell. Jeff Silverstein, a broker with Douglas Elliman, recently sent out a mailing to roughly 1,000 owners in choice buildings south of 14th Street. “Dear Resident Owner,” the letter began, “I am currently working with a client who is looking to live downtown. The inventory is extremely low and I need either a two-bedroom or three-bedroom apartment for her. ...” He has received three responses since the letters went out a couple of weeks ago.

Canvassing worked for Andrew Phillips, a broker with Halstead Property, when he was working with a family looking for a pied-à-terre. After a deal fell through on a $3.2 million apartment on Leonard Street in TriBeCa, Mr. Phillips sent handwritten letters to the owners of similar apartments in the building, including one that had recently been pulled from the market. When he didn’t hear from the owner or his former listing agent, he tracked the owner to his Florida address and called him.

“I said, ‘I have a buyer who missed out, and we’re not going to question the price,’ ” Mr. Phillips recalled. The owner gave him the go-ahead to show the unit, which was slightly smaller than the other place but nicely renovated. The family liked it so much they paid an additional $150,000 for the furniture, which brought the total to $3.45 million.

Approaching owners also recently paid off for Michael Rubin, an agent with CORE.

Last spring, Deepak and Kirti Srikant dropped by an open house Mr. Rubin was hosting in their building. They were just curious, said Mr. Srikant, the marketing director for a medical device start-up. “We weren’t convinced just yet that we wanted to move or sell.” But because the couple were sharing the bedroom with their small child, “we knew we’d have to move at some point. ”

Mr. Rubin asked if they would be interested in listing their apartment. He told them he had buyers already lined up. He said he knew he could sell at a good price.

“I harassed them,” he said jokingly.

Eventually, the couple agreed to show their apartment without actually listing it, with a specific price in mind: $1.35 million. They closed last month for nearly 4 percent more than what they had hoped for and more than 20 percent above what they paid in 2007.

And the Srikants made money on the deal by spending less than they had received on a two-bedroom with two baths and an office alcove in the financial district. “It’s a win-win that way,” Mr. Srikant said.

Search Expired Listings

Apartments are taken off the market for all kinds of reasons, ranging from low offers to visiting houseguests. You can search for expired listings on Streeteasy.com by selecting “advanced search” and “include only unavailable listings” under “listing status.” You will need to do a fair amount of cross-referencing to be sure a place has truly been removed — not sold and taken off the broker’s Web site or relisted with another agent. Then you can contact the original broker to see if the former client is still interested in selling. Be prepared to offer more than the original listing price.

Jessica Cohen, an associate broker with Douglas Elliman, came up with a three-bedroom on the Upper West Side by thumbing through expired listings.

Though the apartment had received multiple bids, she said, the owner had decided he wasn’t ready to move — partly because he’d had trouble finding a larger apartment for himself. But because her clients’ budget was higher than what the owner had initially asked, he allowed them to see it.

“It’s hard to get comfortable with paying over asking price for something that didn’t sell three months earlier,” Ms. Cohen said. But with “nothing to buy” she said, her clients are considering putting in an offer.

Consider a Combination

Can’t find a large enough apartment? Maybe you should be thinking about combining two small units. Studios and small one-bedrooms are fairly plentiful in the Upper East Side corridor east of Third Avenue beginning at 96th Street and stretching down through Kips Bay into the 20s, according to Frederick Peters, the president of Warburg Realty.

Spotting just such an opportunity, Elaine Tross, an executive vice president of Halstead Property, showed two side-by-side units at 250 East 87th Street, a Junior 4 and a two-bedroom two-bath unit that had a combined 2,300 feet of space. The total asking price was $2.175 million.

Because the building was in the thick of the Second Avenue subway construction zone, buyers would have to live with daily blasts for many months. But with few large apartments on the market, families looking for space were drawn to the listing.

The place ultimately sold to a seven-person household, including a live-in nanny, for $2.031 million. A completed three-bedroom combination in the same building is currently on the market for $2.5 million.

Combining apartments is not for everyone, Ms. Tross said, pointing out that such renovations are expensive, and require an architect as well as approval from the building and the city. But after several months of extensive remodeling, the seven-member family now has a four-bedroom four-bath home, she said.

“For the headache of it,” Ms. Tross said, “they got the apartment at a good price.”

Sweet-Talk the Doorman

Privy to many intimate details of the lives of their building’s residents, doormen often know, long before any listings are posted, when a move is planned.

“They have a very early idea of what’s happening,” said Jarrod Randolph, a broker with CORE, who found a client a $4.1 million Upper East Side three-bedroom about a year ago by chatting up the doorman.

Engaging in a conversation that may produce such information requires some finesse. You can’t be pushy and ask for the unit number, Mr. Randolph said. A better approach is to leave your card and ask the doorman to please pass it on to the sellers.

“I might come back a week later at the same time and on the same day, assuming the same doorman will be there,” he said, “and I might bring him coffee and cookies.”

Get a Well-Connected Broker

Michele Kleier, the president of Kleier Residential, has been going through her mental lists of past sales to figure out who might be ready to move again. “You need to keep on top of lifestyle changes,” she said, “because the truth is, if somebody is becoming an empty nester, very often they are going to move to a smaller apartment.”

People don’t necessarily focus on when the best time would be to enter the market, she added. With demand so strong for larger apartments right now, past clients with three or four bedrooms are sometimes shocked to learn how much their apartments are worth. Learn to Play Chess

Tova Weiner, an agent with A. C. Lawrence & Company, has been volunteering at nursing homes and retiree centers since grade school, never with any idea that it would end up benefiting her real estate career.

“One day an elderly woman asked what I do for a living,” Ms. Weiner recalled. “I told her I’m a real estate agent. In less than 60 seconds I had the whole room gather around asking advice regarding their properties. I walked out of that nursing home that day with my hands full of listings.”

Ms. Weiner, who primarily handles commercial listings but also does some residential, says she continues to receive calls and referrals from “the elders,” as she respectfully refers to the people she has met in nursing homes over the years.

“They know everyone and everything that’s in their neighborhood,” she said. “They know who is getting married, expecting a baby, getting divorced, moving, dying, selling and buying, and they know the story behind the vacant building down the street.

“Can’t find what you’re looking for?” Ms. Weiner said, “Just go to the park chess tables and ask.”

 

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The Mann Report Residential Warburg Realty Unveils New Marketing and Rebranding Warburg Realty, one of New York’s oldest and most respected residential brokerage firms, has created a new look which…... Read more >

The Mann Report Residential

Warburg Realty Unveils New Marketing and Rebranding

Warburg Realty, one of New York’s oldest and most respected residential brokerage firms, has created a new look which focuses on the firm’s historic commitment to customer service and local market knowledge.

The campaign includes a re-envisioning of the firm’s online and print advertisements, electronic brochures, social media pages, mailings as well as a brand enhancing new display on the company’s www.warburgrealty.com website homepage.

“We are all very excited about the new look,” said Frederick W. Peters, president of Warburg Realty. “Our market research showed us not only what customers and clients think of Warburg but also what they are looking for in an agent. Point C Studios and Platform Media NY have brilliantly integrated that information with Warburg’s century-old commitment to customer service. This new campaign will speak to ALL New Yorkers – the emotional resonance of their home buying and selling decisions, and how partnering with one of our extraordinary professionals can elevate that process.”

The news of the re-branding also follows the recent announcement that Warburg Realty will be moving into a new, state-of-the-art, 7,000 s/f headquarters at 654 Madison Avenue early 2013.

Michael Cooper, President of Point C Studios, said, “in our research we kept hearing from clients about a superior level of knowledge, service and integrity from the Warburg agents. They knew they were in good hands from the start. It was really an emotional connection, and something that clients of other brokerages just didn’t express. We tried to capture that sense of ‘knowing when it’s right’ throughout the creative.”

 

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SCENE Frederick Peters Warburg Realty, President My career in real estate has been one of complete serendipity. When my wife and I first bought our apartment, in 1977, I was bitten by the real estate…... Read more >

SCENE
Frederick Peters
Warburg Realty, President

My career in real estate has been one of complete serendipity. When my wife and I first bought our apartment, in 1977, I was bitten by the real estate bug. Even though I was a graduate student in music at that time, I began tracking down and studying floor plan books every chance I got. I memorized the layouts, the locations, which were simplexes and which were duplexes – I became obsessed. So when an opportunity to join a firm arose for me in 1980, I jumped at it! Five years of brokerage later, I moved firms to become a manager at Albert B. Ashforth, which I then bought with a group of broker shareholders in 1991. We changed the name to my middle name, Warburg, in 2003. So I have been the President of the firm, in one form or another,  for over 21 years.

What I love about my job is the variety. I still do brokerage, always in conjunction with an agent from my office. That gives me the chance to share business while learning their strengths and weaknesses and giving them on the ground advice about how to up their game. In addition, I am very focused as a blogger and a speaker on outreach for the firm, how to get the Warburg message of integrity and customer service out to the public as effectively as possible. I run meetings at all three of my offices every week or every other week, I work closely with our marketing department to create our look and determine where to place it, I speak to reporters from all the major publications, I meet with sellers and developers, I give pricing and deal advice. No two days are ever the same. I could not think of a more engaging and interesting way to spend my days.

1904 - Albert B. Ashoforth creates the first apartment co-operative plan in New York and puts into operation

1986 - Fredercik Warburg Peters joins Ashforth as Director of Sales

1991 - Peters and eight of the firm's top agents purchase the company, renamed Ashforth 
Warburg Associates

1992 - The firm's in-house advertising agency is launched

2003 - Ashforth Warburg Associates becomes Warburg Realty Partnership Ltd

2005 - Warburg opens two new offices; 30 East 76th Street, and 100 Hudson Street in Tribeca


 

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A Mad Dash to Avoid a Bigger Tax Bite NOT that anybody needs more stress during the holiday season, but sellers and their brokers and lawyers across the country have been scrambling to close deals and…... Read more >

A Mad Dash to Avoid a Bigger Tax Bite

NOT that anybody needs more stress during the holiday season, but sellers and their brokers and lawyers across the country have been scrambling to close deals and avoid January tax increases that will eat into their profits.

Sellers are agreeing to sizable discounts, some amounting to hundreds of thousands of dollars, while brokers are sprinting to keep up with the volume of deals.

“I am losing my mind,” said Raphael De Niro, a broker in New York with Douglas Elliman, who said recently that he still had a handful of deals left to close by Dec. 28. “In almost 10 years of doing this I have never seen a scramble to close deals in December before year-end like I am seeing now.”

What is everyone so worried about? Federal capital gains taxes — the tax you pay when you sell an investment — are expected to rise at the top rate from 15 percent to at least 23.8 percent. That would include a 5 percent tax increase and a new 3.8 percent tax on investment income levied on high earners to pay for health care.

While no one knows exactly what will be decided in Washington to avoid the fiscal cliff, many people expect that the cost of selling an investment will be higher in January than in December.

In New York City, where capital gains taxes are the highest in the country, sellers are facing an especially pricey situation. With New Yorkers already having to pay about 12.5 percent in state and local taxes, some owners and investors could be paying 35 percent on their appreciated assets, according to Frederick Peters, president of Warburg Realty.

The new tax picture has prodded owners to unload properties now, leaving brokers to sort out logistical snarl-ups like quickly finding moving trucks for furniture and precious art, and pleading for speedy approvals from lenders, appraisers, and co-op and condo boards.

Dolly Lenz, vice chairman of Douglas Elliman, found herself doing inventory at a wine cellar at 1 a.m. one night earlier this month at a $30 million co-op apartment on Central Park West, before the movers came to collect the 355 bottles. The apartment closing was at 8 the following morning.

“It was a bit of an oversight by the owners, who forgot they had all that wine,” Ms. Lenz said. The wine might have been more valuable than the apartment, she half-joked (three pieces of art in the apartment were valued at a total of $51 million, she said).

Ms. Lenz wrapped up the entire deal, from signing to closing, in just under seven days. It helped that the buyers, foreigners who had lived in the United States before, paid all cash.

Sensing a chance to land an apartment at cut-rate prices, many opportunistic buyers — including several from the hedge-fund and private-equity industries in New York, brokers said — have approached owners with offers that were rejected earlier in the year. They’re suddenly finding a receptive ear.

One buyer promised to close by year-end if the seller of a Central Park West apartment gave him 25 percent of the profit the seller would reap from the sale, Ms. Lenz said. The owners “have owned it for 30 years, so it was a big number,” she added.

For some buyers, the end-of-year deadline has proved particularly challenging.

John Burger, a broker at Brown Harris Stevens, was set to close the sale of a Manhattan apartment when the condo board threw “an unusual curveball,” requesting to interview the prospective buyers, who had already left the country on a vacation. Mr. Burger proposed doing the interview via Skype, but the board declined. “At this juncture we are hopeful there will be an interview by Dec. 27 so the contract can close,” he said. “But all of us are a little bit concerned about the timing.”

Complicating matters in parts of New York and New Jersey are the aftereffects of Hurricane Sandy. Some downtown Manhattan condo buildings that suffered flood damage still have not been deemed habitable, which has caused lenders to back off from approving the financing needed to close deals. Lenders have required reappraisals of flooded buildings’ common areas, but with so many wanting to sell at the same time, appraisal firms have had to turn away business.

“As of 10 days ago, my firm stopped accepting appraisal assignments for financial planning where we had to deliver by Dec. 31 because we are inundated,” said Jonathan J. Miller, president of Miller Samuel, a New York appraisal firm.

Lawyers are benefiting, too. Sandor Krauss, a Manhattan real estate lawyer, had 16 closings scheduled for this week and said he was on pace to do as many as 70 closings this month — triple the volume he did last December. “This will be the biggest December of my career,” he said.

Because of the looming deadline, sellers and their brokers have lost a lot of their negotiating leverage. Senada Adzem, a broker based in Boca Raton, Fla., said a seller recently gave a $50,000 discount to a buyer to close the sale of a five-bedroom beach villa there for $6.3 million — a final sweetener to close by year-end after already having negotiated the price down from $6.795 million.

The seller, Harold Acker, the 82-year-old chairman of Sleepy’s mattress company, has been eager to wrap up this deal, and another one to buy a piece of land for $3.2 million. He is concerned about estate planning, she said.

The other expected changes related to the fiscal cliff include a lowering of the inheritance amount at which estate taxes kick in. Currently, estates under $5.12 million are exempt. Next year the cutoff for an exemption could go back to its 2002 level of $1 million.

Ms. Adzem, who said she was working until 2:30 a.m. on Wednesday, has scheduled five showings for Christmas Day. “There are so many loose ends we have to tie up before the year-end,” she said.
With all the December closings, some in the industry are predicting that early 2013 will be unusually slow.

Mr. Peters of Warburg, on his blog, predicted that next year, “until individuals become accustomed to the changes, owners of large properties, with large embedded capital gains, simply won’t sell. They will shut their doors to a few of their bedrooms and stay put.”

 

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Warburg Campaign Aims to Put Buyers in the Know Warburg Realty, one of New York’s oldest and most respected residential brokerage firms, has created a new look. The campaign includes a re-envisioning…... Read more >

Warburg Campaign Aims to Put Buyers in the Know

Warburg Realty, one of New York’s oldest and most respected residential brokerage firms, has created a new look.

The campaign includes a re-envisioning of the firm’s online and print advertisements, electronic brochures, social media pages, mailings as well as a brand enhancing new display on the company’s www.warburgrealty.com website homepage.

The campaign was designed by New York-based graphic design firms Point C Studios and Platform Media NY.

“We are all very excited about the new look,” said Frederick W. Peters, president of Warburg Realty. “Our market research showed us not only what customers and clients think of Warburg but also what they are looking for in an agent. Point C Studios and Platform Media NY have brilliantly integrated that information with Warburg’s century-old commitment to customer service.

“This new campaign will speak to ALL New Yorkers – the emotional resonance of their home buying and selling decisions, and how partnering with one of our extraordinary professionals can elevate that process.”

Michael Cooper, President of Point C Studios, said, “in our research we kept hearing from clients about a superior level of knowledge, service and integrity from the Warburg agents. They knew they were in good hands from the start. It was really an emotional connection, and something that clients of other brokerages just didn’t express. We tried to capture that sense of ‘knowing when it’s right’ throughout the creative.”

The news of the re-branding also follows the recent announcement that Warburg Realty will be moving into a new, state-of-the-art, 7,000 s/f headquarters at 654 Madison Avenue early 2013.

Warburg was the first firm to implement an iPhone app, through the AroundMe platform; and has incorporated social media as part of its daily business.

The brokerage is also featured on the hit HGTV show, Selling New York.

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Warburg Realty Unveils New Marketing and Rebranding Campaign Warburg Realty Partnership, one of New York’s oldest and most respected residential brokerage firms, has created a new look which focuses…... Read more >

Warburg Realty Unveils New Marketing and Rebranding Campaign

Warburg Realty Partnership, one of New York’s oldest and most respected residential brokerage firms, has created a new look which focuses on the firm’s historic commitment to customer service and local market knowledge.  The introductory campaign, which officially kicks off on November 13, includes a re-envisioning of the firm’s online and print advertisements, electronic brochures, social media pages, mailings as well as a brand enhancing new display on the company’s www.warburgrealty.com website homepage.

The campaign was designed by New York-based graphic design firms Point C Studios and Platform Media NY.

“We are all very excited about the new look,” said Frederick W. Peters, president of Warburg Realty.  “Our market research showed us not only what customers and clients think of Warburg but also what they are looking for in an agent. Point C Studios and Platform Media NY have brilliantly integrated that information with Warburg’s century old commitment to customer service. This new campaign will speak to ALL New Yorkers – the emotional resonance of their home buying and selling decisions, and how partnering with one of our extraordinary professionals can elevate that process.”

“In our research we kept hearing from clients about a superior level of knowledge, service and integrity from the Warburg agents. They knew they were in good hands from the start,” said Michael Cooper, President of Point C Studios. “It was really an emotional connection, and something that clients of other brokerages just didn’t express.  We tried to capture that sense of ‘knowing when it’s right’ throughout the creative.”

The company’s new ads will begin appearing online as well as in local newspapers and lifestyle magazines throughout the New York region in the coming weeks. The news of the rebranding also follows the recent announcement that Warburg Realty will be moving into a new, state-of-the-art, 7,000-square-foot headquarters at 654 Madison Avenue early 2013.

Warburg Realty is known within the industry for providing top-quality service. As a technology leader, Warburg was the first firm to implement an iPhone app, through the widely popular AroundMe platform; and has incorporated social media and blogging as part of its daily business. The brokerage has also garnered national attention for its starring role on the hit HGTV show, Selling New York, where the firm’s agents and exclusive listings are regularly featured in the storylines.

 

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Warburg Realty Partnership: Celebrating the 21 Years of Experience, Relationships, and Expertise in New York’s Dynamic Residential Real Estate Market Since its inception in 1896 as Albert B. Ashforth,…... Read more >

Warburg Realty Partnership: Celebrating the 21 Years
of Experience, Relationships, and Expertise in New York’s Dynamic Residential Real Estate Market

Since its inception in 1896 as Albert B. Ashforth, Warburg Realty Partnership has evolved into one of the most influential, independently-owned residential brokerages in New York.  Frederick Warburg Peters, the current president acquired the firm in 1991 with a group of eight shareholders, and renamed it in 2003. The 1991 acquisition represented the first example in the New York market of top-earning agents becoming owners of, and profit sharing participants in, a residential real estate company. While the name and branding have changed since then, the same core values remain at the heart of the firm’s success. Through strong leadership and extraordinary client service, Warburg has become renowned for its extraordinary service combined with cutting-edge technology in marketing and media that keeps it at the forefront of the highly competitive residential industry.

Over the past two decades, Frederick has expanded the company from 60 to 150 agents, geographically well-situated throughout the city. He leads the firm’s strategic initiatives, while keeping his finger on the pulse of the marketplace, making him a more valuable resource to his agents. His daily involvement ensures that Warburg's core philosophy as a trusted advisor forging strong relationships between its professionals and the customers and communities they serve is consistently fulfilled, and that the firm's position as an independently owned major player in the New York City marketplace is maintained.

Frederick is the main contributor to Warburg's Blog, and one of the most quoted experts in the Manhattan residential real estate industry. His dedication is further evidenced through his involvement on The Real Estate Board of New York's (REBNY) Board of Directors - Residential Division; as a member of REBNY's Board of Governors; and as the Vice President for Residential Brokerage on REBNY's Executive Committee. He has been twice honored by this professional organization, once with the prestigious Kenneth R. Gerrety Humanitarian Award which recognizes meritorious service to the community by a REBNY member; and also as a recipient of REBNY's 1996 Henry Forster Award, given for a lifetime of achievement and contribution in the residential industry.

As an industry thought leader, his weekly blogs on real estate topics and quarterly market reports have become must-reads for those who want to be up-to-date with the all of the trends and challenges that face consumers in this evolving marketplace. As Warburg remains one of the city's few privately owned firms, all of the firm’s brokers are in direct and regular contact with Frederick and his management team, providing its clients with a level of expertise unrivaled by many of its peers. 

As part of its effort to remain in the vanguard of technology and marketing savvy leaders, Warburg is constantly implementing new approaches to buying and selling New York residential real estate.  The efforts range from providing sellers with 24/7 access to personalized marketing programs to track activity and results to implementing regular website upgrades to warburgrealty.com to increase searchability and information. The firm’s commitment to offering the best technology options available explains why warburgrealty.com regularly averages over eight million hits a month, with more than 90,000 hits to the Warburg Blog alone. The website is complemented by Warburg’s dynamic presence on social networking sites like Facebook and Twitter, iPhone search application in partnership with AroundMe, and authoritative contributions by   many agents to the blogosphere, further distinguishing the company at the forefront of tech-savvy real estate agencies.

In addition, the firm also has expanded its branding presence as part of the cast of the extremely popular HGTV show, Selling New York, where their expertise in the market, creativity and successful deal making are regularly on display.

Warburg’s extraordinary success has been made possible through the deal-making prowess of the firm’s agents and the support of the firm’s eight shareholders. The shareholders consist of Jane Bayard, Jane Andrews, Bonnie Chajet, Lisa Deslauriers, Wendy Greenbaum, Ronnie Lane, Linda Reiner and Judith Thorn.

As head of Warburg’s thriving 969 Madison Avenue office, Jane Bayard’s impact on the firm’s success has been tremendous. An industry professional for 40 years, she was a top-producing broker, selling in most every major building on the Upper East Side, before transitioning into a management role. She is integral to the performance of her agents, who benefit from her proven insight, guidance and unparalleled command of the market that helps optimize the level of customer service and results. She has also received many accolades including the prestigious Henry Forster Award from The Real Estate Board of New York.

Another long-time industry power broker is Jane Andrews, who began her real estate career over 30-years ago and came to Warburg’s predecessor company in 1985. Jane has built a reputation for down to earth approach, negotiating finesse and insightful perspective to the cooperative board process. These traits are invaluable to her clients, colleagues and the firm as a whole, where she regularly ranks among the top selling brokers.

At the top of the firm’s producer pyramid are Bonnie Chajet and Ronnie Lane, who have worked at Warburg since 1986 and as partners together for the past 40 years, making them the longest partnership in New York City’s residential real estate market. Their in-depth market knowledge, humor and humility have made them a well-known presence in the industry and a vital part of the company.

Successful partnerships are a theme among Warburg’s Realty shareholders, and another fruitful pairing is Lisa Deslauriers and Linda Reiner. For 17 years, Linda and Lisa have regularly been among the firm’s top selling agents. Known for their ethical standards, these two have built a successful practice known for its high-profile clientele which they have built exclusively on a referral basis.

Wendy Greenbaum is highly admired for her disciplined deal making skills and no nonsense approach. Her reputation as a trusted advisor and market-savvy, are instrumental to her success.

Rounding out the partnership is Judith Thorn, who has worked with the company since 1986. Consistently one of its top selling brokers, she sells all over Manhattan but is particularly well-known for her knowledge and sales in the Gramercy Park and Greenwich Village areas, where she has had many record-breaking sales.

Always looking ahead, the firm will be launching a new branding campaign and just announced the opening of a new state of the art corporate headquarters on Madison Avenue. Warburg always remains committed to staying true to the core philosophy of integrity, courtesy, market knowledge, and the professionalism of its agents.

 

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Warburg Realty, one of Manhattan’s oldest and most respected residential real estate companies, has announced plans to open a new state-of-the-art corporate headquarters at 654 Madison Avenue. The new…... Read more >

Warburg Realty, one of Manhattan’s oldest and most respected residential real estate companies, has announced plans to open a new state-of-the-art corporate headquarters at 654 Madison Avenue.

The new 7,000 square foot office at 654 Madison Avenue will occupy an entire floor designed by architect Chandler Pierce. The location will include a brand new training center for Warburg U, the firm’s professional development program that offers ongoing training and market insight sessions for both new and experienced agents.

The agents currently based in the 969 Madison Avenue office will move to 654 Madison Avenue. The firm will retain the 969 Madison Avenue location.

After a complete renovation, the members of the Warburg team currently working at the 30 E 76th Street office will move into the 969 Madison Avenue space.

The move into the 654 Madison Avenue office is expected to be complete by February 2013.

“I am extremely excited about this next phase in the life of Warburg Realty. The new space provides easy access for Warburg agents to all parts of the city. It enables us both to expand and to consolidate our position at the top of the pyramid of the city's mid-sized high end brokerages,” said Frederick W. Peters, president of Warburg Realty.

Since its formation more than a century ago, Warburg Realty remains at the forefront of the industry’s changing needs, and is consistently working to improve and enhance its services to meet its customers evolving needs, as evidenced by these announced moves and renovations.

Warburg Realty customers also benefit from the firm’s ongoing branding efforts and role as a thought leader through the integration of social media to market real estate. As the first firm to implement an iPhone app, through the widely popular AroundMe platform, it regularly incorporates Facebook, Twitter and blogging as part of its daily business. The brokerage has also garnered national notoriety for its starring role on the hit HGTV show, Selling New York, where the firm’s agents and exclusive listings are regularly featured in the storylines.

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NYC’s best firms to work for A survey of the standout workplaces among residential brokerages September marks the official end of summer — even if the thermostat says otherwise. This month, as real…... Read more >

NYC’s best firms to work for
A survey of the standout workplaces among residential brokerages

September marks the official end of summer — even if the thermostat says otherwise. This month, as real estate brokers bid adieu to the beach and return to the office, The Real Deal took a look at what they’ll find when they get there.

Since most agents are independent contractors (as opposed to employees), their workplace happiness involves different factors than the average worker: For real estate agents, it’s less about salary, more about commission splits; less about vacation time, more about marketing support.

Even so, there is still a range of offerings that differentiate firms from one another. TRD set out to find the best residential brokerages to work for in New York City by analyzing a number of different factors that influence brokers’ satisfaction at work. To do that, we asked residential brokerages of all sizes to complete a two-page survey detailing the unique programs and perks their companies offer. (Several large Manhattan brokerages declined to officially participate, but we interviewed brokers at those firms and other sources to find out which features get high marks from agents.)

What follows is a compilation of standout benefits and amenities offered by New York City residential brokerages.

Health care and retirement benefits
It’s rare for real estate firms to offer agents anything like the kind of benefits that most employees receive — including health insurance, paid vacation time or retirement benefits. In fact, offering such benefits can drag a firm into muddy legal waters, numerous companies noted.

“Our agents are independent contractors,” Warburg Realty stated in its submission to TRD. “We are not prepared to endanger that status either for them or ourselves by treating them like employees, which is against the tax code.”

But DSA Realty Services, a 50-agent firm that operates out of a storefront location near Union Square, does contribute to agents’ health insurance plans, much like an employer.

Here’s how it works: Agents buy their own plans (they receive a discount through DSA’s corporate parent, a national management company), and the firm reimburses them for either 35 or 70 percent of the premiums, based on their production levels, explained company president Jesse Rhinier.

Other firms have taken a different approach, offering agents discounted insurance plans. Bellmarc Realty administers insurance plans that agents can buy into at a group rate, though it doesn’t contribute to employees’ premiums. The plans are orchestrated by firm president Neil Binder, who is able to do so easily because he is a licensed insurance broker and accountant. “I had a unique skill set,” he told The Real Deal last month, “that other people who are real estate brokers may not have.”

For several years, Texas-based Keller Williams has offered customized health, dental and retirement plans to its U.S. agents through Small Business United, a small business and independent contractor association. Premiums for individual health plans, which agents pay for themselves, range from $165 to about $300 per month.

Meanwhile, Brooklyn-based brokerage Rapid Realty, which has 800 agents in about 40 different franchises across the city, recently struck a deal with Aflac Inc. to get its agents a 40 percent discount on the health, life and other products offered by the insurance giant.

Rapid founder Anthony Lolli said he hopes the partnership, which officially launches this month and comes at no cost to the brokerage, will help breed loyalty among his brokers, who “will appreciate a company that’s looking out for them.”

Meanwhile, Town Residential offers $150 annual reimbursements for gym memberships and other health-related expenses.

Perks and other extras

Numerous New York brokerages reward their agents with freebies intended to boost morale and enhance the workplace. Perks offered by city brokerages include company-funded happy hours, Zipcar memberships and discounts on car rentals, hotels and office equipment.

But a few firms offer especially notable extras.

Nest Seekers International offers the use of a chauffeured car to brokers taking out clients looking to spend at least $2 million on an apartment. Boutique firm Mercedes/Berk pays for agents’ lunches every day and covers brokers for showings when they go on vacation. And Blu Realty Group gives its agents discounts at Blu Café, the coffee shop located in its office on Riverside Boulevard.

A firm that particularly stands out in this area is Town Residential, which offers its brokers concierge services administered by Luxury Attaché, the same company that caters to the staff of Google and, when they move in next year, the residents of new condo tower One57.

The concierges — who are installed at the reception desks in each of Town’s six locations — are available free to brokers seven days a week, and do everything from booking restaurant reservations and theater tickets to hiring movers for clients. Since Town opened in December 2010, agents have put in nearly 2,000 requests for moving assistance, the firm said.

Offering these services to brokers, rather than just their clients, is an apparently unique perk among New York City residential brokerages.  Town CEO Andrew Heiberger said it’s a valuable time-saver for his brokers.

“It is now too time-consuming for the best residential representatives to deliver world-class concierge assistance and simultaneously work on marketing their listings, network with new buyers and sellers, close sales and rentals, and maintain a substantive and well-balanced family life,” he wrote in an e-mail.

Town broker Robert Dvorin said that shortly after joining the firm from Prudential Douglas Elliman, he used the concierge to have his sunglasses fixed.

At Town, “you’re not just a broker, you’re a client,” Dvorin said. “That’s the philosophy.”

Listing databases
Access to property listings — and the ability to broadcast exclusives to other agents — is the lifeblood of a broker’s business. So the database a firm provides for accessing listings is an important consideration for some brokers when deciding where to work, particularly in a market that lacks a comprehensive multiple-listing service.

Some New York firms use third-party listings services — such as On-Line Residential, RealPlus and StreetEasy.com — but others have invested in proprietary technology that some brokers say is more wide-ranging and easier to use.

The city’s two largest residential brokerages, Prudential Douglas Elliman and Corcoran, both have their own databases, dubbed Limo and Taxi, respectively. (The firms declined to be interviewed for this story.)

Both have gotten good reviews from brokers. Taxi is “simple, easy to use, very user-friendly, [and had] a lot of information,” said a former Corcoran broker who now uses OLR, adding that Taxi seems to have more listings than OLR.

Taxi also allows brokers to add property “remarks,” such as changes to a building’s financing limits or the addition of a bike room, that are presumably only accessible to users of the system, said one broker who uses Taxi.

Limo won points with an Elliman broker for having more accurate and up-to-date listings than other services. Elliman agents can also see notes from colleagues about contract signing dates or changes to listing details, the broker said.

Some of the other firms that have designed their own listings databases include Bond New York, Town Residential, City Connections, Bellmarc Realty, Keller Williams NYC, Citi Habitats and Fenwick Keats Real Estate.

Bond’s listing database — called Bentley, as a wink at its more established competitors — has also gotten favorable reviews from its users.

Bond broker Brian Dusseau — who has worked for Manhattan Apartments, City Connections, Keller Williams and, most recently, the now-defunct Barak Realty — called the Bentley system the “most comprehensive database that I’ve worked with,” in part because it contains sales and, especially, rental listings that do not appear in other systems. That’s because Bond has relationships with smaller landlords that have open but limited listings, meaning they are not exclusives but are not widely disseminated, Dusseau said.

Also, information on customers who register with the firm is fed directly to agents’ computer dashboards, giving them the ability to link listings to clients and create show sheets, or property fact sheets, within the system.

Many of the city’s other major firms, including Stribling & Associates, Brown Harris Stevens, Halstead Property, Nest Seekers International and Sotheby’s International Realty, use RealPlus, sources said.

Unique bonding activities
Forget happy hour at your local watering hole: For City Connections brokers, bonding sessions start with discount exercise classes and tributes to the Grateful Dead.

Company founder David Schlamm has paid for tickets to see Dark Star Orchestra, a 15-year-old group that re-creates Grateful Dead concerts right down to historical set lists. About 29 City Connections agents caught the band at a recent show at the Brooklyn Bowl in Williamsburg.
Schlamm also sponsors a monthly Spin N’ Salad night, featuring a private spinning class at the New York Health & Racquet Club, followed by a dinner of salad and frozen yogurt.

About 15 agents have participated, and Schlamm said his thrice-weekly spinning classes have helped him lose 35 pounds. “I hope to lead by example for anyone who wants to get healthy,” he said.

Other firms bond by dining at B.B. King Blues Club & Grill (Rubicon Property), attending spinning classes at SoulCycle (Town) or attending regular group movie nights (Mark David & Co.).

Office facilities
Offices have a way of mirroring a firm’s personality.

Take the Chelsea outpost of Stribling. The office was opened in 1819 by James N. Wells & Sons, and is the longest-running residential real estate office in the country. (It is currently undergoing a renovation in tandem with the company’s image overhaul.)

By contrast, four-year-old Miron Properties’ offices have a decidedly start-up feel, and seem to embody founder Jeffrey Schleider’s reverence for Google’s corporate philosophy: The Union Square flagship features a foosball table, while the Greenpoint outpost has a graffiti mural.

For agents, offices represent more than the requisite desks and computers. A firm that offers multiple locations across the city makes it easier for brokers to work from different neighborhoods, while storefront locations help drive foot traffic and client leads, brokers said.

With 22 locations across the five boroughs, Elliman has more offices than any of its New York City rivals, according to its website. That’s almost twice as many as Corcoran’s 13 offices in Manhattan and Brooklyn.

Rapid Realty has more than 40 franchise locations, although they are less than 750 square feet, and agents do not have private desks.
It doesn’t hurt if a firm’s offices are attractive enough to impress visiting clients.

Bond New York, whose headquarters are spread over two floors at 1776 Broadway, goes for functionality — with a couple of posh touches — in its five Manhattan outposts.
The 250 Mercer Street location is in a 5,000-square-foot loft with 25-foot ceilings, while the Chelsea outpost is in a triplex townhouse featuring a landscaped backyard.

Town has earned a reputation for its striking facilities, which Heiberger and financial partner Joseph Sitt have no doubt spent a fortune on outfitting with sleek furniture and eye-catching art.
The firm’s six locations — the largest is the Flatiron flagship at 110 Fifth Avenue — each have a “Town Square” lounge area with couches and dining areas designed as a “multipurpose meeting and break space for employees.”

“You walk in there and you’re blown away by everything,” said Rutenberg’s Bernstein, who has never worked at the firm. “Some buyers and sellers need that. They love to be treated to all of that.”

Most durable branding [literally]
Many firms boast about the loyalty of their agents, but how many can back up those claims with tattoos?

In the last year or two, almost 20 agents at Rapid Realty have permanently branded their bodies with the firm’s logo, most recently last month at a Park Slope tattoo parlor. As a franchise, Rapid offers brokers a chance to run their own businesses, which may inspire the outsize dedication.

“Some folks are just that excited,” said Dumbo agent Martin Charles, who plans to open a Rapid franchise in Forest Hills, Queens, with his wife, Michele — but does not plan to get inked.
Adam Altman, a Bushwick agent whose forearm now sports a pair of interlocking Rs, explained his motivation in a YouTube video documenting the body art session:
“The company’s been good to me. I don’t see myself going anywhere, [and] if I have it on my arm, it’ll force me to keep going and working hard,” he said. “Rapid for life, yo.”
 

Training
Brokerages take varying approaches to training their agents, from bringing in regular guest speakers like mortgage bankers and attorneys, to offering one-on-one coaching sessions, to letting agents shadow more-experienced counterparts. But some firms have particularly extensive or effective in-house training programs, sources said.

For newer agents, Citi Habitats’ mandatory 40-hour training program, taught from a 130-seat auditorium in the firm’s Park Avenue headquarters, is notably useful, sources said. The firm also offers one-on-one coaching with a corporate trainer, weekly 30-minute productivity workshops, special classes on topics like social media and listing photos, and events with guest speakers like Jeff Blau of the Related Companies, the firm said.

The program was implemented in 2000 by Greg Young, who went on to launch the agent training company Broker Heaven. Citi Habitats brokers interviewed by TRD identified the training as one of the best things about the company.

Meanwhile, Keller Williams NYC offers more than 60 courses — from collaborative brainstorming sessions to a coaching program called Mega Achievement Productivity Systems, or MAPS — under its Keller Williams University banner. Most of the classes, which are taught from a 120-seat auditorium at the firm’s Park Avenue office, are free for agents.

“If you want to be in school all the time, they offer enough different things,” said broker Jason Penner. Although some courses were designed by the national firm, Penner said the Manhattan franchise does a good job of tailoring classes to the local market.

Bellmarc’s training is aimed at new agents. The four-week program consists of twice-weekly seminars with Binder, Bellmarc’s president, “how to” seminars with the firm’s sales managers and outside experts, two essay-based exams and additional assignments that could involve visiting 25 open houses.

Town has also put a particular emphasis on education, not only for new agents but for those focusing on specialized topics, such as “Land Use Issues: Intro to Zoning in Manhattan,” and “Analyzing Building Financial Statements.” About 50 of the classes offered are led by Jeff Appel, the firm’s director of education and professional development, who moonlights as a mortgage broker at Citibank.

Town also offers five-hour neighborhood specialist courses focused on 17 areas of Manhattan that include a lecture and walking tour with historian and Town broker Lina Viviano. To be certified as a specialist by the firm, brokers must pass a test made up of multiple choice, fill-in-the-blank and essay questions.

More than 80 percent of Town’s agents have participated in the firm’s classes, the company said. They are taught in a 30-seat auditorium in its Astor Place office.

 
Technology
From in-house IT departments to user-friendly websites, technology is invaluable for real estate firms today.

In this arena, Corcoran’s online marketing efforts, led by Matthew Shadbolt, are worth noting. With more than 58,000 likes on Facebook, almost 11,000 Twitter followers, and nearly 1,000 subscribers on its dedicated YouTube channel, Corcoran is far outpacing its peers when it comes to attracting social media users, brokers said. The firm also recently debuted an iPad listings app.

One smaller firm has woven technology into its very existence: the online brokerage RealDirect.com. Launched in 2010 by CEO Doug Perlson, who helped create the online radio advertising company TargetSpot, RealDirect essentially uses technology and data to replace some duties traditionally fulfilled by brokers.

Sellers can list their home using RealDirect technology (which also feeds listings to StreetEasy.com, REBNY and other listing databases) in exchange for a 1 percent commission or $395 monthly fee, or turn over additional duties to brokers for a 2 percent commission.

Keller Williams NYC’s eEdge platform lets agents manage contacts, leads and clients, oversee their personal website and listings, automatically create and send custom marketing materials to clients and complete transactions.

In addition to an on-site tech staff, the brokerage provides round-the-clock off-site IT support. However, the tech package costs agents $150 per month (which also covers REBNY dues and errors and omissions insurance, which many firms require agents to pay for in case of professional mistakes).

High-commission-split firms
At many of the city’s major firms, a 50 percent commission split is still standard for newer agents, while more experienced brokers earn around 70 percent, and star brokers can negotiate even more favorable terms.

But as TRD has reported, a number of firms with new high-commission-split business models have appeared in New York City. These firms fall roughly into two camps: those that charge minimal monthly fees plus transaction fees for each deal, and those that charge flat fees that run several hundred dollars per month.

These firms are not for everyone: trade-offs include shouldering marketing costs, working from no-frills offices and giving up a measure of camaraderie in favor of a more entrepreneurial approach. For inexperienced agents, the training, infrastructure and brand name cachet of a major firm can be invaluable for learning the ropes and building referrals, sources say.
For those interested in trying out the high-commission-split model, the following firms offer noteworthy versions of it.

Kathy Braddock and Paul Purcell’s Rutenberg Realty, which has almost 500 brokers after its founding in 2006, charges a $99 monthly fee — plus a $1,000 transaction fee for sales under $1.5 million and a $2,000 fee for sales above $1.5 million. Rental transaction fees range from $200 to $800. Brokers receive an account for the OLR listings database, a profile on the firm’s website and the use of the Rutenberg office at 127 East 56th Street (which has space for about 14 to 20 brokers at a time).

Brokers who have embraced the high-commission-split model swear by the Rutenberg approach. Robert Bernstein, a former Corcoran Group broker now at Rutenberg, said, “I’m doing the exact same thing I was [doing] at Corcoran — I’m just getting paid a lot more money.”

At City Connections, brokers start at a 70 to 90 percent split and qualify for a 100 percent split after grossing at least $83,500 in commissions. Brokers must cover their own Craigslist ads at $3 a pop, plus licensing fees and membership dues for REBNY.

Spire Group, which now claims 130 agents and is based in the Flatiron District, has a program dubbed the “True 100% Commission.” Agents pay a $495 monthly fee, but must have at least one year of experience, demonstrate a “high closing ratio” and make a full-time commitment in order to join the firm, which was founded by Kevin Kurland.

Meanwhile, Oxford Properties is one of the few firms that give brokers a choice: pay either $349 per month and keep 100 percent of the commission, or pay $49 per month and keep 90 percent. Brokers can switch plans “in good faith,” and must cover their own marketing costs. (See “For Oxford Property Group, a room of its own.”)

One of the most distinctive approaches is Keller Williams’s hybrid model. Every year brokers start at a 70 percent split until they earn $50,000 for the firm, at which point they receive 100 percent of their commissions for the rest of the year.

In exchange, brokers also pay $150 per month in technology and insurance fees; a desk fee ranging from $150 to $1,000 per month, depending on the size and location of the desk (the most expensive option being a windowed desk on Park Avenue that accommodates four); and an annual $3,000 royalty and franchise fee that is deducted from commissions.

Brokers can also qualify for profit-sharing with the firm by recruiting new agents. Although the Manhattan franchise is not officially participating in the program, since it only launched last year, about a dozen agents in the office are getting checks for referring agents who work in other U.S. locations, according to Zhann Jochinke, chief operating officer of Keller Williams NYC.

Heddings Property Group, founded several years ago by veteran broker Doug Heddings, also has a unique approach. All 26 of the firm’s agents receive the same 70 percent split and share in the firm’s profits based on their productivity. The company also has no internal competitions or awards.

Marketing support
Firms have different ways of providing marketing support for their brokers. Some offer unlimited advertising budgets for exclusive sale listings. Others give brokers annual budgets based on gross commission income. Some even offer their brokers the opportunity to take part in reality TV shows.

Brokers from the firms Core, Gumley Haft Kleier and Warburg have, of course, recently begun starring on HGTV’s “Selling New York.” While it’s difficult to track whether the show translates to more business — brokers from Core and Gumley Haft Kleier declined to be interviewed for this story — its 1.7 million viewers undoubtedly bring widespread exposure to the firms.

For example, Warburg officials said traffic spikes after the show is broadcast on Thursday nights. After a 30-second appearance on one episode, Kaufman said she received calls from people across the country.

But TV appearances alone won’t sell a house.

For every exclusive listing, Warburg also provides photographs taken by the firm’s in-house photographer, floor plans and show sheets at no charge to brokers. Warburg brokers also receive an annual budget based on productivity levels. “Frankly, I have not ever had to spend any extra money” out of pocket, Kaufman said.

Another marketing standout, sources say, is Town, which offers a corporate matching benefit for promotional efforts that aren’t necessarily related to one specific listing, such as charity sponsorships or client events, Dvorin said. Inspired by Town marketing chief Nicole Oge’s time at Mercedes-Benz, the program will match up to $5,000 per year of a broker’s own contributions.

Town also covers marketing costs for sales exclusives and high-priced rentals, and provides annual budgets for agents depending on productivity, Dvorin said.

Also noteworthy is Sotheby’s, which has an extensive international presence. Unlike the other major Manhattan firms, Sotheby’s has nearly 600 offices in 40 countries across the globe. That allows for a broad network of in-firm referrals, brokers said. But in exchange, Sotheby’s agents pay higher marketing fees and insurance than brokers at other companies, as The Real Deal has reported.
 

Management
When it comes to managers, everyone’s different: What strikes one agent as a lack of attention may appear to another as a welcome dose of freedom.

But some firms have paid special attention to implementing policies that transcend the varying personalities of individual managers and help all agents do better.

One such firm, sources say, is Halstead Property, led by Diane Ramirez.
While Halstead officials declined to participate in TRD’s survey, brokers at the firm describe a family-like atmosphere, where board packages never leave the office before managers give their approval.

“The two managers that we have [in the Park Avenue office] are the best I’ve ever seen in this business,” said one Halstead broker, who has worked at several other firms.

James Gricar, the firm’s general sales manager, is “a doll, an angel, the best thing since sliced bread,” said another Halstead broker.

The agents’ enthusiasm is all the more noteworthy because Halstead is a large firm, so managers have many agents to look after. With 1,000 agents in the tri-state area, about 600 of them in Manhattan, Halstead managers are spread over 11 offices in Manhattan and Brooklyn.

Downtown broker Jane Greenberg, who has been at Halstead for eight years, said new agents at the firm are given time to prove themselves.

“It’s not like, ‘Oh, gee, it’s been three months and they haven’t got a deal going,’ ” Greenberg said. “They get that there’s a learning curve.”

Warburg is another firm noteworthy for its management, namely because of its well-respected president, Frederick Peters.

“He sets a tone for the firm of dealing correctly with people and ethical behavior, and it trickles down,” said Warburg broker Harriet Kaufman.

Brokers praised Peters for his smarts, his accessibility and his quick adoption of social media and online marketing practices, exemplified by his frequently updated blog, “Fred’s View of Manhattan Real Estate.”

“Fred Peters is an incredibly, incredibly bright person,” said one former Warburg broker. “He really understands the business as a broker, and I think that’s unusual.”

Other firms are standouts for their manager-to-broker ratios. At the 50-agent DJK Residential, there is one manager for every seven brokers — a ratio on par with firms a fraction of its size, according to TRD’s research.

Agent retention
In any given year, there is a certain amount of broker churn within the industry, but some firms manage to keep agents for the long haul.

Of the original eight brokers at Stribling when it opened in 1980, only one has left for another firm: Barbara Fox, who departed to start her own eponymous brokerage.  Many agents have worked at Stribling for decades, the company said.

Warburg also focuses on agent retention: 26 percent of its 138 agents have worked there for at least 15 years, the firm said, while 14 percent have been there for more than 20 years.

Brown Harris Stevens and Sotheby’s also have a reputation for low turnover (though both declined to provide specific figures).
 

Motivating the troops — with lavish prizes
Some firms offer prizes for brokers who bring in the most exclusives, signed leases, referrals or gross commission income. Among the most tantalizing:

• At Spire Group, agents who bring in the most new recruits between June 15 and Sept. 15 will receive $2,500 toward a trip to the broker’s destination of choice.
• Modern Spaces offers a four-day paid vacation in the Bahamas to any agent who racks up 30 rentals at a TF Cornerstone development between May and Labor Day.
• At Platinum Properties, any agent who grosses $20,000 in commissions gets a custom-made suit (for men) or a shopping spree (for women).

 

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The Bard of Real Estate Warburg’s Frederick Peters By Wendy Maitland As a psychoanalyst at heart, I’ve always been fascinated by what makes captains of industry “tick.” I chose Frederick Peters,…... Read more >

The Bard of Real Estate
Warburg’s Frederick Peters
By Wendy Maitland

As a psychoanalyst at heart, I’ve always been fascinated by what makes captains of industry “tick.” I chose Frederick Peters, president of Warburg Realty, for my first column because I admire his capacity to lead fearlessly, while having no fear of showing his human side. I learned that his blog is as much an outlet for his love of writing as a way to educate on real estate. I admired Fred even more at the conclusion of our interview than at the beginning. We had a great time talking culture, opera, art and the beloved true grit of the industry … that is after we ogled a picture of his adorable 16-month-old grandson Owen on Fred’s iPad.

WM: Why did you chose real estate?
FP: At the time I chose it, it was almost always a second career for people. I had been a musician, I had my young kids. My daughter was born when I was 26. We grew up together! In 1977, my wife and I bought our first apartment, the apartment we still live in today. I was completely bitten by the bug. I had a passion.

I was always intellectually inclined. I studied literature at Yale. One of the things that has been cool for me about the business that has expanded with social media is that there’s so much more room to be who you are in a controlled public forum. My blog afforded me the chance to tie the various pieces of my life together with my interest in writing.

WM: What is your favorite activity outside of work?
FP: I am still passionate about music. I go to concerts and I’m involved in the world of new music. I also bake. Unlike our deals, it’s all done in an afternoon. The other thing I’ve become passionate about is gardening which, unlike baking, is a much longer process than real estate.

WM: What drives you?
FP: I’m one of four brothers. Underneath this friendly exterior, I’m actually very competitive.

WM: What is your fondest memory and what is your most devastating memory in the business?
FP: My best moment was in 1991 when the Ashforths asked me if I wanted to buy the residential division from them. It was in the middle of the last big recession, so I was terrified. We negotiated for almost a year, then I became president of this new entity. That was the most exciting day of my career.

I haven’t had too many really bad experiences. Because I am so paternalistic, I hate it when people leave the firm. Closing offices at the time of the last recession was the worst think I have had to do.

WM: What’s the key to handling the pressure?
FP: I allow myself 24 hours to feel crummy after a set-back. Then I move on.

WM: How do you take care of yourself?
FP: I try to have one technology-free day a week. I’m training myself that not everything requires an immediate response. People survive if you don’t get back to them for a few hours, or even, God forbid, the next day.

WM: Do you have a close friend in the business?
FP: There are a number of people I really like. My closest friend outside of the office is Barbara Fox.

WM: Can competitors be friends?
FP: I don’t see why not. What we have in common is greater than what divides us.

WM: Getting back to the lighter side, can you sing? Or dance?
FP: I’m a good ballroom dancer. I love to dance! And I’m an opera buff. I can’t even begin to tell you how much I love opera.

WM: Who in the world of business do you most admire?
FP: I would have to say Warren Buffet. I admire his courage. He’s such a contrarian. “It’s only when the tide goes out that you see who’s been swimming naked,” is one of the greatest quotes of all time.

WM: Do you have any enemies?
FP: I don’t think you can be successful without stepping on a few toes.

WM: What’s the most important characteristic people need to get to the top in business?
FP: Determination, intelligence and you’ve got to make relationships work.

WM: What is the single value you hold most sacred?
FP: Integrity.

WM: What do you love most about a deal?
FP: Assembling the puzzle. It requires all of our skills. You have to be mathematically astute, personality-smart, and you have to see the path from here to there.

WM: Is you life more glam than grit or the other way around?
FP: I’d say my life is all grit! I’m not looking for glam. I want to be in the trenches.

 

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AVENUE'S REAL ESTATE SPRING ROUNDTABLE Manhattan Market Movers Green shoots in the 2012 market,  the rise of the foreign buyer, and new insights into the age-old  question of condos  vs.…... Read more >

AVENUE'S REAL ESTATE SPRING ROUNDTABLE

Manhattan Market Movers

Green shoots in the 2012 market,  the rise of the foreign buyer, and
new insights into the age-old  question of condos  vs. co-ops

Why did the homebuyers cross the ocean?  To get to the other side, of course, where foreign currency covets luxury in close proximity to Central Park, Madison Avenue, Lincoln Center and Broadway, and  everyone- New Yorkers especially- comes out a winner. Earlier this year, seven of New York City's  real estate  royals met  with  Manhattan Media's chairman Richard Burns  and  me to discuss  the current  state of our  housing  market.  Right  now, that  market  is (perhaps  surprisingly) strong, high-end  condos  are up but they're also increasingly  scarce, and though Upper East Side co-ops may seem down  since bonus  babies and flight capital don't like board  scrutiny, the smart  money says they're ripe for a revival, because although  this is a global city, it's an ever-more¬ family-friendly town, too. 

PARTICIPANTS (IN ALPHABETICAL ORDER):
• DOROTHY HERMAN, President and CEO, Prudential Douglas Elliman
• KATHRYN KORTE, President and CEO, Sotheby's International Realty
• KELLY KENNEDY MACK, President, Corcoran  Sunshine Marketing Group
• WENDY MAITLAND, Managing Director, Town Residential
• FREDERICK  PETERS, President, Warburg Realty
• DIANE  M. RAMIREZ, President, Halstead Property
• ELIZABETH STRIBLING, President, Stribling & Associates

AVENUE: There is a lot  of experience in this  room,  and I am wondering if this current time  period reminds you of any other time in New York real estate? Fred?

FREDERICK PETERS: A year or two ago reminded   me of  the  early  '90s.  But today we're actually moving into somewhat uncharted territory. That is mainly because we haven't had a marketplace  which  has been impacted  by globalization in the way today's marketplace is.

ELIZABETH STRIBLING: New York, more than ever, has become the most cosmopolitan city in the world. About 30 percent of our condo purchases are made by foreigners. There are always pockets of people from all over the world, and our latest insight at Stribling is the British are coming to Brooklyn.

DOTTIE HERMAN: Yes, we compete in a global market. If you compare prices to any other city that competes in that global market, like London or  Hong Kong, New York is cheaper. There are more foreigners here now than in the peak of the  boom. Even if we think we are going through uncharted times as a country, it is still a lot safer bet than any other place in the world.

KATHRYN KORTE: I would say the current period shares similarities with the summer of 2003, when we finally began to move out of the economic landscape that occurred   in the  aftermath  of 9/11.  Back then we saw  New  Yorkers recommitting to New York. Now we are seeing an influx of foreign money and  foreign buyers. Initially there were many Russians entering the market, but now  there are more buyers from Asia, the  Middle  East, India, and Australia. There is a greater focus on wealth preservation now over investing, which many buyers view as a safe haven.

DIANE RAMIREZ: Every time period is a little different. We are starting to see some conversions, which we really have not seen in a long time, not since the '80s. Some rental buildings have changed hands and will be very exciting new product. But I think we might see more rental buildings converting and we have not even heard that word in a long time.

FP: There was at one time concern about an inventory overhang, but we actually have a relatively serious inventory shortage. This fantasy that there were going to be thousands of unsold condos depressing the market for years to come just turned out to be completely wrong.

ES: In fact, in 2013, there is going to be a shortage of new condominiums.

MICHAEL GROSS:  Is that shortage because of the dip in construction?

ES: The current supply  is being  quickly snapped   up,  because  what  people want today is the latest    finish, the most modern construction, the least  in  need of renovation.  And most of the new developments are going to have fewer than 100 units. So, we don't have a lot   in the pipeline.

WENDY MAlTLAND:  What I see in our market today is that it is much  more segmented than  it was, say, five  years  ago.  There is a lot happening at  the  very  high  end  of  the market, and less in the more cookie cutter type of product.

KELLY MACK: Over all, the whole market, at every  price  category  is  very strong. Everyone is talking about the high end   of  the   market   because   there  were about  94 deals done  last year at over  10 million dollars, which is amazing. But the issue right now is lack of inventory, across the board.

AVENUE: Statistically, the overall market through the end of 2011 was flat. But average prices in the luxury category, which is defined by the top 10 percent of sales, were up three percent. So, does that jive with what  you're  saying  in terms of supply and demand? You would expect it to be higher. Dottie?

DH: It is almost a doughnut. The middle market is the weakest. But still, I don't think that it is a real estate problem. I think what we have is a financing problem. The boom market,   around  2006,  would   not   have existed  without   financing.  I've  lived through a lot of different  markets,  and  I don't hear anyone saying, 'I don't want  to buy  real  estate.  I  don't  trust  real  estate: I  haven't  heard  that  for  a  couple  years. People are sold on New York City. But financing is a problem.

DR: The number of  available   units continues to decline market wide. The areas and sizes with the lowest
level of inventory are poised for price awareness.

KM: The condominium market operates a little differently. Condo pricing  has increased about 5.9 percent per year  over  the past 25 years,  but  last  year, it increased 6.5 percent. Scarcity of new product is now driving up prices.

AVENUE: Here's an eyebrow-raising stat. The attorney general  approved 609 units for sale last year. In 2006, they approved just shy of 24,000.

KM: More than 8,000 new development units were brought to market in 2008. Compare that to last year when just 286 new units were introduced. Construction financing is unlocking for strong developers, so we expect 1,500 units to hit the market  annually   for the next  few  years.  That's an   in1provement, but far below the historical average.

FP: How can  we predict  anything but  a shortage   three years  from now? We've returned   to  the  pre-construction sell-outs.  Who would  have  guessed  that three years ago?

AVENUE: Let's turn to the age-old question of  condos vs. co-ops.  Do you have a preference?

WM: Clearly, cooperative deals traditionally are more  arduous,  although  I  think the condo  boards  are inching  up. I think we all have  to  give kudos  to  our  co-op boards,  which  helped  protect  New  York compared  to every other  market in the world.

ES:  You  can  convince a  co-op  buyer  to  look at  a  condo, but  you cannot convince the condo buyer to look at a co-op.

AVENUE:  In terms of sales  since 2005.  Co-ops have risen  3.2  percent. Condos, 16.5 percent. That tells a story.

FP: Condos have a few outlier sales, which I  would guess would skew the numbers somewhat. I wonder if it would be as extreme if you remove the outlier sales.

MG: Are the co-ops loosening a bit as the condos are tightening? Are condo boards behaving like co-op boards and vice versa?

FP: My observation is with big ticket sales in the past year, there is a big de-emphasis on  the finance industry. In  2006, every expensive apartment  was  bought  by  a finance   person.   Now,   the   finance people  are  no  longer  in  the forefront.  This  is  relevant to your question because co-ops  are  looking  at bonus   income  differently now. If you can't afford  the  apartment with  your  salary  and the money you have already accumulated, they are not taking your bonus into  account  the  way they used to. That is a sea change.

DH: People like new. I also think people not from New York City  have  a problem  with someone telling them they can't sell their apartment to whomever they want. At some point in time, the co-op boards may loosen up, as older people retire and new ones come on, but I am not seeing it yet.

DR: I have always said the co-op boards have to change. The next board has  to  make  the  process easier,  and  it  has  never happened. The close financial scrutiny of the co-op boards gets tighter  and  more  far reaching. Income and assets  are  looked   at near  term  and  not  at the  long  term  value. It makes the ownership more insulated to a downturn in the financial  market   but   very restrictive to  the  general buying public.

ES:  I  think  a lot of the snobbery is gone. As long as a person is not disruptive, they've got  some  liquidity  in the bank, they pay their bills on time and don't have a huge dog that  is  going to bite the neighbor's  children, they should get into the building.

MG: Will there ever be a movement for co-ops to convert to condos?

ES:  No, because there are 32 people more or less in  that  building, and if they all have to pony up to pay off the mortgage, they won't do it.

KK: You're always going to have a market for co-ops. When a co-op listing comes to the market like the new 2 East 70th Street penthouse, the demand is fantastic. That being said,  the condo market has really taken oft: as condominiums have greater stature now. The trend I see in the condo market, which I  think  is  wonderful for New Yorkers, is that there are more condos now with large floor plans and layouts that are ideal for family living, which are quite different from the shiny new pied-a-terres that might be more appealing to foreign buyers. So even if New Yorkers have lived all their lives in a co-op apartment, condos offer a fun change of pace.

MG: Are we looking at a situation where there are going to be many peaks of the pyramid, instead of just the Fifth Avenue, Park Avenue Candela, Emory Roth, Carpenter  buildings  alone  at  tl1e  top? Will living in a Stern building, say, become just  as desirable as living in  a Candela building?

WM: Desirable to whom is the question. There a re people who   like   Birkin  bags, and  people  who   prefer Balenciaga. There are always going to be different   peaks and different styles.

KK: For many years, the new development was in  TriBeCa and  SoHo and  on  the West Side, like Riverside Drive. What's happening now is a resurgence of the Upper East Side, with buildings like 737 Park  and  150  East  72nd,  and  more family-oriented            buildings and apartments.The Upper East Side is going to make its  comeback in its own way.

MG: With people grasshopping from Park Imperial to 15 CPW to Time Warner, and more and more foreign buyers, does New York remain a community or is it just be¬ coming a global beehive?

DH:  It is still a  community. Certainly, you can choose to live somewhere where you  don't   know  your   neighbors.  But families have grown up in New York, too. We should be grateful that it is a global city because, during the recession, we got bruised, but we did not get killed.

WM: It's not a competition. There is no other Paris. There's no other New York. No one is going to say, 'Should I buy in Shanghai or Brooklyn?'

AVENUE:   At   the  end  of  the  year, what are we going to say about 2012 in real estate?

DH:It is an election year. So I don't think anything significant will change this year. We are moving ahead, it is a healthy, perhaps even a healthier market than we had in the boom.

WM: I agree that it is a healthy market. Globally, New  York  represents  safety, quality and stability in the context of what is happening in the world.

KM: I think the biggest story of the year is going to be One57. They have had a tremendous start  and  there  is  a  lot  of pent up demand for very high-end luxury product. Because of the lack of inventory we  are  going  to  see  upward  pressure on pricing continue.

DR: We have had a great 2010 and 2011. I think 2012 will be very good as well. Not great, but good. I see all markets moving, the two-bed¬ room and  up. If it is a good apartment and priced well, which is key, good location and in good condition, it is off the shelf in milliseconds. We're starting   to see  bidding wars, and the prices of the bidding wars are starting to go over asking, which we have not seen for a few years. I see another good year, a solid year, but not big jumps.

FP:  We signed  two and  a  half  tin1es as  many  contracts  in  January,  2012 as in  January, 2011. We have had the lowest  vacancy  rate   in   the rental  market  that  any  of us   can   rem ember.  We have all been waiting for that to flip, for people to  go  back  into  the sales market  with the smaller            apartments. That is  starting  to happen. I am usu¬ally  pretty  gloomy as  a prognosticator, but  I  think that  2012 is going to be quite strong,  both  in   terms  of  volume  and in  terms  of pricing  because demand  is outstripping supply.

ES: We're going to  have a good, solid, strong yea r. I agree that it is not going to shoot  through  the  roof.  People are still worried about the global economy and what is going to happen in this country. I think it will be slightly stronger than 2011.

 

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The Real Estate Artists It couldn’t be more black and white, Manhattan’s real estate superstars always know how to play their roles as market movers and shakers to the hilt. Real estate is the language…... Read more >

The Real Estate Artists

It couldn’t be more black and white, Manhattan’s real estate superstars always know how to play their roles as market movers and shakers to the hilt. Real estate is the language that these leading lights speak. In any era – silent or talkie, and they all deserve an Oscar for their performance in the most exciting market in the world. Here they are, in AVENUE’s own take on the Academy Award-winning film presented to you … with pleasure.

 

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Frederick Peters appeared on the Stoler Report on Monday, September 5th, 2011. The Stoler Report is New York’s only television broadcast featuring real estate and business. http://youtu.be/MVmRWHcPvuY... Read more >

Frederick Peters appeared on the Stoler Report on Monday,
September 5th, 2011. The Stoler Report is New York’s only television broadcast featuring real estate and business. 

http://youtu.be/MVmRWHcPvuY

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The Real Deal Who got it right and who got it wrong in predicting the 2011 market In real estate, everybody has an opinion, as readers of The Real Deal perhaps know best (see our infamous comments…... Read more >

The Real Deal

Who got it right and who got it wrong in predicting the 2011 market
In real estate, everybody has an opinion, as readers of The Real Deal perhaps know best (see our infamous comments section). And at the start of every year, heavyweights in residential and commercial real estate weigh in, attempting to foretell what the mysterious market will bring. Sometimes they were wrong, sometimes they were mostly right, and sometimes they were dead-on. Without further ado, here's 2011's real estate predictions parsed -- with the benefit of hindsight.

Prediction: "In 2011, we expect hotel deal volume to increase by 90 to 130 percent over last year's levels -- ­ the increase in transaction volume [is due to] the dramatic recovery in revenue per available room, or revpar, continued improvement in the debt markets, investors'  intention to sell assets before the 2007-2012 loan terms expire, and currency movements."
Soothsayer: Arthur Adler, CEO-Americas for Jones Lang LaSalle Hotels.
Verdict: Thumbs sideways, but pointing slightly up. Hotels traded at an even quicker pace than Adler anticipated, according to Real Capital Analytics' Ben Carlos Thypin. "[Real Capital] tracked over $3 billion in hotel deal volume in Manhattan in 2011 and the finalized total may be higher. While JLL's prediction ended up being a little conservative, their rationale for predicting such a dramatic increase was right on the money," Thypin told The Real Deal.

Prediction: Mortgage rates for 30-year fixed-rate loans will be around 5.5 percent at the end of 2011.
Soothsayer: Mortgage Bankers Association.
Verdict: Thumbs down. According to the most recent numbers from Freddie Mac, 30-year fixed-rate mortgages finished out 2011 at an average of 3.95 percent. But staggeringly low mortgage rates lasting through 2011 is not the sort of trend anyone could have predicted, according to appraiser Jonathan Miller of Miller Samuel. Last year at this time there was "trepidation about mortgage rates rising in the second half of 2011," he said. "I don't think anybody anticipated the downgrade [of the U.S. credit rating]..­ that was the biggest error of foresight for 2011." But low mortgage rates are not all positive, in fact, the short-term payoff --  increased incentive to buy and increased volume in refinancing -- doesn't account for the long-term issues the low rates present, Miller said. "In the long run, record low rates can hurt housing because until rates go up mortgage underwriting is so tight. Instead of looking for triple A borrowers, they are looking for quadruple A."

Prediction: Residential sale growth will be less than 5 percent, and the very high-end will lead the residential market out of the slump.
Soothsayer: Frederick Peters, president of Warburg Realty Partnership, in The Real Deal's real estate predictions for 2011.
Verdict: Thumbs up. "I think that was pretty much spot-on," said Noah Rosenblatt, publisher of UrbanDigs, a Manhattan real estate data site. "In 2011, we saw a continuation of a progressive re-flation in median price trends since the lows in 2009," Rosenblatt said. The slight overall price growth was propelled by the high-end, which began seeing an increase in March, and peaked in June, he said. But fears that "another shoe would drop," kept prices from growing too rapidly, and similar fears will likely keep a cap on growth this year, he said. Perhaps most prescient was Peters' statement that the high-end would lead the market. "That was dead-on," Rosenblatt said. "I don't think I would have gone on record in 2010 saying that." As it turned out, the year was also rife with high-end sales, such as the sale of Sandy Weill's 15 Central Park West penthouse for $88 million, and a condominium at the Plaza for $48 million, to Russian composer Igor Krutoy in March. As The Real Deal reported, owners in the Time Warner Center were reportedly turning down offers of more than $10,000 per square foot.

Prediction: There is enough room in the real estate industry for specialists, such as Massey Knakal Realty Services, to grow their business into the retail sector.
Soothsayer: Mary Ann Tighe, CEO of CBRE for the tri-state region, speculated that Massey Knakal's new retail division would be a success. "They are equipped to know what retail can work where, "Tighe said at last year's Real Estate Board of New York banquet.
Verdict: Thumbs up. Massey Knakal's new retail division, even with a somewhat unorthodox approach, made a strong start in 2011. According to the firm, they currently have 56 exclusive retail listings. "I think that's a significant amount of exclusive listings for a new shop," said Robin Abrams, executive vice president at Lansco. "Because they have the existing reputation to go out and acquire business, and I think in 2011 they were successful in doing that."  But the coming year will show how well the firm's unique approach, wherein brokers have their own territories, works out, Abrams said. "They have a different twist.. it's challenging because landlords might have properties in different areas," meaning the traditional approach of developing relationships with landlords will work differently for Massey Knakal. "We'll have to see how they deal with those things, how brokers will support one another when they are outside of their territory." 

 

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2012 NYC residential real estate predictions   In the wake of Sandy Weill's reported $88 million sale of his 15 Central Park West penthouse, The Real Deal wanted to touch base and see if real estate…... Read more >

2012 NYC residential real estate predictions
 
In the wake of Sandy Weill's reported $88 million sale of his 15 Central Park West penthouse, The Real Deal wanted to touch base and see if real estate executives had any last minute predictions for the New Year since speaking with the magazine for the December residential market report.

Dottie Herman, president of Prudential Douglas Elliman, and Frederick Peters, president of Warburg Realty Partnership, said to expect 2012 to be a bit of a repeat of 2011, while developer Donald Trump said "really good real estate will have excess value." Elizabeth Stribling, president of Stribling & Associates, predicts a "continuing strong demand for new condominium offerings all over town," while Stuart Saft, chairman of Dewey & LeBoeuf's global real estate department, said "the euro will continue to be in trouble causing a flight to safety to the U.S. and particularly New York City, so New York City properties will trade at even lower cap rates." Meanwhile, Citi Habitats President Gary Malin and Halstead Property Development Marketing President Stephen Kliegerman recently told amNY that 2012 would bring more development and fewer amenities to New York City's real estate market.

Check out what the pros told The Real Deal:

Dottie Herman, president of Prudential Douglas Elliman
I expect 2012 to be a repeat of 2011, but perhaps a bit better, continuing the trend of sales on trophy and high-end properties. The middle market may be sluggish, not due to a lack of demand, but a lack of financing available.

Stuart Saft, chairman of Dewey & LeBoeuf's global real estate department
Rents will continue to rise at a rate significantly greater than [the consumer price index] resulting in co-op and condo prices increasing by at least 10 percent. This renewed activity in the co-op and condo market will result in the [attorney general] receiving more than double the offering plans than it received in 2011. Moreover, because of continuing budget shortfalls, the real estate taxes charged on residential (and commercial) property will increase by more than 10 percent as will water and sewer charges. Interest rates on residential real estate, including multi-family, will continue at the present historically low rates through the end of the 2012 (i.e., after the presidential election) but will begin to rise after 2012, and the availability of mortgage financing will increase due to comfort with the New York City market for housing. Finally, the euro will continue to be in trouble causing a flight to safety to the U.S. and particularly New York City, so New York City properties will trade at even lower cap rates.

Judi Desiderio, CEO of Town and Country Real Estate in the Hamptons
I predict the blue chip properties will be of highest demand. Those are the estate areas [in the Hamptons] … and of course village and waterfront. The size of the homes [built and sold] will be smaller than in the recent past but the quality and amenities shall remain.

Lois Weiss, real estate columnist for the New York Post
Wealthy people are coming into town from all over the world and putting down cash on expensive apartments or buying extra apartments as investments or to save on hotel bills, keeping the luxury market moving at a brisk pace. But I think it will continue to be difficult for those who are the city's middle class people to buy a two- to three-bedroom apartment in either Manhattan or the better areas of Queens and Brooklyn. Nevertheless, young families with kids want to remain in New York City with their friends and are doubling up their children in a bedroom to remain in the city. This is putting a big damper on sales in surrounding bedroom communities in the suburbs… Newer condo buildings are getting socked with taxes as abatements roll off so watch this year as political leaders will be lobbying hard to get co-ops and condos more property tax assessment increase protections which would push more of a tax burden onto multi-family rental buildings and commercial buildings.

Frederick Peters, president of Warburg Realty Partnership
My prediction for 2012 is that it will in many respects resemble 2011. I expect the Manhattan market to continue to demonstrate the same highly stratified and uncertain behavior which defined 2011: a) Big swings in confidence and therefore in activity, especially leading up to the election; b) Continued capital flight from the BRIC [or Brazil, Russia, India and China] countries bolstering the mid- and upper-ends of the condo market; c) A continued emphasis on turnkey condition to bring in top prices; d) A steady stream of deals in the $5 million and up category, with a diverse buyer population not entirely grounded in the finance industry e) Many apartments, especially in the older condos and in co-ops, lingering for months on the market as the sellers try to find an appropriate price f) Very tight rentals and maybe a resultant uptick in the smaller apartment marketplace as there will be little inexpensive rental product.

Adrienne Albert, CEO at the Marketing Directors
There is a fortune of money looking for a home on both sides of the development equation. Sites are already in play for both rental and for sale product. I believe this will escalate in 2012 resulting to a steady return of the development and construction industries. The New York rental market will continue to flourish. Rentals will stabilize if not continue to climb in value. New rentals are averaging over $80 per square foot and we believe that figure will be eclipsed in 2012. Because there is only six months of standing inventory in for-sale product, condominium prices will substantially escalate. Our for-sale market will continue to be fueled by the local New Yorker and supplemented by the foreign buyer throughout 2012. End loans will be more attainable also helping to fuel the demand side of the market. We believe the average per square foot in Manhattan will exceed $1,800 [for new condos] in 2012.

Donald Trump, president of the Trump Organization
Residential real estate will remain similar with a slight uptick, but the really good real estate will have excess value.

Elizabeth Stribling, president of Stribling & Associates
I am cautiously optimistic because demand is high, financing is easier and mortgage rates are low. High [rental prices may] prompt more people to buy, and foreigners [will] continue to favor the safe haven of the U.S. and the prime location of New York City. That said, concerns about global markets and economies and unemployment in the U.S. continue to contribute toward overall anxiety. Overall, New York City will continue to fare better than the rest of the country. I predict a continuing flat [and] steady real estate market in New York City with a continuing strong demand for new condominium offerings all over town.

Andrew Heiberger, founder and CEO at Town
On the Manhattan sales front, I believe that prices and price per foot in all parts of Tribeca, the far West Village, Noho and west of Park Avenue on the Upper East Side will rise the most due to a lack of supply. The same is true for townhouses and other single-family residences, where quality supply is also limited. Overall, I believe 2012 will see more sales transactions and slightly higher prices in Manhattan, with the market buoyed in part by interest rates remaining at historic lows during this upcoming election year. [In terms of the] new development sales market, I believe Gary Barnett's One57 will be a grand slam and the success story of 2012. On the Manhattan rental front, the vacancy rate will remain low and rents are sure to rise starting around the second quarter. If I were renewing a lease right now I would try to extend for two years if given the choice, because once employment numbers pick up, rents will jump even further to record highs. Low mortgage rates are keeping rents in check because the alternative of buying becomes feasible once you approach the $80-per-square-foot threshold for units under $1.5 million.

Mitchell Rutter, president of Essex Capital Partners
In 2012 we are very optimistic about the continued growth of the rental market in Brooklyn and Queens, not withstanding anticipated layoffs in the finance and banking sectors. In Manhattan, the price-per-foot being paid for new rental projects leads us to question whether the projected rents necessary to justify these projects can be met in the short term. But over the long term, beyond 2012, the growing rarity of development sites means these projects too will be sustained.

Jonathan Miller, president and CEO at Miller Samuel
No significant economic policy initiatives to help economy/housing will come from Washington (it's an election year). Mortgage rates will remain low with possible nominal uptick toward [the] end of year. U.S. unemployment will improve but remain above 8 percent. Credit will remain historically tight. Housing prices in the U.S. and New York City region will soften as foreclosure activity ramps up after the 2011 reprieve, a la "robo-signing" scandal. High-end housing will continue to outperform the balance of market. [The Federal Housing Administration] will need to be bailed out. A stronger dollar against the euro will temper foreign buyer demand in New York City.

Barbara Corcoran, founder of the Corcoran Group
This will be the year buyers get tired of waiting. And that alone will turn this whole market around. Get ready to rock and roll!

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The New York Times December 29, 2011 2011: The Year of the Turndown By VIVIAN S. TOY EVEN as 2011 was a year of stable prices and steady sales in Manhattan real estate, it may go down in history as a…... Read more >

The New York Times
December 29, 2011

2011: The Year of the Turndown
By VIVIAN S. TOY

EVEN as 2011 was a year of stable prices and steady sales in Manhattan real estate, it may go down in history as a banner year for co-op and condo board vetoes.
Real estate brokers, lawyers and property managers all said boards had significantly stepped up their financial scrutiny of prospective buyers in the last year. Condo boards technically cannot reject prospective buyers, but brokers say some condo and co-op boards now use delaying tactics and requests for further documentation as a strategy to drive away certain buyers.

It was a year in which many real estate rules seemed to have been turned on their heads. Condos behaved like co-ops. Buyers with mortgages were looked at more favorably than all-cash buyers. Why? The reasoning goes that since mortgages are so hard to come by, anyone who gets one has been thoroughly vetted by the bank.

It also became much more common for buildings — co-ops and condos alike — to ask buyers to put large sums of money in escrow as a way of guaranteeing that they would not default on their monthly carrying charges.

Many buildings asked buyers to put six months’ to two years’ worth of maintenance into escrow. But brokers also said that in these uncertain financial times, some buildings had asked for escrow of as much as 10 years’ worth of maintenance. “That sounds to me like a nice way of saying goodbye,” said Paul Gottsegen, the director of Halstead Management, which manages more than 200 buildings.

One such case was handled by Warburg Realty. Frederick Peters, Warburg’s president, said the amount requested for escrow, which was in the hundreds of thousands of dollars, “seemed crazy to me,” but the buyers agreed and the deal went through.

Mr. Peters said he did not know why the board had been so concerned about the buyers. “We don’t get to ask those questions,” he said, adding that the buyers were a young married couple with parental guarantors who were “very financially solid.”

Mr. Peters said Warburg used to see only a few such deals in a given year, but handled more than 20 in 2011. “That’s a lot of deals,” he said. “But if escrow is a way for a board to get comfortable with a buyer, I’d much rather have that than a board turndown.”

Steven D. Sladkus, a Manhattan co-op and condo lawyer, says most buyers who have the wherewithal will agree to escrow accounts, “because it’s still their money and in most cases, they’ll get it all back if they pay faithfully for a year or two years.” In some cases, though, buildings ask to maintain the escrow indefinitely.

But Jessica Cohen, an executive vice president of Prudential Douglas Elliman, says some buyers take offense when they get an escrow request. “They see it as the board considering them unfit to buy without an insurance policy,” she said.

Ms. Cohen estimated that about a third of her deals last year involved an escrow request, so she now routinely mentions the possibility to all her buyers. “It’s better to let them know it’s a possibility rather than have it come up as a surprise at the point of a board approval and risk having the deal fall apart,” she said.

Brokers and property managers said that these days, deals that used to take a month can take two to three months, as boards request a second or third year’s worth of tax returns and other financial documents or an escrow account. Boards have also become much more selective in other ways.

“People that would have passed boards two years ago, offering to pay all cash, aren’t passing now,” said Leslie Modell Rosenthal, a managing director at Warburg. Some condos now frown on investors, she said, even though that category of buyer has helped sustain condos for years. Other buildings that routinely approved purchases involving parental guarantors are no longer doing so.

“Even if there isn’t an outright rejection,” Ms. Modell Rosenthal said, “some boards will drag their feet to the point where the buyer gives up and goes away.” Boards are not required to give their reasons for turning down an applicant, but brokers say it is often because they feel he or she has too much debt, not enough liquidity or not enough of a job history.

Although some high-priced exclusive buildings have sought buyers with liquid assets of two to three times the purchase price of an apartment, buildings have typically expected them to have about two years’ worth of mortgage and maintenance in liquid assets, or $50,000 to $100,000, depending on the size of the apartment. But today, brokers say, many more buildings want buyers to have several hundred thousand dollars in liquid assets.

Ms. Modell Rosenthal said she worked with a 28-year-old buyer recently who had been turned down by an Upper East Side co-op board, she suspects because he was a single young man and his parents were paying all cash for the apartment.

“He was a truly lovely young man, and he had a three-year job history,” she said, “but he had no liquidity.” She decided to resubmit his board package after getting character references from his former neighbors, and the board eventually approved him. “I knew he was the right candidate for the building,” she said. “I just had to educate people that he was the right candidate. It shows that if you go back with enough ammunition, you can turn it around.”

Condos as a rule cannot reject buyers, though they can exercise a “right of first refusal,” which means the condo board can block the sale by opting to buy the property. But since many don’t have the financial reserves to buy apartments, they use stalling tactics more typically associated with co-ops.

“The way they flex their muscles is to ask for documentation,” said Dan Wurtzel, president of Cooper Square Realty, which manages about 450 buildings. He said more condos now had very specific lists of required information, similar to criteria in a co-op board package. “If a purchaser doesn’t complete that list,” Mr. Wurtzel said, “the application can be considered incomplete. And our instructions are: we don’t turn it over to the board until it’s complete and we have all the documentation.”

Property managers said that some co-ops and condos were turning down or holding off applicants not just on the substance of the application but on its presentation. Mr. Gottsegen, of Halstead, says some boards request colored dividers, numbered tabs and information placed in a specific order according to a table of contents. “If the package isn’t in the exact form they’ve asked for,” he said, “they’re rejecting it, or at the very least are not happy about it.”

Brokers said they had mixed feelings about the heightened scrutiny and tougher standards being enforced by building boards.

“There’s no question that the financial vigilance of co-op boards contributed to the stability of the Manhattan real estate market during the big economic downturn,” said Mr. Peters, of Warburg, pointing to much lower rates of foreclosures and defaults than elsewhere. But this level of vigilance is sometimes unnecessary, he said, “and in some cases, quite detrimental to the seller,” especially if a buyer is rejected and there are no guarantees that a second buyer would be willing to pay the same price.

 

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ynetnews.com    'Israelis, Canadians, Indians awakening NY'                                    …... Read more >

ynetnews.com   
'Israelis, Canadians, Indians awakening NY'                                    

In Real Deal real estate magazine's annual forum, speakers offer investment tips and caution against investment in commercial property on city's outskirts

"Our market is good, probably the best in the world. There's New York and then there's the rest of the State," said William Macklowe, president and chairman of New York's major real estate corporation Macklowe Properties, at the Seventh annual forum held by Real Deal – one of the leading real estate magazines in the United States.

The conference was held over the weekend at Lincoln Center with a crowd of 1,600 realtors, who all appeared to agree that the luxury real estate market in New York is coming to life.

Figures presented at the conference show that the sale of building blocks in New York doubled in 2010 as compared to the previous year especially in light of Google's $1.8 billion mega deal.

Office occupancy is climbing for the first time in three years and apartments in the city are going for just 14% below their peak prices. The rental market, for the time being, is showing signs of stability with slight increases as people are apprehensive when it comes to buying property and prefer to rent.

'You see a lot of Israeli investors'
"The uncertainty in other markets and mainly the euro crisis are driving people to invest in New York," said Frederick Peters, president of Warburg Realty Partnership, one of New York's oldest real estate agencies. "We see many of our buyers coming from outside of the US."

Jonathan Adelsberg from the Herrick Feinstein law firm, which specializes in real estate and was one of the event's sponsors, said: "The mayor encourages foreign investments and today we see many foreign investors from Israel, South America, India and especially Canada, because the Canadian dollar is getting stronger."

Architect Daniel Goldner said, "We see Israeli entrepreneurs arriving in New York en mass. I don't know what the reason for this is."

"It's true that prices dropped, but development and building are almost at a standstill," revealed Nir Amzal of HAP. "The banks have closed the credit tap and Americans, who are accustomed to working with banks, just can't conceive digging into their own pockets. Israelis are used to working with their own money."

Rich Schulhoff from Brooklyn real estate agency BNYMLS recommends Red Hook – a port neighborhood on the bank of the east river, not far from Manhattan's financial district.

"This year, we've seen a 6% rise in sales and a 4% rise in prices in Brooklyn," he said. "Everything is happening at breakneck speed – once a neighborhood becomes hot, the prices rise and it's on the next neighborhood.

"People love Brooklyn because it's very neighborly. Kids can play in the streets and you know who your neighbors are."

'Investing in large buildings in prime locations'
Jean Luc Butbul, a local Jewish real estate entrepreneur, said he looked for good deals in lower Manhattan, but that they were hard to come by. "It's like looking for a diamond in a haystack."

Butbul explained that he was seeking projects in the range of $30-$300 million and that in the current atmosphere "you have to find projects that no one has heard about yet."

Investment consultant and commentator on local TV, Dr. Roger Hanwehr, who is interested in mega-projects, said the best places in New York to invest in were the large buildings in good locations along the river with a view.

"Like they say – location, location, location. Investing in a dump in the notion that some developer will come along and turn the area into Beverly Hills is just wrong."

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The New York Times May 23, 2011 N.Y. / Region  - THE APPRAISAL An Apartment Full of Reality Showmanship By DIANE CARDWELL The party, in a triplex loft floating high above the East River, was just…... Read more >

The New York Times
May 23, 2011

N.Y. / Region  - THE APPRAISAL
An Apartment Full of Reality Showmanship

By DIANE CARDWELL
The party, in a triplex loft floating high above the East River, was just getting started a little after 6 p.m. on Wednesday. The models, leggy young women dressed in Nina Ricci, Proenza Schouler and Calvin Klein, had started to circulate as waiters came through with trays of canapés like smoked salmon topped with glistening orange roe. A jazz quartet kept up a steady rhythm from under the stairs as guests milled about, exclaiming over the panoramic views through four enormous, synchronized glass clocks set in the tower walls.

But over by the door, the evening’s hosts were tied in a vibrating knot of anxiety, trailed by a television crew as they paced in heels with phones glued to their ears and fretted about the rain. They were real estate agents trying to drum up excitement for what could become the most expensive apartment in all of Brooklyn — if it sells — and frantically trying to arrange cars to ferry missing brokers over to Dumbo from Manhattan.

“It’s very hard to get people here just to look at it — they won’t come,” said Michele Kleier of Gumley Haft Kleier, which is marketing the 6,800-square-foot apartment at the top of the Clocktower building. “But if you offer them a fabulous evening,” she added, and provide transportation, maybe you can get enough people who know other people willing to shell out $23.5 million for a trophy apartment, with its own glass-walled elevator, crow’s nest deck and catering-inspired kitchen.

But the party, an event that has become almost de rigueur as a luxury marketing tool, was notable for more than the lengths to which Ms. Kleier and her daughters, executive vice presidents of her agency, had gone. It was also an embodiment of the intersection of real estate and reality TV, a junction where the proliferation of shows turning a voyeuristic eye on the getting and shedding of expensive homes has injected a higher dose of showmanship into the marketing strategy.

Indeed, the Clocktower party, taped for the half-hour show the agency regularly appears on, HGTV’s “Selling New York,” became an art-and-commerce version of the serpent eating its tail. Asher Abehsera, managing director of residential properties at Two Trees, which developed the building and much of Dumbo, had been impressed by a segment on the show featuring Ms. Kleier’s marketing of the Stanhope on Fifth Avenue and asked her to take on the Clocktower after running into her at a cafe on the Upper East Side, he said.

“Very successful brokers are really about selling real estate and it’s very much all day, all night — it’s part of what they do,” said Shari Levine, senior vice president of production at Bravo, which is shooting another reality show, a New York version of its Los Angeles-based “Million Dollar Listing,” which will follow the work and personal lives of three brokers.

“Selling New York” follows a revolving cast from four agencies. The talent is paid an honorarium for appearances, enough for “a decent dinner” out, said Courtney Campbell, who oversees the show at JV Productions, the company that brought it to HGTV.

But Ms. Kleier and her daughters, Sabrina Kleier-Morgenstern and Samantha Kleier-Forbes, say that the show has brought them more clients.

A castmate, Frederick Peters, president of Warburg Realty Partnership, sees the benefits differently.

“It would be hard for me to say that we now have more listings because of that,” he said. “But inevitably, over time, having more people know about your company and see that we do a thorough and professional job translates into more calls, more business.”

But some see no benefit at all, and caution that many of the so-called new clients are actually more interested in being on television than in buying or selling property.

“I think it is much more about someone — whether it’s a buyer, a seller, or a broker on there — about their 15 minutes of fame than anything else,” said Hall F. Willkie, president of Brown Harris Stevens, adding that buyers at the highest end want more, rather than less, privacy about their interests and purchases. He added that the shows reach a vast audience, but not the intended audience of buyers. “No one looking for real estate in New York City — not a soul — turns on reality TV to find their property.”
Back at the party, though, things had picked up. A mix of brokers, publicists, business professionals and artistic types, like the clothing designer Yeohlee Teng and her partner, the architect Joerg Schwartz, were crowded onto the main level and wandering upstairs. Andrew Rothstein, one of the show’s directors, hovered behind the cameras, listening through an earpiece to what the Kleier women were saying as they squired guests around.

“We’re looking to capture real moments, real stuff,” he said. “Someone could come up and say, ‘I want to make an offer.’ We want to know right away. Then we want to grab and interview them.”

A few feet away, a man resembling a slighter version of the rapper Fat Joe — who identified himself as Pablo Escobar Jr., though the family of the slain drug lord has labeled him a fraud — took in the view, one he said made the price tag “not bad,” along with his companions. They included Brittany Andrews, a former adult film actress — “I’m a two-time Hall of Fame porn star!” she volunteered — who said she now makes mainstream films and was considering the space as a location. Later the group attracted attention as they posed for pictures with Richard Garcia, a Tupac Shakur impersonator.

At the end of the night, as the caterers loaded glassware into pink plastic racks and the models had changed out of their designer garb from Edit boutique on the Upper East Side, the Kleiers seemed to be breathing a collective sigh of relief.

“It was horrible weather — I was so nervous when I first got here because I was like, where are the people, now it’s packed,” Michele Kleier said. “The party is over, and nobody’s leaving — there are still people here, so yes, I’m happy.”

She paused. “I’ll be happier when I sell it.”

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TOP RESIDENTIAL AGENTS OF THE WEEK April 15, 2011 Frederick Peters and David Jacobs of Warburg Realty, Property Price $7.23 million, 30 East 72nd Street - Roberto…... Read more >

TOP RESIDENTIAL AGENTS OF THE WEEK
April 15, 2011

Frederick Peters and David Jacobs of Warburg Realty, Property Price $7.23 million, 30 East 72nd Street - Roberto Buarton purchased the four bedroom, three bathroom co-op.< Read less

Brokers big for Selling New York, Million Dollar Listing   Selling a full-floor loft in TriBeCa was hardly a cakewalk for Deborah Lupard of Warburg Realty. The private rooftop space was sorely in…... Read more >

Brokers big for Selling New York, Million Dollar Listing
 
Selling a full-floor loft in TriBeCa was hardly a cakewalk for Deborah Lupard of Warburg Realty. The private rooftop space was sorely in need of an update and had a vent that blasted cooking fumes from an adjacent restaurant. The owners, a former soap star and her husband, were in a hurry to unload the 2,000-square-foot unit but refused to take Ms. Lupard's advice to invest in sprucing it up to help speed up a sale.

After six months of effort, Ms. Lupard looked directly at her clients through her horn-rimmed, tortoise-shell glasses and demanded that they drop their price by $150,000, to $2.3 million. They reluctantly agreed. Someone bought the loft shortly afterward for $2.125 million. Not what the couple had hoped for, but it had at least sold, and the broker earned a $127,500 commission.

The entire saga played out on a recent episode of Selling New York, the reality show that chronicles the exploits of Big Apple brokers as they attempt to move the city's luxury properties. Unlike other reality programs, which depict people at their worst and reinforce ugly stereotypes—for example, some say MTV's Jersey Shore trashes the image of young Italian-Americans—Selling New York presents brokers positively: as savvy, honest specialists who deal effectively with picky buyers, overwrought sellers and dubious developers.

The series has been a boon for the featured three firms and their top brokers. And it is so popular that Bravo has reportedly decided to expand its Los Angeles-based Million Dollar Listing franchise into New York later this year, a move that may serve to similarly enrich the four Manhattan brokers it will follow. Bravo's program concentrates more on personalities and drama.

Not the least bit sleazy
At the very least, real estate professionals are glad not to be portrayed as sleazy and overbearing in Selling New York.

“We are an inspiration for people, who now feel like real estate is something they might want to do,” said Michele Kleier, president of boutique brokerage Gumley Haft Kleier, who regularly appears on Selling New York with her husband and two adult daughters. Ms. Kleier said she recently received a letter from an 8-year-old gushing that he wants to intern for her as soon as he's old enough.

Selling New York, which airs on Thursdays at 9 p.m., has become one of HGTV's top-rated shows since it debuted last March and attracts roughly 2 million viewers a week. Producers recently began taping a Los Angeles version, according to Executive Producer Courtney Campbell.

Things didn't begin auspiciously for Selling New York. JV Productions, a Toronto-based production company, taped the pilot in 2008—just before Lehman Brothers collapsed. HGTV picked it up, but two of the three selected brokerages were out of business by the time the network was ready to begin production in 2009.

Gumley Haft Kleier was still game. “The market was quiet in late 2008 and 2009,” Ms. Kleier said. “We thought it would be fun.”

Signing on to Selling New York was more difficult for Core, which was chosen to replace one of the defunct firms. Founder Shaun Osher considered such shows “risky” but saw that they could also be a powerful marketing tool.

Broker Maggie Kent is happy the boss consented. She got a call from Gary Rodich, a Los Angeles lawyer who had watched her on Selling New York and asked for her help in finding a Manhattan pied-à-terre. He and his wife are now in contract for a $1.2 million, one-bedroom unit on West 66th Street.

“We didn't know anyone in New York,” Mr. Rodich said. “The show is a way to see how a person works.”

Warburg Realty, which was added to Selling New York's roster last month, said that traffic on Warburgrealty.com soared almost immediately. Traffic hit a nine-month high in January, with more than 10.3 million page views.

“I am having a ball,” said Warburg broker Richard Steinberg, who has appeared in two episodes. “It is wonderful that I am catching my 15 minutes of fame, but I ultimately want business and to build a brand.”

Passed over for Selling New York, Nest Seekers International is getting another chance on Bravo. Ryan Serhant, a Nest Seekers agent and former soap opera star, has been tapped for Million Dollar Listing in New York, according to CEO Eddie Shapiro. (The California-centric edition is currently following three young agents selling posh residences in Hollywood, Malibu and Beverly Hills.)

Ex-porn star in wings
Prudential Douglas Elliman, one of New York's largest firms, is also in on the act. It has confirmed that three of its brokers will be on Million Dollar Listing: Michael Lorber, the son of its chairman; Frederik Ecklund, a former model and Swedish porn star; and Brooklyn native Jessica Cohen.

Neither Bravo nor the agents would comment, but other brokers said the network began scouting and accepting video submissions about a year ago. Some report that they have even spotted cameras in properties for sale.

HGTV isn't concerned about the competition. “There are enough viewers to go around,” said Freddy James, senior vice president of program development and production. “The audience craves beautiful, high-priced Manhattan real estate.”

The brokerages on Selling New York are confident. “The show is an enhancement to the industry,” said Warburg CEO Frederick Peters. “It is professional and focuses on business.”

If Selling New York had wanted to emphasize the personal lives of his 130-plus agents, his firm would not have participated, Mr. Peters said. “That would be too Kardashianish [referring to E!'s Keeping Up with the Kardashians].”

 

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Federal rule change over flip taxes crucial to NYC residential lending, experts say February 04, 2011 12:00PM By Amy Tennery    REBNY President Steven Spinola, Rep. Anthony Weiner, Warburg President…... Read more >

Federal rule change over flip taxes crucial to NYC residential lending, experts say
February 04, 2011 12:00PM
By Amy Tennery 
 
REBNY President Steven Spinola, Rep. Anthony Weiner, Warburg President Frederick Peters, Elaine Mayers of Citi Habitats and Stacey Max of Bellmarc Realty

Tuesday's approval of an amendment to a proposed Federal Housing Finance Agency ruling dealing with flip taxes could keep lenders from abandoning the New York City residential market in the future, according to industry experts.

The amendment pared down an earlier FHFA provision, announced in fall 2010, which would have barred government-sponsored Fannie Mae and Freddie Mac from lending in all multi-family buildings in which a flip tax is written into the contract. In its original form, the proposal could have adversely affected roughly 50 percent of the New York City residential stock, according to Real Estate Board of New York President Steven Spinola.

The amendment was passed as part of a larger proposal that is still winding its way through the approval process.

Flip taxes are commonly written into New York City co-op or condo contracts as a source revenue for buildings. The FHFA proposal targets developers who use flip taxes to receive payouts long after they part ways with a property. But critics said it unfairly lumped in New York City practices with those of unscrupulous builders in other parts of the country, according to industry experts.

Had the original proposal remained intact, it would have had catastrophic consequences for New York City's residential market, Spinola said, because it would have severely limited the amount of credit available to buyers.

"Banks basically look to Fannie and Freddie to buy mortgages back," Spinola explained, noting that with those two organizations barred, banks would have backed away from lending to many co-ops and condos.

Frederick Peters, president of Warburg Realty, agreed that, had the ruling been approved in its previous form, it would have been detrimental to the city.

"In New York, where flip taxes generate so much of the revenue buildings use for capital projects and major repairs, the proposed legislation had the potential to deal a huge blow both to expenditures needed to keep our housing stock up to date and to the value of apartments in buildings with flip taxes," Peters said.

There is no word yet on when the broader proposal could take effect, if approved. Much like a rider on a pending bill, the amendment affects an FHFA ruling that has not yet been approved.

Elaine Mayers, a residential sales agent and senior vice president with Citi Habitats, said she wrote letters to her local representatives in support of the amendment -- championed by Rep. Anthony Weiner and REBNY -- because she felt the ruling didn't properly distinguish New York City flip taxes from those in other parts of the country.

"Everyplace else, that money goes back to the developer," Mayers said. "Here it goes back into the co-op or condo coffers so it can be used for the building. [The ruling] would have tied the hands of people who were getting mortgages in Manhattan."

Shortly after FHFA first announced its proposal, Weiner and REBNY launched a campaign to exempt buildings in which the flip tax is associated with private transfer fees to homeowner associations as well as co-op and condo boards.

"There was a practice around the country… in which developers had put into their initial contract of sale [that with] any resale of that building a fee would be paid to the original developer," Spinola said. "We made the distinction between a fee going back to a developer versus a fee determined by the existing property owners that would go back into the building."

That distinction is crucial for the New York City residential market, according to Weiner, whose district includes portions of Brooklyn and Queens.

"I don't know if a ban of flip taxes would have been a dealbreaker [for banks], but it certainly would have cooled the market a great deal," Weiner said. "[The amendment] shouldn't lead them now to avoid financing co-op and condo owners."

Stacey Max, an executive vice president with Bellmarc Realty, said the flip tax amendment will keep New York City mortgages attractive to lenders, should the overall proposal pass.

"[Fannie and Freddie represent] the only secondary market that there is," Max said. "Unless a bank is willing to hold a loan on its books, Fannie Mae and Freddie Mac are their only option."

And while the FHFA flip tax mandate hasn't yet gone into effect, Spinola said that the adopted amendment is a coup for the city's residential industry.

"It's a very big victory for co-op and condo owners throughout the city," Spinola said.

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Federal rule change over flip taxes crucial to NYC residential lending, experts say Tuesday's approval of an amendment to a proposed Federal Housing Finance Agency ruling dealing with flip taxes could…... Read more >

Federal rule change over flip taxes crucial to NYC residential lending, experts say

Tuesday's approval of an amendment to a proposed Federal Housing Finance Agency ruling dealing with flip taxes could keep lenders from abandoning the New York City residential market in the future, according to industry experts.

The amendment pared down an earlier FHFA provision, announced in fall 2010, which would have barred government-sponsored Fannie Mae and Freddie Mac from lending in all multi-family buildings in which a flip tax is written into the contract. In its original form, the proposal could have adversely affected roughly 50 percent of the New York City residential stock, according to Real Estate Board of New York President Steven Spinola.

The amendment was passed as part of a larger proposal that is still winding its way through the approval process.

Flip taxes are commonly written into New York City co-op or condo contracts as a source revenue for buildings. The FHFA proposal targets developers who use flip taxes to receive payouts long after they part ways with a property. But critics said it unfairly lumped in New York City practices with those of unscrupulous builders in other parts of the country, according to industry experts.

Had the original proposal remained intact, it would have had catastrophic consequences for New York City's residential market, Spinola said, because it would have severely limited the amount of credit available to buyers.

"Banks basically look to Fannie and Freddie to buy mortgages back," Spinola explained, noting that with those two organizations barred, banks would have backed away from lending to many co-ops and condos.

Frederick Peters, president of Warburg Realty, agreed that, had the ruling been approved in its previous form, it would have been detrimental to the city.

"In New York, where flip taxes generate so much of the revenue buildings use for capital projects and major repairs, the proposed legislation had the potential to deal a huge blow both to expenditures needed to keep our housing stock up to date and to the value of apartments in buildings with flip taxes," Peters said.

There is no word yet on when the broader proposal could take effect, if approved. Much like a rider on a pending bill, the amendment affects an FHFA ruling that has not yet been approved.

Elaine Mayers, a residential sales agent and senior vice president with Citi Habitats, said she wrote letters to her local representatives in support of the amendment -- championed by Rep. Anthony Weiner and REBNY -- because she felt the ruling didn't properly distinguish New York City flip taxes from those in other parts of the country.

"Everyplace else, that money goes back to the developer," Mayers said. "Here it goes back into the co-op or condo coffers so it can be used for the building. [The ruling] would have tied the hands of people who were getting mortgages in Manhattan."

Shortly after FHFA first announced its proposal, Weiner and REBNY launched a campaign to exempt buildings in which the flip tax is associated with private transfer fees to homeowner associations as well as co-op and condo boards.

"There was a practice around the country… in which developers had put into their initial contract of sale [that with] any resale of that building a fee would be paid to the original developer," Spinola said. "We made the distinction between a fee going back to a developer versus a fee determined by the existing property owners that would go back into the building."

That distinction is crucial for the New York City residential market, according to Weiner, whose district includes portions of Brooklyn and Queens.

"I don't know if a ban of flip taxes would have been a dealbreaker [for banks], but it certainly would have cooled the market a great deal," Weiner said. "[The amendment] shouldn't lead them now to avoid financing co-op and condo owners."

Stacey Max, an executive vice president with Bellmarc Realty, said the flip tax amendment will keep New York City mortgages attractive to lenders, should the overall proposal pass.

"[Fannie and Freddie represent] the only secondary market that there is. Unless a bank is willing to hold a loan on its books, Fannie Mae and Freddie Mac are their only option," Max said.

And while the FHFA flip tax mandate hasn't yet gone into effect, Spinola said that the adopted amendment is a coup for the city's residential industry.

"It's a very big victory for co-op and condo owners throughout the city," Spinola said.

 

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AFI-USA taps Warburg for 20 Pine Africa Israel USA announced that Warburg Realty has been appointed the sales and marketing agent for 20 Pine The Collection. Deborah DeMaria, Diane Sutherland and Caleb…... Read more >

AFI-USA taps Warburg for 20 Pine

Africa Israel USA announced that Warburg Realty has been appointed the sales and marketing agent for 20 Pine The Collection. Deborah DeMaria, Diane Sutherland and Caleb Hartzler, agents from Warburg’s Tribeca office will market the final 32 homes in the Financial District building.

“SHVO was invaluable to the project, helping sell over 90% of our residences. We are confident Warburg will take us to our final sales goal of full occupancy within the next 6 months and we are working forward to working with them,” said Lori Ordover, managing member of The Ordover Group, a consultant to Africa Israel USA.

“The Financial District has grown into a thriving neighborhood and we are thrilled to be involved with one of its most outstanding buildings,” said Frederick Peters, president of Warburg Realty. Originally the Chase Manhattan Bank headquarters, the Armani/Casa designed 20 Pine offers 30,000 square feet of amenity spaces.

Residents at 20 Pine can enjoy the convenience of a full service spa, an indoor pool, a state of the art fitness center, a Full Swing Golf Simulator and private subway access within the building. Residents of the property’s upper floors can take advantage of Quintessentially, a concierge service regarded as one of the most elite in the world.

 

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OPULENT CITY RESIDENCES TAKE CENTER STAGE  IN NEW SEASON OF ‘SELLING NEW YORK’ Popular Series Returns Thursday, January 6, at 9:00 p.m. ET/PT The excitement of New York City’s high-end real…... Read more >

OPULENT CITY RESIDENCES TAKE CENTER STAGE  IN NEW SEASON OF ‘SELLING NEW YORK’
Popular Series Returns Thursday, January 6, at 9:00 p.m. ET/PT

The excitement of New York City’s high-end real estate market, with its unique, often incredible urban dwellings, returns to HGTV in the compelling second season of Selling New York. The new episodes, premiering on Thursday, January 6 at 9:00 p.m. ET/PT, continue to follow a colorful group of assertive, razor-sharp brokers from three upscale boutique real estate firms—The Core Group, Gumley Haft Kleier and, new this season, Warburg Realty—as they offer viewers a rare glimpse inside the high-powered world of buying and selling luxury Manhattan properties.

“Selling New York offers an intriguing look at what it takes to move these multi-million dollar properties,” said Kathleen Finch, general manager, HGTV. “The series offers a fun, voyeuristic peek inside some of the city’s most exclusive homes, as well as the ingenious ideas the agents use to increase the odds of a sale.”

The series’ second season features the agents’ ongoing scramble to keep the property sales moving, despite astronomical prices, jaded buyers and intense competition. In an early episode, viewers meet Warburg broker Richard Steinberg who must navigate frustrating construction delays to get an apartment on the market. One of the most prominent brokers of apartments and townhouses in New York City, Steinberg grosses over $100 million in sales annually. His comprehensive knowledge of the Manhattan marketplace has made him a frequently cited expert on real estate in many national publications, and he has a client roster of the City’s top celebrities, politicians and business leaders. This episode also features returning broker Michele Kleier of Gumley Haft Kleier, who is pressed to sell an $8 million dollar penthouse with floor-to-ceiling windows that offer a quintessential city view and a wrap-around terrace perfect for parties. To attract interest, she holds a lavish cocktail party at the property, complete with high fashion models and luxurious gifts for guests.

During the season, Warburg Realty President, Frederick Peters, a 30-year veteran in the real estate business, film director turned real estate agent Deborah Lupard, and 2006 Rookie of the Year Leslie Rosenthal, join the series to showcase even more spectacular properties.

Future episodes feature celebrity clients, including soap actress Ellen Dolan of the recently canceled As The World Turns who turns to Warburg to help sell her Tribeca loft as soon as possible. With help from Samantha Kleier, Country star Clay Walker also shops for a pied-á terre, while artist Darren Waterston looks for a residence that can double as an art studio.

 

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City residential market ends 2010 with strong finish Demand for high-end apartments costing $5 million or more is robust; industry observers predict 2011 will bring stable prices and sales activity. Last…... Read more >

City residential market ends 2010 with strong finish
Demand for high-end apartments costing $5 million or more is robust; industry observers predict 2011 will bring stable prices and sales activity.

Last year, the city's residential real estate market stabilized with sales levels reaching historically normal levels and sale prices remaining steady. And experts expect much of the same for 2011, barring any new economic crisis.

Reports for the market's fourth quarter won't be released until the first week of January, but experts say the year ended strong with apartments on the high end, those priced at $5 million and above, leading the sales activity toward the end of the year. They are also confident that the New York housing market will remain solid without the help from government incentives. The week leading into Christmas also showed stronger than expected activity.

“We have a lot of momentum running into 2011,” said Pam Liebman, chief executive of The Corcoran Group. “Brokers are very busy, and there are plenty of buyers out there.”

During the third quarter, the number of apartment sales in Manhattan jumped 19.3% from the same period 2009, according to Prudential Douglas Elliman and appraisal firm Miller Samuel Inc. According to the most recent residential report by Brown Harris Stevens, co-ops priced at $7 million and up doubled in the third quarter of 2010, compared to the same period a year ago.

Experts anticipate that the final quarter of the year will record similar results since a number of big deals took place this month. Those transactions include an apartment at 15 Central Park that recently closed for $40 million and an apartment at 927 Fifth Ave. that went into contract for $27 million. In fact, Jacky Teplitzky, a broker at Prudential Douglas Elliman, said she was busy showing apartments the entire week leading up to Christmas.

“There was so much anxiety after the Lehman Brothers collapse that at the end of 2009 we had pent up demand,” said Ms. Teplitzky. “With the Wall Street bonuses and the extension of the Bush tax cuts, everybody is breathing again.”

While there was a boom in sales activity during the first half of 2010, which sent the number of sales surging by as much as 80% in the second quarter, most observers don't expect a repeat performance next year. Some of that boost was attributed to first-time homebuyer tax credit and record low mortgage interest rates. Instead, experts expect a return to healthy seasonality, when the winter months are slightly slower than the spring and summer, but apartments are being sold at a regular pace.

“I'm anticipating more stability with no drastic increases or decreases in prices,” said Jonathan Miller, chief executive of Miller Samuel. “I don't think we will see any meaningful or significant housing related stimulus from the federal government.”

There was a slight increase in sale prices last year over 2009, but that was due to the sale of bigger apartments during the third quarter, the market for smaller apartments having returned earlier than other segments. During the third quarter, the median sale price for apartments in Manhattan was up 7.5% from year-earlier levels, according to the Prudential Douglas Elliman report.

“Prices won't soar; they will hold their own in 2011, which is the best kind of market for real estate,” said Kathy Braddock, co-founder of brokerage Charles Rutenberg Realty. “Back in the heyday every quarter price went up 10%. It was very unhealthy because everyone was jumping into real estate for the wrong reasons.”

While mortgage interest rates are still low, most experts warn that credit is still fairly tight and that by the end of 2011 interest rates will likely increase. “Any increase will scare buyers off,” said Mr. Miller, who also cautions that unemployment rates remains high and with no rapid employment improvement visible on the horizon, the residential market won't drastically improve.

“Next year will be a modest one for the city,” said Frederick Peters, president of Warburg Realty.

Sofia Song, vice president of StreetEasy.com, agreed, “I would not be surprised to see the market bounce along the bottom for a while before it is in true recovery.”

 

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January 1, 2011 What to expect this year Not much good news ahead for the NYC residential market, but predictions aren't that terrible, either By Melissa Dehncke-McGill Possible price erosion. No more…... Read more >

January 1, 2011
What to expect this year
Not much good news ahead for the NYC residential market, but predictions aren't that terrible, either

By Melissa Dehncke-McGill

Possible price erosion. No more government stimulus propping up the market. But all with the saving grace of more stability. Those are some of the things we can look forward to in the New York residential market in the coming year.

Indeed, the good news is that the predictions for the New York City market aren't dire for the coming year. The bad news is that they aren't that awe-inspiring either.

In this month's Q & A, The Real Deal talked to market analysts and CEOs of brokerages to get their unvarnished views of what to expect in 2011.

While many said there is unlikely to be robust activity this year (largely because of strict requirements from mortgage lenders and the pending concerns about the unemployment picture), they also said buyers and sellers have become more comfortable than they were last year at this time. That will help draw more people into the market.

"Buyers know that they are not clearly buying at what was the height of the market, and sellers clearly have a lot of benchmarks of sales from the past year," said one company head. "We are not in an unknown environment."

Another source argued that 2011 should be the year that the industry stops comparing the New York market to the stretch of time between 2003 and 2007, because it will more closely resemble its historical self. "That [period] was the anomaly," the source said.

For more on which projects and sectors to keep an eye on in 2011, we turn to our panel of experts.

Jonathan Miller
president/CEO, Miller Samuel

What do you think will happen with the residential market in New York City in 2011?

I don't know if there is much to get excited about. I think in 2011 we may see a market that moves sideways, with certain possibilities for some price erosion. It really depends on where employment levels go and where credit goes. Hopefully we will see meaningful improvement. But unless we do, it's hard to see housing lead us out of this. … [Also], it would likely vary borough by borough because some boroughs have a heavy concentration of foreclosures, which are anticipated to continue rising.

After a massive falloff in early 2009, residential sales in Manhattan bounced back somewhat in 2010. Do you expect that to continue in 2011?

What is impressive about the market is how quickly we saw activity rebound from the dire levels of the first half of 2009. But the activity of 2010 was either partially stimulus, low interest rates, first-time tax credits or pent-up demand from 2009. Going into 2011 we don't have much changing. That's why I view it as more leveling off and possibly some slippage in some markets. Hopefully [there will be improvement] sooner than later, but as it stands right now it's unrealistic to expect any kind of robust activity [this] year.

Which price range of the residential market do you expect to do best in New York over the next year?

I would say the middle of the market that relies on conforming mortgage financing -- a $729,000-to-$750,000 mortgage cap -- which would mean under a million or low millions.

What do you expect the biggest challenges to be in the coming year in the New York residential market?

Number one is what happens with municipal taxes; the budget shortfall for the city is a local concern. The other is interest rates as they begin to trend higher, because they have been manipulated and are artificially low. What happens when that pressure is removed would be another significant worry. The next is shadow inventory. Lenders are still in full pretend-and-extend mode. Lenders are doing everything they can to delay the inevitable. Inventory, aside from shadow inventory, is consistent with historic norms right now. So is sales activity, in general. The most important thing people can do in 2011 is to stop looking at 2003 to 2007. That was the anomaly.

New development condos were obviously hit hard during the recession. How do you expect new development condos to perform in the coming year?

I think the days of new condo development are going to be on hiatus, at least for the next couple of years. The majority of the new product coming out is going to be rental, and even then it will be nowhere near the scale of new market entries that we saw. Ultimately a lot of the shadow will be converted to rental or sold over the next three to five years.

What do you think will happen with lending in 2011?

It will probably get easier, but it won't ease as quickly as we need to keep housing from seeing more weakness. If you think about where we are right now, no matter what you are being told, lenders are looking for reasons not to lend. We truly are building a triple-A mortgage portfolio with these banks because all of the new product is clean as a whistle; now triple A actually means something. From a long-term perspective it feels like we are going in the right direction, but it's at a crawl.

Frederick Peters
President, Warburg Realty Partnership

What do you think will happen with the residential market in New York City in 2011?

My prediction is for slight price growth -- less than 5 percent -- combined with a fairly constant trickle of new inventory.

Which price range do you expect to do best in New York in 2011?

I think we can expect to see more transactions at the upper end of the market. … I think that will be where the most significant change in volume will be.

Which area do you expect to do worst?

Oversupply is always the determining factor for what markets struggle more. I think there is still oversupply in the one- and two-bedroom condo markets between 14th and 33rd streets on the East Side. So those are areas of opportunity for buyers.

How do you think the employment situation will impact the market here?

Barring another big round of Wall Street layoffs -- which is certainly not impossible -- unemployment is usually not a direct factor in the work we do. But it has significant overall psychological resonance in the economy, which in turn does affect buyer perception and how they tailor their willingness to purchase. I think both nationally and locally the unemployment issue will take years to resolve, and will continue to be a drag on consumer confidence. And we are in the consumer confidence business.

How do you expect new development condos to perform in 2011?

It's all a question of price. Where developers have readjusted so their expectations are in line with the market, the product sells. I think we will see ongoing absorption of the new condo product, but that will probably be balanced by new units coming out of the rental market and back into the sale market. This will be a multiyear process before the overhang is absorbed.

There was a recent ruling that requires Related to give back a $500,000 deposit to a buyer at the Brompton. What do you expect to happen with ILSA cases in New York in the coming year?

I think we will all be waiting with great interest to see how the Court of Appeals rules on the Brompton case. Because we all know that the truth with these cases is that buyers don't want to get out of them because of some obscure ILSA provision. They want to get out of the deals because the market changed and they feel they paid too much. Is that something the courts should support? Would the court be sympathetic in a rising market to the developer finding a loophole so he could cancel the contracts and sell the apartments for more?

Marisa Di Natale
senior economist, Moody's Analytics

What do you think will happen with the residential market in New York in 2011?

The residential market will continue its [recovery] and by the summer, housing prices in most segments -- single-family, condo, co-op -- will have reached bottom.

Do you expect the number of sales to increase or fall in 2011 in New York?

I expect that sales have already bottomed and will continue to rise steadily through 2011.

How do you think the employment situation is going to impact the residential market here?

The job market will continue to improve in the private sector, but losses in the public sector will offset some of those gains. Wall Street will be hiring again, though at a pretty slow pace. The unemployment rate may be higher a year from now simply because the labor force will be growing faster than job growth. The odds of a double-dip recession are very low, [which will help] the residential market.

What do you expect the biggest challenges to be in the coming year in the New York residential market?

Most of my concern is about the job market, which directly impacts home sales. I'm concerned that layoffs in the public sector will take a lot of the wind out of the sails of the recovery in New York City. I'm also concerned that if high-paying industries like finance and professional services aren't hiring by then, the residential sales market may be weaker for longer.

Sofia Song
vice president of research, StreetEasy

What do you think will happen with the residential market in New York in 2011?

New York City has a long road of recovery ahead. After the Lehman collapse, 2009 felt like a free fall, while 2010 felt more like a period of stabilization. I expect that we will be bouncing along the bottom for a while before we see true signs of recovery.

What do you expect to happen with residential sales volume in 2011?

Residential sales volume in Manhattan definitely increased in 2010, particularly in the second quarter. Most of these sales were in the entry-level market, with many buyers taking advantage of the federal tax credit and other incentives. [But] those government-backed props are gone now. And unless unemployment improves and financing becomes easier to obtain, I don't expect to see a dramatic increase in transaction activity in 2011.

What do you expect to happen with residential prices in New York in 2011?

According to our overall yearly stats, median Manhattan prices have only gone up 1.9 percent from 2009 to 2010. Overall, I don't expect to see any dramatic movement in prices. Tight credit and the inability to close will put downward pressure on prices, but as the economy slowly recovers, consumer confidence will return. I think the market will continue to stabilize.

Which new residential projects should the New York real estate community keep an eye on in 2011?

Definitely the Frank Gehry tower at 8 Spruce Street. It's the tallest residential building in the city and they will begin leasing [this year], commanding the highest rents in the city. I'm also excited to see 57 Reade by the John Buck Company. It wraps around 287 Broadway, which is a beautiful cast-iron, landmarked building. It's been in the works since 2006 and it's finally taking shape. Also, the Related's West Side project and Extell's Carnegie 57.

Which New York City neighborhoods do you expect to do best and worst in 2011?

Overall, the Upper East Side and Upper West Side will do the best. Median prices there have almost returned to their peak levels and transaction activity is strong. I think Upper Manhattan and Midtown will struggle the most. Transaction volume is still way down and median prices are further from the peak than other areas.

What do you expect to happen with ILSA cases in New York in 2011?

The precedent was set [at the Brompton] and I think it will give some encouragement to those with buyer's remorse to back out of a contract. We're seeing it at the Edge right now with nine buyers, using the same attorney who won the Related case, to back out of their contracts.

Kathy Braddock
cofounder, Charles Rutenberg Realty

What do you think will happen with the residential market in New York in 2011?

I think it's going to be stable. I think we will see a slight increase. I always believe we are very Wall Street sensitive, so I think as long as the market stays where it is, with little ups and downs, we are going to be fine. The economic indicators seem to be that people are starting to hire. The good news is that buyers know that they are clearly not buying at what was the height of the market, and sellers clearly have a lot of benchmarks of past sales from 2010 to go from. So we are not in an unknown environment. When you are in the unknown, people are more hesitant to move forward.

Which price range of the residential market do you expect to do best in New York over the next year?

The exceedingly wealthy always have money and there is no reason for them not to have money in this environment. I think we will see some extraordinary sales again. The numbers are huge, but they are few and far between. I think we will see some astronomic numbers because these people have astronomic wealth, but I think the $1 to $3 million market will begin to become stronger as people feel they can spend some more money.

What do you expect to happen with mortgages for buyers in the coming year? Will they get easier or harder to secure?

We are now used to the new reality. ... There are three people in the real estate transaction: the broker, the real estate attorney and the mortgage broker or loan [person]. It is critical to have three experts because any one of the components can implode, and if you are not in the hands of a great broker who can negotiate to keep the deal alive, you don't have a good real estate attorney to overcome some of these problems that do crop up in these buildings today, and a good loan person, then you are not dealing with a 100 percent deck. I have seen deals tank because one or two of the components were awful.

Noah Freedman
partner, Bond New York

What do you expect to happen with prices in New York City in 2011?

We still have a ways to go to get back to pre-collapse numbers. As transactions continue to increase, inventory will begin to shrink and as it does, prices will increase. However, because there is still so much inventory available, prices won't rise with any significance for some time.

Which price ranges of the residential market do you expect to do best and worst in New York in 2011?

From $800,000 to $2 million [will do best]. The bottom rung, under $400,000, [will do worst].

What do you expect the biggest challenges to be in 2011 in New York?

Deals that die are almost always a victim of lending issues. It has become so tough to get deals closed and when you do, it's taken months. So lending is at the top of the list and, of course, unemployment. … Mortgage brokers have become experts at overpromising and underdelivering.

How do you expect new development condos to perform in 2011?

I feel that they are going to remain a small part of overall sales. Prices are too high and developers have less ability to play with price than a resale does. Also, there are still so many empty units that it's hard to get banks to loan. New development is going to lag behind the rest of the market.

Which New York City neighborhoods do you expect to do best and worst in 2011?

I think the Upper East Side is going to make a big comeback this year. Upper West and all the "name neighborhoods" below 14th will be hot, as always. [But] I still think Harlem has a ways to go before it gets hot again. Investors were driving business there and they are not looking to jump back in just yet.

What do you expect to happen with ILSA cases in New York in the coming year?

The ruling [at the Brompton] is going to give buyers a bit more clout. But you know how it goes -- lawyers will create riders to contracts that will protect against these rulings. I don't expect that there will be much difference in the way business is done.

Barbara Fox
president, Fox Residential Group

Do you expect the number of residential sales to continue increasing in 2011?

The number of sales will definitely increase in 2011 -- there is still good value around, and buyers recognize value and will seize the opportunity to buy before prices climb again. A lot of people have been holding off, and more and more, they're returning to the market.

Which price ranges of the residential market do you expect to do best in New York in 2011?

I think the higher price ranges will continue to improve through 2011, as Wall Street continues to get stronger and bonuses continue to be paid out. [The high end], which has been relatively stagnant for the past year and a half, is already starting to improve, and that will continue.

 

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The Real Deal Warburg talent preps for TV debut In picking possible reality stars, stage skills didn't hurt By C. J. Hughes If the casting for season two of HGTV's "Selling New York" is to be believed,…... Read more >

The Real Deal
Warburg talent preps for TV debut
In picking possible reality stars, stage skills didn't hurt
By C. J. Hughes

If the casting for season two of HGTV's "Selling New York" is to be believed, experienced actors, singers and models have an inside edge on the popular real estate-themed reality show.

Producers went on the hunt for more brokers in the spring, choosing, so far, three Warburg Realty brokers (along with company president Frederick Peters) to join colleagues from Core and Gumley Haft Kleier.

During her audition, Warburg broker Leslie Rosenthal broke into an impromptu "Somewhere Over the Rainbow."

"The performance aspect definitely intrigued them," said Rosenthal, who was an actor and singer before she started selling homes. "They wanted people who are natural, who wouldn't get intimidated by the process, and who can do the takes, too."

Others from Warburg who made the cut are just as at ease in the kliegs.

"I sometimes direct myself, like, 'We're losing the light! Let's go!" said Deborah Lupard, who was an assistant director on Hollywood films, working with Martin Scorsese and Oliver Stone, before joining Warburg in 2006. "It's kind of ironic to be on the other end of the camera."

After the first season was under way, JV Productions got word that HGTV wanted a second season of shows. It would be much longer than the first, with 39 episodes instead of 13, so more brokers were needed, explained the producers, who began to put out feelers for fresh talent in May.

Within a few weeks, the producers had settled on Warburg and began to audition some of its brokers, and filming began in June. The new season debuts Jan. 6.

Peters admits that he deliberated carefully on which of his 130 agents would get a tryout.

"We certainly thought about who were the most appropriate people," though "we also tried to include an agent from each of our three offices," Peters said.

For their part, producers say they were more intrigued by the fact that Warburg, unlike, say, the Corcoran Group or Prudential Douglas Elliman, was a lesser-known boutique firm with agents "who have to work hard to make a name for themselves," said the series' producer, Courtney Campbell.

Indeed, these agents make up "a very solid, professional and confident team," said Campbell, who revealed that next month production starts on a spin-off, "Selling L.A.," which is scheduled to air on HGTV in October.

Still, onscreen confidence also seems evident in "Selling New York," like with Warburg broker Richard Steinberg, a star of at least four episodes, including one in which he accompanies New Yorker Roberta Bogen, a designer, on a Los Angeles apartment hunt.

"I will tell you, I'm great at" reality TV, said Steinberg, who used to model in print ads with his wife. (Also, until the mid-1980s, Steinberg was a foot surgeon.) "I was never the captain of the football team, if you know what I mean, so this is clearly my 15 minutes," he said, "and I'm having a ball."

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Today's NYT: The 30-Minute Interview with Fred Peters Mr. Peters, 58, is the president of Warburg Realty Partnership, an independent residential brokerage firm that specializes in luxury property. Warburg…... Read more >

Today's NYT: The 30-Minute Interview with Fred Peters

Mr. Peters, 58, is the president of Warburg Realty Partnership, an independent residential brokerage firm that specializes in luxury property. Warburg is involved in several new developments, including Twenty9th Park Madison, a condominium near Madison Square Park, and 555 Lenox Avenue in Harlem.

The firm will soon be joining the cast of the HGTV show “Selling New York.” 

Q How is the luxury market?

A In the ultraluxury marketplace — $10 million and up — prices are still off peak but not to the degree that they were 15 months ago. Last year we were 30 to 40 percent off. Today I would say we’re off peak by 15 percent to 20 percent. The lower level of the luxury market — starting in the low $2 millions — was very slow for a substantial period of time. Those units are much in demand in the last six months.

Q Wall Street bonuses are expected to rise. Are you getting any inquiries from investment bankers about buying yet?

A We absolutely are. I think we’re seeing it more so than last year at this time, and that’s not only because of the money. Last year there was a sense that it was unseemly to be looking at spending a very substantial amount of money on real estate. I think this year — even though there’s still some of the sentiment — that perception has diminished.

Q Is this still a sellers’ market?

A What’s interesting is that both sides feel empowered: the sellers, by the fact that 2010 has not been a really bad year, and the buyers, by the fact that there is still enough negative economic news slowing things down.

The way I like to describe the market we’ve been in for the last year is as a brokers’ market. We’re in a marketplace in which you frequently have a buyer and a seller with a different perspective, and it’s the challenge of the broker to bridge the gap. I like these markets in which our skills are really deployed.

Q You still actively broker deals even as you run the company. Some might see this dual role as a conflict with your agents.

A I have continued to work as a broker because I love brokering. I also do it because I feel that being in the marketplace places me in a position to understand the market better, which makes me more of a resource to my brokers. I’ve never had a situation of conflict for a couple of reasons: one, I almost always use agents in my office to work with me, so I share the commission; and 80 percent of the business that comes to me I give out in the office.

Q How have the ever-expanding social media changed the way you market properties?

A They’ve changed not only how we market properties but how we market ourselves.

We’ve done continuous upgrading of the Web site, so that we’re very conscious of not only marketing the properties but also giving access to Facebook and Twitter feeds. Our blog is marketed on the home page, and we’ve created our iPhone app.

We have a unique seller page, a password-protected page where the seller can go to at any time to be completely up to date with the marketing efforts that we’ve done on behalf of their property and what their yield has been.

Q Warburg is one of the few large independent brokerages in the city. Have there been overtures to merge with other companies?

A Yes, there have been many over the years, a few recently. I never exactly turn people down. I always say to them that I like to keep the door open. That being said, I feel that I have certain abilities as the owner of an independent firm. When you’re smaller than others — I have 130 agents, that’s not so small, but it is, in the great scheme of things — you can turn the ship more quickly. I feel like Warburg has been able to adopt new technology in a way that didn’t require a lot of layers of decision-making.

Q You have a grown son and daughter. Could either eventually take over the business?
A I live in hope. It would be great, but I’m not counting on it.

Q Your background is in music — in fact, you studied to be a composer. Why switch to real estate?

A I became a parent at 26 and I needed to make money, and that certainly didn’t look like it was in my future anytime soon as a music graduate student. My wife was pregnant again when I was 28. From the time we bought our apartment on Central Park West, I just got bitten by the real estate bug, and I loved being an agent.

I’ve lived in the same co-op for 33 years, but if everybody was like me I’d be out of business.

Q So you just decided to join the cast of “Selling New York”?

A I discussed the show with Michele Kleier and Sean Osher, who were on last season, and both told me they had gotten a huge amount of recognition as a result. It seemed like a brand-building slam-dunk. And the agents are really excited about it.

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New Frontiers of Marketing   Technology is blurring the lines of marketing and building a reach that was unimaginable in days of print, says Warburg Realty Partnership president Frederick Peters,…... Read more >

New Frontiers of Marketing
 
Technology is blurring the lines of marketing and building a reach that was unimaginable in days of print, says Warburg Realty Partnership president Frederick Peters, whose firm has been leveraging technologies like the iPhone, blogging, and online listings for clients. Warburg no longer markets apartment and co-op units its selling in print classifieds. Between sharing them with ancillary sites like Trulia.com and REBNY’s ResidentialNYC.com, and pushing them on Warburg’s iPhone application, he tells us you’re reaching a buyer base that’s actually interested in the marketed space. In old days, this same space was not appropriate for 75% of people who responded to a newspaper ad, he says.
 
Warburg will be developing more iPhone applications, like its AroundMe app, above, for its clients. It’s also developed a password-protected site for its sellers, allowing them to see where their properties have been marketed, hits they’ve received, and what e-mails have been sent about the listing. Fred also blogs about general-interest real estate topics—his belief is that if he positions himself and Warburg as thought leaders for the industry, it drives people to Warburg’s site, giving listings more credibility. Another tip: a photo and description is no longer enough, he says. As a content creator, descriptions need to be crafted to whet the customer’s appetite, with a little bit of a mystery to pique interest.
 

 

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Is Google killing the white glove building? Recently BrickUnderground realized that we didn’t really know what “white glove building” meant, beyond a starchy reference to a high-end Manhattan apartment…... Read more >

Is Google killing the white glove building?

Recently BrickUnderground realized that we didn’t really know what “white glove building” meant, beyond a starchy reference to a high-end Manhattan apartment building.

How, for instance, is white glove different from “full-service” or “luxury”? Is the presence of white gloves a requirement?  Why do people say “white glove co-op” but not “white glove condo?” And why do some brokers avoid using the term at all?

Then and now

For some historical context, we turned to luxury-real-estate chronicler Michael Gross (740 Park and Rogues’ Gallery) He wasn’t sure about the term's exact origins, beyond the fact that the doormen obviously donned white gloves.

The gloves (now largely extinct) may originally have been meant to give the impression that the building was uber clean and therefore “that those who live there are somehow immaculate,” theorizes Gross.

"White glove" these days seems to connote a Queen Mary past with hot-and-cold running service.

Visit www.brickunderground.com for the rest of the story ...

 

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Last to list After losing ground to aggregators, REBNY portal forced to play catch-up, sources say By Candace Taylor The Real Estate Board of New York has recently taken several steps to help give its…... Read more >

Last to list

After losing ground to aggregators, REBNY portal forced to play catch-up, sources say
By Candace Taylor

The Real Estate Board of New York has recently taken several steps to help give its members better access to data in the increasingly digitized world of residential real estate.

As of July 1, REBNY instituted a rule requiring its members to enter sale prices into the group's back-end listing system (known as the RLS) within 24 hours of a closing.

Also, as The Real Deal has reported, the trade association recently requested bids on a new technology provider to replace its existing R.O.L.E.X. data platform, which brokers complain is slow and frequently inaccurate.

A few years ago, both of these moves might have caused quite a stir in the industry and been hailed as steps towards greater transparency.

Now, however, experts say REBNY is going to have to play catch-up.

Brokers in the secretive New York real estate market once had a monopoly on listings information here -- in order to find out what was for sale, customers had no choice but to come to them. Yet over the last few years, the pendulum has swung far in the other direction. Indeed, as it struggles to enforce its rules and enact new initiatives that all members agree on, REBNY -- and by extension, the industry itself -- appears to be losing the battle for consumer eyeballs to outside aggregator websites like Street Easy.com and PropertyShark.com.

At first, these sites were shunned by brokers, but now the majority of the city's firms -- including the two largest, the Corcoran Group and Prudential Douglas Elliman -- feed their listings directly to StreetEasy several times a day. Meanwhile, REBNY's searchable public website, ResidentialNYC, still only has about 70 percent of the city's listings. And while Corcoran joined earlier this year, Elliman still has not signed on.

Ironically, by trying to hold onto its listings information, the industry has been losing the ability to control how it gets to consumers. And some say brokers -- already struggling to maintain their relevance in an increasingly digital world -- are paying the price.

"The consumer right now is impatient with brokers who don't have the information at their fingertips," said Donna Olshan, president and sole owner of Olshan Realty. "StreetEasy is doing a better job than their broker. That wouldn't be the case if we had a really efficient system."

REBNY's new initiatives have spurred the usual calls for a citywide conventional Multiple Listing Service. But that looks unlikely to happen anytime soon, opening the door for even more new players to step in.

"If the real estate community doesn't jump to the plate to really do an MLS, and really have transparency, other people will," said Klara Madlin, president of boutique brokerage Klara Madlin Real Estate, and a past president of the Manhattan Association of Realtors, which operates the Manhattan MLS.

A 'human problem'

When it comes to the back-end system for brokers, REBNY's new 24-hour rule for reporting closing prices is intended to give its members an advantage in the marketplace, said Frederick Peters, president of Warburg Realty Partnership and vice president of REBNY's residential brokerage division.

Closed sales prices are public record, but they often don't appear in the city's ACRIS system for days or weeks after a closing.

"Rather than waiting for the ACRIS price to come out, we'll have on-the-ground information within 24 hours," Peters said. "All of that data is a matter of public record -- we're just accelerating the speed at which our people have it accessible."

But few brokers appear to be adhering to the new rule.

"It's not happening," Olshan said. "Some firms do [it], but most of them don't."

Steve Spinola, REBNY's president, said it may take a few months for the new regulations to catch on. "We will do friendly reminders," he said. "If we find that people are not adhering to it, we will not be as friendly in terms of reminding people."

But it may take more than reminders to get brokers to change their habits. In conventional MLS systems, certain infractions automatically trigger fines or suspensions, industry insiders said. (Only around 25 of the city's firms are members of MANAR's Manhattan MLS.) But REBNY has few mechanisms for tracking compliance and requires firms to try to work problems out amongst themselves before fines are imposed.

"Most of the companies rely on their agents to do the right thing," explained Diane Ramirez, the president of Halstead Property and a member of REBNY's board of directors. She said when infractions at her firm come to her attention they are taken seriously, and agents are frequently reminded to abide by the guidelines. "Our agents know how serious we are with following the rules."

Still, brokers "traditionally have kept this information close to the vest," said Eric Gordon, creator of the listing platform RealPlus, which is used by roughly 300 firms, most of them small, independent
brokerages.

"If there's no penalty, if there's no motivating factor to make agents want to give this information, a lot of them aren't going to be inclined to do it," he said.

Lack of enforcement is also behind many of the perceived problems with R.O.L.E.X. -- the back-end software system that transmits listings among all of the databases used by REBNY member firms -- agents say.

In other parts of the country, MLS systems often double as listing platforms for all of the system's member firms. But New York City has a number of separate internal listing platforms used by local real estate companies, including RealPlus and its competitor Online Residential, Corcoran's "Taxi" and Elliman's "Limo."

In July, REBNY started accepting bids from different vendors for potential new technology to replace R.O.L.E.X., which was developed by Gordon. But instead of embracing the possible change, many agents have reacted angrily, saying that money shouldn't be spent on new technology when many of the problems with the current system are caused by lack of oversight.

"You've got to start with the problem of scrubbing the data and getting it pristine, and making sure everybody plays by the rules," Olshan said. "This is not a technology problem, it's a human problem."

Not only is it expensive for individual city firms to maintain their own internal listing platforms, she said, but she often finds that fellow brokers don't put all of the required information into their listings -- leaving out taxes or the townhouse width, for example.

"It's extremely inefficient," she said. "To have to sit there and research is extremely time-consuming. It lengthens the time on market for the seller and it is not efficient for the buyer. So where have the buyers gone? They've gone to StreetEasy."

Getting consensus

In the mid-2000s, websites like StreetEasy and PropertyShark began offering consumers Manhattan sales and rental information that had never before been available, including days on market and price changes.

At first, StreetEasy was mostly popular with consumers. "The brokers have their internal systems, and that's what they were trained to use," said Dawn Doherty, the vice president of strategic development at StreetEasy.

But now, it does frequent training sessions with agents to help them use the site. And while StreetEasy started by "scraping" firms' websites for data, they now receive direct feeds from all of the major firms several times a day, and many small firms enter their listings manually, Doherty said. (PropertyShark also receives feeds directly from brokerages.)

Sometimes listings pop up on StreetEasy before they make their way through the RLS to other firms' listing systems, Gordon said.

Of course, brokers say StreetEasy has its faults. Some have complained that there are inaccuracies on the site, and since it gets much of its information from feeds, it is plagued by the same problems that impact brokers' internal systems.

"StreetEasy is not immune to a broker who leaves an active listing on the market and doesn't update it," said Noah Rosenblatt, founder of Manhattan brokerage and analytics firm UrbanDigs.

Still, real estate junkies have voted with their mouse clicks. StreetEasy now gets around 12 million page views per month, according to the data tracking website Quantcast.com, while Corcoran.com, for example, only gets 2.4 million -- roughly the amount of traffic StreetEasy got four years ago, Doherty noted. Contrast that growth with REBNY's public site, ResidentialNYC.com, which debuted in 2007, the year after StreetEasy launched. REBNY initially mandated that all firms join the new portal, but members revolted because they wanted customers to search for listings on their own sites, sources explained.

Finally, REBNY relented and made participation optional.

The rest is history: When the site was launched, the city's two biggest firms, Corcoran and Elliman, famously refused to join, and the site never caught on with the public. Corcoran eventually joined in early 2010, bringing the site's total listings up to roughly 10,000 properties (StreetEasy has around 24,000). Corcoran and Elliman both declined to comment for this story.

Spinola remains committed to ResidentialNYC.com. "I haven't given up on my lifetime goal of getting it up to 100 percent," he said.

Sources suggested that changes to the R.O.L.E.X. platform could make it easier for REBNY to require all of the city's firms to feed their listings to ResidentialNYC.com.

But no matter what its intentions, REBNY's efforts are somewhat hobbled by its very identity: As a trade organization, it must get consent from its members before acting.

StreetEasy and other outsiders, on the other hand, don't -- a crucial advantage.

"Our position has always been to stay out of the politics and just work to continually evolve what we've created," Doherty said. "We don't have any rules that we're following in terms of, 'We're paying you, so you can't do this.'"

That's one reason, she said, why the site doesn't currently have plans to offer the type of broker-to-broker information, like commission amounts, that a traditional MLS would have.

But experts say instituting a full-blown MLS is unlikely anytime soon, in part because firms have invested so much in creating their own systems and websites.

"We do not have, and probably will never have, a [conventional] MLS because most MLSes work off a central database," Ramirez said. "We don't all have the same technology and software. We all have spent lots of money on our own systems."

Peters said he favors a citywide MLS but, he noted, "everybody has to want to do it."

And that leaves the door open for even more newcomers. "The industry will be forced to make changes because interlopers will come in, like StreetEasy," Olshan said.

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Big-Time Buildings Broker Darcy Stacom Buys Some $4.8 M. Shoes! By Chloe Malle August 24, 2010 | 8:34 a.m.   CB Richard Ellis Vice Chairman Darcy Stacom has set records for her commercial real estate…... Read more >

Big-Time Buildings Broker Darcy Stacom Buys Some $4.8 M. Shoes!
By Chloe Malle
August 24, 2010 | 8:34 a.m.
 
CB Richard Ellis Vice Chairman Darcy Stacom has set records for her commercial real estate closings, but, according to city records, the winsome blonde and husband Chris Kraus, a managing director at Jones Lang LaSalle, recently closed a deal of their own: a $4.775 million four-bedroom at 447 East 57th Street. Ms. Stacom, who called herself "a shoemaker with no shoes" in a 2009 intereview with The Real Deal in reference to the fact that she has lived in a midtown rental building for the past two decades, has finally bought herself some kicks.

Purchased from George and Leslie Biddle, the high-floor Sutton Place apartment was originally listed for $4.995 million with Warburg Realty's Harriet Kaufman and Frederick Peters. The rambling full-floor apartment in "this most desired Rosario Candela building" has four exposures through new Thermopane windows, as well as two wood-burning fireplaces. Each of the four bedrooms boasts its own en suite bath, as does the generous staff area. Indeed, the listing which begins, "SENSATIONAL SUTTON!" can now be changed to "SENSATIONAL STACOM!"
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Townhouse Price Cut Hits Ritzy Neighborhood By CRAIG KARMIN July 20, 2010 The sale of a sharply marked-down townhouse on one of Manhattan's most exclusive blocks could deflate sale prices for townhouses…... Read more >

Townhouse Price Cut Hits Ritzy Neighborhood
By CRAIG KARMIN
July 20, 2010

The sale of a sharply marked-down townhouse on one of Manhattan's most exclusive blocks could deflate sale prices for townhouses throughout an elite neighborhood.

Brokers were in disbelief when Shelley and Donald Rubin, founder of a giant health-care network and proprietor of a Himalayan art museum in Chelsea, slashed the asking price of their East 70th Street townhouse by 25% to $14.9 million in May after it had sat on the market for about a year.

The $14.9 million sale of an East 70th Street house, above, may curb bids for homes such as that next door, below.

That was one of the steepest one-time markdowns for a high-end residential property in recent memory, but it did the trick: the Rubins accepted an offer this month and the deal is in the contract stage, according to a person familiar with the matter.

Listing broker Kathy Sloane of Brown Harris Stevens declined to comment.

Some say this deal, in effect, re-prices the market for East Side townhouses because buyers and brokers will now use the Rubins' pricing as a benchmark for similar properties.

"That sale is going to color any buyer's impressions on the Upper East Side," says Wolf Jakubowski, a Brown Harris Stevens agent who specializes in Manhattan townhouses. "Owners are going to need to pay attention. If they are not already planning markdowns, they should at least expect to see lower offers."

Two properties that brokers say are in superior condition to the Rubins' home but are still expected to feel the pinch: a neighboring townhouse on East 70th Street with an asking price of $27 million; and a mansion on East 71st Street that is asking $28.8 million.

The Rubins purchased their townhouse in 1995 for $5.05 million, according to Streeteasy. Mr. Rubin is the founder of MultiPlan, a managed heath-care network, and known for his philanthropy and large collection of Tibetan art.

He bought the former Barneys building on Seventh Avenue for $22 million during a 1998 bankruptcy sale and transformed the one-time fashion emporium into the Rubin Museum, which features Asian art.

Through a representative, Mr. Rubin said it wasn't appropriate to comment because there was not a final sale.

Within the brokerage community, there's some debate about whether the Rubins' markdown reflects a new reality or if the couple sold on the cheaper side. Mr. Jakubowski says he and other brokers who toured the townhouse last year—viewing its roof deck, garden, hot tub and wood-paneled library—offered appraisals between $16 million and $18 million. Those assessments suggest that the property eventually might have attracted a richer offer.

Others say the market tends to find the right level. Most anyone asking more than $20 million for a property is expecting more than the market will bear, says Frederick Peters, president of Warburg Realty Partners. "There's no justifying those prices in light of this sale," he says.

Moreover, the block of East 70th Street between Park and Lexington avenues where the Rubin house is located is widely considered one of the most desirable blocks to live, with brokers praising the well-maintained buildings and attractive limestone facades.

That suggests similar townhouses on nearby streets might not be able to command the same price.

Only a handful of residential properties have sold for more than $25 million this year, Mr. Peters says, and sellers shouldn't expect that to change anytime soon.

"Not only are most people less rich than in 2007," he says, "it's not that cool to be seen to be throwing money around."

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Frederick Peters: Manhattan RE Mid-Year Report Posted by Noah Rosenblatt on July 16, 2010 at 8.28 AM A: Here is an excellent summation on the first half of 2010 by Frederick Peters, President of Warburg…... Read more >

Frederick Peters: Manhattan RE Mid-Year Report

Posted by Noah Rosenblatt on July 16, 2010 at 8.28 AM

A: Here is an excellent summation on the first half of 2010 by Frederick Peters, President of Warburg Realty. Fred really combines his experience and wisdom with his 'in the field' observations, anectdotal reports from his agents, and whatever data he has access to for this report. From where I am standing, the observations are spot on. The entire article is worth a read, with some highlighted points to focus on. After you read this, go back and check the Real-time Contracts Signed  (direct from broker updates signaling the pace of listings entering contract from a previously ACTIVE state) chart I posted last week and you can see the confirmations in the data.

From Frederick Peters, "Warburg Realty Mid Year 2010 Market Review"

The second quarter of 2010 behaved like March in the old adage: it came in like a lion and went out like a lamb. April was the acme of a sales avalanche which began gaining force in the fall of 2009. Throughout Manhattan and western Brooklyn residential properties of every category were snapped up, often with competitive bidding, at prices averaging only 10-15% below the 2006/2007 peak. Numerous all time price records were set, especially in mid-sized and larger apartments, during March and April. Confidence and the stock market surged higher.

Buyers began emerging and becoming active during the fall of 2009, as gradually rising prices made them apprehensive lest they miss the opportunity to purchase while the market was still depressed. The wave of purchasing gained traction during the winter, and by March inventory had dropped from a 19 month supply to an 11 month supply, essentially normalizing the marketplace. Larger properties saw particularly robust gains during this period. While the absolute top of the market (properties asking $20 million and above) remained sluggish, demand for properties of six to twelve rooms was intense. It was precisely these properties for which demand had declined so precipitously during the period between September of 2008 and September of 2009. There was little available in this category, especially on the Upper East and Upper West sides, and only those buyers who acted quickly and aggressively succeeded in making a purchase. The early months of 2010 were replete with cognitive dissonance: buyers simply could not believe that they had missed “the bottom” and that failure to act decisively once again left them empty handed just as it had three years earlier!

The smaller apartment market, which had suffered less during the recession, rebounded less dramatically. The one- and two-bedroom markets did see significant absorption, but with lesser price increases and little competitive bidding, as supply for the most part continued to outweigh demand. The inconvenience surrounding construction of the Second Avenue subway depressed prices along that corridor and helped moderate demand for the postwar inventory which makes up the bulk of the housing stock north of 59th Street and east of Third Avenue. In the Village, in which the housing stock remains primarily rental, scarcity drove the market as it had before the recession, with many buyers competing for the few available offerings, especially in the larger two- and three-bedroom categories. In both Tribeca and the Financial District an overhang of unsold inventory from the condo construction boom helped keep prices moderate, while at the same time demand remained strong for the “old” Tribeca lofts, with their high ceilings and enormous windows, in the prewar industrial buildings for which the neighborhood was originally known. In Williamsburg, developers responded early and dramatically to the recession, slashing prices at their buildings and guaranteeing a level of activity which was the envy of most other emerging and more recently gentrified neighborhoods.

As April moved into May and May into June, first economic and then seasonal factors came to bear on the marketplace. Debt crises in Greece and Spain and a falling euro sidelined many Eurozone investors whose interest in New York real estate had buoyed the condo market for years. In our new global economy those European debt concerns began to weigh heavily on OUR equity markets as well. Consumer confidence here at home was further shaken by the program trading driven rout in stocks on Thursday May 6, which temporarily reduced many issues to near zero values. Although the market rebounded, the confidence did not. The jobless nature of our recovery, our mounting national debt burden, and government gridlock, both in Washington and Albany, further depressed the Dow, which lost value during much of June. And then, of course, summer arrived.

Real estate purchasers react in different ways to times like these. While recent developments have certainly taken the sizzle out of our market, deal flow remains healthy as buyers see a home purchase as an alternative to stocks and bonds, with significant collateral benefits. The latter half of June, July, and August are always slower in the residential sales, as both buyers and sellers spend more time out of the city. But with the market a little slower, real opportunities exist for buyers. Some sellers will still be holding out for pie in the sky, but for now that mad moment seems to be over.

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Some Condos Avoid Shoals By CRAIG KARMIN, June 25, 2010   In the upper stratosphere of the Manhattan real-estate market there are a few buildings that seem impervious to the downward drag of the…... Read more >

Some Condos Avoid Shoals

By CRAIG KARMIN, June 25, 2010
 
In the upper stratosphere of the Manhattan real-estate market there are a few buildings that seem impervious to the downward drag of the economy. Fifteen Central Park West is one of these, if a recent deal involving a three-bedroom apartment there is any guide.

An unidentified buyer this week signed a contract to buy the unit for about $19 million, according to a person familiar with the matter. If it's completed, the deal would mark one of the most expensive New York City sales ever on a square-foot basis.

The condo owner, a Senegalese telecommunications mogul, bought the condo for $10.3 million after signing a contract in 2006. While much residential real estate is up slightly since then, his unit will have appreciated by more than 80% if the deal closes.

Considered in absolute dollar terms, the sale isn't especially notable for Manhattan, where apartments have gone for more than twice that amount. But it is among the highest ever in New York when measured by square footage, the industry metric typically used to compare prices on apartments of different sizes.

The sale of the 2,761-square-foot apartment amounts to a price per square foot of about $6,882. That would be higher than all but four other Manhattan apartments that have sold for $10 million or more, according to appraisers Miller Samuel.

The apartment fetched that lofty price the same week that the federal government reported May new-home sales plunged to a record low. In New York, fear remains that a nascent recovery remains vulnerable to the possibility of stock market correction or economic setbacks.

While apartments in most price ranges have enjoyed a rebound since the depths of the downturn, values for most are still far off what they were at the market's peak.

In the ultra-luxury end of the market, condos have been outperforming co-operative apartments as evidenced in deals like the one at 15 Central Park West.

The most expensive condo ever sold by this measure is also at 15 Central Park West: apartment 38A, which went for $27 million in 2008 at $9,486 per square foot, according to Miller Samuel. Three other apartments also sold with prices of more than $7,000 per square foot, including ones at 515 Park Ave. and the Mandarin Oriental residences at Columbus Circle, across the street from 15 Central Park West.
The 15 Central Park West apartment now in contract was listed for $21 million. The six-room condo boasts 11-foot ceilings and panoramic views of Central Park and the river, according to the website of listing broker Corcoran. Corcoran's agent declined to discuss the apartment while the deal is "in contract" or to identify the buyer.

The sale took some veteran brokers by surprise. "I see this as an outlier sale," says Frederick Peters, president of Warburg Realty Partners. "It's not a question of comps. Sometimes a buyer just wants a particular apartment."

Others say that 15 Central Park West has a certain cache shared by only a handful of condo buildings that can command premiums.

"This building has been operating somewhat independent of the luxury market," says Jonathan Miller, president and chief executive at Miller Samuel. "It's one of the best built luxury condos of its era and it has seen tremendous appreciation."

Developed by William and Arthur Zeckendorf, the building between 61st and 62nd streets and the park and Broadway is home to numerous hedge fund managers and Wall Street executives, including Lloyd Blankfein, chairman and CEO of Goldman Sachs Group Inc., and Sanford Weill, former head of Citigroup.

Unlike the city's many recent sleek glass-tower developments, architect Robert A.M. Stern designed 15 Central Park West in the more conservative style of Manhattan's grand limestone buildings of the early 20th century on Park and Fifth avenues.

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Brokerage, We Hardly Knew Ye Courtesy of Frederick Peters of Warburg Realty.  In June, 1980, as a 28 year old doctoral student with a two year old and a baby on the way, I got my real estate license…... Read more >

Brokerage, We Hardly Knew Ye

Courtesy of Frederick Peters of Warburg Realty.  In June, 1980, as a 28 year old doctoral student with a two year old and a baby on the way, I got my real estate license in order to make some money while I completed my Ph.D. At that time the overriding perception of Manhattan real estate agents was one of ladies draped in mink carrying a bunch of keys. Getting a real estate license then (as now) presented almost no barrier for entry; you needed only to take a ridiculously simple state test and endure a mind-numbingly dull and uninformative 45 hour course. I survived both and went to work as a residential broker, not yet understanding that real estate would eat my life.

Brokerage was a very different job in the days before widespread computer use. We had listings, we advertised them in the paper, and buyers came to us for information about what was available. While negotiating and organizational skills were important to success, even the least skilled among us had the keys to the kingdom: file drawers filled with cards containing listing information. There were almost no exclusive listings so there was no co-broking. Buyers had no access to information about what was for sale except through us.

Over the years I have watched an extraordinary step by step transformation in our industry. As real estate firms started to proliferate, the notion of branding crept into the mix. How would we distinguish ourselves one from another? Marketing, which had been limited to placing classified ads in the Sunday real estate section of the Times, began to include magazines. Then radio and TV. As sellers began to give exclusives, the real estate community began to co-broke. For the first time, the possibility arose that a buyer could see everything in the marketplace with one agent.

And then technology completely rocked our world. With the rise of the Internet, brokers no longer controlled access to listings. Information of every sort became public. That change, with all its ramifications, forced us to update our business models and re-imagine our value proposition. If buyers did not need us to find property for them, and sellers did not need us to find buyers, what did we add to the transaction?

Our job, no longer information provider, is now more akin to investment advisor. Today the ranks of residential brokers are filled with former bankers and attorneys. We bring our expertise to bear on the many nuances of the purchase and sale processes. We have become expert online and offline marketers of property and of ourselves,  brand building in both the personal and the corporate spheres.  We still show listings, and we still negotiate (although today more likely with another agent representing the other side than between two principals). We are still, mostly, paid on commission rather than salary. But overall, it’s a different world from the one I entered 30 years ago this month, with a far more empowered consumer population and a better educated and more expert broker force. And today it’s a BIG business!

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http://www.brownstoner.com/brownstoner/archives/2010/05/a_thawing_of_th.php A Thawing of the Development Freeze? Categories: Development, Market Despite what you might think driving through parts of Williamsburg,…... Read more >

http://www.brownstoner.com/brownstoner/archives/2010/05/a_thawing_of_th.php
A Thawing of the Development Freeze?

Categories: Development, Market

Despite what you might think driving through parts of Williamsburg, new building development has not been at a complete standstill. According to an article today in the Wall Street Journal, 364 formerly frozen projects have started back up since February 2009; 108 of those have been in Brooklyn, and of those 31 have been completed so far. "The sites that have recommenced work tell you that there is greater depth to the market than just looking at stalled numbers would suggest," says Kevin Price, a senior vice president of the Radco Cos., a real-estate development firm. "It shows cases where lenders and sponsors are coming to terms." Still, don't expect to see a return to the boom times any time soon. "You're going to see a bifurcated market," says Frederick Peters, president of Warburg Realty Partnership. "Guys with deep pockets have been able to finish their buildings, while a lot of first-time developers walked away."
New Life in New York [WSJ]

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May 27, 2010 Construction Projects Stalled by Recession Are Jump-Started By CRAIG KARMIN Brian Harkin for The Wall Street Journal Workers excavate a site on East 57th Street where construction had been…... Read more >

May 27, 2010
Construction Projects Stalled by Recession Are Jump-Started
By CRAIG KARMIN

Brian Harkin for The Wall Street Journal

Workers excavate a site on East 57th Street where construction had been delayed by the financial crisis.

When New York Schools Chancellor Joel Klein broke ground last week at a development site for two schools and a Whole Foods store, it marked the resumption of work that had screeched to a halt during the peak of the financial crisis.

The 1 ½ acre site, located at Manhattan's East 57th street, is an example of how some developers, architects and retailers were willing to make compromises and wait for the debt markets to normalize to get construction moving again.

"We could have walked away," says the developer David Lowenfeld, a partner at the World-Wide Group. Instead, he says, "we looked to reduce costs."

The Midtown site is one of hundreds of once-stalled construction projects that have restarted in recent months, offering some recovery hopes for the bombed-out building industry. Brian Harkin for The Wall Street Journal

Construction has resumed on a condo building in Park Slope, Brooklyn.

Since February 2009, 364 building sites have restarted work, and of those projects, 94 have been completed, the Department of Buildings said.

The majority of those restarted projects are residential and most have been in Brooklyn and Queens.

"The sites that have recommenced work tell you that there is greater depth to the market than just looking at stalled numbers would suggest," says Kevin Price, a senior vice president of the Radco Cos., a real-estate development firm. "It shows cases where lenders and sponsors are coming to terms."

Buildings Commissioner Robert LiMandri said a new program aimed at enabling developers to restart quickly has helped projects get going again. The department last year said property owners could extend their permits for as long as four years, provided that safety requirements are met.

The previous limit was one year, and many developers had to start the application process anew, delaying working from starting up again.

The restart figures are consistent with other indications that New York's residential market is on the mend—from a pickup in sales that began late last year to fresh signs of life in the rental market. But not all the construction news has been positive.

Stalled construction sites totaled 576 as of April 25, a rise of 12% from the 515 stalled sites recorded at the end of November, according to the Department of Buildings. In Manhattan, the rise was much greater, up 40% since the end of November to 111 stalled sites.

"It's still a problem," says Frank J. Sciame, chairman and chief executive office of F.J. Sciame Construction Co. "Banks continue to hold back on construction loans."

Unemployment levels for the construction industry remain around 30%, says Louis Colletti, president and CEO of the Construction Industry Partnership. "But those restarted sites are good news," he says. "It's preventing the unemployment rate from being even higher."

Mr. Lowenfeld said his project will create 1,100 construction jobs. It involves temporarily relocating one school to 63rd Street to construct new schools at the site, along with retail space and 350 residential units.

Early demolition had just begun when work stopped in the fall of 2008, after debt markets seized up and the city couldn't float bonds to finance the work.

During the work stoppage, the developer, the architect and Whole Foods Market Inc. scaled down their ambitions in an effort to ensure the project could get done. Whole Foods agreed to give up 9,000 square feet of space, settling for 38,000, and some architectural flourishes were simplified.

In April, the city borrowed money in the bond market to resume work. The schools and the Whole Foods store are due for completion in 2012. The housing and other retail space will follow in 2015.

The biggest number of restarted construction sites were in Brooklyn, where 108 projects have resumed and 31 have been completed. In Queens, 101 resumed and 55 have been completed. Most of these sites are smaller residential projects, the buildings department said. In Manhattan, where most of the city's large-scale and commercial projects are to be found, only 36 sites resumed work and two have been completed.

In Park Slope, an independent developer recently restarted work on a four-story condo building that will offer retail on the street level. Anthony Sabatino, who said he is self-financing the project with cash from other family businesses, says he halted work 18 months ago when money became tight.

Since resuming construction last month after his other businesses picked up, he said, "several people have asked me about an opportunity to buy a condo."

Still, some in the industry say the rise in stalled sites reflects a shakeout of the financially weaker and less experienced property developers that tried to ride the boom.

"You're going to see a bifurcated market," says Frederick Peters, president of Warburg Realty Partnership. "Guys with deep pockets have been able to finish their buildings, while a lot of first-time developers walked away."

 

 

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It all started a few weeks ago. First came the return of Tiger Woods, then the volcano eruption, then the sudden return of the real estate market. All over the five boroughs, reports started flying in…... Read more >

It all started a few weeks ago. First came the return of Tiger Woods, then the volcano eruption, then the sudden return of the real estate market. All over the five boroughs, reports started flying in about astronomical sales figures, bidding wars, and houses selling after just two days on the market. At first, I didn’t believe it. A spring rebound? The federal tax deadline?

But it was more than that. Maybe, just maybe, buyers on the fence for the past two years started pulling the trigger. Open houses started seeing huge traffic numbers. At the high end, multiple townhouses sold for more than $15 million. At the $600,000 level, apartments for sale one week were all gone the next. Things were picking up. I asked around, trying to get a handle on just how fast things were moving. Prices shot up like lightning in all ranges. Every day, brokers were calling with stories about the market’s comeback. From 40 sales at a condo in Long Island City since January, to a 300%  increase in total sales from a broker in the Bronx, to new condominiums in Manhattan flying off the shelves, here are some of those stories:

Definitely back
Donald J. Trump
Chairman, Trump Organization
“The market is definitely back, and there are real advantages and opportunities out there. We leased 300,000 square feet at 40 Wall Street — the most activity in any single building downtown — and we are currently looking at several major deals. The penthouse at Trump International Hotel & Tower sold for over $33 million dollars, and I recently purchased two new golf clubs in fantastic locations: Philadelphia and Hudson Valley.  On a national level,  I just received long-term financing for Trump International Hotel Las Vegas.”

Business doubled
John Reinhardt
CEO and president, Fillmore Real Estate, Brooklyn’s biggest real estate brokerage
“In the past 10 days, we have seen business double. That’s right, double. The amount of transactions to contract for the last week of April doubled the previous three weeks. If sellers are listing at the right price, they are selling quickly. The ones who are at the old prices are sitting there. It looks like every neighborhood in Brooklyn is booming, from Fort Greene to Canarsie. We are seeing record-breaking activity in Old Mill Basin, Bensonhurst and Sheepshead Bay. At MeadowWood at Gateway in East New York, 35 units have been sold this month alone, making this its best month ever.”

This is no spring pickup
Louise Sunshine
CEO, Domineum Global Solutions,
considered real estate’s top New York and global consultant
“This is different than a spring pickup. Buyers know they won’t see these prices ever again and now is the last chance to get in the market. Soon, it will be impossible to buy something in the top buildings. Apartments in the Laurel, which has the best amenity package in the city, will not last.”

The lower end is up
Luigi Rosabianca
Principal and founder of Rosabianca & Associates, PLLC, real estate law firm serving an international clientele
“The past few weeks have shown a remarkable uptick. Specifically, the lower end of the market is showing some revitalization because of the tax credit, which has helped that demographic, while the higher end of the market remains solid for classic supply and demand reasons.”

Sales prices soar
Kelly Mack
President, Corcoran Sunshine Marketing Group, top new-development sales and marketing company
“In recent weeks, the performance of our portfolio has been a clear measure of the Manhattan market rebound. Corcoran Sunshine’s deal volume was up 200% in April of 2010 versus the same month last year. Even more encouraging is our average sales price – $810,000 in April 2009 and now at $2.8 million in April 2010 – a phenomenal 254% increase.”

Booming in the Bronx
Gregory Tsougranis
Century 21 Metro Star,
a top-selling Bronx real estate agent
“The massive increase in signed contracts has been a perfect storm caused by the April 30 federal tax credit deadline, low interest rates, steady prices and a supply of quality product. By April 30, we already surpassed our co-op sales for all of 2009.  I have about $2 million in contract in my pipeline. At this rate, we are looking at a 300% increase. It’s unprecedented in the Bronx. I hope the tax credit is extended to help people own homes.”

Continued momentum
Greg Heym
Chief economist, Halstead Property, a leading tristate brokerage
“This is not a recent phenomenon. We’ve seen strong activity for six months. Whether this frenzied pace will continue is the question. This happened without a rise in employment. When jobs come back, which could happen soon, this acceleration might continue.”

Crazy numbers
As reported by new condo sales offices from across the city:
At Solis in Fort Greene, developer Ping C. Moy reports contracts signed on eight of nine units in just five weeks.
At Crystal Point, a 42-story, 269-home condominium building on the Hudson River in Jersey City, 19 homes were sold by Marketing Directors Inc. the past month.
Nest Seekers International has completed close to 40 new sales (of 184 residential units) at The View, 4630 Center Blvd., Long Island City, in the first quarter of 2010. 

The buyer is back
Brian Fallon
A partner of O’Connor Capital Partners, the owner and developer of Manhattan House
“Since April 15, Manhattan House has had 11 transactions, two of which have backup offers on them. We are actively engaged in negotiations with others. The interest and offers received have shown us that the $2 million-plus buyer is back.”

A changed market
Frederick Peters
President, Warburg Realty Partnership
“We brought a classic seven-room (3 BR, living, dining, kitchen, maids) onto the market in a prime Park Ave. building in the 70s  around this time last year. The price was $3,650,000, and it was in nice but not fabulous condition. We kept it on the market till September and during that whole time we got one offer, for $2.8 million. We brought it back on the market earlier this month, for $3,750,000, and it was bought by the first person who walked in the door for $3.7 million. I think that is pretty illustrative of the market then and now.”

Less sleep
Mike Lucev
Contractor from Rockaway Beach
“I haven’t slept in the past 20 days. It’s been mostly commercial work. Custom residential work should come back soon.”

Loads of loans
Richard Mack
Managing director at AREA Property
Partners, huge New York-based real estate developer and international lender
“Residential real estate in NYC has stabilized and is on the way back, but the commercial market is in a different place. The commercial market is awakening but not necessarily improving. I have seen as many loans on the market for sale in the last 30 days [as] I saw in all of the second half of 2009. What happens when people move to foreclose on these loans will determine the direction of the market, but the fact that lenders are selling means that we are on our way to unclogging the logjam in New York commercial real estate. Regularity should follow.”

More lumber
Stephen Fanuka
New York City contractor to the stars
“I’m seeing myself work eight hours per week more than average, meaning I’m doing a lot of estimating and planning forward. In the last 40 days, I’ve spent more on material purchases due to new jobs. Local lumberyards have more material in stock, anticipating a busy season.”

Bidding wars are back
Jacky Teplitzky
Managing director, Prudential Douglas Elliman, top upper East Side real estate agent
“We had a signed contract on behalf of our buyer for an apartment in the $3 million range on the UWS. Buyer sent contract with deposit, and 10 minutes after we got a call from the seller that they had another offer that was $100,000 higher. Our buyer had one hour to decide if he was willing to increase his offer. If not,  seller will go with other buyer.  The buyer actually thought the seller was bluffing and didn’t believe there was another offer on the table. My buyer upped their offer by $100,000 and got the apartment.”

Immediate occupants
Ken Horn
President of Alchemy Properties, builder
of high-quality apartment buildings in Manhattan and Brooklyn
“At Hudson Hill, at 462 W. 58th St. in Clinton, we have done nine contracts in a span of three weeks at almost asking prices. We have averaged about 25 showings a week. It helps that we have immediate occupancy and that almost half of the building is now occupied and there is immediate move-in.”

Flipping foreclosures
Sam Heskel
Appraiser, Borough Park 
“I feel the market is starting to rebound. I believe the recovery will be a long and slow process, but I hope it’s going to be slowly but surely. In Borough Park, condo sales were nearly at a freeze since last year; until the past two months, a couple of contracts were signed and a couple of sales closed at pre-2008 prices. In Jamaica, which is a neighborhood with a high rate of foreclosures, I saw last week a house which was purchased from the bank in January by an investor who renovated the house and put it back on the market. In less than three months, it is now in contract for $400,000.”

Buying sight unseen
Gea Elika
Founder of Elika Associates, an exclusive local firm representing buyers
“While two weeks ago we were doing deals with first-time homebuyers looking to go into contract before the Federal Housing Tax Credit deadline, we are now seeing the top-end buyers reemerge and step up to the plate. I am working with eight buyers seeking homes priced at $3 million and above, and several of these buyers are international investors willing to buy homes sight-unseen, as they are purely playing the currency game.  In addition, I have had two offers accepted in the past week, both around $1 million.”

Brooklyn is hot
Highlyann Krasnow
Executive VP, The Developers Group
“At One Brooklyn Bridge Park, we’ve been averaging six-to-seven accepted offers per week. These deals are not just on small apartments, as buyers are creating combos again. In Williamsburg, overall traffic is up and there is again a sense of urgency. We sold 18 units in the past three weeks at The Edge. Two of the penthouses sold for over $2.2 million each.

Top of the market
Paula Del Nunzio
Broker, Brown Harris Stevens, the top-selling townhouse broker in New York City
“Having closed two townhouses between Fifth and Madison the week of April 15 for nearly $30 million gives the impression the market is definitely improving. Although both transactions were negotiated within 60 days of their closing, the deals of 2010 require much more effort than in the past.”

Landlords end incentives
Noah Freedman
CEO, Bond New York, an NYC sales and rental company
“In rentals, we have seen a big change in who pays us. It was 40% tenant fees and 60% owner-paid commissions until this month. Now, it’s reversed, with 60% tenant fees and 40% fees paid to us by the owners. Landlords are pulling back on their incentives daily. It has gotten busier,  and rents have firmed. Landlords don’t want to listen to offers anymore.”

Increased rental signings
Carole Bloom
Leasing manager, The Corner at 200 West,
a new rental building at 72nd and Broadway from the Gotham Organization
“In the past two weeks alone we’ve seen a 27% closing ratio (people in the door who signed leases), a conversion percentage much higher than the real estate market has seen in this price point in years.  We’ve also raised prices on average 10% in the past two weeks and are renting at higher numbers than most developers and brokers would have ever thought possible. For example, a few days ago we rented an apartment at $112 per square foot — for a two-bedroom, two-bath with a terrace, $12,500.  This week, we also rented a studio for $81 per square foot at $3,625.

The retail scene
Faith Hope Consolo
Chairman, Prudential Douglas Elliman Retail Group
“Retail rents are down 25% still, which is how Madison Ave. filled in all their holes. We hope the same thing [a decrease in prices per square foot] happens in SoHo, where there are at least 80 available locations on the market. The only rates that are holding are on Fifth Ave., at about $2,000 per square foot, the most expensive retail in the world, and Times Square, at about $500 to $600 per square foot.”

Zero tolerance for overpricing
Pamela Liebman
President and CEO, The Corcoran Group
“People purchasing a home now will look back in 12 months and see this as a time of opportunity. Buyers are so much smarter than they were during the boom. Anything overpriced will not sell. We’re telling our agents to price for excitement, meaning to price where people can buy. Today’s buys are emotional, not financial. If the home has everything they need, buyers are making deals.”

 

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How much is too much information? Experts debate should social media sites be strictly business for brokers? In the marketing era where agents need to be everywhere and anywhere, is there such a thing…... Read more >

How much is too much information?

Experts debate should social media sites be strictly business for brokers?

In the marketing era where agents need to be everywhere and anywhere, is there such a thing as too much of a good thing? As brokers expose more about their personal and professional lives on social media, it’s a question more industry leaders are grappling with today. Speaking at a Green Pearl marketing and technology event last week, some of New York’s best sales people gave insight as to where to draw the line.

“There’s a lot of white noise out these,” said CORE President Shaun Osher. “With the advent of the internet there’s a lot of information out there, but do you really want to read everything?”

Prudential Douglas Elliman managing director Jacky Teplitzky would say no.

While a big believer in cross marketing and increasing one’s visibility, Teplitzky says some things are left best to the imagination, meaning social media pages that blend the personal with the professional are problematic for some brokers.

Citing “half naked” and “obscene” photographs colleagues post on their facebook pages, she stressed the importance of maintaining a professional presence on social media. Her solution is simple – keep professional contacts and personal contacts separate.

Teplitzky operates two facebook pages – a personal one to engage with friends and a second facebook fan page to cuild her professional contacts and further control her brand.  Advising team members to exercise the same caution, Teplitzky says she’s not afraid to ignore a friend request in order to maintain that distinction between the two personas.

But Warburg Realty president Frederick Peters disagreed with Teplitzky’s strict separation of the personal and the professional and, when done tactfully, said he feels it actually enhances the broker’s reputation.

Prudential Douglas Elliman executive vice president (and moderator of the panel) Corinne Pulitzer attested to that first-hand. After learning through social media that Peters is a baker, she said she grew more intrigued by him.

Cityrealty.com president Daniel Levy says finding the perfect balance of personal and professional often proves a high hurdle for social media users.

But in Peters’ case, he seems to have struck a chord with readers. Most active on the blogosphere, posting a new entry at least once a week, the number of direct hits on Peters’ blog has climbed at a rate of 10,000 every few months and his blog now attracts an average of 30,000 viewers per month.

Peters believes coupling professional information with personal anecdotes makes blogs successful, and that learning about personal tastes, hobbies and interests “actually deepens my interest in them.”

Halstead Property president Diane Ramirez applauds social media as “another tool in our arsenal” citing new agent websites, an online portfolio, dedicated staff operating twitter and facebook accounts and posting videos.

The one commonality among these tools is the opportunity to unveil personality.

Halstead may broadcast deals of the day, but the firm is leveraging social media to post about the economy, highlight a new shop or restaurant and reveal aspects of personality otherwise unknown to the client. Like it or not, Ramirez said, clients want to know more about the people who they do business with.

Panelists were in agreement that neglecting social media is a dangerous move in today’s digital age. Though firms and agents have embraced social media as the branding tool it has evolved into, deciding which tools to deploy and how much to expose poses some tough decisions.

Some of real estate’s brightest stress consistency in the message, avoiding overuse of too many social media apps and focus on your brand.

In regards to the personal versus professional, that’s a debate likely to play out over the next several months as more brokers tap into the new technology.

But whether one agrees with Teplitzky and Osher’s strategy of separation, or the comingling marketing of Ramirez and Peters, every broker should consider this, said Osher: “Transparency is a double-edged sword, because once it’s out there, perception is reality.”

 

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Insiders Outlook: Residential market comes dramatically back to life By Frederick Peters, President, Warburg Realty New York City’s real estate market came dramatically back to life during the first…... Read more >

Insiders Outlook:
Residential market comes dramatically back to life
By Frederick Peters, President, Warburg Realty

New York City’s real estate market came dramatically back to life during the first quarter of 2010. As buyers and sellers grew more in sync regarding value, absorption increased.  Demand outstripped supply in several areas of the market, fueling competitive bidding. Many of the areas of the city which were hardest hit during the recession, like Harlem and Williamsburg in Brooklyn, began to recover, seeing sales increase as developers reduced their prices to entice a customer base struggling with both less cash and less available financing. In many ways financing and its complications remain the biggest impediment to market recovery.

A word about the financing situation: as I noted in my last market update, the banks, regardless of loan size, tend to be using Fannie Mae and Freddie Mac guidelines to make their decisions. These guidelines, mostly fashioned for cash-strapped garden apartment complexes around the country, have little applicability in our very specific New York City marketplace. The requirement that associations (both condo and co-op) build a 10% contingency into their budgets lest some major piece of equipment fail, for example, simply is not relevant for most of our buildings, which have both the capability to assess and the capability to borrow against lines of credit which are almost always already in place. It is the same with some of the insurance requirements. And the decisions about which buildings are approved seem to vary not just from lender to lender but also from mortgage banker to mortgage banker and from week to week.

An additional problem results from the use of traveling appraisers. These appraisers, many coming from well outside the city, do not understand or account for the nuances of our market at all. Recently we had an appraiser mark down the price a buyer had agreed to pay for one of our developments in Harlem because he noted that “Harlem is a declining market.” One thing I can tell you with confidence, three months into 2010, is that Harlem is not a declining market. THAT news is eight months old. Similarly, an eight room property in the West 80s had been reduced by renovation to six larger rooms. The appraiser, also from out of town, comp’ed it against other six room apartments, therefore coming in with an appraised value several hundred thousand dollars below the agreed on price. The owner was compelled to accept a price reduction a month after the contract was signed if she did not want the buyer to walk away.

In spite of the perception of out of town appraisers, our market is NOT declining. In fact, the market has continued to improve through the first quarter of 2010 in virtually all segments. There do continue however to be differences in the rate of improvement based on both property size and location. And the two overall types of product which make up our marketplace, resale inventory and new development inventory, continue to behave quite differently. Let’s talk about resales first:

In the small apartment market inventory remains high. Studios, one bedrooms, and small two bedrooms are not experiencing much price appreciation, especially in the co-op market. There is still substantial depth of inventory east of Third Avenue on the Upper East Side and in Midtown, as well as in Harlem. Prices for these units have not appreciated in any significant way from the lows they experienced eight to ten months ago. However, absorption is improving, and these markets are approaching a tipping point past which prices may once again begin a modest rise.

Five to ten room apartments, especially on the Upper East and West Sides and in the Village, are enormously in demand and very few are coming to the market. The same is true for the mid-sized lofts in Tribeca, especially those in the older “real” loft buildings. Thus in the first quarter of the year we have seen a big uptick in competitive bidding, especially for particularly well located and well renovated product, with many deals made at or just above the asking prices. Sellers have become so much more realistic about value in the last year that buyers often make their offers within 85% to 90% of these prices, and then they may have to move up fast. The days of offering 25% or 30% below the asking price and waiting the seller out seem to be over.

While there continues to be little activity at the upper end of the market, there have been some landmark deals. A gutted 5,200 square foot condo high above Central Park recently sold for $33,000,000 – close to $6,000 per square foot. This deal is a testament to the continuing power of foreign buyers in our condo market. There have also been a number of co-op deals struck recently for $15,000,000 and above. While this market is also extremely low on inventory, the paralysis which held hostage throughout 2009 seems to be easing. There are buyers out there seeking big properties, they are frustrated about how little is available, and they are ready to act – but not to overpay!

Much has been written about the “shadow inventory” in the new development market: all of the units which developers couldn’t sell over the last eighteen months which were either rented or removed from the market. While this overhang does pose some threat to the improving health of the residential market, the danger is mitigated by the lack of construction currently underway. Over the next three years, the market will gradually absorb these units while, because of the loss of tax abatements for developers, as well as the change in the market and the lack of new build’able sites, the total inventory of units is unlikely to increase too much.

That being said, many new developments still carry substantial unsold inventory and realistic pricing is their only option for encouraging sales. Several projects have been repossessed by their lenders and the writing seems to be on the wall for a number of others. In such an environment, everything is negotiable. Of course, the closer a development gets to being sold out, the less negotiable the developer is likely to be. Absorption is improving, but the land of new development still remains a land of opportunity for the flexible buyer.

We anticipate a continuation of the same trends in the second quarter. Financing will be problematic. Buyers will continue to queue up for five to ten room apartments. The ultra luxury market will continue to improve and show increases in the number of transactions. And little by little, smart buyers will absorb the new development inventory at appropriate prices.

In this business there is no such thing as “business as usual,” but at least today we find ourselves back in a market we can understand.

 

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Should brokerages take a 'VOW' of privacy? While it's true that most brokers can't read minds, with a VOW they can come pretty close. Real estate pros say that VOWs, also known as "Virtual Office Web…... Read more >

Should brokerages take a 'VOW' of privacy?

While it's true that most brokers can't read minds, with a VOW they can come pretty close.

Real estate pros say that VOWs, also known as "Virtual Office Web sites," can give agents a backstage pass to their clients' predilections. VOWs allow buyers to view an agent's listings -- and those belonging to other brokerages -- all on the same Web page.

But VOWs present serious invasion of privacy issues and as a result can be a real turn-off to homebuyers, critics say.

VOWs can track your buying behaviors. For example, if a buyer tells a broker that she has a budget of $1.2 million, but the broker sees the buyer checking out $1.5 million listings on the company's VOW, the broker could potentially push the buyer to make a larger purchase than she had talked about.

New York City companies that have recently announced plans for VOWs include Prudential Douglas Elliman, Halstead Property, Elika Associates, A.C. Lawrence, the Real Estate Board of New York and CondoDomain, a new VOW-based brokerage company in the city. Manhattan got its first VOW, known as the CBS 2 Real Estate Market, last summer.

Found within the terms of service when a homebuyer registers to use a VOW are ground rules on what information the site can mine from you. While the privacy regulations can vary from site-to-site, most VOWs, including those powered by major shared information providers like Realplus Online Listing Exchange and On-Line Residential, the latter which introduced a new software product for brokerages to adopt VOW capabilities in March, allow brokers to track their clients' every move.

Some in the industry say VOWs go too far.

"Everything you do, every search you run, every listing you look at, all that is reported to the broker," Matt Daimler, an Internet entrepreneur and founder of recently-launched New York City real estate consumer site Buyfolio.com, said.

Indeed, in an instructional video for RealPlus, the system's state of the art analytics capabilities are touted to agents, emphasizing the range of information that the brokers can glean from their clients' activities.

"Whenever your client logs into your VOW and conducts a search, analytics is recording all their activity," the video says, adding for emphasis: "every activity your customer performs is recorded and available to you."

This activity, the video says, "reveals [buyers'] true buying criteria," not just the criteria they told you about.

Daimler's site, which he launched earlier this month, allows brokers and clients to communicate via a shared Web site without registration, something that he feels adds a greater level of privacy to the client's experience.

Although Daimler admits his gripes with VOW privacy could be based on competitive instinct, he said that as an observer of the VOW model, the platform's ability to track users' movements is nonetheless disturbing to him. He said that few buyers are aware of how much information brokers can learn about them through the VOW -- and those who do know are given no chance to opt out.

"The consumer has to have a choice to say 'yes, share that information,'" Daimler said. "It doesn't seem like a collaboration [between buyers and brokers] to me… it doesn't give you a choice."

In an ideal world, Daimler said that consumers would be better informed when they use a VOW.

"I think you need to have [a disclaimer] more front and center," Daimler said, "if you're going to monitor on that level."

While Frederick Peters, head of Warburg Realty, said that buyers should be held responsible for understanding the terms of the site their using, he does say that buyers might be turned off by a VOW's tracking abilities.

"I think one of the things people like about the Web is that feeling of anonymity," Peters said. "All of the data you register on a site is going to be used in some way."

Tom Croke, vice president of sales at RealPlus, said that his company tries to negate invasions of privacy by encouraging agents to educate their buyers about how the VOW is used.

"We think that it is [the] best policy for the agent to let the customer know… we don't want them to be spying," Croke said. "If [the buyer] finds out [the agent can track their searches] without the agent telling them, I can foresee that being a problem."

But buyers can access VOWs on their own, signing up for the service without the guidance and tutelage of a broker.

Even so, some in the industry feel that the onus is on the buyer alone.

Jonathan Greenspan, president of OLR, said that if buyers don't like being watched, they can leave.

"At some point it's the consumer's choice -- whether you're buying sweaters or hockey tickets, whether you want to register," Greenspan said. "It's no different than when you or I go to [any] site."

Greenspan said he believes that buyers need to accept the trade-off: what they're giving up in privacy, they're gaining in quality.

Buyers can say to themselves, "I know that these are all active, valuable listings, what am I giving up for that?" Greenspan explained.

Noah Rosenblatt, founder of brokerage and real estate research Web site UrbanDigs, echoed that sentiment, saying that the benefits outweigh the downsides.

"I don't see what the consumer is upset about," Rosenblatt said. "If you go on Google, Google can see everything you're doing."

Next month, his company is partnering with RealPlus to launch a real-time analytical platform to track Manhattan residential market trends, which The Real Deal reported yesterday.

Dottie Herman, CEO of Elliman, which is slated to unveil its $1 million revamped site complete with VOW capabilities this month, said that she'd like to see her clients have options when they use her brokerage's Web site.

"Frankly, the issue of privacy is a huge issue today," Herman said. "[Elliman's Web site] will be completely transparent… they can come to our Web site without registering, the consumer will be in control of what information [they share]."

Even so, Herman said that it's often difficult for buyers to navigate the minefield of privacy invasion when shopping for a home. She said that sites most people visit, like Google and Facebook, track users' movements to a greater degree.

"It has nothing to do with real estate -- it's the world we live in," Herman said.

 

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Brokerage Firm Refreshes Website to Highlight Social Media Capabilities Warburg Realty Partnership, one of New York’s oldest and most respected residential brokerage firms, recently unveiled an updated…... Read more >

Brokerage Firm Refreshes Website to Highlight Social Media Capabilities

Warburg Realty Partnership, one of New York’s oldest and most respected residential brokerage firms, recently unveiled an updated website embracing an extensive array of social media capabilities. The refreshed www.warburgrealty.com reflects the firm’s increased commitment to social networking, acknowledging the exponential growth of the on-line community.

“Real estate brokerage has always been about community building. Buyers and sellers rely on us to provide them with the most powerful and up-to-the minute tools,” said Frederick W. Peters, president of Warburg Realty. “Our website is crucial for both our clients and our agents. Our latest social media enhancements reinforce our position as a technology leader in the industry.”
     
The changes to www.warburgrealty.com include up-to-the-minute blog posts, Facebook status updates, and Twitter posts.
     
The website’s social networking capabilities compliment the recently-added Warburg AroundMe, which provides its exclusive property listings on the iPhone/iTouch, through a partnership with the popular AroundMe application.

Visitors will continue to utilize the “My Warburg” functionality, where buyers and sellers are able to create a personalized log-in. The saved search criteria allows Warburg customers the ability to receive real-time updates as new properties come on the market, add shared notes with their agent, and compare properties that match their saved search criteria. Through “My Warburg,” sellers have access to detailed statistical and marketing information on their properties, including recent print and online initiatives and internet hits.

Warburg’s site also contains simple and intuitive search functions including an interactive map, neighborhood breakdown, pricing and an entire list of additional criteria ranging from outdoor space to pet-friendly homes.  On the property detail page, buyers can view interactive floor plans that bring the residences to life through photographs correlating to the room layout.

Warburg’s site enables visitors to search for agents by name, specialty, or by one of the ten foreign languages spoken fluently by associates in the firm.  The resources section is true to its name, and provides a deep mine on information on the process of buying or selling a home in New York City. The page outlines closing costs, a full glossary of terms customers often encounter, and a detailed explanation of the process step-by-step. There is a complete neighborhood guide to Manhattan and Brooklyn, as well as a high-tech mortgage calculator allowing visitors to compare different financial scenarios

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REBNY Honors Warburg Realty's Frederick W. Peters at 114th Annual Banquet Posted By Susan Piperato, 01/22/10 NEW YORK, NY—Frederick W. Peters, President of Warburg Realty Partnership, was honored by…... Read more >

REBNY Honors Warburg Realty's Frederick W. Peters at 114th Annual Banquet

Posted By Susan Piperato, 01/22/10

NEW YORK, NY—Frederick W. Peters, President of Warburg Realty Partnership, was honored by the Real Estate Board of New York (REBNY) at the organization’s 114th Annual Banquet on January 21, 2010 at the New York Hilton. Peters received The Kenneth R. Gerrety Humanitarian Award, to recognize meritorious service to the community by a REBNY member.

Peters and his family have a long history of service in the New York community, and beyond. Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Peters entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years in the late 80s, he acquired and renamed the 95-year-old firm in 1991.

During the past 15 years, Peters has expanded the company from 60 to 150 brokers and from one to three locations. Peters maintains a reputation as one of the most-quoted experts in the Manhattan residential real estate industry, whose dedication to the industry includes his involvement in The Real Estate Board of New York's Board of Directors - Residential Division, and as a member of the Executive Committee of REBNY's Board of Governors. This year, he was appointed Vice President, Residential Brokerage Division for REBNY’s 2010 Executive Committee. In 1996, he was the recipient of REBNY’s Henry Forster Award, a lifetime achievement and contribution-to-the-industry award.

Peters and his wife Alexandra have supported many diverse organizations, but the primary focus of their philanthropy has been humanitarian aid and music. During the 1980s and 1990s, when their own children were younger, several times a year they hosted children whose mothers were incarcerated at the Bedford Hills maximum security women's prison to ensure the children could spend time each day with their mothers. Later, their support of the humanitarian relief efforts of the International Rescue Committee, led them to open their home to Burmese refugees, some of whom today remain personal friends. Since 1980, Peters has served on the Board of the Caravan Institute, a small nonprofit organization dedicated to Italian language and the promotion of culture; he is now the Executive Secretary and Treasurer.
 
Between 1983 and 1989 he served on the Board of the Opera Ensemble of New York, a small opera company dedicated to the production of new American work. For the last four of those years he was Chairman. From 1991 until 2007 he served on the Board of the Glimmerglass Opera, the highly regarded company in Cooperstown, New York. He participated actively on two committees, Music Policy and Nominating, the latter as chair. Finally, and dearest to his heart, he has since 1993 been Board Chair of Meet the Composer, the largest composer and new music advocacy organization in the country. In this capacity he has been an ambassador for the organization at events around the country, worked with funders, and supported composers and recordings.

The Kenneth R. Gerrety Humanitarian Award celebrates the memory of Kenneth Gerrety who served with distinction as REBNY’s executive vice president for many years and gave valuable community service to his hometown of Garden City, NY.

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LAST NIGHT AT REBNY… There was no bitter cold, no biting wind, and no planes steering into the Hudson yesterday. We only hope this portends a better year for the real estate industry, which was all…... Read more >

LAST NIGHT AT REBNY…

There was no bitter cold, no biting wind, and no planes steering into the Hudson yesterday. We only hope this portends a better year for the real estate industry, which was all about survival in ’09. What we heard from many of the 2,000 attendees at REBNY’s 114th annual banquet last night were glimmers of hope in an uncertain market.
 
The packed—and quite noisy—Grand Ballroom. Last night’s honorees were Kramer Levin’s Sandy Lindenbaum (The Harry B. Helmsley Distinguished New Yorker Award); Vornado’s David Greenbaum (The Bernard H. Mendik Lifetime Leadership in Real Estate Award); Massey Knakal’s Bob Knakal (The Louis Smadbeck Broker Recognition Award); Paramount Group’s Ralph DiRuggiero (The George M. Brooker Management Executive of the Year Award); Warburg Realty Partnership’s Frederick Peters (The Kenneth R. Gerrety Humanitarian Award); and Swig Equities’ Todd Korren (The Young Real Estate Man of the Year Award).
 

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Fred Peters on bisnow.com We also met with Warburg Realty Partnership president Frederick Peters, who's receiving the Kenneth R. Gerrety Humanitarian Award. Did you know that before real estate, Fred…... Read more >

Fred Peters on bisnow.com

We also met with Warburg Realty Partnership president Frederick Peters, who's receiving the Kenneth R. Gerrety Humanitarian Award. Did you know that before real estate, Fred was a composer going for his doctorate in music composition? He’s been promoting the creation of new music for the past three decades and chairs Meet The Composer, an advocacy organization that creates opportunities and residencies for composers. On the real estate side, Warburg’s been focusing on next gen marketing, using social networking and blogs versus print advertising—tools that have been effectively increasing traffic for the firm, he says.
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Real Estate Weekly Would-be baseball stars, composers and star-crossed lovers ... People in the real estate industry are aware of the challenging deals under their belts, they know which boards they serve…... Read more >

Real Estate Weekly

Would-be baseball stars, composers and star-crossed lovers ...

People in the real estate industry are aware of the challenging deals under their belts, they know which boards they serve on, which charities they support, but Real Estate Weekly is pleased to offer the following little known anecdotes about the 2010 REBNY honorees.

For example, did you know the real estate industry has its own Andy Pettitte? From the pitcher’s mound to the sales pitches, Massey Knakal Realty Services chairman Bob Knakal nearly had a career in the major leagues. A coveted baseball player at Hackensack High School, in New Jersey, he received an invitation to try out for both the Philadelphia Phillies and Cincinnati Reds. Knakal ultimately landed in college, where he became an All-Ivy League pitcher at the University of Pennsylvania. Despite the institution’s storied baseball history – which dates back to 1867 – Knakal continues to hold the fourth best ranking on Penn’s all-time low ERA list. Knakal is receiving REBNY’s Louis Smadbeck Broker Recognition Award.

And while Knakal was impressing scouts on the pitcher’s mound, Warburg Realty’s Frederick Peters hit his own high notes with dreams of a career in music composition.

With his training as a composer, Peters was pursuing a PhD in music when he became a real estate agent in 1980. In his 20s with one child (and a second on the way) he entered the business to make some extra money on the side. But real estate consumed his life and though just shy of a dissertation, Peters put the doctoral program aside and, as he puts it, “unsuspectingly morphed from artist to business person.” Peters is receiving REBNY’s Kenneth R. Gerrety Humanitarian Award.

For honoree Ralph J. DiRuggiero, vice president of property management at Paramount Group, one might call him a bit of a historian. An avid reader, he immerses himself in historical fiction and history literature spanning New York City and San Francisco.

Other little known facts about DiRuggiero? His a California wine aficionado; he spends a great deal of time raising scholarship funds for his alma mater, the University of Scranton; and his favorite getaway with wife Susan and daughter Caitlin is the beaches of Deleware. He’s receiving REBNY’s George M. Brooker Management Executive of the Year Award.

And speaking of wives …
Kramer Levin Naftalis & Frankel counsel Samuel H. Lindenbaum – who will receive REBNY’s Harry B. Helmsley Distinguished New Yorker Award – has an interesting tale about how he met his. As a 17 year old counselor at a co-ed camp, Lindenbaum’s bunk was positioned next to the infirmary office. One day, another counselor asked him to call a doctor on the microphone because a girl had been hit in the head with a baseball. Letting curiosity get the best of him, he walked over to the bunk and there lay a “cute little blonde chick” in his bed. Said Lindenbaum, “So when people ask me how I met my wife of 52 years, Linda, I say: ‘she was in my bed.’

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GlobeStreet.com The Real Estate Board of New York, which will honor six of the industry’s leading figures at its annual banquet Thursday evening, has named three new members to its commercial board…... Read more >

GlobeStreet.com

The Real Estate Board of New York, which will honor six of the industry’s leading figures at its annual banquet Thursday evening, has named three new members to its commercial board of directors, which oversees the commercial brokerage division for REBNY. In separate elections, REBNY also appointed three new members to the commercial board.

The new board members include: Nicola M. Heryet, senior managing director with Colliers ABR, now part of Cassidy Turley; Augustus B. Field IV, EVP at Cushman & Wakefield; and Simon Ziff, president of Ackman-Ziff Real Estate Group. William Montana, senior managing director at Studley, is remaining as the chairman of the commercial board. Robert A. Nager, executive managing director for Murray Hill Properties’ retail leasing division, will similarly begin his second year as the vice chairman of the commercial board.

"Each of our new appointees will bring invaluable experience and knowledge, and we are pleased to have them join us on the board," says REBNY president Steven Spinola in a release. He adds that Montana and Nager have been "valuable assets" in their leadership capacities on the commercial board of last year.

On REBNY’s residential board of directors, new members include: Rebecca M. Mason, executive director of Caran Properties, Jeffrey Weisbord, principal of Jeffrey Weisbord Real Estate; and Hall Willkie, president of Brown Harris Stevens. Tresa Hall, EVP of the Corcoran Group, was elected member at large.

At its 114h annual banquet Thursday evening at the New York Hilton, REBNY will present David R. Greenbaum, president of Vornado Realty Trust’s New York office division, with its Bernard H. Mendik Lifetime Leadership in Real Estate Award. Other honorees include Samuel H. Lindenbaum, counsel at Kramer Levin Naftalis & Frankel LLP, who will receive the Harry B. Helmsley Distinguished New Yorker Award; Robert A. Knakal, chairman of Massey Knakal Realty Services and GlobeSt.com blogger, who will receive the Louis Smadbeck Broker Recognition Award; the Paramount Group’s Ralph K. DiRuggiero, recipient of the George M. Brooker Management Executive of the Year Award; Warburg Realty’s Frederick W. Peters, who will receive the Kenneth R. Gerrety Humanitarian Award of the Year Award; and this year’s Young Real Estate Man of the Year, Todd E. Korren of Swig Equities.

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New York Post January 21, 2010 THE KENNETH R. GERRETY HUMANITARIAN AWARD Frederick W. Peters, President, Warburg Realty Partnership Peters received his BA from Yale College and did a Masters and extensive…... Read more >

New York Post
January 21, 2010
THE KENNETH R. GERRETY HUMANITARIAN AWARD
Frederick W. Peters,
President, Warburg Realty Partnership

Peters received his BA from Yale College and did a Masters and extensive pre-doctoral work in music, leading to a job as a residential real estate agent in 1980. After working as a Manager at Albert B. Ashforth, he acquired and renamed the 95-year old firm in 1991. The company has since expanded from 60-150 agents in three locations.

He is on REBNY’s Board of Directors – Residential Division, and a member of the Executive Committee of REBNY’s Board of Governors. In 1996, he was the recipient of the Henry Forster Award.

Peters and his wife Alexandra have supported many diverse organizations, primarily humanitarian aid and music.

Since Peters joined the REBNY Residential Committee in 1987 he has worked with the Board to change and institutionalize almost every aspect of the way they do business. “Co-brokerage, representation transparency, settlement of disputes – all have been transformed by the Board and the relationships formed within it,” said Peters. “To put it simply, REBNY re-made the residential industry from a group of often hostile fiefdoms into a community.”

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REBNY HONORS WARBURG REALTY’S FREDERICK W. PETERS AT 114TH ANNUAL BANQUET  Frederick W. Peters, President of Warburg Realty Partnership, will be honored by the Real Estate Board of New York (REBNY)…... Read more >

REBNY HONORS WARBURG REALTY’S FREDERICK W. PETERS
AT 114TH ANNUAL BANQUET 

Frederick W. Peters, President of Warburg Realty Partnership, will be honored by the Real Estate Board of New York (REBNY) at the organization’s 114th Annual Banquet on January 21, 2010 at the New York Hilton. Mr. Peters will receive The Kenneth R. Gerrety Humanitarian Award, to recognize meritorious service to the community by a REBNY member.

Frederick and his family have a long history of service in the New York community, and beyond. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Frederick entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a number of years in the late 80s, he acquired and renamed the 95-year old firm in 1991.

During the past fifteen years, Frederick has expanded the company from 60 to 150 brokers and from one to three locations. Frederick maintains a reputation as one of the most-quoted experts in the Manhattan residential real estate industry, whose dedication to the industry includes his involvement in The Real Estate Board of New York's Board of Directors - Residential Division, and as a member of the Executive Committee of REBNY's Board of Governors. This year, he was appointed Vice President, Residential Brokerage Division for REBNY’s 2010 Executive Committee.  In 1996, he was the recipient of REBNY’s Henry Forster Award, a lifetime achievement and contribution-to-the-industry award. 

Frederick and his wife Alexandra have supported many diverse organizations, but the primary focus of their philanthropy has been humanitarian aid and music. During the 1980s and 1990s, when their own children were younger, several times a year they hosted children whose mothers were incarcerated at the Bedford Hills maximum security women's prison to ensure the children could spend time each day with their mothers. Later, their support of the humanitarian relief efforts of the International Rescue Committee, led them to open their home to Burmese refugees, some of whom today remain personal friends. Since 1980, Frederick has served on the Board of the Caravan Institute, a small non-profit organization dedicated to Italian language and the promotion of culture; he is now the Executive Secretary and Treasurer.

Between 1983 and 1989 Frederick served on the Board of the Opera Ensemble of New York, a small opera company dedicated to the production of new American work. For the last four of those years he was Chairman. From 1991 until 2007 he served on the Board of the Glimmerglass Opera, the highly regarded company in Cooperstown, New York. He participated actively on two committees, Music Policy and Nominating, the latter as chair. Finally, and dearest to his heart, he has since 1993 been Board Chair of Meet the Composer, the largest composer and new music advocacy organization in the country. In this capacity he has been an ambassador for the organization at events around the country, worked with funders, and supported composers and recordings.

The Kenneth R. Gerrety Humanitarian Award celebrates the memory of Kenneth Gerrety who served with distinction as REBNY’s executive vice president for many years and gave valuable community service to his hometown of Garden City, New York.

 

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REBNY ANNOUNCES EXECUTIVE COMMITTEE CHANGES Frederick Peters of Warburg Realty becomes VP of Residential Brokerage Division Robert Knakal of Massey Knakal named VP for Commercial Brokerage Division NEW…... Read more >

REBNY ANNOUNCES EXECUTIVE COMMITTEE CHANGES

Frederick Peters of Warburg Realty becomes VP of
Residential Brokerage Division

Robert Knakal of Massey Knakal named VP for
Commercial Brokerage Division

NEW YORK, Jan. 6, 2010 – With the start of the New Year and with a new chairperson taking the helm, The Real Estate Board of New York (REBNY) recently announced changes to its 2010 Executive Committee.

Frederick W. Peters, president of Warburg Realty Partnership, has been named Vice President, Residential Brokerage Division. 

In addition, Robert A. Knakal, chairman of Massey Knakal Realty Services is now Vice President, Commercial Brokerage Division.

Other changes to the Executive Committee include the addition of David W. Levinson, chairman & CEO, L&L Holdings LLC, as a new Member at Large for 2010. Bruce A. Beal, Jr. executive vice president of Related Companies, is also a Member at Large for 2010.

Stephen Ross, CEO of Related Companies, who has served as REBNY Chairman since 2007, is now Chairperson Emeritus as Mary Ann Tighe, chief executive officer, New York Tri-State Region of CB Richard Ellis begins her tenure as REBNY Chairman this year.

“REBNY is pleased to have Fred Peters as the new vice president for the Residential Brokerage Division. Fred has been an active member of REBNY’s Board of Governors for many years, and is an influential member of the residential real estate community. In his new role as vice president, Fred will continue to be a vital part of REBNY’s governing body,” said Steven Spinola, REBNY president.

Mr. Spinola added, “I would like to congratulate Fred, as well as Bob Knakal, who we’re pleased to have as vice president for the Commercial Brokerage Division, and new Members at Large, David Levinson and Bruce Beal. Their counsel and industry expertise will be invaluable to the Executive Committee and will help lead the city’s real estate industry as we navigate these challenging times.”

Frederick Peters has served on REBNY’s Board of Governors since 1995. Robert Knakal has been a REBNY Governor since 2000. This is the first time each has been appointed to a title position on the Executive Committee.

“As we welcome our new chairman Mary Ann Tighe, we also bid farewell to Stephen Ross, who has played a major role in the creation and passage of many important federal programs that have been essential to the industry,” said Mr. Spinola. “He has worked with the City on efforts that will result in safer buildings and improved construction standards, among many other highlights of his tenure. We thank Steve Ross for his dedication and leadership over the last three years and we will continue to rely on his invaluable expertise as Chairperson Emeritus in the coming years.”

The Real Estate Board is made up of six divisions, each with its own Board of Directors: Commercial Brokerage Division, Residential Brokerage Division, Institutional Owners and Investors Division, Owners and Builders Division, Management Division, and Allied and Associate Division.  The Board of Governors, REBNY’s central governing body, is made up of representatives from each division.  The Executive Committee is composed of the officers of REBNY and other appointed Board of Governor members. Via its Executive Committee, the Board of Governors reviews recommendations regarding industry issues from REBNY's six divisions, Boards of Directors and standing committees and determines appropriate actions.

The Real Estate Board of New York is the city’s leading real estate trade association with more than 12,000 members. REBNY represents major commercial and residential property owners and builders, brokers and managers, banks, financial service companies, utilities, attorneys, architects, contractors and other individuals and institutions professionally interested in the City’s real estate.   REBNY is involved in crucial municipal matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes and legislation.  In addition, REBNY publishes reports providing indicators of market prices for both the residential and commercial sectors.

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Last updated: January 6, 2010  12:36pm REBNY Adds Knakal, Peters to Exec Committee NEW YORK CITY—The Real Estate Board of New York is starting off the new year with several changes to its executive…... Read more >

Last updated: January 6, 2010  12:36pm

REBNY Adds Knakal, Peters to Exec Committee

NEW YORK CITY—The Real Estate Board of New York is starting off the new year with several changes to its executive committee. Frederick Peters, president of Warburg Realty Partnership, has been named VP of the residential brokerage division, while Robert Knakal, chairman of Massey Knakal Realty Services is now VP of the commercial brokerage division.

Additionally, David Levinson, chairman & CEO of L&L Holdings LLC, and EVP Bruce Beal of Related Cos. are members at large for this year. Related CEO Stephen Ross, who has served as REBNY chairman since 2007, is handing over the chairmanship to Mary Ann Tighe, CEO of the New York tri-state region at CB Richard Ellis. Ross assumes the title of chairperson emeritus at REBNY, according to a release.

Peters has served on REBNY’s board of governors since 1995, while Knakal has been a REBNY governor since 2000. The new appointments mark the first time either man has served on the association’s executive committee. In a release, Steven Spinola, president of REBNY, says the counsel and industry expertise of the new members “will be invaluable to the executive committee and will help lead the city’s real estate industry as we navigate these challenging times.”

REBNY is comprised of six divisions—commercial brokerage, residential brokerage, institutional owners and investors, owners and builders, management, and allied and associate—each with its own board of directors. The board of governors, REBNY’s central governing body, is made up of representatives from each division. The executive committee includes the officers of REBNY and other appointees from the board of governors.

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THE WALL STREET JOURNAL Peters, Knakal ascend at REBNY January 06, 2010 The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to…... Read more >

THE WALL STREET JOURNAL

Peters, Knakal ascend at REBNY
January 06, 2010

The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive committee as the vice president of the residential brokerage division. Meanwhile, Massey Knakal's Robert Knakal has been named vice president of the commercial brokerage division.

Peters has served on REBNY's Board of Governors since 1995 and Knakal since 2000, but this is the first time either of them has been appointed to a title position on the executive committee.

Other new members to the executive committee include David Levinson, the chairman and CEO of L&L Holding Company, and Bruce Beal, Jr., the executive vice president of Related Companies, who will serve as members at large for 2010.

The changes accompany the naming of new REBNY chairperson Mary Ann Tighe, the CEO of the New York Tri-State Region of CB Richard Ellis.

Stephen Ross, CEO of Related Companies, who had served as REBNY chairman since 2007, is now chairperson emeritus. TRD

 

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Peters, Knakal ascend at REBNY January 06, 2010 The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive…... Read more >

Peters, Knakal ascend at REBNY
January 06, 2010

The Real Estate Board of New York announced today that Frederick Peters, the president of Warburg Realty, has been appointed to the organization's executive committee as the vice president of the residential brokerage division. Meanwhile, Massey Knakal's Robert Knakal has been named vice president of the commercial brokerage division.

Peters has served on REBNY's Board of Governors since 1995 and Knakal since 2000, but this is the first time either of them has been appointed to a title position on the executive committee.

Other new members to the executive committee include David Levinson, the chairman and CEO of L&L Holding Company, and Bruce Beal, Jr., the executive vice president of Related Companies, who will serve as members at large for 2010.

The changes accompany the naming of new REBNY chairperson Mary Ann Tighe, the CEO of the New York Tri-State Region of CB Richard Ellis.

Stephen Ross, CEO of Related Companies, who had served as REBNY chairman since 2007, is now chairperson emeritus. TRD

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Brokers Weekly Warburg has an eye on the future Warburg Realty Partnership, one of Manhattan’s oldest residential real estate companies, is proving its got its eye on the future with a new partnership…... Read more >

Brokers Weekly

Warburg has an eye on the future

Warburg Realty Partnership, one of Manhattan’s oldest residential real estate companies, is proving its got its eye on the future with a new partnership with the AroundMe iPhone application.

Warburg’s exclusive New York City listing information will be available to the over seven million global users who have downloaded the free AroundMe app.

“With today’s fast pace, technology enables us to multi-task in ways we never imagined,” said Frederick W. Peters, president of Warburg Realty. “As a firm, we strive to provide our customers with up-to-the-minute information and be a thought leader in the industry. The integration of Warburg into the AroundMe app allows us to provide real time real estate information through this widely used platform.”

AroundMe is one of Apple’s most frequently downloaded iPhone/iTouch apps. Utilizing GPS or WiFi, the app pinpoints the user’s location to find restaurants, coffee shops and popular neighborhood locales, wherever they are around the globe.

The Warburg integration allows AroundMe users to view live information about the firm’s nearby listings. Warburg’s listings, accessed through a list or map view, provide floor plans, photos, additional residence information and the agent’s contact information. Once a listing is selected, the user can retrieve the entire profile, and click through to Warburg’s web listing page.

AroundMe shows a complete list of all of the businesses in the category selected along with the distance from where the user is located. The selected listing is then displayed on a map and plots the route to the nearest address.

Fast, easy and accurate, AroundMe supports English, German, French, Italian, Swedish, Russian, Japanese and Portuguese languages.

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Wide, open Every once in a while a space comes up that gloriously defies the rules — like an open loft residence in a white-glove prewar co-op on the Upper East Side. You can buy this space as a 5,000-square-foot…... Read more >

Wide, open

Every once in a while a space comes up that gloriously defies the rules — like an open loft residence in a white-glove prewar co-op on the Upper East Side. You can buy this space as a 5,000-square-foot plain “white box” for $3.2 million or purchase it renovated for $5.9 million. The sellers of the sunny second-floor co-op at 180 E. 79th St. are child psychiatrist Harold Koplewicz and his wife, Linda Sirow, an artist and Dalton schoolteacher. Barbara Fox of Fox Residential Group and Frederick Peters of Warburg Realty have the listing.

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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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New York Could See a Double Dip in Residential Market Some experts predict a second slide of home prices in the city November 2009—By Alison Gregor While prices and sales activity have picked up in…... Read more >

New York Could See a Double Dip in Residential Market

Some experts predict a second slide of home prices in the city

November 2009—By Alison Gregor

While prices and sales activity have picked up in New York in the last couple of months, a number of analysts are predicting a second round to the downturn here, with prices likely to fall. Estimates range from a drop of a few percentage points to up to 17 percent.

Barry Ritholtz, the New York-based CEO and director of equity research at Fusion IQ, an online quantitative research firm, noted that "there's still some downside to prices" in New York.

"The good news is, the worst of the bloodbath is probably behind us in terms of falling prices," he said. "The bad news is, unemployment continues to tick up and foreclosures continue to ramp up. I do not think New York is at a bottom quite yet."

Financial analysis firm Fiserv predicted last month that the New York City metro area will underperform the nation as a whole over the next two years, with prices falling another 17.4 percent by June 2011.

The biggest problem New York is facing is unemployment. According to the state Comptroller's office, the city shed 115,700 jobs as of June and is expected to hit 328,000 jobs losses -- 47,000 of them in the securities industry -- by the third quarter of 2010, boosting an unemployment rate that has already hit 10.3 percent.

Jonathan Miller, the president of appraisal firm Miller Samuel, said there has never been an economic recovery in New York at the same time that the finance sector was suffering.

"Employment on Wall Street in New York City is still falling," he noted. "There has not been an economic recovery in New York City, ever, when Wall Street employment was declining -- even factoring in bonuses."

Miller also noted that one factor behind the recent reported uptick in Manhattan activity -- sales jumped 45.6 percent in the third quarter compared to the second quarter, while the median price rose 1.7 percent in the same time -- is seasonality.

"Though [prices are] adjusted for seasonality … I still think seasonality is playing a role," he said.

With Manhattan prices already off roughly 20 percent from their peak, Miller predicted either mild housing-price erosion of a few percentage points or, at best, a few years of "moving sideways," which would mean flat prices.

Meanwhile, there are also homeowners in New York City, mostly in the outer boroughs, who have been able to hang on until now, but, like their counterparts nationally, are expected to default on their mortgages and see their properties go into foreclosure. More foreclosures tend to increase sales activity, but also put downward pressure on real estate prices, Miller said.

About 11.6 percent of mortgage borrowers in the New York City area are underwater, according to data from Deutsche Bank. And, as The Real Deal has reported, a recent report by the bank offers a dire prediction that 77 percent of borrowers with outstanding mortgages in the New York City area will be underwater by the first quarter of 2011, well above the bank's projected national average of 43 percent.

Nationally, some of the more bearish economists predict a round two on the recession in housing prices as well.

At The Real Deal's annual forum last month, leading economist Nouriel Roubini said he expects home prices to fall another 7 to 10 percent nationwide over the next year. Roubini, who has been called Dr. Doom for his dire (and largely accurate) forecasts, predicted an extended recession or "U-shaped" recovery, and said there might even be a "W-shaped" recovery, meaning that there could be a second financial crisis ahead.

Fiserv predicts an additional national price drop of 11.3 percent by June 2010.

Other analysts predict that the number of foreclosures -- which as of September had been up for 43 straight months -- will continue to increase through 2010.

"Prices will resume declining again early next year," predicted Mark Zandi, the chief economist of Moody's Economy.com. "The bulk of the price declines are over, but I think we've got another 5 or 10 percent to go. The principal reason for that is a pick-up in foreclosure sales early next year."

The loan modification program created by President Obama, which has taken loan servicers a while to figure out and apply to qualified homeowners, has simply delayed pushing other homeowners through the foreclosure process to sale, Zandi said.

"As the loan servicers figure out who's qualified, they'll resume pushing loans through, and those foreclosure sales will pick up again," he said.

Real estate experts point to rising national loan delinquency rates as an indication that foreclosures will grow. For instance, the serious delinquency rate on homes backed or held by Fannie Mae, the government-backed mortgage finance behemoth, topped 4 percent in July for the first time in history.

The possibility that today's historically low interest rates might rise is also a cause for concern. The federal government has prompted homebuyer activity by keeping interest rates artificially low, primarily by purchasing more than a trillion dollars of undesirable securities through Fannie and Freddie. Those purchases will continue through March 2010, Zandi said.

"If the government ends its commitment at that point in time and doesn't continue to buy, then mortgage rates will rise more quickly," he said.

Miller agreed, saying, "Who's going to buy those securities? If banks have a hard time selling them to investors, that means mortgage rates are going to go up."

That rise in the cost of money, experts said, should place additional stress on the housing market as well.

Though he's not predicting a second financial crisis like Roubini, Ritholtz predicted a "W" shape to the housing market's recovery, since markets tend to overcorrect in recovery.

"I wouldn't be surprised to see homes continue to get cheaper over the next two to three years," he said. "Although it won't be the 25 to 30 percent drops we've seen so far, there's probably another 5 or 10 percent ... to go in some regions," including New York. And up to 15 percent in some parts of the country, he said.

Still, the exact timing and extent of the home price contraction is difficult to predict, he said. Much of the discussion about national housing prices doesn't necessarily apply to Manhattan or brownstone Brooklyn, for various reasons, said Frederick Peters, the president of Warburg Realty Partnership, the Manhattan-based brokerage.

For instance, Manhattan and brownstone Brooklyn have not suffered from a high rate of foreclosures, primarily due to residents taking out fewer of the Alt-A and exotic home mortgages, but also due to the rigorous process used by co-op boards to assess potential buyers, Peters said.

Peters said he anticipates that Manhattan and brownstone Brooklyn will hold onto the price gains seen in the last quarter -- barring an unforeseen calamity, such as another large round of layoffs in the financial sector. Peters said he expects prices to remain flat for the next three to six months. He resisted predicting beyond that.

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Killing deals to protect property values is risky business We've always thought it sounded dubious for a co-op board to turn down a sale because the price was too low, and we've wondered whether it's…... Read more >

Killing deals to protect property values is risky business

We've always thought it sounded dubious for a co-op board to turn down a sale because the price was too low, and we've wondered whether it's legally defensible.

Apparently, it depends on who’s complaining.

According to an article in last week's New York Law Journal, courts generally put the kabosh on the practice when sellers sue, on the grounds that price-based turndowns are an unreasonable restraint on an owner's right to transfer shares.  But because co-op boards don’t owe a fiduciary duty to buyers, disgruntled buyers are out of luck.

The article’s authors—a pair of well-known condo & co-op attorneys from the law firm of Stroock & Stroock & Lavan—suggest some alternatives for boards concerned that the sales price that doesn’t reflect the value of a typical apartment and will depress future sales in the building. (A downloadable copy of the article is available here on Stroock's web site.)

One option is for a co-op board to peg the turndown on something else: Finances, credit rating, litigation history, personal impressions from an interview or application, and bad references are all legitimate reasons to kill a deal.

Another alternative is to green-light the sale but try to make sure that later buyers understand why the apartment sold below market:

“Presumably, if a subsequent purchaser knows the circumstances surrounding a below-market sale, that sale should not affect the price of a later sale, so long as the physical conditions of the units are different. Therefore, if a board develops a reliable mechanism to memorialize the reason for a below-market sale, it should not need to use floor price to disallow an apartment sale.” 

Curious about what form the ‘reliable mechanism’ might take, we asked Eva Talel, one of the article’s co-authors.

“Many buildings maintain a list of their sales for appraisers, and if they don’t, they should,” says Talel.

“You put an asterisk next to the apartment and explain that it was an atypical transaction because it was an estate sale or in very poor condition,” she explains, noting that it’s usually the managing agent’s responsibility to maintain a transfer history list. 

“This is also very, very critically important for refinancing mortgages—if an appraiser isn’t aware of the reasons 5C sold at very low price compared to 6C, they’re going to look at that number as the last transfer,” says Talel.

To get the brokerage community's perspective, we checked in with Frederick Peters, the president of Warburg Realty.

He notes that most buyers these days get price histories from StreetEasy.com and tend to assume that sales prices accurately reflect market values “no matter what you say” to the contrary.

But the bigger problem, he says, is price-related turndowns usually happen because the board is out of sync with reality, not because the price is out of sync with the market. 

“There have been a number of what we perceive as price-related turndowns since Jan. 1, but in fact the prices were market driven,” says Peters. “The board members were simply behind in their understanding of how great the drop in values had been.  Most boards, like most sellers, believe their building is ‘different.’”

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Inside Real Estate Condo Lending Restrictions, Aimed At Lowering Risk By KATHLEEN DOLER, FOR INVESTOR'S BUSINESS DAILYPosted 08/27/2009 06:17 PM ET Despite steep price cuts, selling problems plague condominiums…... Read more >

Inside Real Estate
Condo Lending Restrictions, Aimed At Lowering Risk
By KATHLEEN DOLER, FOR INVESTOR'S BUSINESS DAILYPosted 08/27/2009 06:17 PM ET

Despite steep price cuts, selling problems plague condominiums in the nascent rebound of residential real estate.

Lenders are scrutinizing condo complexes and their homeowner associations like never before, real estate agents say, making it especially hard to get a condo mortgage.

Without lending, condos sit unsold — with some going into foreclosure — or they sell to investors, who sometimes buy in bulk and typically rent out the units. But banks and mortgage backers don't like to lend into complexes with too many rentals or foreclosures, on account of risk. And so the proverbial vicious circle spins.

"Anyone with a pulse could get financing a couple of years ago; now no one can get financing," said Frederick Warburg Peters, president of Warburg Realty Partnership in New York. "The refusal of banks to loan to appropriate people buying in appropriate buildings just inhibits the recovery of the marketplace."

The supply of condos for sale stretched out a bloated 15.1 months in July, National Association of Realtors data show, compared with 8.6 months for single-family homes. The median condo price was down 18.9% from a year ago, vs. 14.6% for single-family homes, though sales of both picked up.

Condo lending rules tightened in January and again in March. They aimed to ensure that only high-quality loans would be packaged into securities, to avoid the kind of mortgage-market collapse that kicked off the housing crisis.

Prior to March 1, 51% of condos in a new complex had to be pre-sold for Fannie Mae (FNM) or Freddie Mac (FRE) to back a condo loan. Then, the percentage was upped significantly to 70%.

No 'Easy Street' Now

Legislators and Realtor associations have been trying, so far unsuccessfully, to get condo lending standards loosened. In June, Reps. Barney Frank, D.-Mass., and Anthony Weiner, D.-N.Y., wrote a letter to Fannie and Freddie saying that the 70% sales threshold "may be too onerous." They asked for "appropriate adjustments" to the condo underwriting standards.

This month Steve Goddard, president-elect of the California Association of Realtors, was scheduled to meet with representatives of Fannie Mae to talk over Fannie's condo restrictions.

Goddard says the lack of lending is devaluing condos further and hurting homeowners and lenders.

"By making it more difficult to sell a condo ... property values continue to go down on for-sale condos," he said.

"Fifty percent sold is a successful new project, especially in an existing neighborhood," said Michael Slattery, senior vice president of the Real Estate Board of New York.

A few lenders will loan on condos and keep the loans in their own portfolios. However, experts say to get these loans buyers must have a huge down payment, as much as 40%, perfect credit and often a relationship with the lending bank.

Goddard and other real estate professionals also say that Fannie and Freddie agency rules on condo lending are not very well understood, and are a moving target. Exceptions to the 70% rule exist — developers can apply for one, but many don't know that, says David Crowe, chief economist at the National Association of Home Builders.

Here are some rules Fannie and Freddie require if a lender seeks government backing for a condo loan:

• Owner-occupancy must be 51% or more throughout the complex.

• At least 70% of units must be pre-sold, in a new complex.

• Approval is required by Fannie's Project Eligibility Review Service, in a new complex.

• Condo association dues can be late for no more than 15% of unit owners.

• No more than 10% of units can be owned by a single investor, individual or firm.

• A minimum 25% down is needed for a condo loan. Otherwise buyers must pay closing-cost fees equal to 0.75% of the loan, regardless of credit score, under new rules that began in April.

Red Tape Leaves Mark

Overbuilding caused some of the pain now being felt in the condo market in the Sunbelt. And condos are often more difficult to sell than single-family homes, due to condo association restrictions and high dues.

But tight lending skews the market to investors, who have cash. If they buy in bulk, that can cause a complex to be unable to meet the 51%-or-higher owner-occupancy rule and the rule about no more than 10% of units being owned by a single entity.

"We're just getting overwhelmed with big groups," said Peter Zalewski, a principal with the consulting firm Condo Vultures, which operates in Florida helping investors find and buy properties.

"We're very happy with the current policies by Fannie and Freddie," he said. With those policies in place, "often the only savior for a condo developer is a bulk buyer."

Zalewski says that in recent months, a number of bulk Miami condo sales have gone for well under current construction costs.

More Changes Coming

Condo lending is about to get even tighter. On Oct. 1, the Federal Housing Administration's spot-loan approval process for condos will be eliminated. After that, condo projects will have to go through a stricter Housing and Urban Development approval process in order for FHA-insured financing to be available .

"The FHA is tightening its guidelines to match some of Fannie's guidelines," said Grant Stern, president of Morningside Mortgage, in Bay Harbor Island, Fla.

He'll be working with developers and others, he says, to get their condo complexes through the new HUD review process.

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Gotta Move, Gotta Sell By TERI KARUSH ROGERS Published: July 17, 2009 AS most New York City homeowners hunker bearishly inside their largest depreciating asset, one unfortunate contingent has no choice…... Read more >

Gotta Move, Gotta Sell
By TERI KARUSH ROGERS
Published: July 17, 2009

AS most New York City homeowners hunker bearishly inside their largest depreciating asset, one unfortunate contingent has no choice but to wade into the storm-tossed market. For these accidental sellers, life has gotten in the way — in the form of a job upheaval, imminent offspring, holy matrimony or the dissolution thereof.

Involuntarily thrust onto the catwalk, many are now stranded there, unable to unload their homes, even at a loss. Those who do sell are finding it takes longer: Figures for the most recent quarter show that it took Manhattan apartments nearly five and a half months to find a buyer, 20 percent longer than at the same time last year, according to Miller Samuel, an appraisal firm.

“The world has changed,” said Frederick W. Peters, the president of Warburg Realty. “In a market like this, I can’t guarantee a quick sale at any price.”

Meanwhile, sellers unprepared for the new reality watch helplessly, and with no small shock.

“You take personally the series of people who fail to buy your property, which is like saying that your child is homely,” Mr. Peters said. “And on top of that, you also have urgency. It’s incredibly stressful. Depression and anxiety usually go along with that.”

Just ask Adam Rogers, 45, a United Nations spokesman, who only a year ago thought he had it made when he was transferred to Switzerland from New York.

Until then, Mr. Rogers, his wife, Gillian, and their two small children had been comfortably ensconced in a four-bedroom, 2,000-square-foot condo in Clinton Hill, Brooklyn. The couple bought it for $599,000 in cash in January 2006, after selling the Hell’s Kitchen apartment they had outgrown for $920,000 at the height of the market, and pocketing a profit that was three times what they had paid.

They hoped to make a similar killing by buying into another gentrifying neighborhood.

“I used what I called the Starbucks index,” Mr. Rogers said. “There were no Starbucks around in Hell’s Kitchen when I bought there, and when I sold there were four. There were no Starbucks here either when I bought.”

With no mortgage to pay, a common charge of only $249 a month and abated real estate taxes, the family could easily afford life on Mr. Rogers’s U.N. salary and Ms. Rogers’s income as a freelance publicist.

Then, a little over a year ago, his job was reclassified into a category that required him to relocate at regular intervals. Bidding for a position abroad, he won a coveted spot as the spokesman for the U.N.’s Development Program in Western Europe in Geneva.

“I had always wanted to live there,” he said. “I thought I was sitting pretty. Everything happened like clockwork, except I was a little too optimistic about the apartment.”

Late last summer the couple decided to rent out the apartment, in case they returned to the United States after Mr. Rogers’s five-year rotation abroad. They listed it at $3,600 a month.

But the rental house they found in Geneva cost $5,000 a month, and other expenses mounted, even as the renter they had counted on failed to materialize. When it became clear that they would have to tap into equity, the Rogerses decided in August to put the apartment up for sale.

“There’s a higher cost of living over there, and the house was a bigger space, so I bought new furniture,” Mr. Rogers said. “Because I was very optimistic the apartment would sell, I probably wasn’t as frugal as I could have been.”

At first the Rogerses asked $679,000, the price at which their neighbor had sold his apartment.

They have since cut the price several times and switched agents; they are now working with Anne Buckley of Fillmore Real Estate in Fort Greene, Brooklyn. The apartment is listed at $599,000; they will lose about $60,000 in transaction costs if it sells at that price.

So far, the couple have had no offers. The only potential renters were four roommates from nearby Pratt Institute, whom Mr. Rogers turned away because he knew that the condo board — stung by student renters before — would never approve the sublet.

He has been using credit cards to finance part of his new life abroad.

“The first six months I didn’t spend much time thinking about it,” said Mr. Rogers, who with his family was on a trip back to New York, staying in the barren apartment on borrowed mattresses.

“I started getting worried in January. I’ve maxed out all my credit cards. Right now we’re stuck at Hertz for two hours trying to rent a car because none of the credit cards work — the wire transfer I made before we left apparently has a delay of several days.”

He says he feels the financial stress affecting him, but struggles to hide it.

“I take a lot of long walks through the mountains and try to stay optimistic.”

His wife, Gillian, says she too feels the strain, especially living in a city where hamburgers can cost $45 and her son’s back-to-school clothes cost three or four times more than back home. She hopes to find some freelance publicity work abroad to supplement their income.

In the meantime, she said, living frugally comes naturally to her, and she tries to keep the rest in perspective: “I look around the world and realize it obviously could be somewhat worse.”

While many accidental sellers are forced into the market for job-related reasons, others are led afoul by the stork.

“Right now, we might put the baby in the closet,” said Elizabeth Demaray, 41, of the compromise she and her husband, Hugo Bastidas, 51, may be forced to make when their first child arrives next month. “The closet is 54 inches wide and the crib is 53 7/8 inches wide. I just need to find an itty-bitty changing table.”

Last year, Ms. Demaray, a sculptor and assistant art professor, and Mr. Bastidas, a painter and art professor, moved to East 116th Street near Lenox Avenue, to a two-bedroom condominium that he also uses as an art studio.

But the 1,200-square-foot space is not big enough for the couple, his canvases, a baby and an exceptionally vocal Bengal cat that must be sequestered in its own bedroom at night if the humans are to sleep.

Mr. Bastidas paid $620,000 for the condo in February 2007. The couple listed it early this spring for $715,000 with Karen Shenker, an associate broker at Corcoran. The asking price was about what comparable units in the building, which has been LEED certified, had sold for. There have been no offers.

“If we wind up staying, we’re going to have to find a studio space for both of us, probably somewhere toward Lower Manhattan or possibly Jersey City,” Ms. Demaray said. “But the cat won’t work in the closet.”

Still, many parents would agree that a baby in the closet is better than two colicky mortgages demanding to be paid at once. That is the unhappy situation of a couple of other parents-to-be, Jon Vernon-Browne and Adriana Herrera.

Days away from the birth of their first child, the couple are living in a newly purchased five-bedroom house in North Caldwell, N.J., while carrying the two-bedroom downtown condo that Mr. Vernon-Browne, 41, an information technology manager, bought for $1 million in February 2007, before he became seriously involved with Ms. Herrera.

It wasn’t until they married and were expecting a child that they realized they would be better off in New Jersey, close to Ms. Herrera’s job and her parents.

At first they planned to rent out the condo at 15 Broad Street (a k a Downtown by Philippe Starck) to wait out the down market, hoping to get $4,300 a month. But their broker helped them understand that because they were taking out a substantial mortgage on their house, they might need the equity from the condo for peace of mind.

They listed it in May for $1.1 million, and have had one low-ball offer, which they rejected. In the meantime, they closed on a $1.05 million house in New Jersey, so that they would be settled before the baby’s arrival.

“There are a lot of feelings going around at the moment,” Mr. Vernon-Browne said. “We are excited about the arrival of our first kid. But we are feeling pretty stressed out about preparing for that, moving to a new house and having a double mortgage.”

He said they were losing $1,000 to $1,500 per month carrying both properties.

“We’ve definitely become a bit more desperate,” said Mr. Vernon-Browne, who may consider a short-term rental at this point.

Nicole and Charles Poliacof are newlyweds and no longer need his and hers apartments. She owns her place and he rents, but as she says, “If my husband and I lived together in my studio, we would be divorced.”

So, Nicole, 31, and Charles, 39, live in his one-bedroom $4,170-per-month apartment on the Upper East Side. They have been trying to sell her nearby property since May.

So far, the 600-square-foot postwar apartment — listed at $410,000 with Shirley Morris and Barbara Blumberg at Corcoran — has received no offers.

The subway construction project outside Ms. Poliacof’s building on Second Avenue and 69th Street isn’t helping. “Unfortunately, there are dug-up sidewalks right there,” she said, “and the unknown construction time frames of the M.T.A. have caused some uncertainty.”

The extra carrying costs of the studio are around $2,100 a month, she said. While it’s doable for a while, she said, some lifestyle changes may be necessary come fall. Meanwhile, the couple’s plan to shop for a two-bedroom apartment in which to start a family is on indefinite hold.

“We may readjust our price soon,” Ms. Poliacof said. “Another option is pursuing a renter, though it’s a challenge to go through the co-op board. But it would definitely put us at ease.”

Couples at the unraveling end of a marriage are also finding that the market is aggravating an already difficult situation.

“When people are getting divorced, a physical separation is equally important,” said Julie Friedman, an executive vice president at Bellmarc.

A lingering denouement is no good for anyone.

“Often the parties can’t decide how to market the apartment, and all the contact is through the attorneys, which adds up to extraneous legal fees,” said Ms. Friedman, who has watched the slowing market throw a wrench into more than one client’s divorce proceeding. “Adjustments in price strategy and marketing strategy, open house schedules — everyone feels the need to add their mark or perspective. It makes things bitter and acrimonious.”

The situation is different when it is propelled by a happy event.

Danielle Dugan, 34, a derivatives-assistant-turned-yoga-instructor, is seven months pregnant with her first child, and would like to sell her one-bedroom Brooklyn Heights co-op by the time the baby arrives in September.

The apartment is a fifth-floor walk-up.

“I’m really fit because of my occupation,” Ms. Dugan said, “and my husband happens to be naturally fit. I don’t see the stairs as a huge problem now, but it’s definitely a factor when you add in me, the baby, groceries and laundry.”

Ms. Dugan, who bought the apartment in 2006 when she was single, listed it in April for $357,000, with Eve Levine, an agent at Corcoran.

“I got pregnant in December and we thought about moving for a while,” she said, “but I guess we were processing the pregnancy first, because it was a surprise.” The only offer thus far has been a low bid from a buyer unwilling to negotiate or put more than 10 percent down. Ms. Dugan recently dropped the price of the apartment to $340,000.

“We’re pretty confident that it will sell eventually to the right buyer, probably someone who was single like I was when I bought it,” she said. “We’re just going to stay and deal with it until we sell it. No one’s really worried about me and I’m not either.”

She says it helps that a lot of her friends in the neighborhood are raising young children in less-than-perfect living arrangements.

“We know a lot of people in their mid-30s who are still getting established,” she said. “So this doesn’t impair my joy. It was a decision for me to pick quality of life and happiness over making a lot of money. It just is what it is and there’s nothing I can really do to change it.”

 

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Saunders & Associates Teams With Warburg Realty In Strategic Alliance Bridgehampton - Saunders & Associates, a leading brokerage firm based in Bridgehampton, and Warburg Realty Partnership, one…... Read more >

Saunders & Associates Teams With Warburg Realty In Strategic Alliance

Bridgehampton - Saunders & Associates, a leading brokerage firm based in Bridgehampton, and Warburg Realty Partnership, one of Manhattan's oldest and most respected residential real estate firms, report to have formed a strategic alliance to "further enhance the industry-leading services for buyers and sellers of luxury homes."

“We share a mutual respect and business philosophy with Warburg Realty and their talented team of agents," Andrew Saunders, president of Saunders & Associates, commented on the association. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent."

Saunders opened its first office last Fall and has quickly recruited some of the top deal makers in the Hamptons. Recently the firm has sold several multi-million dollar properties and has been selected by high profile clientele to represent their properties for sale or for rent.

“We are delighted to partner with Saunders to bring an additional level of excellence to the services we already provide to our clients," Frederick W. Peters, president of Warburg Realty Partnership, commented. “By combining our resources and leveraging the experience of some of the industry's most talented agents, we can offer access to the finest properties in both New York City and the Hamptons."

Since its formation more than a century ago, Warburg Realty has sought to improve and enhance its service "offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms' ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons."

 

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Warburg Realty and Saunders & Associates Form Alliance Serving Homebuyers and Sellers in NYC and the Hamptons Posted By Susan Piperato NEW YORK, NY—Warburg Realty Partnership, one of Manhattan’s…... Read more >

Warburg Realty and Saunders & Associates Form Alliance Serving Homebuyers and Sellers in NYC and the Hamptons

Posted By Susan Piperato

NEW YORK, NY—Warburg Realty Partnership, one of Manhattan’s oldest and most respected residential real estate companies, and Saunders & Associates, a leading brokerage firm based in Bridgehampton, NY, have formed a strategic alliance that further enhances their industry-leading services for buyers and sellers of luxury homes.

“We are delighted to partner with Andrew Saunders to bring an additional level of excellence to the services we already provide to our clients,” said Frederick W. Peters, president of Warburg Realty Partnership. “By combining our resources and leveraging the experience of some of the industry’s most talented agents, we can offer access to the finest properties in both New York City and the Hamptons.”

Since its formation more than a century ago, Warburg Realty has consistently improved and enhanced its service offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms’ ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons.

“We share a mutual respect and business philosophy with Frederick and his talented team of agents,” continued Andrew Saunders, president of Saunders & Associates. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent.”

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Joining 'Higher' Forces: Warburg and Saunders Create Alliance Manhattan-based Warburg Realty is forming <http://therealdeal.com/newyork/articles/warburg-forms-alliance-with-hamptons-firm> a 'strategic…... Read more >

Joining 'Higher' Forces: Warburg and Saunders Create Alliance

Manhattan-based Warburg Realty is forming <http://therealdeal.com/newyork/articles/warburg-forms-alliance-with-hamptons-firm> a 'strategic alliance' with new Hamptons brokerage firm Saunders & Associates, citing both small companies' success in their respective markets. Warburg "A Higher Standard Since 1896" Realty and Saunders "A Higher Form of Realty" & Associates plan on combining their higher forces in a financial agreement based around referral fees between brokers. Says Warburg president Frederick Peters: 'I don’t want an office in the Hamptons. The whole point of doing something like this is the acknowledgment that I do well what I do well … what I do well is sell in [Manhattan].' Both the owners of Warburg and Saunders believe that 'small company focus' will help them survive the market's downturn, owing to a sense of transparency in companies employing 150 and 25 agents, respectively.< Read less

Saunders & Associates, a Bridgehampton-based brokerage firm headed up by President Andrew Saunders, has joined with Warburg Realty Partnership, a Manhattan-based residential real estate company. The…... Read more >

Saunders & Associates, a Bridgehampton-based brokerage firm headed up by President Andrew Saunders, has joined with Warburg Realty Partnership, a Manhattan-based residential real estate company. The two businesses have formed a strategic alliance to further service buyers and sellers of luxury homes both on the East End and in Manhattan.

Saunders, which specializes in luxury properties, opened its first office last fall on the East End.

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Saunders & Associates and Warburg Realty Form Strategic Alliance to Better Serve Home Buyers and Sellers in New York City and the Hamptons Bridgehampton, NY – July 14, 2009 – Saunders & Associates…... Read more >

Saunders & Associates and Warburg Realty Form Strategic Alliance to Better Serve Home Buyers and Sellers in New York City and the Hamptons
Bridgehampton, NY – July 14, 2009 –

Saunders & Associates a leading brokerage firm based in Bridgehampton, NY, and Warburg Realty Partnership, one of Manhattan’s oldest and most respected residential real estate companies have formed a strategic alliance that further enhances their industry-leading services for buyers and sellers of luxury homes.

“We share a mutual respect and business philosophy with Warburg Realty and their talented team of agents,” continued Andrew Saunders, president of Saunders & Associates. “The goal of this new alliance is to provide yet another level of the best-in-market real estate expertise our firms have come to represent.”

Saunders opened its first office last Fall and has quickly recruited some of the top deal makers in the Hamptons. Recently the firm has sold several multi-million dollar properties and has been selected by high profile clientele to represent their properties for sale or for rent.

“We are delighted to partner with Saunders to bring an additional level of excellence to the services we already provide to our clients,” said Frederick W. Peters, president of Warburg Realty Partnership. “By combining our resources and leveraging the experience of some of the industry’s most talented agents, we can offer access to the finest properties in both New York City and the Hamptons.”

Since its formation more than a century ago, Warburg Realty has consistently improved and enhanced its service offerings to meet the ever-changing needs of residential clients. This strategic alliance further strengthens both firms’ ability to provide comprehensive residential real estate brokerage experience to buyers and sellers of luxury properties in New York City and the Hamptons.

About Saunders & Associates

Saunders & Associates is the fastest growing luxury real estate brand in the Hamptons. The marketing savvy company is known for its ability to empower its seasoned brokers to create and enable deals. Starting with its fast and cinematic website, Saunders provides exceptional service that is thoughtfully aligned with the Hamptons sophisticated culture. (631) 537-5454 www.SaundersAssociates.com

About Warburg Realty Partnership

Warburg Realty Partnership is one of Manhattan’s leading luxury residential real estate firms, founded in 1896 by Albert B. Ashforth. The company has a long-standing tradition of extraordinary service that has kept it at the forefront of New York real estate for over 100 years. The firm’s over 150 brokers are strategically located throughout Manhattan to guarantee every Warburg client the quickest access to New York’s finest properties and purchasers.

 

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Fred Peters and Miles Chapin's 630 Park Avenue in the NY Post $3.7 MILLION Park Avenue might not be on the park, but that doesn't mean you can't look out the windows of this "elegant" two-bedroom co-op…... Read more >

Fred Peters and Miles Chapin's 630 Park Avenue in the NY Post

$3.7 MILLION

Park Avenue might not be on the park, but that doesn't mean you can't look out the windows of this "elegant" two-bedroom co-op and gaze upon "tulips and flowering trees" (at least in spring). Just about every room in this classic seven -- living room, dining room, kitchen, even the maid's room -- overlooks the avenue, with the bedrooms and a "spacious" library set quietly in the back. "Ultra-high" ceilings throughout are also a plus, and there are 3½ bathrooms. The prewar apartment is "priced appropriately for today's market" -- in other words, it's a seven-figure deal. Agents: Miles Chapin and Frederick Peters, Warburg Realty Partnership, 212-327-9660 and 212-439-4502

 

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New Condos Up for Resale By Jay Romano Q I’m interested in buying an apartment in a 100-unit condominium completed in 2007. Twelve units are owned by the sponsor and are still unsold. But more troubling…... Read more >

New Condos Up for Resale

By Jay Romano

Q
I’m interested in buying an apartment in a 100-unit condominium completed in 2007. Twelve units are owned by the sponsor and are still unsold. But more troubling is the fact that 16 additional units are listed for resale. Is this a red flag that something is wrong with the building?

A
“While 16 is a large number of resale units, it is not in and of itself a reason to be concerned,” said Frederick W. Peters, the president of Warburg Realty Partnership.

Mr. Peters said that in 2007 and 2008, many new condos around the city were bought for investment purposes. “Many investors may have planned to rent and hold them, others to resell and profit immediately,” he said.

With the rental market soft and the prospects for large increases in value cloudy, these investors may be deciding that they prefer to extract their money from the investment now.

“Even in the best of times,” Mr. Peters said, “it was always typical to have a number of buyers who, for a variety of reasons, immediately placed their new condo units up for sale.”

 

 

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 Market Watch: We Love U Warburg's Frederick Peters blogs, "In the last two weeks, Warburg agents have put together 22 deals. Now, we are not the biggest company in Manhattan and we had two week…... Read more >

 Market Watch: We Love U

Warburg's Frederick Peters blogs, "In the last two weeks, Warburg agents have put together 22 deals. Now, we are not the biggest company in Manhattan and we had two week periods in 2006 and 2007 in which we put together more deals than that. Still, compared to the two or three deals a week we were assembling back in January (half of which never made it to contract) this is an extraordinary number." Let's not get too giddy, though, friends. Concludes Peters, "We are not looking for a V-shaped recovery. A nice slow U will suit us fine." [Warburg Blog]

 

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Profile Review: Frederick Peters, Warburg Realty In 1978, Frederick Warburg Peters’ wife presented her husband with a book entitled Apartments for the Affluent. Peters wasn’t so interested in the…... Read more >

Profile Review: Frederick Peters, Warburg Realty

In 1978, Frederick Warburg Peters’ wife presented her husband with a book entitled Apartments for the Affluent. Peters wasn’t so interested in the staging and decorative aspects of the apartments featured in the book. Instead, the floor plans fascinated him. “That book was a life-altering experience for me,” Peters, owner of luxury real estate brokerage firm Warburg Realty, recalled in his Madison Avenue office. “I couldn’t put it down. I still have it.”

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Looking for Bottom in N.Y. Real Estate By TERI KARUSH ROGERS WITH sales prices of Manhattan Apartments having tumbled by perhaps a quarter in just the past few months, pinpointing the bottom has become…... Read more >

Looking for Bottom in N.Y. Real Estate

By TERI KARUSH ROGERS

WITH sales prices of Manhattan
Apartments having tumbled by perhaps a quarter in just the past few months, pinpointing the bottom has become a top priority for anyone eager to buy, sell or broker a deal on a home in New York.

Some industry observers foresee market drops of 40 percent, while others think that is too extreme and suggest that price reductions of 25 percent will more be likely the new norm.

There's no question, though, that the boom-or-bust experience has arrived in Manhattan, which had seemed to be avoiding the fate of Las Vegas and Florida.

"It's almost surreal," said Dottie Herman, the president of Prudential Douglas Elliman, referring to the abrupt turnabout after the collapse of Lehman Brothers last fall. Until then, prices had been marching upward, with the median price of an apartment more than tripling in a decade.

To some degree, the rise in prices was logical in New York, where a string of outsized Wall Street bonuses lined the pockets of many buyers.
That wasn't the case in other parts of the country, which suffered from speculation and a large number of subprime mortgages.

No one has any hard numbers yet on New York because first-quarter reports, reflecting closing prices of deals struck last fall, will not be available for a few weeks.

Looking ahead, however, some believe it is possible that the average slide from peak values could reach 40 percent by the end of 2010, with variation by neighborhood and market segment. That would put values back to levels last seen around 2002.

Others are more optimistic. "I'm not disagreeing with you that values are coming down," said Pamela Liebman, the president of the Corcoran Group. But, she said, "there's no way the Manhattan market is dropping to those levels that are being talked about. Certain apartments might, but as a whole it will not happen."

Hall F. Willkie, the president of Brown Harris Stevens, said he, too, would be surprised by a decline that large.

"A lot of negative things would have to happen in the general economy,"
he said. He is seeing sales prices 15 to 25 percent below those of last summer, with renters making up an ever-increasing percentage of buyers.

And he saw a positive sign in the fact that, despite all of the bad economic news, sales volume is about half what it was this time last year.

Jonathan J. Miller, the president of Miller Samuel, a Manhattan research and appraisal company, estimates that contract prices have declined by about 25 percent since last summer.

Just how much further prices will dive may depend more on how soon and how generously banks resume lending than on the recovery of Wall Street or the end of the recession.

Ms. Herman said she expected the brunt of the pain to be borne within the next six months. Others expected the downward drift to last for a year to 18 months, until credit markets regain their equilibrium.

When will we know when the market has reached the bottom?

Frederick Peters, the president of Warburg Realty, noted that some deals his firm had brokered lately were nearing the lows being predicted by others. "Even if the New York market were to end up being 35 to 45 percent down," he said, "to the degree we're seeing deals done at 30 to 32 percent down anyway, it's not very far away."

Mr. Miller says sales activity needs to stabilize first. "You're approaching bottom when you start to see sales activity stop declining and level off," he said. "Pricing begins to push up when you have an extended period, like a year, when sales activity doesn't decline anymore."

One measure of just how anorectic sales have become is the bloated state of inventory.

"It's right now the highest since I started tracking in 1999," Mr. Miller said. Inventory levels in Manhattan have averaged 7,021 a month for the last decade, he said, and there were 10,243 co-ops and condominiums for sale at the end of February - 38 percent more than a year ago.

Many expect that the million-dollar segment will stabilize first because it is powered by first-timers who are drawn by falling prices and don't have to sell before they buy. The process is being helped along by federal efforts to increase mortgage lending: The latest stimulus package enables Fannie Mae and Freddie Mac to extend loan guarantees to New York City mortgages originated this year for up to $729,750.

Mr. Peters predicted that larger apartments, in the three-bedroom-and-up category, would stabilize over the next six months. Those buyers, he said, tend to have an easier time obtaining mortgages through private banking relationships and will become more active once sellers trim prices.

Large drops in prices are not new in the city. The last decade-long increase in prices was followed by about seven years of falling prices starting in the early 1990s, said Ingrid Gould Ellen, the co-director of the Furman Center for Real Estate and Urban Policy at New York University School of Law. Prices fell about 29 percent.

"But there's no rule that a downturn has to be six or seven years," she said. "It's possible that rather than seeing price declines spread out over a six-year period, this time it could be concentrated in a two-year period."

Indeed, both Ms. Herman and Ms. Liebman note that this recession differs from previous ones in that there are buyers on the sidelines this time.

"We see a real increase in traffic and a lot more buyers out there," Ms. Liebman said. "The fish are circling and they will eventually get hungry and start biting. What we're seeing is a big disconnect - sellers need to get more realistic, but buyers don't even think it's enough. Buyers are not hesitating to walk in and bid 40 percent off the price, but sellers aren't taking it."

Recovery, when it arrives, is predicted to be modest. Lenders aren't expected to return to the open-valve position of the boom years.

Ms. Herman said she anticipated a return to annual appreciation rates of 5 to 7 percent. At 6 percent annual appreciation (should that occur after the market stabilized), it would take about nine years for an apartment worth $1 million at peak - and about $600,000 at bottom - to regain its value, according to calculations by Mr. Miller.

The degree and rate of recovery will be influenced by various factors. A Goldman Sachs analysis of the New York City condo market published in early January addressed the possibility that pay cuts in the financial industry or a significant departure of affluent residents could reduce incomes to their pre-Wall Street boom levels of two decades ago. If per-capita incomes were to revert to twice the national average (versus more recent measures of three times the national average), condo prices would need to fall by 58 percent to match the price-to-income ratios of the late 1990s, before the run-up in the real estate market, according to the analysis.

The leveling of the boom may strike condos and co-ops differently.

As prices head south, Mr. Miller said that he expected condos to be more volatile. New construction, including condo conversions, seems likely to suffer the most. "Contract activity on new development has been much harder hit than co-op resales because of credit," Mr. Miller said.

Co-op boards, however, could damage themselves, he said, if they become too picky with buyers.

"The danger they face is that co-op boards are in denial about the change in the market," Mr. Miller said. "They've been even more conservative with this downturn in terms of financial qualifications - if you work on Wall Street now that's like a liability - and they've been killing sales that they feel are low, to protect values in the building."

That sort of behavior only depresses values within a building. "It gets a reputation in the brokerage community of being unrealistic about market conditions and that makes it much more difficult to attract buyers," Mr. Miller said. "I'm not saying they shouldn't be prudent, but by overreacting they are doing what lenders are doing, which is damaging the collateral they are trying to protect."

Mr. Peters said his firm had negotiated some co-op deals "dramatically below where prices have been."

"What we see is that boards are scrutinizing the purchases carefully but not striking down the deal because the price isn't high enough," Mr. Peters said. "I definitely agree that in the current environment, that would be profoundly foolish, because the world is a different place."

A different place and possibly a better one, said Ms. Liebman, who like many brokers manages to see the positive in any environment that comes along. "Why should an average one-bedroom with nothing special to offer cost well over a million? The market got ahead of itself, and this correction is good for New York because it brings the affordability back in line."

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New York Magazine Basic Instinct: Bye-bye, screening rooms. Give me square footage and closet space. By S.Jhoanna Robledo, Published Feb 1, 2009   When the real-estate market was booming,…... Read more >

New York Magazine
Basic Instinct: Bye-bye, screening rooms. Give me square footage and closet space.

By S.Jhoanna Robledo, Published Feb 1, 2009

 

When the real-estate market was booming, all those years ago at the beginning of the 21st century, a tower seemed to be rising on every corner in Manhattan. The people developing and selling these buildings had to differentiate their products, most of which had the same ceiling heights, oak flooring, and more or less standardized kitchens and baths. So a lot of them did it with glitz: Add a super-duper lobby, a wine cellar, a pet spa to one of those buildings, and you could advertise your new development as “unique living!” Buyers, too, joined in. Many had new money, from Wall Street; others were envisioning a Sex and the City life, and amenities like a dedicated game room for the guys or a spa for the women seemed appropriate.

When Vanessa Uzan bought a condo a few years ago, just across the river in New Jersey, she wanted something fabulous and fresh. Now she is looking to move back into Manhattan, and everything’s different. “I’m not swayed by a brand-new kitchen. I don’t need a granite countertop,” she says. Uzan is strictly focused on the fundamentals: location, square footage, closet space, and maintenance fees.

All over the real-estate business, observers are saying that same calculus is playing out. “It’s more about the space, the home, what life they can live in it,” says Century 21’s Barbara Lamb. Buyers are far less quick to forgive subpar locations or odd layouts in sexy projects. “When the market was hot, they’d see amenities and cool configurations and respond to that,” says JC DeNiro executive vice-president S. Hunie Kwon. “I sold spaces where, in the final walk-through, buyers would say, ‘Oh, I didn’t know there were only three closets.’ ” But at his recent open house, he says, hardly anyone admired the fancy backsplash and high-style furniture; the efficient layout and washer-dryer “really got them going,” Kwon says.

Warburg Realty’s Frederick Peters says apartment-hunters are no longer “willing to be teased by what they thought was sexy. This is a value marketplace. Gimmickry won’t motivate.” Instead, says developer Henry Justin, whose 211 East 51st Street condo has only the amenities he deemed essential—doorman, gym, a garden. “You want to make sure your home is where your money’s spent.” Particularly if buying it leaves you too broke to go out.

 

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THE WALL STREET JOURNAL. A Look Ahead/What’s Next Industry Luminaries Look Ahead: What can we expect in 2009? Residential Sales and Development Price-wise, big apartments are taking the biggest hits.…... Read more >

THE WALL STREET JOURNAL.
A Look Ahead/What’s Next

Industry Luminaries Look Ahead: What can we expect in 2009?

Residential Sales and Development

Price-wise, big apartments are taking the biggest hits. Historically, in the past 20 years, the upper end of the market has been the most insulated, but now, with the financial world the hardest hit, buyers are shying away from larger units. In markets like this you tend to see a flight to the familiar. Buyers feel more secure investing in more established neighborhoods. Therefore we anticipate that as in other downturns, the Upper East and West Sides, the West Village and the most established areas of Tribeca will remain strong.

Frederick W. Peters
President, Warburg Realty Partnership

 

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THE REAL DEAL When Comps Fall Short With Fewer Sales, Naming a Price Difficult In Today's Market By Lauren Elkies, August 2008 When sales velocity is slow it can be difficult to accurately price…... Read more >

THE REAL DEAL
When Comps Fall Short
With Fewer Sales, Naming a Price Difficult In Today's Market

By Lauren Elkies, August 2008
When sales velocity is slow it can be difficult to accurately price a home.

Typically, real estate brokers look to comparable sales data, or comps, to find out what similar homes in the seller's building and neighborhood have sold for. But if there is a dearth of sales, as is the case now, the data becomes thin.

"We're in a whole new world. Pricing right now in this market is very hard," said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

Can a broker use closed sales from as far back as a year ago, which reflect deals negotiated before the credit market erupted? What about from six months ago, with those sales going to contract at the end of 2007 in the wake of the meltdown?

Some real estate experts are looking back even further to increase the reliability of their pricing, while others are focusing on current listings.

"We are using the same tools for comps, but also looking at how the prices are comparing to the previous one to two years," said Eddie Shapiro, president and CEO of Nest Seekers. "The idea is to try and identify inflated values as opposed to legitimate rates of appreciation — with all the relative considerations including location, neighborhood, exposure, presentation and condition."

In this market, Stacey Max, an executive vice president and sales manager at Bellmarc Realty's Downtown office, prefers to rely more heavily on listings currently on the market rather than older, completed sales.

"This reflects what the competition is for that property," Max said. "In the past, we used to be able to assume that we could get a higher price than the previous sale in any particular building, and right now that is no longer the case."

But not everyone agrees with that approach.

Jonathan Miller, president and CEO of appraisal company Miller Samuel, said that while the data set is smaller today, he prefers not to look at older data or depend more heavily on listings just to accumulate more data.

"We're spending more time trying to flesh out more recent data just because it's harder to obtain," Miller said. "We've noticed compared to last year, there are fewer sales. So it's more challenging."

By fleshing it out, Miller means talking to the parties involved in a previous sale, getting hold of the actual listing, verifying the square footage, and getting details about all of the amenities beyond what is on the listing.

In rare cases, where little information is available for computing comps, such as in the case of an unusual penthouse, Miller will look back even further.

Miller said his typical methodology includes looking at listings, contracts and closings over the last six months, with emphasis placed on the last month or two.

But relying on listings in this market tends to be less useful than it was a year ago, because "they're rising in number and the average marketing time is expanding," Miller said.

As listings increase, so does competition among sellers, making accurate pricing more critical to closing a transaction.

"It's more challenging now because of the uncertainty, and there's a lot of misinformation out there," Miller said. "National housing statistics have nothing to do with the local market."

As Noah Rosenblatt, a vice president at Halstead Property, pointed out on his site urbandigs.com at the end of June: "If you think you can fool a buyer into paying a 10 percent premium over 2007 comps, think again!"

Still, some real estate pros said they have not altered their approach to testing the market.

Andrew Gerringer, a managing director at Prudential Douglas Elliman who oversees new development marketing, said that his comps approach has not changed.

"The comps we are using are based upon closed sales and current contracts out in a particular market," Gerringer said. "However, this is no different than how we have always approached this." He noted that he uses comps from the past three to six months.

Frederick Peters, president of Warburg Realty Partnership, said he continues to focus on the here and now.

"I always tried to use very current comps," Peters said. "Even if you went back six months, the numbers were never good. Actually, nowadays the comps are easier to use, since we try to persuade sellers in most markets to peg their pricing to the last sale."

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THE REAL DEAL How Long Will Downturn Last? Imperiled Economy To Squelch Market Through 2009, Some Say By Alison Gregor, August 2008   The residential real estate market in New York City…... Read more >

THE REAL DEAL
How Long Will Downturn Last?

Imperiled Economy To Squelch Market Through 2009, Some Say

By Alison Gregor, August 2008

 
The residential real estate market in New York City is showing clear chinks in its armor. The average Manhattan apartment sales price in the second quarter fell for the first time since the fall of 2006, and some analysts expect the bumpy ride to be a rather long one.

"Manhattan held up better than most other places," said Mark Zandi, the chief economist and co-founder of Moody's Economy.com. "Long Island is being hit, as is Northern New Jersey. I do expect Manhattan's housing market to weaken measurably over the course of the coming year."

A combination of less demand, due to the lack of available credit for potential buyers, and more supply, due to a surge in foreclosures, has given the national housing market a wallop, he said. But the weak American dollar has spurred even stronger global demand for Manhattan apartments, propping up the local market.

However, dire predictions among financial analysts and fund managers of a European recession could weaken foreign demand considerably. And the hit being sustained by the financial services sector should make itself apparent in the coming months, Zandi said.

"The fallout from the problems on Wall Street is taking some time to manifest itself in the housing market, but it will as people lose their jobs and bonuses are significantly cut back," he said. "I expect that fallout to hit the Manhattan housing market later this year and in 2009."

As for the national housing market, Zandi, who recently published a book titled "Financial Shock: A 360° Look at the Subprime Mortgage Implosion, and How to Avoid the Next Financial Crisis," said he anticipated home prices bottoming in the summer of 2009 — by which time they will be 25 percent off their spring 2006 peak — with no appreciable gain in prices for another year.

"It won't be until well into the next decade that we start to experience measurable price growth," he said.

Other analysts agree with that national perspective. Paul Krugman, writing in the New York Times, has said U.S. home prices have fallen 17 percent in the past year, and probably still have "a long way to fall," such that the housing slump may continue to 2010 or later.

Other analysts in New York City, such as the appraiser Jonathan Miller, the president of Miller Samuel, expect a rut in the Manhattan housing market, including a drop in prices, and suggest it will last into 2009 and beyond.

Frederick Peters, the president of Warburg Realty Partnership, a residential brokerage firm, said any slowdown in the Manhattan market that might occur is pinned to the credit crisis.

"In June, Federal Reserve Chairman Ben Bernanke was commenting that he thought the worst of the credit crisis was behind us, but July has clearly proved that that's not the case," Peters said. "And in fact, [August is] the anniversary of when this all kind of hit the fan.

"What I'm saying to my brokers is that the national economy is probably going to be very challenging, and credit issues are probably going to still have an impact on buyers' psychology through the balance of 2008 and the first quarter of 2009."

Peters was careful to say that any downturn he has seen in the Manhattan housing market has been in sales volume, not in pricing. According to Prudential Douglas Elliman Real Estate's second-quarter Manhattan market overview, there were 3,081 sales in the second quarter of 2008, which was down 21.8 percent from the 3,939 sales seen in the prior-year quarter.

"In this case, we've experienced a volume downturn, for sure," Peters said. "One has to be much more specific in parsing prices."

He said the length of time that apartments are staying on the market has grown, which will increase pressure to lower prices. According to the Douglas Elliman report, Manhattan apartments stayed on the market an average of 135 days, an increase of 15 percent from 117 days in the prior-year quarter.

"For a number of years, we had a marketplace in which many listings typically remained on the market for two weeks," he said. "We're not seeing much of that any more. Everything is on the market for months. Obviously, that creates a deeper inventory pool in many marketplaces, which then brings price pressure to bear."

There is price pressure, especially on smaller units, which is being offset by price increases on larger, luxury apartments, Peters said.

"There's downward price pressure probably on the Upper East Side east of Third Avenue," he said. "Also, in certain parts of Tribeca, where there's been a lot of new development. Certainly, there's been some price pressure in new development in Harlem."

Luigi Rosabianca, a managing member of the law firm Rosabianca & Associates, said developers will do anything to keep from cutting prices, even agreeing to hold the note for those who can't obtain mortgages. Still, he said he anticipates a "natural correction" to the Manhattan housing market to the tune of a 5 to 10 percent price decrease.

"Things did go a little haywire, so if there's a natural correction, maybe that's healthy for the market," Rosabianca said. In terms of sales volume, he said, "I think we'll see this summer being quite quiet, and you may have gradual improvement over the fall and winter. And then we'll see a spurt in sales next spring."

But Rosabianca pointed out that the elections this fall may also play a role in spurring the economy, which could boost the housing market.

"It's amazing what elections do to an economy," he said.

Stuart Saft, a real estate partner at the law firm Dewey & LeBoeuf, said he has not seen a price cutting thus far among developer clients, largely because many canceled or postponed development plans two years ago.

"A lot of developers, when they saw the market starting to soften two years ago, pulled out and decided to wait," Saft said. "So we never had that kind of excessive development that exists in other parts of the country."

Still, Saft said the residential real estate market "will soften and probably continue to soften through the end of the year."

Even if some developers postponed their plans, there were enough projects that went forward to keep at least one business watching. Philadelphia-based Korman Communities owns four AKA properties, which specialize in extended-stay lodging converted from failed condominium projects. It aims to add as many as a dozen more properties in the next five years, said co-president Brad Korman.

"We are starting to see some incredible opportunities for growth," he said. "Buildings that broke ground 18 to 24 months ago are starting to come online, and owners that are very nervous are starting a sales effort in this market."

While the residential market downturn is more a reflection of the credit crisis than market fundamentals, that could change if the banking industry is further weakened, leading to further loss of consumer confidence, he said.

"Nobody is certain where the bottom of the market is, and everyone is afraid of paying too much in a falling market," Korman said. "This attitude will keep velocity down just as many new condo projects are starting their sales effort."

Korman predicted that while international buyers will continue to fuel the luxury apartment market, the mid-priced sector will need 50 percent more time than expected to sell its inventory. The real exposure in Manhattan will be Downtown in the Financial District, where a price drop is almost inevitable.

"The Financial District was solid in selling condos in the $700- to $900-per-foot range," Korman said. "Too many new buildings came online trying to sell at $950 to $1,300 per foot. When the investment banks stopped the bonuses, these buildings lost the majority of their buyers. I think these buildings will have to rely on foreign purchasers, and I believe prices will come down to compensate for the location."

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THE REAL DEAL Summer Sales Slower Than Usual Price Cuts Increase, Signaling Weakening Residential Housing Market By Lauren Elkies, August 2008 July was hot, and buyers were not bothered –…... Read more >

THE REAL DEAL
Summer Sales Slower Than Usual
Price Cuts Increase, Signaling Weakening Residential Housing Market

By Lauren Elkies, August 2008
July was hot, and buyers were not bothered – at least when it came to buying Manhattan real estate.

Open house attendance was down, beyond the usual summer ebb, and price adjustments were more frequent — both indicators of a weakened housing market.

Richard Rothbloom, a vice president at Brown Harris Stevens, said that his sales open house attendance last month was "hit or miss."

Stefani Pace, an associate broker at Prudential Douglas Elliman, said that appropriately priced units are garnering heavy traffic at sales open houses, but if they are even "just a little overpriced," attendance drops off.

At Barak Realty's Sunday open houses, there was an average of 6.7 visitors in July versus 7.4 in June. Barak Dunayer, the company's president, said that the drop in the number of house-hunters as well as the increase in the number of price cuts reflect the soft market.

Crowded open houses usually mean a property will sell quickly, said Frederick Peters, president of Warburg Realty Partnership, adding that he does not know if the reverse holds true — that a sparsely attended open house translates into a property that sells slowly.

On the rental side, open houses were doing poorly last month.

"Rental open houses are dead," Pace said. (For a different take on open houses for rentals, see story on page 82.)

Lesley Steiner, associate broker at Century 21 NY Metro, echoed Pace's comment.

"There are [fewer] people coming to rental open houses, and in some cases no one shows up," Steiner said.

Apartments have been languishing on the market, but some brokers say that price slashing seems to be effective at increasing buyer and renter interest.

Esther Sapan, a rental salesperson at Adina Equities, said that while the rental market was busier in July, rents were reduced both months to get deals done.

On the sales side, "some apartments are still sitting, but as you do incremental price drops, more buyers come out to look at it," Brown Harris Steven's Rothbloom said.

The discount off the asking price that buyers are getting from sellers has increased. Between the first and second quarters of 2008, the spread between list price and final selling price grew to 3.6 percent from 3.2 percent, according to data prepared by appraiser Miller Samuel for Prudential Douglas Elliman. In the second quarter of 2007, the discount was only 2.2 percent.

Jonathan Miller, president and CEO of Miller Samuel, said the expanding spread does not necessarily mean that price drops were greater. It could be that list prices rose faster than sales prices did. "Either way," Miller said, "it shows a widening gap between buyer and seller."

Ari Harkov, an associate broker with Halstead Property, said, "Properties are still trading, some immediately after coming onto the market and some at full asking or even above, but I think price sensitivity is increasing. This is leading to a larger percentage of properties sitting on the market that may not sell at all or will only sell after several months on the market and several price reductions."

Sha Dinour, president of Triumph Property Group, estimated in mid-July that apartments were sitting on the market 10 to 15 percent longer in July than in June. Second-quarter market reports for Manhattan showed that year-over-year, inventory shot up and sales activity slowed, but home prices still hit record highs. Sales at the high-end 15 Central Park West and the Plaza Hotel, which were negotiated in the first quarter of the year if not before, skewed the numbers.

Looking at just the tail end of the second quarter, only May and June, the last two-month period for which data was available, sales picked up by 12.5 percent to 1,204 sales, according to data from a report by Terra Holdings, parent company of Brown Harris Stevens and Halstead Property. The median sales price receded between the two months by less than 1 percent to $960,000, Terra Holdings determined.

Market takes hit, brokers adjust

As the middle market suffers and buyers demand greater price cuts, brokers are adjusting their approach to keep up with changing market conditions.

The Real Deal sent out its monthly survey to see what some brokers had to say about what they are seeing in the field. Here is a sampling:

Stefani Pace, associate broker at Prudential Douglas Elliman: The middle co-op market is where I am seeing the biggest slowdown. Many of my customers are putting their search on hold and my clients are getting frustrated.

Khashy Eyn, president and CEO of Platinum Properties: If you list a $5 million-plus home, you know that there is a scarcity of homes in this category, and you'll ultimately find an affluent individual willing to spend that amount. What seems to linger on the market the longest are the listings that have 100 other listings or so in the same category — for example, one-bedrooms under $1 million in Midtown.

Steen Rasmussen, senior vice president and sales manager, Warburg Realty Partnership: Brokers are revising and improving their business and marketing plans and preparing themselves for a bumpy six to nine months ahead. They are adjusting to the new pace of the market, which requires more patience working with both buyers and sellers.

JoAnn Schwimmer, sales agent, DJK Residential: The renters [were] back in the Manhattan residential market in July. Buyers are also out there and looking for drastic price reductions as a result of the negative national news, but the New York City market is very strong. Higher-end properties have dropped slightly, but the mid-market prices are steady.

Ken Scheff, managing director, Stribling & Associates: Some buyers of smaller apartments are being affected by tighter financing guidelines.

Cindy Gise, vice president, Prudential Douglas Elliman: I think we have to be tougher and need to tell sellers they need to be realistic if they are serious. Screening buyers is a must and something you need to do from the beginning of your buyer/broker interaction.

Sha Dinour, president, Triumph Property Group: I think no one is denying the slowdown, and we are all just grateful to move our inventory. I think appointments and accommodations by other brokers have improved.

Edward Longley, senior vice president, City Connections Realty: As of this point I have not seen any drastic changes. I am spending a little more time finishing my doctorate, playing with my daughter and so forth, but I think that is just a seasonal thing.

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THE REAL DEAL This Time, Inflation May Have Different Impact By Alison Gregor, August 2008   Reports that consumer prices spiked 1.1 percent in June raise the issue of inflation, which…... Read more >

THE REAL DEAL
This Time, Inflation May Have Different Impact

By Alison Gregor, August 2008

 
Reports that consumer prices spiked 1.1 percent in June raise the issue of inflation, which has in the past been advantageous to real estate investors. In the current state of the market, it's not clear if rising inflation will end up being a boon or a burden on top of the credit crisis.

During the inflationary periods of the 1970s and 1980s, many investors who held real estate made out reasonably well, reinforcing the idea that real estate is a good investment for bad times.

"A lot of people buy real estate during inflationary times with the idea that it would be a hedge against inflation," said Robert Stella, an executive vice president and principal at Cresa Partners, a commercial real estate brokerage. "Say it cost you $1,000 to build a building. If inflation goes up 10 percent, your building's probably going to be worth at least 10 percent more, or $1,100, so that's good."

Inflation is often thought of as a beneficial phenomenon for real estate investors, agreed Jim Frederick, an executive managing director and principal at Colliers ABR, a commercial real estate services company.

"Hard assets are always more attractive in inflationary times," Frederick said.

Since inflation, in a sense, can add equity to a building, it can effectively take a bite out of the building's debt, Stuart Saft, a real estate partner at law firm Dewey & LeBoeuf, said.

"Credit is more significant in real estate than any other aspect of the economy, because real estate is basically an illiquid investment," Saft said. "Having a period of inflation, if you're a real estate owner or lender, solves the credit problem, because suddenly, the value of the asset can be in excess of the amount of debt that's on the asset."

However, real estate investors in today's market face other pressures that make it less advantageous to own real estate now. First of all, the absence of cheap and easy financing makes it difficult to sell a building and reap any immediate benefits from inflation, Stella said.

"If people aren't buying your building because they can't finance it, the value is only a paper value," he said. "That's a new twist that could create some issues for an investor trying to hedge, because if you want to sell it, there may not be many buyers — at least until this credit crisis plays out."

Paul Fried, a principal at AFC Realty Capital, a national boutique investment bank, said real estate might be a hedge in inflationary environments — as long as it's not the sector that went through the inflationary period.

"Normally, you would think it would be good to hold real estate in an inflationary period, but you're assuming real estate is not the asset that's in the inflationary cycle," he said. "Right now, real estate values are at historical highs as a result of going through an inflationary cycle caused by cheap monetary policy."
The Federal Reserve's reaction to inflation may also determine whether or not real estate investors thrive, or have to struggle to survive. The Fed could decide to increase interest rates.

"What matters to real estate is the real interest rate, which is the nominal interest rate minus inflation," said Mark Zandi, the chief economist and co-founder of Moody's Economy.com.

"If you have an acceleration of inflation and interest rates don't rise, i.e. if the Federal Reserve doesn't tighten policy, then generally, it's good for real estate," he said. "If conversely, though, inflation rises and the Federal Reserve tightens policy, and real rates increase, that's bad for real estate."

Zandi said he believes the latter is more likely, with the federal government sacrificing the economy to achieve the goal of stable inflation.

"In the 1970s and early 1980s, inflation increased, but the Federal Reserve did not raise interest rates, so real rates went negative, which was good for real estate," he said. "That won't happen this go-around."

Saft agreed with Zandi, asserting that officials in the Federal Reserve, which had been gradually cutting interest rates to aid the struggling housing market, will worry that investors will shift their capital from U.S. securities markets to other markets where they can get a higher return. The federal government will raise interest rates to attempt to make the U.S. securities market more competitive.

"That's where the real pressure on the Federal Reserve to raise interest rates is going to come from," he said, adding that it will have a devastating effect on the housing market. "Raising interest rates will make the dollar more competitive as an investment, but on the other hand, it's going to trigger more defaults here in the U.S.," he said.

Fried said that if Federal Reserve officials raise interest rates, it will be a "double whammy" to real estate values.

"You know they've got to be struggling with this, because the instinct is to raise rates, because that is better for monetary policy," he said. "If they do raise rates, you're really going to get squeezed in terms of tightened underwriting standards along with the increased cost of capital.

"So does it feel like real estate is a hedge?" Fried continued. "The answer is 'no.' Don't argue with your gut on this one."

Still, Fried said, while real estate as a sector may be hurt by increased interest rates, individual assets with either solid fundamentals or strong cash-flow that are being held in the longer term should be "reasonable places to be."

But real estate owners with floating interest rates — for instance those who took out short-term loans 18 months to three years ago to purchase transitional buildings with a vision of turning them around — may end up losing their properties if the Federal Reserve raises interest rates, Fried said.

Frederick said he thinks the Federal Reserve will be sensitive to the credit problems plaguing the real estate market and forego raising interest rates.

"I don't think the Fed will be able to raise rates any time soon because of the continuing banking turmoil and most recently the issues with Fannie and Freddie," he said.

Frederick Peters, the president of Warburg Realty Partnership, a residential brokerage firm, said the looming problem for the mortgage market is not simply more conservative underwriting standards, but a shortage of capital altogether. For that reason, the Federal Reserve won't raise interest rates.

"On the one hand, you have an economy that's not zippy, and which to some degree is being stifled by the general lack of credit," he said. "On the other hand, you have this threat of inflation.

"Ordinarily, you'd try to pump energy into the first problem by lowering rates," Peters said. "And ordinarily, you'd try to manage the second problem by raising them. So my guess is, at least for the time being, [Federal Reserve Chairman Ben] Bernanke's not going to do anything."

In the meantime, price inflation caused by more expensive petrol-based construction materials, along with increased global competition, will make new real estate development less feasible, he said.

And as the rate of inflation increases, the value of payments on longer-term debt decays. Yet many New York City residents are protected simply because the large number of co-ops in the city means many people are no more than 75 percent financed. Still, depending on what happens with real wages, homeowners will most likely pay a larger chunk of their income toward common charges.

In the commercial market, there's an air of uncertainty because costs are going up due to inflation for both tenants and landlords, said Abraham Hidary, the president of Hidrock Realty, which is a commercial real estate services firm that also serves as a landlord. Landlords often tend to shift excess costs to tenants.

"Tenants are being squeezed, so they are avoiding signing long-term commitments right now; they're waiting until the last possible second to sign a lease extension or to move," Hidary said. "And if they do have to sign a lease, they're keeping it as short as possible — a five- or seven-year lease versus a 10-year lease.

"And if they do have to move, they'd rather be in a quality building a little bit off location to keep their rent down."

 

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SHOULD ALL CO-OP APPLICATIONS BE THE SAME? By Lauren Elkies, June 2008 It's a process that can be a veritable nightmare: getting a mortgage loan approved, supplying personal information, preparing financial…... Read more >

SHOULD ALL CO-OP APPLICATIONS BE THE SAME?

By Lauren Elkies, June 2008

It's a process that can be a veritable nightmare: getting a mortgage loan approved, supplying personal information, preparing financial documents, acquiring reference letters, undergoing credit checks and finally, making numerous collated copies of the package for review by the property manager and co-op board — and all that's before the fateful interview.

Besides being extensive and intricate, co-op board applications are not uniform, and with roughly 2,500 co-op buildings in Manhattan alone, that can amount to a lot of different variations. Now even condos have become fussier, with applications similar to those required at co-ops.

Some real estate pros think the co-op application process could be simplified with a standardized application. The topic was addressed at a recent meeting of the Real Estate Board of New York sales council, a group of brokers who liaise between REBNY and its member brokers. Alan Pfeifer, a senior vice president at Halstead Property and co-chair of REBNY's sales council, said the group decided at its May meeting to form a subcommittee that will work on the uniform application in September, when the council reconvenes.

Proponents of a standard form say that it could make matters simpler for managing agents, who oversee the building's day-to-day maintenance and finances, and for buyers and their brokers, who would know from the get-go what the board was looking for. Opponents say that managing agents are lame ducks, so their preferences are irrelevant, and since all co-op boards basically ask for the same information, brokers should know how to prepare their buyers. In addition, a uniform application does not work for boards seeking additional information.

Anthony Miller, a vice president at Bellmarc Realty who initially raised the standardization issue at a previous sales council meeting, said, "I got sick and tired of board packages that maybe don't serve the interests of the boards nor the managing agents and can drive both buyers, sellers and brokers absolutely crazy.

"Miller said that he recently helped a couple prepare the financials for an application to a co-op. The board wanted the assets to be divided between the husband and wife.

"This doesn't really help matters because in no case did it show what the combined assets were," he said. "That's an example of a bad format. It makes the asset total look weaker than it actually is."

Miller said that a standard form could be used on a voluntary basis, and buildings would be able to customize it with a "rider or an addendum to the application."

Not everyone thinks uniformity is a good thing.

Arthur Weinstein, vice president of the Council of New York Cooperatives & Condominiums, a not-for-profit organization for housing cooperatives and condominiums in the New York area, and a real estate attorney, thinks standardizing the forms is a "terrible idea." He added, "It's a stupid idea because each building has its own concerns."

One building with porous interior walls that he represents asks on the application about smoking habits because many of the building's residents are asthmatics who cannot have smokers dwelling in the building.

"Other buildings wouldn't care less about smoking," Weinstein said.

So long as it's legal, "the whole point of the matter is to live in a co-op, you should be able to pick who your neighbors are going to be," Weinstein said.

Still, a voluntary standard form could be a decent idea, he acknowledged, and a good jumping-off point.

But as private corporations with total autonomy, many co-op boards would be opposed to the new approach, he said.

Frederick Peters, president of Warburg Realty Partnership, said that while managing agents might be amenable to using a standard board package, the boards would not be because "they're not going to want some outside body telling them what to do. They want the autonomy."

Some buildings are more interested in social issues than others, with questions about a would-be buyer's friends and organization memberships. Other buildings emphasize more rigorous background checks. Still others want to know about pet ownership and subletting.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty, said that there is no way a co-op board is going to agree to use a standard form.

Besides, the application isn't the issue since they all pretty much ask for the same information. Preparing a successful package is more about what's not in the application.

"It's not what you need; it's how it's presented, how it's tweaked," she said.

An application may ask who will be residing in an apartment, for example, but only someone familiar with a specific board would know that the board only approves couples with a maximum of two children. Or, a board may specify the number of references on the application, but only someone knowledgeable about the building would know its board only accepts written references.

Managing agents often run a number of buildings, and a uniform application would make their lives easier.
Donna Weinberg, a management executive at Lawrence Properties, a residential management and brokerage firm, said she thinks a standard form would be "great." The applications at the company's 60 residential buildings, 95 percent of which are co-ops, all have the same financial and reference requirements, but some of the building's house rules may be different, Weinberg said.

Anita Sapirman, founder and president of Saparn Realty, a residential management firm, said that she uses a standard application but alters it to suit each building.

"Usually, you can have one that is fairly standardized and then try to accommodate that particular board, adding some little item that they may want," Sapirman said. She uses a uniform rental application.

"For me, it's a great idea. I love that it would be one standardized form. It just makes it simpler for my staff to go to the board and say, 'Here's the application; let's use this,'" Sapirman said.

Neil Binder, principal of Bellmarc Realty, which has a property management arm in addition to its main business, residential brokerage, said he would not support standardizing co-op applications.

"Different buildings have different criteria that they feel are pertinent to their evaluation search. There is already a number of 'standard forms' including those proposed by Bellmarc," Binder said. "Invariably, boards have objections to these forms and wish to have additional elements added."

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REBNY gala lifts spirits amid gloomy financial news By Jen Benepe - The Real Deal Thousands of who's who in New York real estate descended on the Hilton Hotel on January 17 to commemorate…... Read more >

REBNY gala lifts spirits amid gloomy financial news
By Jen Benepe - The Real Deal

Thousands of who's who in New York real estate descended on the Hilton Hotel on January 17 to commemorate the Real Estate Board of New York's 112th anniversary. An exclusive, invitation-only cocktail party started off a night of industry power brokers mingling with politic bigwigs, including a parade of the 2009 mayoral candidates.

Tickets to the event were $900 each and the crowd was suitably dressed to impress, creating a sea of tuxedos dotted with the occasional elegant gown, like the navy Armani worn by Faith Hope Consolo. But the mood was somber at moments.

The gala took place the same day that Merrill Lynch announced its worst earnings quarter in four years, and days after Citigroup announced a jaw-dropping fourth-quarter loss of $9.83 billion, adding more fuel to worsening fears that the mortgage meltdown has triggered a recession that will hurt real estate sales, even in the so-called "insulated" New York City market.

"Sales will be leveling off," said Frederick Peters, president of Warburg Realty, on line to check his coat. "The first two quarters won't be so good, and prices may be down."

"This is an interesting time to have the event," said a commercial real estate finance executive. "No one is smiling except the Goldman [Sachs] guys—or it's the alcohol," he noted. He declined to be identified because he works for a major firm that” got burned" this year.

A sampling of big real estate players on hand included: Bob Knakal, chairman of Massey Knakal; Sandy Lindenbaum, of Kramer, Levin, Naftalis, and Frankel; Douglas Durst; Jon Mechanic of Fried, Frank, Harris, who received the Kenneth R. Gerrety Humanitarian Award; Francis Greenburger, CEO of Time Equities Inc.; Mark Shaw, executive vice president for strategic planning at Extell Development Co.; Darren Hornig, Dwelling Quest's founder; Pam Liebman, president of the Corcoran Group; Jerry and Rob Speyer of Tishman Speyer; and Bruce Mosler, CEO of Cushman & Wakefield and recipient of the Louis Smadbeck broker recognition award.

A perennial observation about awards ceremonies: Attendees often pay little attention to them, even though they pull out all the stops to be there. In this case, officials on the dais as usual tried in vain to shush the talkers in the crowd, to little avail.

But more difficult to talk over was New York City council member Melinda Katz's rendition of "America the Beautiful," proving that patriotism trumps bad manners.

Still, the country's economic health was clearly on the minds of the guests.

David Baxter, a member of the Cushman & Wakefield team that sold 666 Fifth Avenue in December 2006 for $1.8 billion, the highest amount ever paid for a single building in the U.S, said he is "cautiously optimistic," about next year.

"Pricing is off 5 to 10 percent, depending on the area," he said. Nevertheless, he added: "there is still tremendous demand."

Bob Knakal said he thinks the devalued dollar will continue to help New York real estate in the coming year. "People are talking about deals," he noted.

When asked to comment on the economic outlook for 2008, Steve Ross, chairman of the Related Companies, said, "I have two words for 2008: troubled waters."

Joseph Moinian, who was with his tall son Mitchell Moinian (his second eldest, and a sophomore at New York University) said, "It's going to be a great year for the Moinian Group."

Is he poised to buy while everyone else loses their buildings? "For the right situation, yes," Moinian said. "But while all the other diehards are busy getting their act together, we're delivering amazing product to the market, like the W Hotel, and Atelier," he said.

"It's still early in the game to predict, and there has been no slowdown in leasing activity," said William Rudin, president of Rudin Management. "Things went up too fast and too quickly," he said of the last few years. The current market is more realistic, with more appropriate lending standards. 'We don't overleverage as a company," he noted.

Will he capitalize on some of the fire sales coming up in 2008? Rudin is less likely to go after a building with a "5 to 6 percent cap [rate]," he said. By contrast, his St. Vincent's development in the West Village is a "long-term play that has complexity," he noted.

"From a broker's perspective, [the declining economy means] they're going to need us now more than ever," said Lisa Maysonet, senior vice president at Prudential Douglas Elliman. "Before, the properties would almost sell themselves, but now you need real deal makers."

Tamir Shemesh, a managing director at Elliman, said he is still bullish on 2008.
He noted that despite the talk, overall bonuses on Wall Street surpassed total 2006 bonuses at the biggest investment banks, and foreign money continues to drive business. "We lost a bidding war with a buyer from Spain" for a $2.3 million property, he noted.

Edward Andron of Leebar Management, a building management company, said the coming year was going to include "a budget crunch, and a tightening of our belts." The net effect: "There will be a lot more for foreigners to snap up, but it will also be more competitive."

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FINDING BRIGHT SIDE OF A DOWNTURN February 2008 THE REAL DEAL Falling Wall Street bonuses and fears of a nationwide recession may affect demand for Manhattan homes, but local market watchdogs…... Read more >

FINDING BRIGHT SIDE OF A DOWNTURN
February 2008 THE REAL DEAL

Falling Wall Street bonuses and fears of a nationwide recession may affect demand for Manhattan homes, but local market watchdogs maintain, albeit cautiously, that Manhattan real estate is still a solid investment.

"Quite obviously, if the country goes into a recession, New York City real estate would logically be affected," said Elizabeth Stribling, president of Stribling & Associates. "That said, the perception that real estate in New York City is a better investment than placing money in the stock market continues to be a stated reason for buying for many of our customers."

Naturally, lower bonuses and record losses among some of the largest companies will temper activity, particularly among those dependent on their bonus to purchase an apartment. But bonuses still ranked the second highest since at least 1985, at $33.2 billion or an average of $180,420 a person, according to data from the state comptroller.

They are "still very hefty numbers," said Diane Levine, brokerage manager of the downtown office of Sotheby's International Realty. The "market in New York City is still active."

Frederick Peters, president of Warburg Realty Partnership, was more circumspect.

"We have so far not seen much change one way or another in the marketplace," Peters said. "Clearly, there has been a large injection of capital into the portfolios of many in the financial industry. There is of course some offset of apprehension about the fear of recession and the continued weakness in the national housing market. For the moment, these two forces seem to be holding one another at bay."

If the country sank into a recession, it would take time for the effects to take hold of Manhattan's residential real estate market.

"How much time would really depend on how deep the recession goes," said Gregory Heym, executive vice president and chief economist at Terra Holdings, parent company of Brown Harris Stevens and Halstead. "You have to remember that homes are not like stocks; their prices can't move as fast. The concern over the next few months will be the effect of a possible recession on buyer confidence."

And looking further out, there's unease over what bonus payouts will be next year.

On the surface, sales in December ended with a bang, but the data, the most recent available at press time, were skewed by a spike in closings in new developments fetching eyebrow-raising prices.

The number of co-op, condo and cond-op unit sales in Manhattan increased to 779 in December from 720 in November, according to research by Heym of Terra Holdings. The median sales price increased in December to $928,378 from $836,250 in November.

"The rise in price, and to a lesser extent, sales, can be attributed to 15 CPW, which had more closings in December than November," Heym said. "Also, there were closings at the new development 823 Park Avenue, four of which were for over $10 million. Forty-five Park Avenue also had a lot more closings in December. So, basically I'd attribute both increases to new developments."

December saw a drop in inventory, consistent with years past. Inventory fell to 5,415 from November's 5,677, according to data from Jonathan Miller, executive vice president and director of research for Radar Logic. Sellers typically take their homes off the market in order to re-list them in the stronger spring market.

While brokers said that the sales market is chugging along with buyers who can withstand greater loan scrutiny, the rental market seems to be taking a big hit, though December data from Citi Habitats show that rents averaged $5.25 more in December from November to $3,219.

"Even with less rental buildings being constructed, the lack of demand is almost unprecedented in my 35 years in the business," said Marc Lewis, COO of Century 21 NY Metro.

"Landlords, across the board, are reporting this, and only the ones who sharpen their pencils and reduce rents, pay fees or offer other incentives are rapidly renting their units," he said.

He forewarned, "The market is returning to where it was during the recession of 2001."

Effects of the credit crisis could be more apparent in Manhattan this quarter than the third and fourth quarters of last year, since closings in the first three months of the year would likely reflect deals from the latter part of last year, following the eruption of the credit market.

In terms of current activity level, this month will be telling since generally there is a burst of contract activity at the end of February, Miller said.

"That's something to look for as an early warning sign of what's going on," he added.

Residential brokers sound off

With bonuses dropping, companies suffering record losses and fears of a recession looming, it's hard to ascertain what is going on in the real estate market. To get a handle on market conditions, The Real Deal recruited real estate pros last month to give their opinions on which way the market is headed.

Rick Pretsfelder partner, Leslie J. Garfield & Co.
While bonuses overall are down 4.7 percent, the composition of the bonuses (i.e., more stock than cash in some cases) is also an important factor. We don't expect a huge impact in the immediate term, but if there is a sense that bonuses will be down again in 2008, then the real estate market may take a hit.

Mike Simon president, Century 21 NY Metro
The rental market is getting off to a slow start with a tremendous amount of inventory, some of which has been sitting around not being rented for a few months. Some owners are having trouble adjusting, and this is clogging up the market as others are reducing rents, paying fees or giving away free time as an inducement for clients to take their units.

Gil Neary president, DG Neary Realty
There will be more activity, but people, as opposed to last year, will be a little more cautious about how they spend their money – looking for better value, perhaps.

Frederick Peters president, Warburg Realty Partnership
There is no sign and no anticipation of an increase in prices, nor does there seem to be a decline in absorption or a decrease in prices.

Michele Kleier president and chairman, Gumley Haft Kleier
Everybody wants a piece of New York. I don't think people who get smaller bonuses are going to move out to the suburbs. … People with lower bonuses may be going from buying a $9 [million] to buying a $7 [million] apartment.

Toni Haber executive vice president, Prudential Douglas Elliman
Probably if you bought a year ago and you're selling now, if you include closing costs from before, you may not come out in the positive. Appreciation is not as great, unless it's 15 Central Park West.

Lisa Lippman senior vice president, Brown Harris Stevens
It is still a seller's market if someone bought more than two years ago. It's easier for buyers to buy now than it had been, but still there are more buyers than good inventory.

Sha Dinour president, Triumph Property Group
Anyone transitioning from a rental to a purchase can find good deals in comparison to a rental scenario. Anyone in need of selling a property to upgrade or downgrade for another property is experiencing a much more difficult time.

Eddie Shapiro CEO, Nest Seekers International
Some buyers are actually under the illusion that if they wait a little [while], prices will come down; not going to happen. … New fed programs, including tax rebates and massive interest rate reductions should fuel confidence again.

Klara Madlin president, Klara Madlin Real Estate
In the last five years, people have grown to expect sales with bidding wars and double-digit appreciation. This year will return to more normal housing conditions, single-digit appreciation and a six-month turnaround on sales.

Robin Schneiderman vice president, Citi Habitats
New buildings or condo conversions with high common charges will be the first to slow down. People are concerned about overall costs and are looking at these charges more carefully.

Compiled by Lauren Elkies

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December 2007 After slow fall, inventory starts to grow Will lower bonuses make the traditionally slow fourth quarter even slower? By Lauren Elkies It's a simple real estate equation: Sales go down, inventory…... Read more >

December 2007

After slow fall, inventory starts to grow

Will lower bonuses make the traditionally slow fourth quarter even slower?
By Lauren Elkies

It's a simple real estate equation: Sales go down, inventory piles up and prices start dropping.

That's what's been going on in Manhattan's residential real estate market, and more of the same is on the way as deals made in the wake of the credit crisis come to a close.

"August and September were bad. If I had a weak August and September, collections will be weak in December and January," said Neil Binder, principal and co-founder of Bellmarc Realty. "Most firms will have to go into reserves to keep the show on the road" those two months.

"The month of October was fine, nothing special, nothing terrible. It was just OK. This particular month looks similar," Binder said in late November.

Add to that the post-Thanksgiving market slowdown, the traditionally weak fourth quarter and uncertainty about bonus payouts. Some news reports have said bonuses are expected to be flat to down 15 percent compared to last year. Bonus payouts are predicted to vary by different sectors within banks more than most years, because some divisions like stock trading and investment banking did well, while areas the with most exposure to the mortgage fallout did poorly.

"If there is a significant bonus payout, you see a pickup in activity in the last few weeks of December. I would suggest you won't see as much of that this December, because the expectation is that bonuses will be lower than last year," said appraiser Jonathan Miller, executive vice president and director of research for Radar Logic.

Although New York's market is faring better than markets in the rest of the country, October data, the most recent available at press time, showed a less than rosy picture.

The number of co-op, condo and cond-op unit sales in Manhattan dropped 11.5 percent to 1,048 from 1,184 between September and October, according to research by Gregory Heym, chief economist at Terra Holdings, parent company of Brown Harris Stevens and Halstead. There was a slightly more dramatic drop -- 13.7 percent -- year over year, when there were 1,215 sales.

Manhattan condo, co-op and townhouse inventory was up in October from September. The number of available homes rose 4.2 percent to 5,721 in October from 5,490 a month earlier, Miller said. Barak Dunayer, president and founder of Barak Realty, shrugged off the increase, saying, "What's the big news? A tiny 4 percent increase in inventory?"

Each building class saw an uptick. There were 2,522 co-ops, 2,900 condos and 299 townhouses on the market in October, up from 2,472 co-ops, 2,732 condos and 286 townhouses a month earlier.

Though telling, the numbers are not completely atypical.

"I would suggest it's not unusual to see inventory rise somewhat in October, but this would suggest a weaker level of demand," Miller said. Last year, however, listings did not actually rise between September and October. Indeed, they shrunk 9.5 percent to 7,350 from 8,118.

In addition to a rise in inventory, the median home price fell 3 percent in the borough between September and October 2007 to $800,000 from $825,000, Heym of Terra Holdings found.

On the rental side, market assessments were varied.

"The prices of the rentals are down. For $3,500 rentals, we can't get $3,000," Binder said. "I think that there are just a lot of people that are uncertain that are not moving."

October's vacancy increased to 1.13 percent from 1 percent in September, 0.85 percent in August and 0.81 percent in July, Citi Habitats numbers show (see Rental market shows some signs of weakness and In a rental town, vacancy numbers stir debate).

Anecdotally, some real estate pros said the sales business was going strong last month, although buyers still need some handholding in following the credit crisis.

"I'm not the cock-eyed optimist but I'm basing it on what I see now," said Paul Purcell, co-founder of real estate consulting firm Braddock + Purcell.

Leonard Steinberg, an executive vice president at Prudential Douglas Elliman, said that he expects business to "be slow through December" and "pick up in January, not at the same level of previous years though." He added that "buyers and sellers are cautious right now. This is a bit of a 'wait and see' market. That always changes sooner of later."

Sounding off from the trenches
To keep our finger on the pulse of the Manhattan residential real estate market, The Real Deal sent out a survey last month to key players in the industry, asking them to weigh in on the current climate. Some excerpts:

Shai Shustik CEO and founder, Manhattan Residential
There has definitely been a slowdown for the average cookie-cutter unit. People are looking for deals and taking longer to execute. Units that are priced as if we were in 2005 are not moving and just flooding the market with unsold statistics.

Frederick Peters president, Warburg Realty Partnership
There are few bidding wars, and when they do occur it is only on very well-priced properties. Even then, things are not going much over the asking price and there may be two or three bidders, not six or eight. Almost nothing is sold anymore in a week or two.

Kathy Braddock co-founder, Braddock + Purcell, and Charles Rutenberg Realty
The most positive trend in the market right now is that the mortgage problem and the media have not deterred our market. The most negative is that it is still hard for first-time buyers to acquire the liquid assets that they need.

Diane Levine brokerage manager of the Downtown office, Sotheby's International Realty
Certain sellers are still attempting to push beyond the value of their property. Correctly priced properties are moving. And, those attending open houses tend to be "real" buyers.

Gordon Golub senior managing director, Citi Habitats
Studios as well as larger units (1,600- to 2,200-square-foot two-bedrooms and three-bedrooms) are being absorbed very rapidly, while one-bedrooms are taking longer to go to contract.

Barak Dunayer president and founder, Barak Realty
Overall, the attendance at open houses has been steady. The only noticeable difference is that buyers stay away from undesirable properties. I still remember the times that people bought any hole in the wall.

David Schlamm president, City Connections Realty
The rental market actually slowed down a lot earlier than in previous years. This year we felt it slow down in the beginning of October, where traditionally it really slows down closer to Thanksgiving.

Brian Huang sales manager, City Connections Realty
The overall market has strength in prime locations, but we are seeing some negotiability in "up-and-coming" areas. We've also had more interest in larger apartments than last year.

Jonathan Miller director of research, Radar Logic
There is modest appreciation based on median sale price, a relatively tight listing discount and the normal number of days on market so buyers and sellers seem to be in sync.

Because of all the turmoil on Wall Street and the discussion of lower bonuses, we're expecting to see an expansion of marketing times and some cooling off of the elevated activity. But, we're still seeing a lot of activity.

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November 2007 The borough in a bubble Residential market holds steady, but first-time buyers feel pinch By Lauren Elkies The residential real estate market is doing well, according to real estate professionals.…... Read more >

November 2007
The borough in a bubble

Residential market holds steady, but first-time buyers feel pinch
By Lauren Elkies

The residential real estate market is doing well, according to real estate professionals.

As of last month, serious buyers were being more cautious but appeared to have shrugged off concerns over the tightening lending standards that emerged late this summer.

"What's happening in the rest of the country is not happening in New York," said Brown Harris Stevens President Hall Willkie.

The market held relatively steady in the third quarter, according to the most recent Prudential Douglas Elliman report available at press time. The average sales price increased 2.7 percent to $1.37 million compared to the prior quarter, and inventory dropped 0.6 percent to 5,204 apartments on the market.

The number of sales did drop somewhat, however, down
11.2 percent to 3,499 completed deals during the third quarter. The number of days on the market also increased 4.4 percent to 123 days.

Still, the local market is faring well compared to the national market. At the beginning of September, the U.S. median new housing price was, for example, down 7.5 percent from the year before, the biggest drop since 1970, and the number of purchases was at its lowest point in seven years, according to the Commerce Department. The Manhattan median price was up 2.3 percent in the same year-over-year period.

In Manhattan, buyers are asking probing questions about the market, which is actually a "healthy" thing, Willkie said.

But the scrutiny and questioning are not slowing down purchases, he added.

Stan Ponte, president of Coldwell Banker Hunt Kennedy's Previews division, which focuses on luxury marketing, had a similar perspective.

"It's forced a kind of conservatism, which isn't bad," said Ponte. "There can be some short-term pain, but it's gone from kind of a speculative buyer to a more thoughtful buyer market."

But some brokers said that effects of the mortgage crisis are evident among first-time buyers.

"We're seeing the weakness in the one-bedroom market east of Third Avenue," said Frederick Peters, president of Warburg Realty. "I think those buyers tend to be first-time buyers, and they tend to be more impacted by what's going on with mortgages."

Tighter lending standards are also hindering purchases by buyers who like to fly by the seat of their pants.

"The 10 percent-down, high-income, low-asset buyer is pretty much an extinct animal in New York," Ponte said. "Banks are not approving those loans, and the buyers are reassessing what they can look at."

But in many cases, serious buyers are just becoming more serious.

Ponte said, "We have fewer showings, but those showings are more qualified and are resulting in a higher ratio of second showings."

Requests for appraisals are not down, said appraiser Jonathan Miller, executive vice president and director of research at Radar Logic.

"As near as I can tell, contract activity as opposed to this time last year is a little bit higher," Miller said last month. "But it's less than what we saw over the summer, so I guess what I'd say is, we're not seeing a significant impact from the Wall Street credit situation yet."

Inventory increased in September, when there were 5,490 units (co-ops, condos and townhouses) on the market; in August, there were 4,897 homes on the market, according to Miller's research. The overall increase was 12.7 percent.

The August-to-September uptick is not unusual as sellers gear up for the fall season.

"Four out of the last five years, inventory increased from August to September," Miller said.

The number of homes on the market is still down an impressive 32 percent from last year, however.

Real estate brokers have speculated that the credit crunch has benefited the city's rental market because more and more would-be buyers are taking rentals upon realizing they can no longer afford to buy.

But rents averaged less, and the vacancy rate edged slightly higher in September than in the two months prior. The average rent for studios through three-bedrooms was $3,260 in September, down from $3,295 in August and $3,392 in July, according to data from Citi Habitats. September's vacancy rate was 1 percent versus 0.85 in August and 0.81 in July.

Despite recent largely positive reports and feedback from brokers, the city's residential market might not be out of the woods yet.

It could be in the fourth quarter when Manhattan's residential real estate market sees the tangible effects of the credit crisis.

"We'll see somewhat lower transaction activity in the fourth quarter" due to "credit
tightening for purchasers and bonus concerns," Miller said.

Even Mayor Michael Bloomberg expressed pessimism about the market. Bloomberg said real estate prices would drop, but not "as much as any of the other places in the country because here, people don't build or buy on spec," according to the New York Post. "They build and buy and rent to live in them. And so, there's much more stability here."

 

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October 2007 REBNY portal: City's biggest one-stop shop opens on Web Real Estate Board of New York gets most firms on board; Corcoran and Elliman still won't enter portal By Lauren Elkies Manhattan homebuyers…... Read more >

October 2007
REBNY portal: City's biggest one-stop shop opens on Web

Real Estate Board of New York gets most firms on board; Corcoran and Elliman still won't enter portal
By Lauren Elkies

Manhattan homebuyers now have free access to thousands of exclusive real estate listings on a single Web site, launched by the Real Estate Board of New York after a long fight with some of its members.

The trade group unveiled ResidentialNYC.com, which has listings from 60 of its member firms, last month. It now lists about 3,000 properties.

The advantage, says REBNY president Steven Spinola, is that the site allows house hunters to view a concentration of listings, bypassing classified ads and other Web listings, some of which may not be legitimate.

"They are exclusive listings. They are real listings," he said.

ResidentialNYC.com is a Manhattan-centric site, and its roster now posts roughly 40 percent of all exclusive listings in Manhattan, Spinola said. The site has a sizable number of listings in Brooklyn and a few in Queens and the Bronx.

Brown Harris Stevens, Halstead Property, Sotheby's International Realty, Stribling & Associates and Warburg Realty Partnership are among the major firms now using the site, which saw some controversy when smaller firms balked at the initial price tag.

A number of firms declined to participate, including residential heavyweights the Corcoran Group and Prudential Douglas Elliman. The two firms accounted for 60 percent of Manhattan listings among the 10 biggest firms last year, according to a survey by The Real Deal.¬

Corcoran and Elliman released similar statements about their decisions, saying, essentially, thanks, but no thanks, at least for now.

The decision to stand on the sidelines drew a less-than-sympathetic response from Michele Kleier, president and chairman of Gumley Haft Kleier, whose firm is offering listings to the portal site.

"It's their loss," she said. Kleier said the decision means more work for consumers who will have to go to each company's Web site to view their listings.

Citi Habitats, Bellmarc Realty and Bond New York also declined to join the portal, which is powered by real estate search engine Trulia.

Citi Habitats declined to comment.

"We really felt that it wasn't going to make an impact in the marketplace," said Neil Binder, principal and co-founder of Bellmarc Realty. He criticized REBNY for not aggressively marketing the site prior to its launch. Like Corcoran and Elliman, Binder said he reserves the right to join at a later date.

Spinola said REBNY will be launching a $1 million marketing campaign over the next year. Funding will come from firm initiation fees and annual dues. The fee for participation ranges from $2,500 to $12,500, depending on company size, plus an annual $100 per-agent fee, which Spinola said will go toward advertisements and site operation. REBNY does not intend to make a profit from the site, Spinola said.

Bruno Ricciotti, co-founder of Bond New York, said, "There's a risk of redundancy at this point." A number of classified outlets already blanket the market, most notably the New York Times and Craigslist. "I have a hunch that it will turn out great for everybody, but I want to see how it works first."

While the portal is a product of the city's biggest real estate trade organization, start-ups exist that perform some of the same functions. StreetEasy.com, for example, cobbles together agents' listings through direct feeds from brokerages as well as individual firm Web sites. Like ResidentialNYC.com, StreetEasy.com lists only exclusives and does not accept for-sale-by-owner listings.

ResidentialNYC.com allows prospective buyers to search by various criteria, from property type to attended or unattended lobby. With two clicks, the consumer is brought directly to the individual firm's online posting.

Property shoppers can sign up to receive e-mail alerts of new and sold listings, among other resources.

"What benefits the consumer benefits us," said Frederick Peters of Warburg and REBNY residential committee co-chair.

Participating companies cannot pick and choose which listings get posted; they all are, REBNY's Spinola said. To keep everyone on the same playing field, given all other search criteria being equal, the order in which listings pop up has been randomized.

The majority of listings are for-sale properties rather than rentals, which are often done on a non-exclusive basis. The dearth of exclusive rental deals on the site is exacerbated by the fact that Citi Habitats, the city's biggest rental company, declined to participate.

Spinola said some buyer's brokers have contested the site because it excludes brokers like them who do not maintain their own listings.

When ResidentialNYC.com officially debuted on Sept. 28, Manhattan had 2,231 homes for sale; 564 for rent; and 2,732 properties recently sold.

In Brooklyn, there were 474 homes for sale; 35 rentals; and 5,376 recently sold. The Bronx had 24 homes for sale; seven for rent; and 1,465 sold. In Queens, 21 were for sale; one was for rent; and 7,989 had recently been sold.

Spinola mentioned that viewers of ResidentialNYC.com will not be bombarded with advertisements. Seventy to 80 percent of the home page is dedicated to real estate information, and the remainder will be available for advertising ancillary services, not listings or broker ads. And there will be no pop-up ads.

"It's clean, concise, accurate," said Diane Ramirez of Halstead Property and a REBNY residential committee co-chair. REBNY is creating a new board to provide oversight.

Meanwhile, the same week REBNY's portal was unveiled, the New York Times introduced a mobile component to its real estate classifieds. Some observers have said that the Times stands to lose out on advertising revenue if brokers start to rely on ResidentialNYC.com rather than placing property ads in the Times.

The Times' feature will allow people to view properties on their mobile devices and will send listings from the print version of the newspaper or Web to their mobile device.

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October 2007 Credit crunch: Much ado about (almost) nothing Third-quarter numbers show Manhattan residential market still healthy By Lauren Elkies While residential buyers and sellers question the fate…... Read more >

October 2007
Credit crunch: Much ado about (almost) nothing
Third-quarter numbers show Manhattan residential market still healthy
By Lauren Elkies

While residential buyers and sellers question the fate of the real estate market, some brokers report that in Manhattan it's much ado about (almost) nothing, at least in the short run.

"The credit crunch is expected to temper sales activity as tighter underwriting standards knock some people out of the market," said Jonathan Miller, executive vice president and director of research for Radar Logic, which reached a deal last month to purchase Miller Samuel, the residential real estate appraisal firm co-founded by Miller in 1986. "However, to date, there is no real evidence that sales activity is down relative to typical August/September market periods."

Sellers are still selling and buyers are still buying.

In the third quarter, the number of sales decreased 11.2 percent to 3,499 from the second quarter, but rose 65.6 percent from the third quarter of 2006, according to data prepared by Miller for Prudential Douglas Elliman. The average sales price saw a 2.7 percent uptick to $1.37 million from the second quarter and a 6.3 percent increase from the third quarter of 2006.

Fall came on the heels of a solid August when demand continued to chip away at inventory.

Co-op and condo units and townhouses on the market were "all down from last year, but they're coming from a high place," Miller said. The number of unsold Manhattan co-op units dropped by 41.9 percent to 2,077 in August; condos decreased 31.2 percent to 2,569; and townhouses dropped 46.8 percent to 251, Miller found. Together, they sunk year-over-year to 4,897 units from 7,784 units, a 37.1 percent decline.

There was little change in co-op and condo inventory between the second and third quarters, the Elliman statistics indicate, but together they dropped 31.7 percent from a year earlier.

Barak Dunayer, president and founder of Barak Realty, said that business has been on track.

"In New York we really don't see that much of a difference," Dunayer said.

But not all market watchdogs have such an optimistic view.

"It's very simple: As of the beginning of September, the market has totally stopped creating the level of activity as it had before ... and it's not because of the Jewish holidays," said Neil Binder, principal and co-founder of Bellmarc Realty.

Open house attendance has fallen off, some brokers say.

At Warburg Realty Partnership, attendance gradually decreased over the summer months from a high of 60 in the spring to between eight and 20 last month, the company's data indicates.

Also in September, Elliman saw a sharp drop in attendance at open houses. An average of six to 10 people showed up at open houses last month as opposed to 15 to 20 a year earlier, said Steven James, president of the Manhattan brokerage division at Elliman. The percentage of offers, however, was about 20 percent higher last month, James said. In some cases there were even bidding wars. On the flip side, he noted that a few buyers got cold feet mid-deal, which he attributed to the mortgage crisis.

Binder said that at the start of September, closings were on track and open houses were "getting decent activity."

But he added that open house numbers are not the same as transaction numbers. "No one's putting money down on the table," he said.

Some price points are seeing more activity than others.

"High-priced stuff is starting to have problems," Binder said, referring to properties starting at $3 million. Middle-market properties, on the other hand, are surviving because of a much wider buyer pool, he said.

Brokers said they were not seeing asking price reductions last month or homeowners aggressively unloading their apartments into the marketplace in response to the turbulent economy.

Since Wall Street bonuses drive big real estate purchases, should payouts be substantially less this year than last, high-end property sales could suffer.

But concerns about bonuses this year might be overstated since a single-digit cut from last year's record figures would still amount to some of the highest allocated in history, Miller of Radar Logic said. Greater harm could come from public perception of a bad year.

Sales in new developments could be harder hit than resales because of the premium they command and the time the deals take to close. A qualified buyer today could become an unqualified buyer by the time the closing rolls around.

Developers seem to be preparing for the ripple effect of the mortgage crisis as they employ public relations tactics like wining and dining brokers.

Manhattan's real estate market is not expected to take the same beating as markets elsewhere in the country because stringent financial requirements make Manhattan buyers less dependent on mortgages.

Still, a mortgage crisis makes buying real estate a game for cash-rich buyers.

"We're reverting to a higher down payment scenario than we have seen in five years, and I don't see that changing in the immediate future," Miller said.

The Federal Reserve attempted to ameliorate the situation by cutting interest rates by half a point to 4.75 percent last month, but marginal buyers still are likely to be pushed out of the market.

"Across the board, I suspect you won't see the record pace of activity that we saw this year, but I suspect it will be elevated," Miller said.

Brokers speculated that this month sellers would become more realistic about pricing, in turn spurring more sales.

The market "won't tolerate wildly inflated pricing," said Frederick Peters, president of Warburg Realty. "People will want the sense of value because of the credit crunch. I don't think prices will go down. There will just have to be a clear price-to-value ratio more than there was six months ago."

While potential buyers cannot anticipate dramatic markdowns, they may be able to take advantage of market uncertainty by seeking concessions from sellers, such as covering buyers' closing costs.

Not everyone considers the current state of affairs to be a bad thing.

"It's ultimately good for us because it means that once again money is mainly being loaned to people that ought to have money loaned to them," Peters said. "I think that's a stabilizing force in the marketplace."

 

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The Manhattan Real Estate Slump That Wasn’t By TERI KARUSH ROGERS Published: August 19, 2007 IT wasn’t supposed to happen this way.  Just a year ago, as real estate brokers fretted through an…... Read more >

The Manhattan Real Estate Slump That Wasn’t

By TERI KARUSH ROGERS
Published: August 19, 2007

IT wasn’t supposed to happen this way.  Just a year ago, as real estate brokers fretted through an ominously quiet third quarter, many Manhattanites waited for the housing market to reverse its madcap ascent and fall into line with the rest of the country.

But something happened on the way to the Great Manhattan Housing Slump. After what brokers optimistically termed a “pause” in the second half of 2006, buyers swarmed into the market. The torrent was so intense that by the end of this past June, it was clear that an astonishing gulf had opened up between Manhattan and nearly everywhere else.

On the national level, sales of existing homes slowed by 17 percent in the second quarter of 2007, compared with the second quarter of 2006, while inventory swelled by 16 percent, according to figures provided by the National Association of Realtors. New homes fared even worse: they fell by almost 19 percent, according to Commerce Department figures.

In Manhattan, by comparison, sales of new and existing apartments more than doubled. In a trend that could shift quickly in light of the recent problems in the credit and stock markets, inventory shed a third of its bulk. It dropped to 5,237 units, despite the influx of several thousand new condos, according to Miller Samuel Inc., the Manhattan appraisal company

Prices have been starkly different as well. By last month, the national picture was so dire that Angelo R. Mozilo, the chairman and chief executive of Countrywide Financial, the country’s largest mortgage lender, said things had not been so bleak since the Depression.

Cut to Manhattan. After a boom with annual price increases of 20 percent or more ended in mid-2005, prices have continued to rise over all, but not as sharply. In the second quarter of 2007, Miller Samuel said the average sale price of a Manhattan studio climbed 16.5 percent compared with the second quarter of 2005. The average for a one-bedroom climbed by 18.4 percent and a two-bedroom by 5.9 percent.

Apartments with three bedrooms, which make up about 6 percent of the market but appeal to an ever-more-moneyed class of buyers, rose by 17.9 percent in the same period.

Major brokerages, including Halstead Property, Bellmarc Realty, Brown Harris Stevens, Prudential Douglas Elliman and the Corcoran Group, say they are recording sales and profits that rival boom-time results. In fact, Douglas Elliman and Corcoran predict that this will be their most lucrative year by far.
Whether this momentum can be sustained remains to be seen, particularly in light of the recent gyrations in the debt market, which have led to a reduction in the availability of large mortgages and to an increase in their rates. A deepening credit-market crisis and national housing slump could squeeze the economy, the stock market and bonus pools.

“For the first time in over a year, there is some negative talk — about the credit markets and whether or not this will permeate the New York City real estate market,” said Pamela Liebman, president of Corcoran. “As of right now, it hasn’t. There has been no slowdown.” She said the biggest concern among her agents is finding enough inventory to satisfy demand.

But a buying binge alone does not a housing boom make. “I’m still not characterizing the market right now as a housing boom except in the upper echelon,” said Jonathan Miller, president of Miller Samuel.
So how has Manhattan (and, to a lesser extent, sought-after pockets of Brooklyn) managed to avoid a slump?

“Obviously, the market was helped first by the rumor and the reality of bonus money,” said Frederick W. Peters, president of Warburg Realty. He was referring to the fourth straight year of substantial bonus increases, particularly on Wall Street, that along with a rising stock market helped push buyers off the sidelines at the end of 2006 and caused some agents to cancel their winter vacations.

“But I also think we’re just in one of those demographic upswing periods,” Mr. Peters added. “More people are moving into the city, fewer people are moving out, and the rental market got much tighter over the course of 2006, which once again made buying a more attractive option. You put all those things together, and the market sort of entered the narrow part of the hourglass.”

There were other factors to consider, too. Tourism is at record highs, and the local economy is doing well in general. And it’s nearly as hard to find premium office space or a spot in private school as it is to find a family-size apartment.

But that’s exactly what more and more families have set their sights on.

It has been years since Samantha Kleier Forbes, a broker at Gumley Haft Kleier, lost a client to the suburbs. “My last casualty was in ’04,” she said. As two-career couples work longer hours and as the city grows safer and more family-friendly, there is a big demand for large apartments like Classic 6’s — a two-bedroom apartment with living room, dining room, kitchen and maid’s room (where children can be found bunking like sailors).

Families who want to stay, brokers say, are only one segment of the more stratified and well-heeled masses clamoring for a piece of Manhattan. While the dollar’s seemingly endless slide may have crimped the foreign vacation plans of many Americans, the purchasing power of Europeans has strengthened. They are increasingly matched, if not outmatched, by buyers from countries like China and India. And foreign buyers find Manhattan real estate very appealing when they compare prices in other large international cities like London.

“I’ve had 20 percent more business from international clients in the past couple of years,” said Sallie Stern, a senior vice president and managing director of Brown Harris Stevens. “They probably account for 30 to 35 percent. It’s a world market now.”

Shaun Osher, the chief executive of CORE Group Marketing, which is handling 11 condominium projects in Manhattan, said the number of foreign apartment-seekers had doubled since the end of 2005. Foreign buyers now constitute 5 to 10 percent of the sales in the buildings marketed by his firms.

“When you look at hotel rates and what it costs to come into Manhattan, it makes sense now to buy a pied-à-terre,” he said.

Besides foreign buyers, brokers say, more parents are snapping up apartments for their children, and some retirees are choosing Manhattan over the likes of Boca Raton.

“The baby boomer generation isn’t ready to give up and live in a swamp,” said Darren Sukenik, an executive vice president of Prudential Douglas Elliman. In fact, they are living the lives their nearby children would like to lead if only they weren’t working so hard, he said.

Meanwhile, renters have emerged as a force in the market, particularly for entry-level apartments. “Rents are rising again, and that pushes people back into the condo and co-op market if they have more than a one- or two-year time frame for living in Manhattan,” said Stephen G. Kliegerman, the executive director of marketing for new developments at Halstead Property.

Fanning the flames have been job and population growth, historically low interest rates and a trove of personal wealth minted by hedge funds, private equity firms and, to a lesser extent, the investment banks that serve them. Add to that the psychological comfort of knowing that Manhattan flourished after the Sept. 11 terrorist attacks, and further, that it appears to have shrugged off a national housing slump.
Even the condo glut that so many real estate executives feared has turned out instead to be a boon of sorts. “If we didn’t have new development coming on at the pace we did, we’d have a chronic shortage across all sectors, and we’d see 20 percent price growth,” said Mr. Miller, the appraiser.

Mr. Peters of Warburg Realty agreed. “You can’t even imagine how awful it would be,” he said. On the other hand, he added, things may feel pretty awful already for buyers who want a prewar apartment, since inventory in this sector continues to evaporate. In the last two years, co-ops, about half of which were built before World War II, have slipped from 63 percent of the market to 47 percent as new condos have been built, Miller Samuel said.

“There are so many new units coming on the market and being sold, but the real heart and soul of the co-op market is really depleted,” said Barbara Fox, the president of the Fox Residential Group, a Manhattan brokerage.

Consequently, brokers say, many prewar apartments in good condition, along with family-size apartments of any vintage, are being snatched up in bidding wars whose aggressiveness outrivals those of two years ago.

“The new rule is that there are no rules, and when you’re lying bleeding on your way to the emergency room, you’re still shouting, ‘Higher offer, higher offer!’ ” said Julie Friedman, a senior associate broker at Bellmarc.

She was among the many brokers who said that “best and final” offers have largely become neither, with buyers and sellers routinely negotiating after another bid has been accepted. “You remind sellers that there is a moral component, but my duty is to get the highest amount, and ‘moral’ and ‘the highest amount’ don’t necessarily overlap,” she said.

Some brokers complained that the demise of the sealed bid, which has been replaced over the last two or three years by e-mail offers to the seller’s agent, has further undermined fair play. “Buyers don’t trust them as much,” said Michele Kleier, president of Gumley Haft Kleier.

Whether Manhattan continues to be the land the slump forgot or is merely sunning itself before a hurricane is something of a guess. A strengthening dollar, a severe terrorist attack or a national economy hobbled by housing market woes could inflict blows of varying strengths.

More immediate is the worry about the availability of credit. “While I don’t think we were propped up to the extent other markets were by subprime and adjustable-rate mortgages, it does make credit hard to get for everyone to some degree,” said Gregory J. Heym, an economist for Brown Harris Stevens and Halstead Property. “Most people are probably expecting mortgages to be tougher to get.”

Mortgage lenders everywhere are going back to pre-boom lending standards, so obtaining a mortgage is harder for buyers with pockmarked credit or sketchy employment. But there is no panic over rising mortgage rates on jumbo loans (those exceeding $417,000), at least not now.

Large lenders like Chase and HSBC that typically sell mortgages after they make them can no longer do so because the credit crisis has dried up the secondary market, said Jeffrey Appel, a senior vice president and the director of new development financing at the Preferred Empire Mortgage Company in New York. Many large institutional lenders have raised their rates as a hedge against uncertainty, but rates at smaller regional savings banks, the so-called portfolio lenders who hang on to their loans, have hardly budged.

Last Monday, Melissa L. Cohn, the president of the Manhattan Mortgage Company, the largest residential mortgage broker in the New York, New Jersey and Connecticut, said her best rate on a 30-year $1 million mortgage was 6 7/8 percent, offered by a portfolio lender. And her worst rate, offered by a lender that sells mortgages on the secondary market, was 8 3/8 percent.

“Despite this incredible hysteria,” Ms. Cohn said, “there’s plenty of money for qualified borrowers.”

The credit-market meltdown could yet cloud Manhattan’s real estate prospects because of stock-market jitters. And an end to the leveraged buyout boom, if that happens, could trigger layoffs on Wall Street and eat away at bonuses.

But the fiscal year is far enough along that financial services workers can expect gains of 10 to 15 percent when bonus season rolls around later this year, said Alan Johnson, the managing director of Johnson Associates, a Wall Street compensation consultant. The real pain, if there is any to be felt, would come in the 2008-09 bonus season, he said, and a year or two later for private equity firms, which typically make their profits several years after a takeover.

“Pay is going to probably drop, but if it’s dropping from a really, really high level, we’re probably not going to have any charity dinners for these people,” Mr. Johnson said.

By then, too, the flow of new development is expected to slow significantly, judging from the dwindling number of construction permits filed this year. To the extent Manhattan’s housing market is threatened by a weak national economy and by declining bonuses, said Mr. Miller of Miller Samuel, “then the fact that we have a lower level of supply coming on would help keep the market from correcting.”

Neil Binder, a principal in Bellmarc Realty and a 30-year industry veteran, typically views upturns with a jaundiced eye. But in a residential market with tight supply and intense demand, he doesn’t see Manhattan’s real estate karma changing anytime soon, even in the face of mortgage-market turmoil.

“My brokers are saying their biggest frustration is to have buyers when there’s no product and that there’s nothing out there but new construction,” Mr. Binder said. “We may have bumps, but I don’t feel the underpinnings are weakening. My biggest problem this month is that I have all my salespeople taking vacations because they made so much money. My East Side office is a ghost town.”

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Cracks may appear in Manhattan apartment market Mon Aug 13, 2007 10:47AM EDT By Ilaina Jonas NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers…... Read more >

Cracks may appear in Manhattan apartment market

Mon Aug 13, 2007 10:47AM EDT
By Ilaina Jonas

NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price.
On July 27, the end of a week when the Standard & Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home.

There is no sign of a downturn in sales figures for now, but Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fund losses and newly cautious lenders.

"I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed," said Kory, senior vice president of the Corcoran Group.

She also suspects he may have feared his bonus was going to be hurt by the market's slide. The bidder, like much of her clientele, works in the financial industry.

Manhattan is among the few U.S. real estate markets to remain buoyant. Elsewhere, demand for homes has slackened, numbers of homes for sale have swelled, and in an increasing number of markets, prices have declined.

Fat Wall Street bonuses handed out at the beginning of this year, a relatively strong New York economy, and foreign buying fueled by a weaker dollar, have driven Manhattan apartment prices higher. In the second quarter, the median price of a Manhattan apartment rose 1.7 percent to a record $895,000.

Other nearby markets with roots in the financial community, such as Greenwich, Connecticut -- the headquarters for many hedge funds -- and the summer playground of the Hamptons on Long Island, have also been resilient.

Real estate experts say the size of bonuses may be crucial and the market may meander until it becomes clear whether those sums will be slashed from the record amounts handed out in early 2007 -- an estimated $23.9 billion.

"They stimulate demand just because after a good bonus year there is so much more activity in the first few months of the year that sets the tone for the spring market," said Jonathan Miller, chief executive of appraisal firm Miller Samuel Inc.

"If this situation continues to erode ... I think compensation would be more impacted in '09 than '08, just because we've already had a good year," Miller said.

Credit tightening stemming from bad loans to less-than-creditworthy home buyers also has infected the market for mortgages for borrowers with better standing.

Given the expense of buying an apartment in Manhattan, many buyers use jumbo mortgages, defined as those over $417,000. Some risk-averse home lenders are curbing their jumbo lending or raising rates.

Jumbo mortgage rates are about a half a percentage point higher than they should be, said Eric Appelbaum, president and owner of Apple Mortgage. "If this isn't corrected, I think it could put a serous damper on two- or three- or four-bedroom apartments in the city," he said.
But real estate experts said it will take more than a couple of weeks of financial instability to put the brakes on Manhattan real estate.

And August is a slow time for real estate, as Manhattan's well-off head to summer retreats in places like the Hamptons, the Catskills and Martha's Vineyard. Any slowdown will be difficult to detect for now, brokers said.

"I still have people signing contracts, but it will be much easier to tell if there's impact a month from now," said Frederick Peters, president of Warburg Realty.

TIGHT SUPPLY, CO-OP BOARDS

A limited supply of properties in Manhattan and related markets has helped keep prices up.
"It's all about the inventory," said Andrew Saunders, senior vice president of Sotheby's International Realty in Bridgehampton. "In the $5 million-and-up market there is just not a lot."

In the Hamptons, tight rules about what can be built and the desire to be near the beach has limited supply. Meanwhile, the Greenwich market is relatively small with only about 900 sales a year, said David Ogilvy, president of David Ogilvy & Associates, a Christie's Great Estates affiliate. Prices for residential properties in Greenwich run from $600,000 to about $39 million, and many people buy with cash.

"Some of these hedge-fund people have made so much money, they're not looking to sell their homes," Ogilvy said. "If they have to cut back ... they don't use their jets."

Manhattan has another layer of protection: co-op boards. About two thirds of all the non-rental residential units in Manhattan are co-operative apartments.

In a co-op, the apartment building becomes a corporation. Instead of owning their individual apartments, buyers own shares in the corporations, which are governed by boards.

The boards can demand buyers put a large percentage of their own money down, often 25 to 50 percent. In addition to being asked about their current assets and income, buyers may also be asked about their career prospects.

"Most co-ops have always held a more stringent underwriting standard than even the most stringent bank," Appelbaum said.
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Cracks may appear in Manhattan apartment market Aug 12 2007 10:10AM EDT By Ilaina Jonas NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were…... Read more >

Cracks may appear in Manhattan apartment market
Aug 12 2007 10:10AM EDT
By Ilaina Jonas

NEW YORK (Reuters) - At the end of July, Deanna Kory had a bidding war on her hands. Three potential buyers were vying for a luxury apartment the Manhattan real estate broker was selling for a client at a $4 million asking price.
On July 27, the end of a week when the Standard Poor's 500 stock index suffer its worst one-week percentage drop since 2002, she called the winning bidder with the good news. The next day he withdrew his bid for the Upper West Side home.

There is no sign of a downturn in sales figures for now, but Kory's experience may be an early sign of weakness in the robust Manhattan market that could be vulnerable to struggling stock markets, hedge fun losses and newly cautious lenders.

"I guess he called his mortgage person and found it wasn't going to be as easy as he thought for him to get what he wanted. He got nervous and decided not to proceed," said Kory, senior vice president of the Corcoran Group.

She also suspects he may have feared his bonus was going to be hurt by the market's slide. The bidder, like much of her clientele, works in the financial industry.

Manhattan is among the few U.S. real estate markets to remain buoyant. Elsewhere, demand for homes has slackened, numbers of homes for sale have swelled, and in an increasing number of markets, prices have declined.

Fat Wall Street bonuses handed out at the beginning of this year, a relatively strong New York economy, and foreign buying fueled by a weaker dollar, have driven Manhattan apartment prices higher. In the second quarter, the median price of a Manhattan apartment rose 1.7 percent to a record $895,000.
Other nearby markets with roots in the financial community, such as Greenwich, Connecticut -- the headquarters for many hedge funds -- and the summer playground of the Hamptons on Long Island, have also been resilient.

Real estate experts say the size of bonuses may be crucial and the market may meander until it becomes clear whether those sums will be slashed from the record amounts handed out in early 2007, an estimated $23.9 billion.

"They stimulate demand just because after a good bonus year there is so much more activity in the first few months of the year that sets the tone for the spring market," said Jonathan Miller, chief executive, of appraisal firm Miller Samuel Inc.

"If this situation continues to erode... I think compensation would be more impacted in '09 than '08, just because we've already had a good year," Miller said.

Credit tightening stemming from bad loans to less-than-creditworthy home buyers also has infected the market for mortgages for borrowers with better standing.

Given the expense of buying an apartment in Manhattan, many buyers use jumbo mortgages, defined as those over $417,000. Some risk-averse home lenders are curbing their jumbo lending or raising rates.
Jumbo mortgage rates are about a half a percentage point higher than they should be, said Eric Appelbaum, president and owner of Apple Mortgage. "If this isn't corrected, I think it could put a serous damper on two- or three-, or four-bedroom apartments in the city," he said.

But real estate experts said it will take more than a couple of weeks of financial instability to put the brakes on Manhattan real estate.

And August is a slow time for real estate, as Manhattan's well-off head to summer retreats in places like the Hamptons, the Catskills and Martha's Vineyard. Any slowdown will be difficult to detect for now, brokers said.

"I still have people signing contracts, but it will be much easier to tell if there's impact a month from now," said Frederick Peters, president of Warburg Realty.

TIGHT SUPPLY, CO-OP BOARDS
A limited supply of properties in Manhattan and related markets has helped keep prices up.
"It's all about the inventory," said Andrew Saunders, senior vice president of Sotheby's International Realty in Bridgehampton. "In the $5 million-and-up market there is just not a lot."

In the Hamptons, tight rules about what can be built and the desire to be near the beach has limited supply. Meanwhile, the Greenwich market is relatively small with only about 900 sales a year, said David Ogilvy, president of David Ogilvy Associates, a Christie's Great Estates affiliate. Prices for residential properties in Greenwich run from $600,000 to about $39 million, and many people buy with cash.

"Some of these hedge fund people have made so much money, they're not looking to sell their homes," Ogilvy said. "If they have to cut back... they don't use their jets."

Manhattan has another layer of protection: co-op boards. About two thirds of all the non-rental residential units in Manhattan are co-operative apartments.

In a co-op, the apartment building becomes a corporation. Instead of owning their individual apartments, buyers own shares in the corporations, which are governed by boards.

The boards can demand buyers put a large percentage of their own money down, often 25 to 50 percent. In addition to being asked about their current assets and income, buyers may also be asked about their career prospects.

"Most co-ops have always held a more stringent underwriting standard than even the most stringent bank," Appelbaum said.

 

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May 2007 Q & A: Going for brokerage Firm management walk fine line in quest for profits By Melissa Dehncke-McGill If location, location, location is the core cliché of real estate success, the second…... Read more >

May 2007
Q & A: Going for brokerage
Firm management walk fine line in quest for profits
By Melissa Dehncke-McGill
If location, location, location is the core cliché of real estate success, the second is at least equally sound: Watch the bottom line. The Real Deal spoke to chief executives of Manhattan's top residential firms about running a brokerage in today's market.

Agents constantly push for better commission splits, and technology, space and advertising overhead costs continue to mount. Keeping operating costs down and revenue up is a tough proposition for any business, but it's especially hard in the competitive Manhattan real estate market.

Of course, brokerage heads are finding more ways to make money too, including the "gold rush" of new condo developments. Other firms are recouping some costs of doing business with new agent fees.

"It has never been overly profitable; it's a razor-thin business," says Neil Binder, principal and co-founder of Bellmarc.

Barak Dunayer
founder and president, Barak Realty

How profitable is the brokerage business now, and how has that changed over time?

If you know what you are doing, it's very profitable. Because of the intense competition, if you don't know how to manage your overhead, it's less profitable. A lot of people go from agents to brokers, but running a company is a completely different business. You are managing human resources, cash flow and administrative positions. A lot of people are coming into the business and opening their own shops and have no idea.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

That is huge. I think $1,500 per agent is outrageous. I think a lot of agents are not happy about that. It's going to get a lot of resistance. They still have the traditional commission split model, so they can have their cake and eat it too.

How important is marketing new condo development in the brokerage business today, and how has that changed in recent years?

That's been the gold rush of last five years. People got extremely wealthy marketing new developments. If it's a successful project, it's like selling pizza slices. On the other hand, there are firms that have entered into bad projects that were not successful. There is a huge risk in putting so much into marketing a new project. A lot of time and resources can be concentrated on that project, and if it's not successful and you neglect other areas, you can be in trouble. You have to select carefully and turn down bad projects.

What are the major costs to run a brokerage, and how has that changed over time?

Office rents are up, advertising rates go up every year, and payroll -- you have to keep managers on a salary.

What about desk costs?

We take the 30 desks at Barak Realty -- overall overhead plus phones, electricity, paper and administrative costs -- and divide it by 30, and we get the cost to run the desk. We say to agents that at a minimum assume $50,000 to run a desk. If the agent is on a 50/50 commission split, an agent at minimum has to make a $100,000 to break even, to make a minimum to maintain a desk. A handful of firms have popped up recently offering 100 percent commissions to agents, instead of a typical split with the brokerage. In exchange, the agents have to pay a monthly service fee to the brokerage.

Do you see this type of business model increasing in New York City?

The firms with fees have passed the risk of cash flow management to the agents. I don't think the agents are equipped to assume that risk. It's a nice novelty, though.

For the brokerages that follow the traditional commission model, what trends are you seeing in terms of commission splits?

I think as desk costs and overhead costs go up, the people in the middle of those firms who are at 50 to 55 percent commission splits are the bread and butter for the firms. That's how the firm makes money. The higher commission splits have a lot of activity, but the bottom line is that the firm makes much more money on the people in the middle.

Do you think you'll continue to see the biggest firms -- Corcoran and Elliman -- continue to get bigger, which it seems they certainly have in the past couple of years?

I think so. They are going to get bigger; I don't know if they'll get better, because it's harder to do quality control, but they will certainly get bigger. The key is quality control, which is extremely difficult.

Is there an overrated part of the brokerage business right now?

One thing the biggest firms sell you is the Web site. I think it's the most overrated part of the pitch, a lot of smoke and mirrors there. Mainly because 90 percent of the time property is sold broker to broker -- there's a seller broker and buyer broker.

How important is office location and spending money on an office? Is it important to have a retail presence?

I think it's very important to have some kind of retail presence. We are planning to open a storefront on the Upper East Side next year. But you have to look at it as half is rent for the space and the other is for advertising.

Dottie Herman
president and CEO, Prudential Douglas Elliman

What is the most interesting trend you see in the New York City residential brokerage business right now?

Ten to 15 years ago, if you did really well, a broker might decide to open his or her own company. Now the cost of opening one's own shop is astronomical, and it is prohibitive to do that and give the service that big companies provide, so sales agents are basically becoming a business within a business. They have their group or team that they run within the context of the larger company. In New York City it is new that agents are branding themselves a bit. Five or six years ago you would never see an agent's name in an ad.

How profitable is the brokerage business now, and how has that changed over time?

Traditionally the real estate brokerage business has been a very low-margin business, and it really still is. The costs are a lot more now with computers and technology. Years ago there was no secretary, and the demands of the consumer were a lot less. If anything it's a declining margin. That's why companies look for other avenues of income.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

At the end of the day I think that the whole industry has changed. The cost of being in business is much greater, and if companies intend to stay in business, they need to pass on some costs.

Are the broker ranks expanding right now or receding?

They're expanding. Being in this business is one of the hardest, most grueling careers, but if you are good at what you do, it looks easy.

Neil Binder
principal and co-founder, Bellmarc

What is the most interesting trend you see in the New York City residential brokerage business right now?

One trend is a much greater tendency toward image marketing rather than portraying apartments. [Some firms] would rather portray an awareness of who they are as an identity, as a participant in the game, rather than showing a slew of apartments in the newspaper for sale.

What are the major costs and how has that changed over time? What about desk costs?

Technology has become a larger cost year by year. The Internet is a huge expense. You can't just put up a site; you have to manage the site, manage the content, usability and the degree of services the site offers. My Internet consulting firm views me as one of its best friends. It's a marriage between in-house and out. We have a design development person who is not internal who does design for us. We also have an internal computer department of four people.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

Every firm has certain kinds of expenses in one form or another that they charge salespeople. This has become back-door income for a lot of companies, but I am not in favor of it, and it is not in our plans to do it. Some charge a computer fee of $1,500 a year and $1,000 a year for errors and omissions. Those are names given to those expenses; they are just mechanisms to get additional money for the company, in my opinion. At the end of the day, it's more money in my pocket rather than in yours. It's a device used by certain firms in order to tell people they can have a higher commission split because they are not focused on all the ancillary costs that are not being deducted from every deal. Marketing high commission splits but getting more increases in fees is just a device. That's how I read it.

What surprises you most about the brokerage business currently?

How well we are doing. I can't believe how many transactions there are compared with the rest of the country and world. In 1990, many firms went under, so Manhattan does not always do well.

Frederick Peters
president, Warburg Realty Partnership

What is the most interesting trend you see in the New York City residential brokerage business right now?

I think the major trend in recent years has been small companies going out of business or being swallowed up by bigger companies. As with other industries, consolidation seems to be the word of the day.

A handful of firms have popped up recently offering 100 percent commission to agents, instead of a typical split with the brokerage. In exchange, the agents have to pay a monthly service fee to the brokerage. Do you see this type of business model increasing in New York City?

That model requires brokers to focus on running more like a small business. It distracts them from doing what they are likely to do best, which is selling real estate.

How profitable is the new development marketing part of the business compared with regular resale brokerage?

On a unit-per-unit basis, it's probably slightly more profitable. If you are the agent for that building, you get a boatload of exclusives to sell. In one negotiation you can get access to 20, 50 or more exclusives. From the agent's perspective that's extremely desirable.

What trends are you seeing in terms of advertising? In terms of amount spent, design of ads, branding, etc.?

Every year there is less interest in classified advertising. The major trend has been the Internet, and most of us, firms that do significant business, are increasingly interested in directing traffic to our Web site as well as marketing properties and ourselves most effectively.

Are the broker ranks expanding right now or receding? Are firms changing their hiring patterns in general?

I basically urge them not to go into the business. It is a very hard time to become a broker unless you have a big sphere of influence and can get up to speed with information and be committed to surviving a number of months without money. People are exiting the business, and fewer are coming in, and I think that's all to the good.

Do you think you'll continue to see the biggest firms -- Corcoran and Elliman -- continue to get bigger?

Yes, that will continue if you are part of a public company. It is all about year-over-year growth.

Any changes you see ahead in how brokerages will expand their business model?

Throughout the country, there are on-site mortgage services and the one office that does everything. That has never really caught on in New York City. My personal feeling is that the people who do best in any industry are the ones who stay focused. Speaking for myself, I really want to remain a brokerage business. I don't want to be distracted by doing other stuff.

Jim Mazzeo
president, Weichert Realtors Mazzeo Agency

What is the most positive trend you see in the New York City brokerage business?

The industry in the city is more cooperative. The Real Estate Board of New York's regulations requiring members to co-broker their listings has pulled the industry together a bit and standardized some of the ways we do things. It has also increased education and member events, which in general are good things for the industry.

Corcoran recently introduced an annual marketing fee that brokers are required to pay, similar to what's seen in the rest of the country. Do you think you'll see more of that in the city?

The larger companies have greater difficulty with advertising because they are unable to monitor each individual ad, and instead of monitoring, they put their agents on a budget. I think that makes it harder for the agent. I approve every ad I run, which actually allows me to run more ads for my agents because I can better monitor the results. I think you will see the larger companies continue to get tougher with their agents on advertising as they continue to try to maximize profits.

Is there an underrated part of the brokerage business right now?

The underrated part is that you really are having a positive effect on people's lives and they most often fare far better from having purchased than not.

Rick Hoffman
regional senior vice president for the East End of Long Island, Corcoran

What percentage of brokers have left the industry in New York?

I haven't seen the ranks diminish out here, but there are fewer coming in as newly licensed agents. We have the same number in the industry; it's just not growing the way it was with new people.

How important is a retail brokerage presence?

Retail is very important. Spending money is important; we have some of the best [retail] offices in the industry out here.

Jerry Weinstein
founder and president, Manhattan Apartments

What is the most interesting trend you see in the New York City residential brokerage business right now?

The most interesting aspect of the brokerage business right now is the motivation of most companies to continue to grow and expand as quickly as they can. This trend has been going on for a number of years and shows no signs of a letup.

What is the most negative trend in the brokerage business?

The most negative trend is that agents forget that they are the brokers of a deal, and the ones who make the deals happen, rather than the idea that they just "show" apartments through open houses and the opening of doors. They are tending to underestimate the value of their own participation in the transaction.

Are the broker ranks expanding right now or receding?

Right now the glamour of the brokerage business has receded, and fewer people are coming into the field. That requires more competition in marketing and hiring techniques. Still, most companies are looking to expand.

Is there an overrated or underrated part of the brokerage business right now?

The overrated part of the business is the continued drive towards luxury as the prime market, in a city that prides itself on the commonality of all.

The underrated part of the business is the steady presence of the rental business as a strong force in the New York real estate market.

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SPRING FEVER THIS AIN’T NO BUBBLE - MANHATTAN LUXURY IS BACK WITH A VENGEANCE By MAX GROSS April 26, 2007 -- Well, that didn’t take long. Whether you saw it as a bubble bursting or a dip or a slowdown,…... Read more >

SPRING FEVER

THIS AIN’T NO BUBBLE - MANHATTAN LUXURY IS BACK WITH A VENGEANCE
By MAX GROSS






April 26, 2007 -- Well, that didn’t take long.

Whether you saw it as a bubble bursting or a dip or a slowdown, whatever it was that was afflicting the housing market in 2006 seems to be over.

No, the market hasn’t quite gone back to those halcyon days when people were making wild-eyed offers on overpriced closets. We haven’t heard any recent reports of buyers slugging it out at an Alphabet City open house. But the high-end market has taken off into a stratosphere never before seen, with buyers going gaga over properties that cost $3 million and up.

Yes, the madness has returned.

Let’s throw out the requisite disclaimers: Interest rates might rise. A recession would hit housing extremely hard. Areas like the Financial District and much of Brooklyn are seeing an incredible amount of new development that will need time to be absorbed.

But consider this: The current Manhattan frenzy feels a lot more solid than the last time the market went into heat. Many recent eye-popping transactions involve buyers paying all cash for co-ops. Such transactions, of course, mean there’s no chance of defaulting on a million-dollar mortgage.

“Seventy percent of the housing stock in New York are co-ops,” says Hall Willkie, president of Brown Harris Stevens. “Co-ops are some of the best buildings in the city and you don’t even know the names of them. Every co-op restricts financing. So what you have is people paying $20 million in cash for an apartment.”

And Willkie and numerous industry insiders we spoke to have seen high-end properties not just selling, but selling for way over their asking prices.

“I’d say it’s much more of a frenzy” now than it was two years ago, says Shaun Osher, CEO of Core Group Marketing.

Osher points to an apartment he sold on West 23rd Street that Core had listed for $6.5 million. “It had been on the market for 3 1/2 or four years with five different brokers,” Osher says.

But shortly after taking it over earlier this year, Core had multiple offers above the asking price. The property went to contract for just under $7 million.

“The difference between now and two years ago is that two years ago the frenzy existed on any property anywhere,” says Pam Liebman, president and CEO of the Corcoran Group. “Today, it’s more of a focused frenzy. It’s really if your property is special, if it offers something unique . . . But where the frenzy exists, it’s just as strong as it was two years ago, and several brokers have told me it’s stronger.”

In the last year, the Corcoran Group saw a 31 percent price increase on lofts larger than 2,500 square feet. Prudential Douglas Elliman saw the price for apartments with four or more bedrooms jump 24.8 percent to an astronomical $8,957,570. And Brown Harris Stevens saw the average price per square foot for apartments with four or more bedrooms soar to $2,208. Last year, it was $1,615.

And if what’s happened in the last few months is any indication, those numbers are moving even higher.

“In December and January . . . we started [telling clients], ‘You have to be prepared to go 5 percent above asking price to get what you want,’” says Frederick Peters, president of Warburg Realty. “Then, more recently, we’ve been saying you have to go 10 percent. Just in the last couple of weeks, a few things have been more like 15 percent.”

“I just won a bid at 158 Mercer,” says Dolly Lenz, vice chairman of Prudential Douglas Elliman. “And the people just had to have it. They said ‘Whatever it takes.’ It was going for $8.9 million, they made an offer of $10 million. They just wanted to be sure it was theirs.”

Sellers have felt free to chuck an accepted offer in favor of a better one. Or they have made lavish demands like a 30 percent down payment. Immediately. In cash. Getting half a million dollars or even $1 million over the asking price is not so unusual.

And new condos like French architect’s Jean Nouvel’s 100 11th Ave. in West Chelsea have started out of the gate asking for $2,000 per square foot. This should hardly come as a surprise; Nouvel’s SoHo building, 40 Mercer, sold out with many units going for significantly more than $2,000 per square foot.
“If you have a three-bedroom in SoHo or TriBeCa,” says broker Darren Sukenik, an executive vice president at Prudential Douglas Elliman, “you can just make up a price and it will sell.”

“My heart is breaking for this one couple I have who have lost so many bidding wars,” says broker Wendy Maitland, a senior vice president at Brown Harris Stevens. “Every single loft that’s a good family loft in the West Village they’ve bid on and they keep getting outbid.”

And the frenzy is hardly limited to the super-trendy neighborhoods. A 3,721-square-foot penthouse above 100th Street listed by the Corcoran Group’s Deanna Kory and Karen Kelley, in a building with no doorman, sold for $4.95 million after just three days on the market.

Anecdotes aside, one can see this major uptick borne out by statistics.

According to real-estate appraiser Jonathan Miller of Miller Samuel, the average price per square foot of the top 10 percent of Manhattan apartments was $1,744 in the first quarter of this year - up 13 percent from the same quarter last year.

“The higher level of sales have really eaten into inventory,” says Miller, “especially at the high end of the market.”

And with less inventory, prices could continue to rise for a while.

How, exactly, did this happen? Part of it obviously has to do with the record $33 billion in bonuses on Wall Street last year. Another part has to do with how weak the dollar has been.

“There’s a ton of foreign money,” says Sukenik. “For Europeans, it’s like a 35-percent-off sale - a lot of these are foreign ego apartments.”

And Peters thinks it has something to with the fact that most potential buyers who stayed out of the market last year are simply tired of waiting around.

“No buyer wants to be the last person to pay a big price before the market goes south,” Peters says, “And people were apprehensive about how they were not going to be the last one to pay a lot. So you saw a lot of people sidelining themselves in ’06.”

But, Peters adds, “Successful people have only a limited tolerance for delayed gratification, and I think the tolerance was exhausted by the end of 2006. Maybe they got that big bonus and said, ‘You know what, we waited, the market didn’t go south and we’ve got to go on with our lives.’”

Also, it might have something to do with the fact that the suburbs are becoming a less attractive alternative for workaholic families.

“One of the things that’s really driven our boom has been the fact that moving to the suburbs was always predicated on a 9-to-5 work day,” says Peters. “Nobody has one of those anymore. If you’re working 9-to-8, adding a two-hour commute really affects the shape of your day, it affects spending time with your family, and I think that’s an influential factor for a lot of people to stay in the city.”

“People who used to buy in Armonk or Scarsdale or Greenwich . . . [now] want New York because it’s convenient for both parents,” says Sukenik.

Another part of the surge has been that despite all the new construction, there is surprisingly limited inventory for big apartments.

“There’s a really good supply of two-bedrooms that have been selling quickly, but developers didn’t want to develop too many large luxury products,” says Osher. “Basically, they didn’t want to put all their eggs in one basket. Luxury was kind of ignored by developers.”

“When we did the Time Warner Center and were offering 8,000-square-foot penthouses, people thought we were crazy,” says David Wine, vice chairman of the Related Companies. “But we saw the demand. You can get a tremendous amount of money from people with large families - well, wealthy families, not necessarily large. But they’re demanding the space.”

Does this mean that the era of the big buildings filled with small studios is coming to an end?

“We’ve thought about [designing bigger apartments], but we’re not sure if we’re going to do it,” says Elad Dror, director of residential property for the Moinian Group, developer of buildings like the Atelier, where buyers can use their American Express card for their down payment. (Think of the miles!) “There’s still a demand for more efficient-sized homes in the city ... If the market turns, we don’t want to be stuck with four-bedrooms. You’re better off with one-bedrooms.”

And Dror has seen why: If buyers can’t get a four-bedroom, they’ll just buy three apartments next to one another and build their own.

“I saw someone come into the Atelier and try to buy eight apartments - six two-bedrooms, and two one-bedrooms,” says Dror.

Despite the demand, developers like Related and Moinian aren’t rushing out to build complexes with 300 multimillion-dollar units. For many, this latest market move doesn’t feel like irrational exuberance. It feels more sustainable than what happened two years ago.

“I see right now a much more stable market,” says broker Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman. “A crazy market is much more dangerous.”
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Playing the Waiting Game Two-bedroom penthouse, for sale, cheap! Unbudgeable tenants included. By S.Jhoanna Robledo  (Photo: William Mebane) April 16, 2007-- There’s nothing wrong with the spacious,…... Read more >

Playing the Waiting Game
Two-bedroom penthouse, for sale, cheap! Unbudgeable tenants included.
By S.Jhoanna Robledo 

(Photo: William Mebane)
April 16, 2007-- There’s nothing wrong with the spacious, bright apartment at 328 West 86th Street. So why is it priced at $549,000, barely half what it’s worth? You can buy it, but you can’t move in. The current occupants have a rent-controlled lease, and they can stay put for as long as they pay the bill. Which means a ghoulish calculation: “You pretty much have to wait for them to pass away, which could take five years or 30,” says listing agent Ray Kiswani of Bellmarc Realty.

For the very patient, an “encumbered” apartment can be a rare bargain. How else could one get a two-bedroom Sutton Place penthouse for less than a million? “The payoff is really terrific!” says Prudential Douglas Elliman agent Jerri Sherman, who’s representing two such apartments on West 13th. Of course, doing so “absolutely doesn’t make any sense for the typical buyer,” says Frederick Peters, president of Warburg Realty. Those old leases aren’t likely to cover the mortgage, let alone monthly charges. (The lucky soul in the Sutton Place penthouse pays $1,080 a month; the maintenance is $1,900.) These purchases are considered investments, which require commercial loans with higher interest rates than standard mortgages. You can try buying out the tenants, but they usually say no, says developer Andy Field, who co-owns the West 86th Street apartment.

How do you figure the price? It depends on three assumptions: how long the resident will stick around, what the real-estate market will do over that time, and what real dollars will do as well. Let’s say you think you’ll take possession in twenty years, and assume a 5 percent annual increase in the market, and expect a 10 percent compounded return on the investment—all decent guesses. An apartment that would ordinarily be priced at $500,000 today will, under those conditions, be worth $1.32 million twenty years hence. That amount, calculated backward into today’s dollars, with a risk factor calculated in, is about $200,000, which is how much you should offer.* Suggest less if your tenant jogs, and more if he or she loves bacon.

You also need to remember that you’ll pay any difference between the tenant’s rent and the maintenance fees. And remember that you’re gambling: If rent-control or -stabilization laws change radically, or if the lease is about to be destabilized, all your computations go south. (On the upside, there’s that luxury-decontrol clause: If your tenant makes over $175,000 for two years in a row and the rent edges past $2,000, you get to hike it as high as you want.)

All-cash buyers are the best candidates, because they can park money in these properties, treating them like a 401(k), says Kiswani.  No matter what kind of buyer you are, though, Peters says, you’re still betting that real estate will continue to appreciate. Besides, “in the event your analysis goes awry, it could be a very expensive mistake. Actuarial tables aside, your 90-year-old tenant could live to 105.”
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March 2007 Open houses become full houses By Lauren Elkies Heavily attended open houses are the place to be in Manhattan, and the constant crowds are more evidence that the residential market is resurgent.…... Read more >

March 2007
Open houses become full houses

By Lauren Elkies
Heavily attended open houses are the place to be in Manhattan, and the constant crowds are more evidence that the residential market is resurgent.

They "are mobbed, with 50 people, 70 people," said Frederick Peters, president of Warburg Realty Partnership.

Some people say that an unusually warm winter has spurred more open-house activity.

But Peters does not subscribe to the seasonality argument. He said he has seen as many people frequenting open houses on bitterly cold days as on warmer ones. Any connection between weather and real estate is merely a correlation, he said.

Nellie Wilson, a senior associate in the Carnegie Hill office of the Corcoran Group, said buyer interest is once again resulting in bidding wars.

"We've had very, very active open houses and some of those visits have resulted in offers," Wilson said.

"We're beginning to see a bidding war" climate, although not like the same frenzy of a year and a half ago, she said.

The recent spurt of activity follows a long stretch of inactivity that began in the second quarter of 2005, when potential buyers waited on the sidelines -- in many cases opting to rent -- for prices to drop.

Starting in November, sellers started pricing their apartments more realistically, real estate pros said.

"Buyers and sellers have finally come onto the same page," said Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles Rutenberg Realty.

A stable economy, good wages, flat interest rates, the Nov. 7 Congressional election and buzz about record Wall Street bonuses reignited interest in the market.

It's those buyers, partly, that waited out the market by renting who are attending the open houses.

"[They are the ones] soaking up the sales inventory," said Jeffrey Jackson, co-founder of appraisal firm Mitchell, Maxwell & Jackson.

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March 2007 Call it a comeback Slowdown gives way to boom as NYC's residential market rebounds By Stuart W. Elliott   To paraphrase Mark Twain, the rumors of the death of New York City's residential…... Read more >

March 2007
Call it a comeback
Slowdown gives way to boom as NYC's residential market rebounds

By Stuart W. Elliott
 
To paraphrase Mark Twain, the rumors of the death of New York City's residential market were greatly exaggerated.

After a year-and-a-half slowdown, apartment sales have clearly sprung back to life -- part of a revitalized bull market where open houses are crowded once again.

This month, a spring roundup by The Real Deal takes a look at the new environment from multiple angles -- at the change in pricing that has helped sellers lure buyers, how New York City stacks up against the national market (favorably), the best and worst case scenarios going forward, as well as the prospect for a new condo development glut now.

A strong fourth quarter of 2006 -- when the market came back to life, with a jump in sales and a sharp drop in homes on the market -- was followed by more strong sales activity in January, up 20 percent from the same time a year prior, according to Miller Samuel appraisers.

Bidding wars are back, brokers say, and the uptick is clearly visible at open houses.

They "are mobbed, with 50 people, 70 people," said Frederick Peters, president of Warburg Realty Partnership.

Stacking us up against the national market, New York City's unique position comes into greater relief.

Nationwide, the median sales price of a home inched up only 1.1 percent in 2006, according to the National Association of Realtors.

In Manhattan, the median sales price for an apartment was up nearly 10 times that amount. Prices were 10.7 higher in 2006 compared to 2005, even though sales were generally slow for most of the year because buyers didn't want to pay high prices.

Sellers have been pricing properties more competitively in recent months, and because sellers are lowering their prices, buyers appear to be taking the bait. But pricing discounts could be on the way out again, as a study by property listing Web site Streeteasy.com found.

Still, there are some storm clouds on the horizon, including a rising number of foreclosures and more new development coming on the market, which could cause oversupply and drag down prices. The stock market and economy are another concern.

Not everyone is a believer that New York is immune from the general national slowdown. For some, the revival may be short-lived. "New York is the anomaly," said Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College. "I just think it won't continue to soar while the rest of the country is going down. How can New York be an island?"

 

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The Real Deal March 2007 Will this rise be followed by a fall? By Lauren Elkies What goes up must come down, so the proverb goes. If that's the case with New York's real estate market, experts…... Read more >

The Real Deal
March 2007
Will this rise be followed by a fall?

By Lauren Elkies
What goes up must come down, so the proverb goes. If that's the case with New York's real estate market, experts are wondering whether the recent residential sales revival is only a brief pause on a downward slide that pulls the city into line with the rest of the country.

The market is also watching whether the amount of new development coming online will play a part in a decline.

"Right now we're seeing fairly robust activity, more than we did last year at this time, and that's contrary to a large portion of real estate markets in the rest of the country," said Jonathan Miller, president and CEO of Manhattan appraisal firm Miller Samuel.

Barry Hersh, associate director of the Steven L. Newman Real Estate Institute at Baruch College, said the pace inevitably will slow down again.

"New York is the anomaly," Hersh said. "I just think it won't continue to soar while the rest of the country is going down. How can New York be an island?"

Some market observers have warned that new condominium development could result in a glut, with an oversupply of units driving prices down. The number of construction permits issued for residential units in the city in 2005 and 2006 was the highest for any two-year period since 1965, and many of those projects are coming to completion now. Despite the slowdown in the market in the past year, only 2.1 percent fewer permits were issued in 2006 than in 2005, according to U.S. Census Bureau figures.

But Frederick Peters, president of Warburg Realty Partnership, doesn't think there is a problem.

Market saturation is unlikely because fewer new developments are coming online now than near the end of last year, he said.

"It looked more gluttish probably in September and October of '06 than it does now," Peters said.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York real estate company Charles Rutenberg Realty, said, "There are more than enough people out there that are interested in buying."

Still, by historical levels, condo inventory is high.

Between 2000 and 2006, condo inventory grew by 83 percent, Miller Samuel found. The number of available co-ops rose only a modest 8 percent during that time period.

Last month, there were practically the same number of condos on the market as co-ops, despite the fact that there are three times more existing co-ops in Manhattan than condos.

Looking at both condos and co-ops, overall inventory has been generally shrinking recently, but it is a far cry from the lower availability seen over the last six years.

February 2007 inventory was still higher than February 2001, 2002, 2004 and 2005, and just below the number in February 2003, according to Miller Samuel.

On the other hand, the absorption rate, which is a good barometer of the market, was 7.3 months in the fourth quarter of 2006, according to appraisal firm Mitchell, Maxwell & Jackson, a positive drop from the 10-month rate seen in prior fourth quarters.

"When inventory is above eight months you are in an oversupply situation and prices start to come down," said Jeffrey Jackson, co-founder of Mitchell, Maxwell & Jackson.

Others remain bullish on the future of the developments soon to hit the market.

Because of the volume of interest, at least two of the 10 new developments Warburg Realty Partnership is marketing -- one on the Upper East Side and one in Harlem -- are looking to raise prices, Peters said. Granted, the two projects are already almost sold out.

New development -- and the prospect of a condo glut -- will be hindered, also, because of the changes to the 421-a tax abatement program, to take effect at the end of the year.

"People are clearly taking a second and third look at their decisions to acquire a new site and are recalculating the numbers," said Steven Spinola, president of the Real Estate Board of New York.

Spinola estimates that that there will be 7 to 12 percent price growth this year.

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REAL ESTATE SHOWCASE: SPRING PREVIEW February 26, 2007 Point of View “New developments are hotter than ever,” says Frederick Peters, president of Warburg Realty Partnership. “But these…... Read more >

REAL ESTATE SHOWCASE: SPRING PREVIEW
February 26, 2007

Point of View





“New developments are hotter than ever,” says Frederick Peters, president of Warburg Realty Partnership. “But these days they seem less about over-the-top amenities and more about great design and relative value. A good example is our

Diamond House development on the Upper East Side where buyers are offered solid, well-designed family-size spaces at reasonable prices. At the end of the day, it’s the apartment that counts.”

 

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Market Overview Housing Bubble and Real Estate Market Tracker Posted on Feb 19th, 2007 Housing Market Heats Up Again in New York City Since the new year began, a burst of activity has broken out in Manhattan…... Read more >

Market Overview
Housing Bubble and Real Estate Market Tracker
Posted on Feb 19th, 2007

Housing Market Heats Up Again in New York City

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.

Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.
Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.
“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.
“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”

 

 

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Bucking nationwide trend, New York City  housing market hot again The Associated Press Monday, February 19, 2007 NEW YORK: New York City's housing market is hot again in spite of a tepid market…... Read more >

Bucking nationwide trend, New York City  housing market hot again

The Associated Press
Monday, February 19, 2007

NEW YORK: New York City's housing market is hot again in spite of a tepid market in many other urban areas around the U.S., according to preliminary indications from real estate firms, The New York Times reported in Monday's edition.

Droves of people are hunting for co-ops, condominiums and townhouses in New York City, sending prices higher, sparking bidding wars and jamming open houses, the newspaper said.
Both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006, according to the city's three largest real estate companies.

Experts pointed to higher Wall Street bonuses, a strong regional economy and pent-up demand for the hotter-than-hot market. "For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," said Frederick W. Peters, the president of the Warburg Realty Partnership.

The market is hot across price ranges — from studios in the East Village to mansions on the Upper East Side.

A report released last week by the National Association of Realtors showed that prices were falling in many metropolitan areas around the country.

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February 19, 2007 Housing Market Heats Up Again in New York City By TRACIE ROZHON Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers…... Read more >

February 19, 2007
Housing Market Heats Up Again in New York City
By TRACIE ROZHON

Since the new year began, a burst of activity has broken out in Manhattan and several Brooklyn neighborhoods as New Yorkers frenetically hunt for co-ops, condominiums and town houses, sending prices higher despite sluggish sales in many other cities.

Preliminary indications from real estate firms showed that this increased activity, with open houses jammed and bidding wars taking place, has occurred in all price ranges — from tiny studios in the East Village to red-brick mansions on the Upper East Side — in counterpoint to the heavily weighted record sales of luxury properties that led the market in the late summer and fall.

Real estate brokers and statisticians are quick to point out that not every single apartment is flying into contract. During the last quarter of 2006, the major real estate agencies differed on which way prices were headed.

But now, the three largest real estate companies in the city agree: for January, at least, both prices and the number of signed contracts rose in double-digit percentages compared with the same month in 2006.

With higher Wall Street bonuses, a strong regional economy and pent-up demand from New Yorkers who were once worried that the city’s real estate market would crash, buyers’ attitudes have done an about-face. “Their psychology has changed,” said Frederick W. Peters, the president of the Warburg Realty Partnership. “For almost two years, they’ve been scared that the market would plummet and they’d end up like fools who paid too much.”

Real estate experts say they see no reason for the trend to not continue, with economists predicting stable mortgage rates and a continuing city budget surplus. However, other factors may alter New Yorkers’ renewed interest in buying real estate, including an expansion of the Iraq war, a changing employment picture or another terrorist attack.

Yet, there is “cautious exuberance,” according to Steven L. James, director of Manhattan sales for Prudential Douglas Elliman.

A week ago, one open house attracted 100 people to an Upper West Side one-bedroom; a $2.475 million house in the Park Slope neighborhood of Brooklyn sold in a day.
Across the board, the prices of Manhattan apartments are rising. Jonathan Miller, the president of Miller Samuel, an appraisal firm, said the number of contracts signed this January was 19.4 percent higher than in January 2006. Prices were up 14.4 percent in the same time period. Inventory, which was mounting last summer, is shrinking fast.

Now, according to Mr. Miller, statistics showed that sales of studio and one-bedroom units, stagnant over the past year, were up 13.7 percent in January. “It’s not like a lot of huge sales at the high end skewed the average up.”

According to a report released last week by the National Association of Realtors, prices are falling in many other metropolitan areas around the country. The report covered only the last quarter of 2006, and showed a modest increase of 3.1 percent for the New York area, which includes parts of northern New Jersey.

Anecdotally, there isn’t much talk of falling prices in Manhattan and in the most sought-after neighborhoods in Brooklyn, where young people looking for a break, empty nesters looking for a guest room and foreigners looking for a pied-à-terre say they want to live.

Katalin Shavely, a 30-year-old bedding designer in Manhattan, devotes her weekends to scanning the classifieds and attending open houses, searching for just the right one-bedroom apartment for less than $750,000. She can’t find it. “I made a mistake,” she said last week. “I should have started looking before Thanksgiving.”

Mr. Miller said New Yorkers had been reluctant to buy because of the feeling of an impending crash. “Last summer, a lot of information was being dumped on the consumer: stories about the glut of condos in Miami, Washington, D.C., and Las Vegas, exacerbated by the constant debate on the blogosphere about housing bubbles, mixed together with a barrage of negative predictions,” he said in a telephone interview.

Although no one can pinpoint the moment when New Yorkers started feverishly buying again, Kirk Henckels, the director of the private brokerage division of Stribling & Associates, said he thought the luxury market picked up after Labor Day.

He and others said the resurgence was partly fueled by the fall’s record-setting (and well-publicized) sales of a few multimillion-dollar apartments and town houses, like the Stanford White limestone palazzo at 25 East 78th Street bought by Mayor Michael R. Bloomberg for $45 million and the Harkness mansion at 4 East 75th Street sold in October for $53 million.

Then came this year’s stratospheric Wall Street bonuses, and the market exploded, real estate executives said.

“The plunger that freed up all the hesitation at all price levels was those bonuses,” said Diane Ramirez, the president of Halstead Property. “It cleaned the pipes and gave confidence to even small apartment buyers.”

Within the last month, the Corcoran Group, Halstead and Prudential Douglas Elliman, three of New York City’s largest real estate sales firms, say they have recorded double-digit increases in contract prices and in the number of transactions.

In a real estate market where 18 and 22 percent price increases were recorded in 2004 and 2005, last year’s 6 percent increase was depressing, Mr. Miller said.

Pamela Liebman, the president of the Corcoran Group, reported that the company’s contracts for this January totaled $1.3 billion, an increase of 53 percent from January 2006.

Prices in many areas of Brooklyn are going up, too. According to Marc Garstein, the president of Warren Lewis Realty in Park Slope, prices in what he called the downtown neighborhoods — including Brooklyn Heights, Park Slope, Carroll Gardens, Cobble Hill, Prospect Heights and Windsor Terrace — are now approaching 2004 highs, after being off about 10 percent in the last two years.

A town house at 171 Garfield Place in Park Slope, priced at $2,475,000, sold for the asking price one day after it was put on the market. Fifty people had shown up at the open house, Mr. Garstein said.
Customers said they had expected a buyer’s market in which they could call the shots, but found a race track, instead.

Jane LaFarge Hamill, a 25-year-old painter who lives in a “small, kind of stinky” studio in Chinatown, said she had looked at 60 apartments over three months, trying to take advantage of the lull she had noticed. “We decided to look while sellers were still worried that the market was crashing,” she said.

When she started looking last fall, there was still “wiggle room,” she said. But now, there is frenzy, said her mother, Leita Hamill, who, with her husband, Bill, is helping her daughter search for and buy a new home. The Hamills had gotten into a bidding war, one of many reported by brokers these days, for a two-bedroom co-op in Gramercy Park. They had started bidding above the asking price, but it wasn’t enough.
“There were people bidding on the apartment sight-unseen,” Mrs. Hamill said. The victors got the co-op through a sealed bid, she said. “It was like a pair of shoes that you absolutely had to have,” she said.
Real estate executives say they do not know how long the market’s heat will be turned up, although they say the regional economy looks strong.

They also say that the first two quarters of the year — the spring market — are traditionally stronger than the last two. Thus, the average for the whole of 2007 may or may not show the double-digit growth that the first part of the year is showing. “It’s all about price now,” Ms. Ramirez said. “The market is not in a spike mode, when anything, for any price, will sell.”

Ms. Ramirez, who has sold real estate for more than 30 years, said she expected that the current rocketing growth would be followed by a period of slower yet steady increases. “I don’t want to hear, ‘Oh my gosh, the market is slowing up again,’ ” she said. “With the number of deals we had last week, it has to calm down. But I feel much more confident than at any time in the last five years when the market had fits and starts and there was always a certain underlying nervousness.”

Toward the end of 2004, the real estate market in the city was booming. But then, brokers started seeing “great concern among clients that mortgage rates were about to jump and that house prices would suffer a sharp correction,” Mr. Miller said.

Since then, there has been change of leadership in Congress, Mr. Miller noted. In the region, unemployment has dropped. Mortgage rates didn’t soar. “Two years ago, we were predicting they’d be up to 8 percent now,” he said. (Rates for a 30-year fixed loan on a New York City co-op hover around 6.25 percent, according to the Manhattan Mortgage Company.)

After months of trying to push shoppers over the edge of indecision, brokers now say they spend time warning house hunters not to rush in heedlessly — advice the would-be buyers don’t always listen to.
“When my wife and I got into the market in mid-December, people told me there was a glut of one-bedroom apartments and I could take my time,” said Shelly Cohen, 51, an empty-nester. “When we actually got into the market, I found it was just the opposite.” He just found a newly created condominium in a beige brick high-rise at 1438 Third Avenue at 81st Street and quickly signed the contract. He said he felt he had to.

Mrs. Hamill, the mother of the young artist in Chinatown, offers her own advice to friends.
“Now I tell everybody: Be ready to write the check the minute you see something you love,” she said. “If it’s any good, it’ll be gone by the next day.” She paused. “Or, even by that same day.”
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United Press International News. Analysis. Insight. February 18, 2007 Sunday 10:37 PM EST Housing sales spike in New York Real estate sales -- and property values -- are rising in New York so far in 2007,…... Read more >

United Press International
News. Analysis. Insight.
February 18, 2007 Sunday 10:37 PM EST

Housing sales spike in New York
Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.

Sales activity is spiking in Manhattan and several Brooklyn neighborhoods, as New Yorkers step up the hunt for co-ops, condominiums and town houses, The New York Times reported.
Real estate firms say the activity -- which features well-attended open houses and even some bidding wars -- has occurred across all price ranges.

During the fourth quarter of 2006, the newspaper said, major real estate companies differed on which direction the market was taking. Now, however, the three largest real estate companies in New York agree that in January, there was a double-digit increase over the same month in 2006, both in prices and the number of signed contracts.

The increase is being attributed to factors including a strong regional economy, pent-up demand and higher year-end bonuses on Wall Street.

Frederick W. Peters, president of the Warburg Realty Partnership, said homebuyers' psychology has changed.

"For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," he said.

 

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February 18, 2007 The Psychology of Pricing By TERI KARUSH ROGERS IN a market where buyers and sellers circle one another warily — each certain that he or she is being taken advantage of, no matter…... Read more >

February 18, 2007
The Psychology of Pricing
By TERI KARUSH ROGERS

IN a market where buyers and sellers circle one another warily — each certain that he or she is being taken advantage of, no matter what the conclusion of a deal — the asking price of a property is rarely a straightforward reflection of comparable values. While comparables may be a starting point, the price at which a seller offers a property is often also based on wishful thinking, propaganda and ploy.

Buyers, in turn, parry by deconstructing the price. They aim not merely to assess a dwelling’s fair value but also to plumb a seller’s bottom line and vulnerabilities. How a price tracks with similar properties, how large and hasty any reduction is, and even how parsed or rounded a number is — all these are grist for concluding, rightly or not, whether a price is firm, desperate or a sign of painful dealings to come.

Or even a sign of delusion.

Despite whispering advice like courtiers into the ear of a monarch, brokers say some sellers have delusions of grandeur, stemming from a failure to grasp that what they want for their home has nothing to do with what it’s worth.

“Most of the time a seller will start to talk about what they want, and I will say, ‘I don’t care — don’t tell me,’ ” said Andrew M. Phillips, a senior vice president of Halstead Property, who teaches classes on pricing to Halstead agents. “I will do my analysis and come back to you with quantitative information.”

Even when the seller and broker reach an agreement on a home’s value, it is often wise to adjust the asking price downward, and not just because buyers like bargains.

An equally compelling reason to fly low is to adhere to psychological “break points.” These are dollar thresholds that buyers are most likely to select as the top amounts they are initially willing to spend or to use in Internet searches.

(“Initially” is the key. Once buyers set foot in a house or apartment and make an emotional connection to it, they are more vulnerable to budget creep, by which a $25,000 increase can be rationalized as a little bump of $30 or $40 a month in the mortgage.)

Major break points occur at $500,000, $1 million, $1.5 million and so forth. Smaller ones occur every $100,000 and then at every $20,000 or $25,000. So, for example, if the market value of an apartment is around $610,000, brokers generally advise sellers to round down to $600,000 so that the property lands within a buyer’s budgetarily myopic field of vision.

(For each type of apartment, there are other contextual break points. For example, Mr. Phillips noted, many studio buyers say they won’t look at anything over $300,000, while buyers of small one-bedrooms often hover below $500,000 and, for larger one-bedrooms, below $750,000.)

Many brokers tweak break points even further, counseling their clients to name a price just under a break point — for example, choosing $599,000 rather than $600,000. While buyers intellectually recognize the lack of meaningful difference, the lower amount is said to appeal on a less conscious level. (It works in reverse, too: buyers in a bidding war are often counseled to offer an amount just above the next break point.)

“I always joke with people that I’m a department store pricer, because I think that psychologically the first number has an impact,” said Frederick W. Peters, the president of Warburg Realty. “Even though it may seem cheesy, it actually works.”

As an example, Mr. Peters said that it’s wiser to price a property at $4.995 million if it’s worth $5 million. “People are influenced by the first number,” he said, adding, “It’s the 4 that influences the way they perceive the price. Also, if you stay under a threshold, you are going to be found by more computer searches.”

Barbara Fox, the president of Fox Residential Group, suggests pricing a property slightly below a threshold but a little higher — say, 5 percent — than its market value. “Everybody likes to be able to negotiate a little bit,” she said.

Some brokers reject the relatively common $99 or even 99-cent endings. They argue that marching to a more distinctive rhythm — like $487,500 instead of $499,000 — may not only sweep aside listing clutter but also telegraph that the asking price has been so carefully calculated as to be nonnegotiable, assuming that is the desired message.

Theoretically, with a carefully calculated figure, “the power would be much more on the seller’s side in terms of a negotiating position,” said Joan Sacks, an associate broker at Stribling & Associates, “whereas when you get to the more typical type of pricing, rounded numbers, like $995,000 or whatever, the instant perception is that this is just the first asking price.”

A highly specific price reduction that follows a rounded original listing price may lead some buyers to more strongly infer nonnegotiability, which may or may not be the seller’s intention. But affixing a truly oddball number can also send that message.

“I’ve seen prices like $433,779,” said James Lake, a vice president of Bellmarc Realty. “It indicates it’s going to be a difficult transaction from beginning to end.”

Ms. Sacks agreed. “That would be a real turnoff,” she said. “Then, you’re talking about someone who’s going to be arguing about leaving a curtain rod.”

Even if round numbers invite negotiation, proponents say, they are more effective than fractional ones because soliciting bids of any amount is exactly the point, leading to snowballing and competing interest. (An exception: dwellings valued around $1 million. In New York and other states where buyers of properties priced at $1 million and higher pay a “mansion tax” of 1 percent of the purchase price, a listing of $999,999 is a better choice than $1 million.)

Using round numbers that catapult a listing to the top of a break point may confer an additional, subtle psychological advantage merely by being the first to trot onto the stage after an online search.

“The higher up you show up in the search engines, the better off you seem,” said Ravi Dhar, a professor of marketing and management at Yale and the director of the Yale Center for Customer Insights. He pointed to studies of voting habits that demonstrate a slight advantage to the candidate listed highest on the ballot. “The first few options you see are a reference point, a starting point, and all of the advantages of that apartment loom larger.”

Still, sellers are almost certainly at a disadvantage if their price towers over comparable properties’. Prices of more than 5 percent over the market will probably have a chilling effect on buyers, said Confidence Stimpson, a senior vice president at Stribling.

Sellers who think that buyers will simply show up and make their best offer do not understand how the market works. “The challenge is getting buyers to see it in the first place, because their broker is doing the search at $5 million, and you’re at $5.2 million,” Mr. Peters said.

The buyers who do see it, meanwhile, will be disposed to make negative comparisons with better endowed dwellings in the same price range. Even apartment hunters who like the place may shy away from making an offer at what they believe is a fair, but lower, amount.

“They feel like they’ll be rejected,” said Mr. Lake, “and they don’t want to be financially embarrassed.”

Sellers who have priced too high can still salvage the situation. Brokers say they must act quickly — ideally within a few weeks — and make sure there are buyers around to take notice. (“In July, a one-bedroom price drop will get activity, but a Classic 6 probably won’t because families are away,” Mr. Phillips said.)

Second, to be effective, the lower price must tempt a whole new group of buyers, which means slimming down to at least the next break point.

“Something dropping from $949,000 to $899,000 will suddenly show up on someone’s radar,” said Lisa Strobing, a Bellmarc executive vice president who teaches classes on pricing to agents.

For sellers already hovering just above a break point, the reduction can be small though psychologically significant, like going from $2.01 million to $1.95 million. But in general, Ms. Fox said, “small reductions are a waste of time.” She recommended whittling down by 5 to 10 percent, or more depending on the situation.

Of course, Mr. Phillips said: “A good broker will interpret certain things if a property’s been around for a month at $1.5 million, and then dropped by $100,000. If another couple of weeks go by and there’s no action, you will know a little bit of negotiation is possible there.”

Still, proper pruning can elicit a swift reaction.

Last February, Wendy Maitland, a vice president at the Corcoran Group, listed a client’s SoHo loft for $1.695 million, because her client “really wanted room to negotiate it.” The one-bedroom, two-bathroom co-op, which was newly renovated, languished for six months until the seller, motivated by a job transfer to London, dropped the price by $200,000, to $1.495 million. It went into contract for $1.48 million in October, less than two weeks after the reduction.

“In that case, it was a dramatic price drop because I didn’t want to drop it little by little,” Ms. Maitland explained. “It’s much more effective to do a one-time significant price correction than to drop something in dribs and drabs. It ends up staying on the market for too long and can become somewhat of a white elephant even if there’s nothing wrong with it at all.”

But problems can’t always be cured by price cuts alone.

Charlie Summers, a senior associate broker at Bellmarc, had a one-bedroom co-op in the Gramercy Park area listed last May at $499,000. “People looked at it as an overgrown studio, and we just couldn’t sell it,” he explained. Over the next six months, the sellers, Stacy Jessup, a 33-year-old accountant, and her husband, Cooper, a 33-year-old business analyst, dropped the price to $479,000 and then to $450,000, their bottom line all along. But they worried that buyers would bide their time waiting for further reductions. They knew from looking that that could happen.

“Sometimes you watch a place, and you see the price drop, and you think, ‘I’m not even going to look at it yet,’ ” Mrs. Jessup said.

Their concern seemed justified. “We still were getting nothing but nonserious offers,” Mr. Summers said. “People would smell blood, a stale listing and a desperate seller, and put in lowball offers like $360,000, $370,000.”

By December, with their first baby expected any day, the Jessups dropped the price to $399,000 and issued a public ultimatum with their listing: if their apartment didn’t sell by Dec. 20, they would take it off the market altogether.

“We were serious,” Mr. Jessup said. “We weren’t going to risk bringing all sorts of strange germs into an apartment with our baby there.”

The final two open houses, spaced two days apart, drew a total of 55 people, versus the meager turnout of 5 or 10 the previous showings had drawn.

“People could see it was obviously attracting a lot of attention, and their brokers were telling them it was underpriced so they should come in over the ask,” Mr. Summers said. “By that Wednesday I had collected six prequalified offers.” The apartment is in contract for substantially over the $399,000 asking price, and the Jessups, now the parents of a son, are house hunting on Long Island.

Like the Jessups, other sellers agonize that rather than whipping up buyers’ interest, cutting the price will dim a property’s luster and make them look desperate.

Professor Dhar suggested that some anxiety may be warranted.

“If we start getting a good deal on something, we always think, ‘Is there something wrong there?’ ” he explained. “It makes you look at the apartment through a more critical eye and notice the deficiencies, like buying products on sale in the marketplace.”

On the other hand, he said, “if you give people a reason why you’re dropping a price, then psychologically they interpret it differently.” Sellers could neutralize a buyer’s negative reaction, he suggested, by explaining that they were moving to another state.

As for brokers, many argue that seeming eager to sell — even if you aren’t — is a canny strategy.

“There’s always new infusions of people into the market, and it’s not like you’re soiled goods,” said Neil Binder, a principal in Bellmarc. “It would be good to let buyers perceive that you’re desperate so that they say, ‘Let’s run in and make a bid.’ I want to get a lot of people in there to develop a crescendo of activity and create a bidding war.”

Price reductions also work by making buyers feel more in control.

If, for example, an apartment is not drawing offers at $450,000, Mr. Summers said, then as a buyer, “you’re afraid to put in an offer for $410,000, possibly because you don’t see anyone else making offers, and you’re afraid you’re overpaying even at that price.”

 

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Playfuls.com - Targu Mures,Romania Housing Sales Spike In New York Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.…... Read more >

Playfuls.com - Targu Mures,Romania

Housing Sales Spike In New York

Real estate sales -- and property values -- are rising in New York so far in 2007, at a time when sales are sluggish in many other cities.
Sales activity is spiking in Manhattan and several Brooklyn neighborhoods, as New Yorkers step up the hunt for co-ops, condominiums and town houses, The New York Times reported.

Real estate firms say the activity -- which features well-attended open houses and even some bidding wars -- has occurred across all price ranges.

During the fourth quarter of 2006, the newspaper said, major real estate companies differed on which direction the market was taking. Now, however, the three largest real estate companies in New York agree that in January, there was a double-digit increase over the same month in 2006, both in prices and the number of signed contracts.

The increase is being attributed to factors including a strong regional economy, pent-up demand and higher year-end bonuses on Wall Street.

Frederick W. Peters, president of the Warburg Realty Partnership, said homebuyers' psychology has changed.

"For almost two years, they've been scared that the market would plummet and they'd end up like fools who paid too much," he said.

< Read less

February 2007 In post-boom, who's best and worst Harlem, Washington Heights top list of areas with largest gains By Lauren Elkies The first part of the winter in New York City was unseasonably warm. So…... Read more >

February 2007
In post-boom, who's best and worst
Harlem, Washington Heights top list of areas with largest gains

By Lauren Elkies
The first part of the winter in New York City was unseasonably warm. So was Manhattan's residential market in the last three months of 2006.

After a cooling-off period of more than a year as the housing boom receded, sales activity increased.

The uptick helped Manhattan's various neighborhoods, but not uniformly. The Real Deal looked at which areas have fared best and worst in the post-boom market, and found some wide variations in Manhattan's 16 neighborhood areas.

Upper Manhattan prices saw a bigger jump than any other section of Manhattan between the fourth quarter of 2005 and the fourth quarter of 2006, part of a decade-long rise in the area's fortunes.

Washington Heights experienced the largest percent increase in average apartment price, hitting $543,100 in the fourth quarter of 2006. Harlem and East Harlem saw the biggest rise in average price per square foot, which some brokers view as the most reliable yardstick of the market; it climbed 43 percent, from $474 to $678.

The price information was provided by the appraisal firm Miller Samuel, which cautioned that price data can fluctuate more widely for individual neighborhoods than for Manhattan as a whole, because there are fewer sales to form a comparative basis. Included below are charts showing the number of deals collected for each neighborhood.

The big Uptown increases come at a time when the average Manhattan price continues to edge up incrementally, rising 3.2 percent from the end of 2005 to the end of 2006.

"In Harlem, the neighborhood is improving, and the quality of the product that is available is improving," said Brett Grabel, an associate broker who works in the Harlem office of the Corcoran Group. "I think you can expect to see another increase."

Frederick Peters, president of Warburg Realty Partnership, which has an office in Harlem, said prices would likely keep climbing and would be positively affected by the small resale market.

"Inevitably, in a less mature market, people are more influenced by how people are pricing the units than the history of sales, because there is little history," Peters said.

After Washington Heights' 92.4 percent gain in average sales price over the last year, Hamilton and Morningside Heights finished second with a 42.6 percent rise.

While the gains may seem astronomical, they jibe with long-term trends in the area.

According to a 2005 report by Miller Samuel, median apartment prices in Uptown Manhattan rose 349 percent from 1995 to 2004, going from $68,000 to $305,000 -- twice as fast as in other parts of Manhattan.

Once-depressed sections of Downtown also saw a significant pickup in 2006, despite a slower overall residential market in Manhattan.

Co-op and condo prices in the Financial District climbed 21.5 percent for all of 2006 compared to all of 2005. (Full-year figures weren't included in the charts because not all neighborhood information could be obtained as of press time.)

Trendy Soho and Tribeca also notched large gains. Average prices for co-ops and condos were 20.9 percent higher in the fourth quarter of 2006 versus the fourth quarter of 2005. The average apartment price reached nearly $2.5 million, higher than in any other neighborhood. The high average price is also a function of the typical apartment size in loft-dominated Tribeca, which runs larger than apartments in other neighborhoods.

In last year's strong rental market, Soho and Tribeca fetched the highest average rents among Manhattan neighborhoods, too. According to Citi Habitats, fourth-quarter average rents for studios were $2,616; one-bedrooms hit $3,493; two-bedrooms, $5,079; and three-bedrooms came in at $8,772.

Warburg's Peters said differences between the neighborhoods were emerging: "I don't actually think they're really the same market anymore." Soho has remained steady, he said, but Tribeca has had a burst of activity.

Average prices per square foot were down in several prime neighborhoods, according to Miller Samuel. Between the fourth quarter of 2005 and 2006, the number dropped 2.3 percent in Chelsea, 2.6 percent in Greenwich Village, 2.8 percent on the Upper West Side, 2.9 percent in Midtown East/Turtle Bay and 3.9 percent on the Upper East Side.

For Manhattan as a whole, the average price per square foot was down 0.4 percent for the year, even while the average total price edged up a bit. The divergence between these two indicators was also seen with a number of neighborhoods, which may indicate that a few large sales drove up the average price while the average price per square foot remained unaffected.

Overall, the market ended the year on a positive note, with fourth-quarter sales up 55 percent compared to a year earlier, and inventory down, even if prices declined slightly for the quarter (see Big numbers bode well for '07).

"The increase was likely due to the expenditure of record Wall Street bonuses and the continuing rise of new development," said Jonathan Miller, president and CEO of Miller Samuel. "You'll see more of that."

The 2007 outlook for Manhattan real estate remains strong, and activity has been brisk since the beginning of December, said Peters.

Peters attributed price increases to the strength of the upper end of the market, which thrives on bonuses. "It's the luxury product that's bringing up the numbers," Peters said. The ripple effect of two consecutive years of record Wall Street bonuses will show up in the first two quarters of 2007, though Peters cautioned that "bonuses in and of themselves are not the only market driver."

 

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February 2007 Residential firms, from staid to splashy Manhattan brokers offer behind-the-scenes look at their office cultures By Lauren Elkies Anyone in the midst of a shop talk conversation knows…... Read more >

February 2007
Residential firms, from staid to splashy Manhattan brokers offer behind-the-scenes look at their office cultures

By Lauren Elkies
Anyone in the midst of a shop talk conversation knows that it's not just what you do that makes you happy; it's where you do it. New York real estate brokerages are as varied as the properties they represent, though some differences are more obvious than others.

The Real Deal talked to residential brokers and their bosses last month, conducting an unscientific survey that sought to explain how corporate culture reflects each firm's work. Questions ranged from dress codes to where they dine to how agents do business.

Our findings aren't set in stone, but the results helped The Real Deal divide the brokers into five different categories: Upper East Side boutique brokers that talk about how the rich -- often including the brokers themselves -- are different from the rest of us; the brokerage behemoths that dominate much of the market; the ranks of young, energetic rental brokers who are sometimes looked down on by their sales broker colleagues for their inexperience; mid-sized firms, some of which are more corporate and maintain mass market appeal, as well as others that are slightly more upscale; and Downtown boutique brokers that mirror their hip clients in Chelsea and farther south.

For the most part, the cultures of the firms mimic the demographic they serve -- Upper East Side brokers will dress and act like their clients and the same thing is true Downtown. Most brokerage executives touted their comfortable offices and low employee attrition rates. While the Uptown boutique firms said that they only hire people they know, mid-size and large companies recruit to help fill their ranks. Citi Habitats is the most aggressive recruiter, giving weekly pitches to students at New York Real Estate Institute.

Differences between brokers and management, and the vibe in a firm's offices, can affect the bottom line. A poisonous office culture can drive brokers away and repel top talent. A supportive and dynamic culture -- mostly conveyed through the firm's leadership -- motivates agents to get deals done.

But it's probably better to let the brokers and executives speak for themselves. We'll start at the top drawer:

Uptown boutique firms

It's clubby at the top. Uptown boutique firms rely on reputation, their hold on a niche market and their sophisticated sales associates. They get their employees the same way they do their clients -- referral and reputation.

Kathy Braddock, co-founder of real estate consulting firm Braddock + Purcell and the New York City real estate company Charles
Rutenberg Realty, said that these small companies "are the last holdouts" in a consolidating market where bigger is better.

In a climate where mergers and buyouts are shrinking the number of brokerages doing business in Manhattan, some of these long-established -- and perhaps a little uptight -- boutique firms are discovering that in order to survive, they need to modify the way they do business.

Upper East Side firms such as Alice F. Mason, Fox Residential Group and Gumley Haft Kleier, for example, have expanded from their traditional areas of focus to doing business in the Downtown market.

It's a business where customers are friends, and even potential employees. Edward Lee Cave, owner of the brokerage that bears his name, lives on Park Avenue and has a house in Connecticut where he retreats for weekends. One of his 20 employees has an apartment on Sutton Place and a second home in Connecticut. Another broker lives on Fifth Avenue, has a place in Maine and visits her family frequently in London. "That goes right down the line with our people," Cave said. "We live the life we sell."

Cave has been known to boast, "Our clients, we either know them socially, we went to school with them, or we once were married to them."

Cave has roots in the art world, and maintains his own collection. He was the first American to be offered a senior position at the real estate arm of the storied British auction firm Sotheby's. He was the senior vice president in charge of operations at the auction company and became the founding chairman of their international realty company.

He started his real estate company in 1982, and soon broke some records. He sold Dino de Laurentis' Beverly Hills mansion, which was the highest price paid for a private residence in the country at the time.

Cave focuses on selling "superior" homes rather than just large units or a simple studio or two-bedroom apartment.

"We're like the private banking division in a bank," Cave said.

In this niche, work often imitates life. Barbara Fox, president of the 40-agent Fox Residential Group, said new employees tend to imitate her style, wearing dark-colored jackets and pants, but there is no dress code. Unlike some of the other Uptown boutique firms, Fox Residential Group is a little more relaxed. Employees can wear jeans when they don't have appointments, and they generally eat lunch in the office, often getting the food from the restaurant EAT, a neighborhood diner or sushi.

"They're very down-to-earth businesspeople. That's who I hire," Fox said.

Some Fox agents specialize in neighborhoods outside of the Silk Stocking District, including Downtown and far Uptown. Her agents tend to live in the areas they cover, Fox said.

"I try to have a very well-rounded group, so there's someone for everyone. There's a broker for every buyer," she said.

Fox lives on the Upper East Side and has a country house in Connecticut; other employees have second homes in Connecticut, Westchester, Columbia County and Long Island, including the Hamptons. Her agents have vacationed recently in Mexico and the South of France.

"I'm the only one that doesn't take a vacation," she says.

Brokers range in age from their 20s to their 70s. Fox said, "again -- something for everyone."

Michele Kleier's shop, Gumley Haft Kleier, is known for its high-end Upper East Side business, but with her two young daughters on board in addition to other family members, the company is a little more easygoing.

At the 2005 Gumley Haft Kleier holiday party, held in Kleier's Park Avenue apartment, "The parlor and living room were filled with chic-looking middle-aged agents and their spouses. There were some younger brokers looking like Junior Leaguers and some real estate reporters happily munching food," according to an article in the New York Times.

Still, like at other Upper East Side boutiques, the brokers at Gumley Haft Kleier reflect the client base.

There is no one working there that "I haven't known" in some way, said Kleier, the company's president and chairman. "I don't like dealing with strangers."

Kleier and her husband, Ian, run the 40-person company -- she is a broker, and he handles advertising and the business end. Kleier's best friend and son-in-law work there. And daughter Sabrina Kleier Morgenstern is executive vice president, and her sister Samantha Kleier Forbes is vice president.

Upper East Side natives Morgenstern and Forbes graduated from the prestigious Horace Mann School and the University of Pennsylvania. They both still live on the Upper East Side. Morgenstern started her career at NBC's Access Hollywood before going into the family business.

Two other firms that are holding the old line are Phyliss Koch Real Estate and Alice F. Mason.

Technology, for example, has not been a huge boon to these brokerages, though it's transformed the business at mass market shops.

Alice Mason of Alice F. Mason and Phyliss Koch of Phyliss Koch Real Estate do not rely on e-mail for communication. "I like to speak to people," Koch said. "A lot gets lost in an e-mail."

Koch said that while Corcoran and some of the other big firms will hire "anyone," she only hires people she knows who have a built-in network and knowledge of the city's apartment buildings.

The youngest of her nine agents is in his 40s, Koch said. Koch depends on referrals for customers and her husband and employees for technological matters. She said the Web isn't the answer in real estate because you need to see a property to buy it. "I believe in the personal touch."

Koch lives in the San Remo and vacations in tony Atlantic Beach on Long Island. Known for her focus on the West Side, Koch also does a fair number of deals on the East Side. It's not that Koch hasn't broken any ground. "We've always been up at Columbia when no one would go up there," she said.

She said all the big firms have approached her to buy her out, but she has rebuffed their offers. "We do what we do and we do it fine," Koch said. Besides, she said, "people don't necessarily want to work with a larger firm."

Mason has been in the business since 1953, a time when tony cooperative apartments only sold to people in the Social Register, a directory of the privileged class. At the time, shut out of the social elite, Mason capitalized on Manhattan's rental market. She even found Marilyn Monroe a rental apartment at 2 Sutton Place in 1956 (see How it feels...).

Mason is known for having hosted celebrity-packed dinner parties with guests including Presidents Bill Clinton and Jimmy Carter. She has maintained a stronghold on the Upper East Side high-end market, but as luxury real estate development has extended to Downtown Manhattan, her company is following suit. She says her agents also will handle deals below $1 million.

Times have changed, but Mason still relies solely on the telephone to communicate with her office. She has stayed in her Upper East Side rental apartment for 44 years, where she also works. While many companies are hiring fresh, young talent, most of the 12 employees at Mason's office are in their 50s. All came with built-in networks. Her daughter and senior vice president, Dominique Richard, 45, has worked with Mason for 23 years.

Rental firms

Manhattan's large rental firms are at the other end of the spectrum, with their brokers working to house large numbers of people as fast as they can be put into apartments.

Rental firms attract young employees that need a steady income and are drawn to the promise of a quick paycheck. In contrast to the exclusive, top-drawer mores of the boutiques and sales-oriented firms, turnover is greater and payouts are smaller. Sales agents tend to dismiss rental agents as professional novices.

At the top of the rental food chain is Citi Habitats, the biggest rental company in the city.

Founded by Andrew Heiberger, Citi Habitats has grown from two agents to 680 employees, spread out across 16 Manhattan offices, according to Gary Malin, the chief operating officer since 1998. The company is also the on-site leasing and sales company at 12 buildings in Manhattan.

"Citi Habitats has evolved since its inception in 1993," Malin said. "We're not the new kid on the block."

The company proved the value of its high market share in 2004, when Heiberger sold it to NRT, a subsidiary of the public Realogy Corp. The company, which owns the Corcoran Group, Sotheby's International Realty and Coldwell Banker Hunt Kennedy, paid $49 million for a mix of quantity and quality. Heiberger is now president and CEO of developer Buttonwood Real Estate.

Citi Habitats has served as the breeding ground for many brokers that later went on to start their own rental firms, including Bond New York, Kurland Realty, A.C. Lawrence and Company, and the Real Estate Group New York.

While some agents drew criticism for their business methods in the early years of the firm, Malin's guiding hand improved Citi Habitat's reputation, according to brokers.

Malin said he still hopes to maintain a family-like atmosphere. He said he sends a congratulatory e-mail to agents when they make their first sale and their commission cut increases.

Bond New York, co-founded six years ago by Bruno Ricciotti and Noah Freedman, aims for widespread appeal, as reflected by its employees.

In the company's Greenwich Village office, there are artists, actors, musicians, former Wall Street guys, real estate building managers and even an art professor, said Shane Kramer, 36, the rental manager in the office.

The sales associates dress in Downtown-chic clothing, Kramer said.

"We do have a dress code, but we allow the agents to have their individuality," Ricciotti said. "We're definitely not a robotic operation."

Most of its employees are between 28 and 37 years old, though they range up to 69 years old.

Ricciotti and Freedman are in their early 30s. Freedman likes to surf.

"A lot of people that come here think we're very young and tech savvy," said Ricciotti. "We are super, super cool," he said, tongue-in-cheek.

Benjamin James Associates president Douglas Wagner said his firm "in some ways is the anti-broker in that we've never established a corporate culture. Instead we've always attracted the more sort of freelanced, entrepreneurial, somewhat creative profile in our agent ranks."

Today, the 14-year-old, Downtown-oriented firm's business is 65 percent rental and 35 percent sales. Because of its rental focus, the company appeals to young people, some of whom have been with the company since its inception, Wagner said. Its 80 agents are mostly in their mid-20s to mid-40s, though some agents are in the 50s and 60s, Wagner said.

The company's founder and Wagner's partner, James Ferrari, helped produce a film that debuted at the 2006 Tribeca Film Festival, the romantic comedy "Kettle of Fish," which starred Gina Gershon and Matthew Modine.

"That also influences the creative factor at Benjamin James," Wagner said.

Large firms

The city's biggest firms have an advertising and marketing presence so ubiquitous that casual observers might see them as indistinguishable brands, along the lines, say, of the car rental companies Avis and Hertz.

The Corcoran Group and Prudential Douglas Elliman continue to vie for the top dog spot, said Braddock, a former general sales manager for Douglas Elliman turned consultant.

She says the struggle for the No. 1 spot puts each at risk of losing its unique identity.

"For the broker they're all beginning to feel like they are a Bloomingdale's," Braddock said. "They're the place you can go to get a little bit of everything. You're not going to be blown away by anything, but you won't be lacking either."

But it's nearly impossible for apartment hunters to disregard Corcoran and Elliman, which command huge total market share across a wide spectrum of residential property types. In April 2006, together they accounted for more than 60 percent of listings among the 10 biggest residential firms -- 2,658 out of 4,426, according to a survey by The Real Deal.

Elliman had the most agents of any firm in Manhattan -- 1,337 at the time of the survey. Corcoran had the second-highest total, with 877 agents. The other firms in the top 10 biggest list were (in order of size) Citi Habitats, Halstead, Brown Harris Stevens, Bellmarc, Coldwell Banker Hunt Kennedy, Stribling, Warburg and Sotheby's.

Even in a large organization, a dynamic leader can make a big company feel a lot more like family. When Corcoran founder Barbara Corcoran sold the company to NRT six years ago and Pamela Liebman became the president and CEO, conventional wisdom -- and employee chatter -- indicated that the company went from a family-run business to a corporate environment.

Under Barbara Corcoran, agents were offered in-house weekly massages, manicures and shoeshines. The perks have disappeared and so has a bit of the spirit, some brokers say.

"She was a leader that people followed. She appealed to many people," said an industry source who requested anonymity.

Corcoran herself described the company she ran: "It was very much a family atmosphere because I knew every agent and we put every agent first. The agent was the God we served, not the customer."

The insider added that Pamela Liebman is more businesslike and buttoned-up.

But, the culture shift at Corcoran is not really about Liebman versus Barbara Corcoran, Braddock said. It's about being a part of a public conglomerate rather than a private entity.

But real estate pros still praise aspects of Corcoran's operations, particularly the strength of the brand name and the company's comprehensive Web site.

Brokers that stayed at Corcoran or joined since the NRT sale have benefited from Liebman's no-nonsense style, which is responsible for expanding the firm significantly in the Hamptons and Florida. The Corcoran Group declined to comment for the story.

In many ways, Corcoran's rival Elliman shares a similar atmosphere.

They are both large companies under the leadership of a strong woman. CEO Dorothy "Dottie" Herman is seen by some as dynamic and similar to Barbara Corcoran.

"Dottie Herman is like what Barbara Corcoran used to be," said Leonard Steinberg, a Downtown broker who has been with Prudential Douglas Elliman for five years. But, unlike Corcoran, Steinberg added, there is the advantage that Herman is a broker. "She's definitely a broker's broker."

Elliman also declined to comment for the story.

Esther Muller, who runs the Real Estate Academy for Continuing Education, said Herman and chairman Howard Lorber run the company like a mom-and-pop shop despite its size.

While some people thrive on just being with a large company, others at big brokerages strive to create the boutique feeling by partnering up with other sales associates.

"The teams are taking over," Braddock said, "I think much more so." Like individual imprints at large publishers, the giants offer room for branding and individual identities through these groups. At Elliman, that's evident in the Bracha Group and the Jacky Teplitzky Team.

Others, including Michael Shvo and Shaun Osher, have ridden on the coattails of their success at Elliman to start up their own firms. Shvo headed the top producing group at Elliman in 2003, and Osher did the same in 2004.

Osher left two years ago to start up Core Group Marketing.

"I created my firm to provide individual attention," Osher said. "The larger these companies grow, the more they have to operate like a corporation. And buying a piece of real estate is a very personal and not corporate decision."

At another large firm, Halstead, sister company to Brown Harris Stevens, there are still some personal touches.

Richard Hamilton, a senior vice president in the Halstead Village office, gets a five-figure ad budget -- and access to a refrigerator filled with cold drinks, he said. "They put Diet Dr. Pepper in there for me."

Higher-end mid-sized firms

For agents who like the small-company feeling but find a boutique firm to be too stifling and a large brokerage too impersonal, a mid-size company is often a good option.

Mid-sized firms roughly divide into two categories in Manhattan -- the mostly independent, Upper East Side higher-end firms that are cousins of the Uptown boutique brokerages, and middle-market firms aimed at the bulk of the market.

At these mid-sized firms, management is still able to have an influence on the day-to-day affairs of every broker.

Frederick Peters, president of Warburg Realty Partnership, does not concern himself with providing free soda, juice and ice for agents.

"As far as I'm concerned, a lot of that stuff is gimmicky, and that's not what we're about," Peters said.

Peters is more concerned with the preservation of his company's image. "We certainly have high behavioral standards," he said. Keeping his finger on the pulse of the company is important to Peters -- he manages 150 agents in the company's five Manhattan offices and interviews job candidates personally. He also runs office meetings.

Similar to many other high-end brokers and managers interviewed at large and small firms, Peters has a second home in northwestern Connecticut.

"We are an intimate pick that is still a status pick," Peters said. He said Stribling, a rival firm, is most like his own company.

Venturing a bit beyond the company's traditional areas of coverage, Warburg established a luxury brokerage office in Harlem in 2004, and has recently added Downtown offices as well. Peters has expanded the company from 60 to 150 brokers, and from one to five locations since acquiring and renaming the 95-year-old firm Albert B. Ashforth in 1991.

Elizabeth Stribling, owner and president of Stribling & Associates, is as famous for her stylish suits -- all made by French designer Christian Lacroix -- as she is for the zip codes of the homes she markets, including the residences at the Plaza Hotel.

That concern for presentation filters down to her employees. A dress code is strictly enforced in the 200-person company, whether agents are hanging around the office or out showing property. "Jackets for men and a suit or a dress for the ladies," Stribling said via telephone from France. "I'm an old fashioned gal."

Like Cave, Stribling lives the life she sells and the business follows suit. She owns a townhouse in the East 80s and retreats to her two homes in France to escape. Likewise, Stribling & Associates has a Manhattan and European presence. The company has three Manhattan offices -- on the Upper East Side and in Tribeca and Chelsea -- and conducts business in the West End of London and the South of France, Stribling said.

Of all the firms, Stribling said, Brown Harris Stevens most closely matches her company. "I think Brown Harris puts a lot of emphasis on professionalism, comportment, service."

More upscale and smaller than its sister brokerage Halstead Property, both part of privately held Terra Holdings, whose owners include two members of the Zeckendorf real estate family, Brown Harris Stevens focuses on the high end of the market.

Brown Harris is the biggest of the white-shoe brokerages and among the most respected. The firm had 264 agents at the time of The Real Deal's biggest firms survey in April 2006.

"I think in most ways we try to be the luxury brand," said Jim Gricar, an executive vice president and director of residential sales for the West Side division of Brown Harris Stevens. "We tend to have the most luxury, white-shoe image."

Of the department stores in the city, Bergdorf Goodman most closely reflects the image of Brown Harris Stevens, Gricar said, "in terms of size and presence."

Brown Harris Stevens' agents work in seven New York City offices on the East Side, West Side, Downtown and in Brooklyn. The company also has offices in the Hamptons.

Brown Harris Stevens has always been "considered a little bit more buttoned-up," and Halstead is a bit cozier, said Braddock of Braddock + Purcell.

Sotheby's International is another high-end firm with a mid-sized presence in Manhattan. It is different than Stribling, Warburg and Brown Harris Stevens because it is part of the NRT national conglomerate, which includes Coldwell Banker Hunt Kennedy, the Corcoran Group and Citi Habitats -- even if it is a high-end part of that chain.

Kathryn Korte, the new president and CEO of Sotheby's International Realty, said the firm is known for its 200-year history as a luxury brand name and its art auction business, which often refers collectors to buy multimillion dollar homes from the brokerage.

"The Sotheby's auction client is the Sotheby's real estate client," said Korte, who has spent her 22 years in real estate at the firm.

Like Manhattan's boutique firms, Sotheby's hires through word of mouth, and its employees tend to live the lifestyle they sell, said Korte.

Sotheby's Manhattan brokers live on the East and West sides and Downtown, except for one agent who resides in Locust Valley on Long Island, Korte said, and many have second homes in the Hamptons; Litchfield, Connecticut; and Millbrook, NY.

Elliman's Steinberg described the Sotheby's Downtown office as friendly, but "Uptown it's cold, it's like the temperature is on 40 degrees."

Middle-market, mid-sized firms

In a rapidly consolidating market, the future looks grim for middle-market, mid-sized firms, some observers say. Buyouts may soon swallow firms of this size until the market is split between behemoth brokerages and boutiques. Managers at these firms disagree, though it seems that mid-market prosperity comes with affiliation with a larger company.

One mid-sized firm backed by national real estate conglomerate Century 21 is trying to grow into a larger firm by assembling pieces of smaller firms.

The marriage of two distinctly different brokerages, Dwelling Quest and Century 21 Kevin B. Brown, resulted in the 140-person Century 21 NY Metro, which is split between two Manhattan offices, one on East 57th Street and the other in Harlem. The franchise, which does not specialize in the high end of the market, includes Dwelling Quest's hip, tech-savvy brokers and Century 21 Kevin B. Brown's more seasoned and mature brokers.

"The young, upstart side of the business has really carried us," said Michael Simon, president of Century 21 NY Metro.

But the two sides have found a common ground, with Dwelling Quest employees turning to their older colleagues for experience and training, and the Kevin B. Brown folks looking to their younger colleagues for their Interne t know-how, Simon said.

Also part of a franchise with worldwide connections, Coldwell Banker Hunt Kennedy has more than 275 agents in the New York City division, at the company's three Manhattan offices.

Like Century 21, Coldwell Banker is not necessarily a super-luxury market specialist, but JoAnne Kennedy, COO of Coldwell Banker, said that agents at the brokerage will make money and get stock options.

About 20 percent of the New York City business is rentals, Kennedy said. The downtown office is the most laid-back, young and fun of the three Manhattan offices, Kennedy said.

Kennedy lives on Riverside Drive and has a house in Dutchess County. If she had to pick a department store that best represented Coldwell Banker, "we're probably Saks," she said.

Not every middle-market firm is part of a conglomerate. Bellmarc, which has 250 agents in six Manhattan offices, has been going strong for 27 years. Janice Silver, executive vice president and sales manager of Bellmarc's East Side office, said that only about 5 percent of the company's business is rentals.

Neil Binder and Marc Broxmeyer established the Bellmarc Companies in 1979.

While Broxmeyer focuses on the company's real estate investment acquisitions and management, Binder guides the direction of the company, develops the new agent training curriculum and leads many of the seminars.

Muller, of the Academy for Continuing Education, said that Binder is a "born teacher," and likes to hire new agents so he can train them himself. Muller said that Binder's emphasis on education is evident in that agents cannot take a buyer out to see a property unless they have memorized the contract of sale.

Downtown specialists

Just as Uptown has its boutique brokerages, so does Downtown. Like with other firms, their companies' cultures tend to line up with the types of clients they serve. In this case, it's the more artsy Downtown demographic.

Among the many boutique brokerages Downtown, DG Neary Realty and its 30 or so agents (according to the firm's Web site) have had a hold on the Chelsea market for 20 years. In addition to the company's sales and rental business, it's also one of the only residential real estate companies that explicitly caters to the gay community and helps run the Gay Roommate Information Network.

"Pretty much everybody lives in the neighborhood and works in the neighborhood," said managing partner Gil Neary. "We're kind of neighborhood people. I rarely leave the neighborhood."

Neary and his partner Dan Gerstein run a mom-and-pop shop, sitting just an arm's length away from the agents.

The agents can dress very casually; even Neary wears jeans and sneakers when he has no appointments with clients.

Another firm with a big Downtown presence, JC DeNiro & Associates, has 12 agents in its Chelsea office, where Christopher Mathieson, partner and co-owner, is based; 11 in the West Village; and six on the Upper West Side. The other three agents work from home.

Mathieson, who co-founded the four-year-old company with Florida-based 82-year-old Jack DeNiro (who is also Robert De Niro's uncle), puts an emphasis on the appearance of the storefront offices and the appearance of the block.

He is involved in street beautification and designs and buys the furniture for the offices himself. Each desk and chair is unique.

"People think it's a gallery or a furniture store," Mathieson said.

The agents range in age from 24 to the mid-40s and hail from the neighborhoods where they work. Part of the company's business model, Mathieson said, is "where we have offices is where we hire agents. They're part of the fabric of the community."

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Real Estate The September Factor September 18, 2006 Amid talk of “plateaus” and “softening,” the real-estate world is watching this month extra closely. • By S.Jhoanna Robledo   It’s…... Read more >

Real Estate
The September Factor
September 18, 2006
Amid talk of “plateaus” and “softening,” the real-estate world is watching this month extra closely.
• By S.Jhoanna Robledo
 

It’s been a funny sort of summer in the real-estate world, as the July and August doldrums have felt less like the usual quiet and more like the beginning of something bad. Ask Prudential Douglas Elliman broker Lisa Wong, who admits to a little survivor guilt. Though she’s been able to buy and sell properties for a steady trickle of clients—a big difference from the deluge a year or two ago, she does admit—many of her colleagues have found themselves with more time on their hands to agonize over the flattening market. Will it get better? Or worse? “I’ve heard that it’s dead,” she says.

April may be the cruelest month, but many agents say it’s September that’s make-or-break time for them. “It’s a litmus test for what the rest of the year will be like,” says Christopher Mathieson, managing partner at JC DeNiro. “This one’s really important because we want to see if the market’s going to continue to plateau.” And they’re hoping the news is good, given all the pessimism out there. A recent Halstead Property report showed that prices dipped 12 percent from June to July this summer; brokers say August was even more sedate. To make deals stick, “you have to work two or three times harder,” says Wong. “You’re getting lowball offers and calls you’d never get before. For something worth $1.9 million, you’ll get an offer for $1.6, something crazy.” Which explains why many agents look forward to the early fall, when beach homes have been shuttered, kids are back in school, and vacation days are used up. “It’s a renewal,” says Barak Realty’s Catherine Holmes.

Or maybe not. “September is clearly a better gauge than July or August. That being said … brokers are like everybody else. They’re looking for benchmarks. Obviously, if you can create some kind of benchmarking for September [and you reach it], it’s reassuring,” explains Frederick Peters, president of Warburg Realty. But if not, says broker Barbara Fox, it’s no reason to reach for the panic button, either. “We’re coming off the most frenetic market in history, and what we’re seeing now is more normal,” she adds. “This is what people who’ve been in business a while are used to.” Besides, says Mathieson, the calmer market may actually be a blessing. “It can be a little boring,” he says, laughing, “but it’ll give us an opportunity to have a life.”

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September 10, 2006 When a Deal Turns Sour By TERI KARUSH ROGERS THOSE who bought an apartment in the last dozen years or so — and who may well have fought to get it — may be shocked and very likely…... Read more >

September 10, 2006

When a Deal Turns Sour
By TERI KARUSH ROGERS

THOSE who bought an apartment in the last dozen years or so — and who may well have fought to get it — may be shocked and very likely offended to learn that they are actually living in a lemon. They are hardly alone.

“The concept of anything being hard to sell is completely unfamiliar at this point to a whole generation who have grown up in the market since around 1992,” said Frederick W. Peters, the president of Warburg Realty, referring to the fact that in a rising market, buyers are more likely to snatch up flawed properties. “A 20 percent increase in your value of real estate was like a constitutional guarantee, kind of like life, liberty and happiness. But buyers are more anxious in a slower market.”

That anxiety is creating a more expansive crop of so-called lemons, Mr. Peters explained. Defects like airshaft views are becoming deal killers as buyers agonize about how such shortcomings will affect price when it’s time to sell. And with so much more on the market to choose from, buyers are favoring blue-chip properties over cubic zirconia or even diamonds in the rough.

So what is a lemon these days? Rising construction costs and more onerous construction rules in some co-ops have made a lemon out of anything that needs a gut renovation, once a mainstay of up and down markets alike. But many problems — like impaired views, lack of light and high maintenance or common charges — retain their repellent qualities in any slow market.

Other immutable lemons include properties with extraordinary flip taxes, which may limit sellers’ ability to negotiate, and buildings that don’t own the ground beneath them.

Consider the young couple who bought an apartment in an Upper East Side postwar building with a land lease in April 2004. They thought they had negotiated a good deal, paying around $600,000 for a two-bedroom, two-bath unit on the 11th floor with open city views and a full dining room.

Then they executed “the perfect renovation for this kind of apartment,” said Audrey F. Ruden, the Prudential Douglas Elliman broker who recently attempted to sell it. “They didn’t overimprove it — they paid a lot of attention to the details that matter, installing a washer/dryer, a great kitchen and bathrooms, and windows with extra insulation in the master bedroom so it was soundproofed.”

The couple listed it in April for $1.15 million. The apartment sparked intense interest from the 40 or so buyers who saw it, Ms. Ruden said. But the building itself sat on leased land scheduled to be revalued in December and every six years thereafter, an unusually short period for land leases, which are normally recalibrated every 20 or 30 years, or even longer.

Because of rocketing real estate values in recent years, much higher land-lease costs could increase the apartment’s monthly maintenance of $2,170 by nearly $1,000. The apartment’s only bid, for slightly under its asking price, failed to go forward.

Meanwhile, the remaining would-be buyers drifted away wistfully as they — or their lawyers — noted the likely spike in maintenance, Ms. Ruden said. The sellers took the apartment off the market in June; they plan to try again once the land lease is recalibrated in December.

As with any citrus-y drawbacks, often the best strategy for a stricken seller is to offset flaws with a lower price. “There is a lid for every pot,” said Barbara Fox, the president of the Fox Residential Group. “Everything is salable for a price.”

Last year, Ms. Fox herself bought what she described as a lemon: a two-bedroom East 70’s penthouse with a wraparound terrace, owned by a 50-ish Austrian bachelor, that had been on the market for more than a year.

“Every wall had either some sort of gun or saber,” she recalled. “Also, every book on the bookshelves was about Adolf Hitler or the Third Reich. The apartment had not sold because the vibes were so negative.”

The asking price for the prewar co-op plunged from $4.3 million, to $3.99 million, to $3.650 million. Ms. Fox and her husband, James Freund, an author, mediator and retired lawyer, bought it for $3.3 million in June 2005. “We gutted every single interior wall,’’ she said. “We just purged it all.”

But pointing to a major turnabout in the market, Ms. Fox and other brokers say that fewer buyers are willing to shoulder increasingly grueling gut renovations. The shifting attitude toward fixer-uppers seems to contradict the proliferation of home-improvement shows on television over the past decade.

“In the early 90’s, during the recession, there was a whole cottage industry of people buying apartments, renovating and flipping,” said Jonathan J. Miller, the president of the Miller Samuel appraisal company. Next, during the housing boom, “there was such tight supply that people would buy anything,” he said.

One reason for the growing disinclination toward renovation is that while the discount for a wreck has remained steady at around 20 to 25 percent, the cost of construction has soared, Mr. Miller said.

Mr. Peters of Warburg Realty blamed Hurricane Katrina for the spike in the price of building materials. “It’s hard to do a decent renovation in New York now for much less than $200 a square foot,’’ he said, “and even that’s relatively low.”

But cultural change may also be forcing the fixer-upper’s fall from grace.

“In New York, every year it seems people work longer hours, so the truth of the matter is that the number of people prepared to undertake renovation seems to grow smaller and smaller,” Mr. Peters said. “They don’t want to devote their leisure time to supervising a renovation.”

Also, the intensive marketing sparked by thousands of new condominiums may have stoked a desire for immediate gratification and a tropism toward brand-new apartments. “I don’t know if all those new condos were built in response to a new demographic that just had no patience for renovation or if the new condos created the culture,” Mr. Peters said. “I don’t know if it’s the chicken or the egg.”

Ray Kiswani, a senior vice president of Bellmarc, faced a double whammy when he was hired to market “an absolutely unlivable” wreck, a 500-square-foot junior one-bedroom in a prewar co-op on West 86th Street. The sponsor had tried to sell it for almost a year.

“There was no kitchen, only a sink, and the wires were hanging from the ceilings,” Mr. Kiswani said. “There were no hardwood floors, just cracked concrete.”

In addition, he said, maintenance was more than $2 per square foot “because when the building was converted to a co-op, the attorney who did the offering plan thought that the attached terrace belonged to the apartment.” Standard maintenance charges run about $1.50 a square foot.

Mr. Kiswani asked an architect to create a set of renovation plans so that buyers could see past the dismemberment, and also persuaded the sponsor to offer a $300 per month rebate on the maintenance for three years. Two weeks after the apartment was listed for around $400,000, it sold in a two-way bidding war to Javier Frias, 27.

Mr. Frias is negotiating to buy the terrace from the building so that he can create a two-bedroom, two-bath apartment. But it’s taking months longer than he expected, which is another reason wrecks are less popular than ever.

Another reason is that building boards are taking a dim view of renovations. “The boards and the buildings have gotten so much tougher on their alteration agreements,’’ said Diane M. Ramirez, president of Halstead Property. “It’s almost like one building will think of something” — yet another rule — “and another will add it. On the top of the list is ‘summer renovations only.’ What if you buy an apartment in June?

“You have to wait till the next summer. So added to the cost of the apartment is a year’s worth of carrying charges. And if there is a renovation following yours, you sometimes have to go to the back of the list again to finish up.”

Just like apartments that need extensive renovations, a dreadful view can scare buyers away. The price penalty could be “10 to 20 percent if you’re looking at an airshaft or in very close proximity to a building, as compared to clearing the roofline of the adjacent building,” Mr. Miller said.

So how close is too close? “If you’re looking out the window and can read the headlines in the person’s paper across the way, it’s going to be tough to sell,” said Marc G. Windheuser, an associate broker at Prudential Douglas Elliman.

Jorden Tepper, a vice president and a managing director of Manhattan Apartments Inc. and of Manhattan Lofts Inc., said: “It’s not views especially but having some kind of openness. If you’re looking into a brick wall, it will take a lot longer to sell.”

Or not, with the right spin or the right buyer.

“I used to hold my breath and say, ‘This would make a great media room,’ ” said Harriet M. Norris, a sales agent at Prudential Douglas Elliman, who was referring to a bedroom that faced a wall in a $4.5 million Central Park West apartment she marketed last year. She eventually sold the apartment to a banker who planned to use the view-challenged bedroom for a small child.

Dim rooms have also been pitched as photographer’s darkrooms or meditation spaces. “Frequently you can compensate if you decorate well and have clever lighting,” said Mr. Peters, who suggested installing sheer curtains backed by small light bulbs that mimic daylight. “It improves the situation enormously. You’re less aware of something ugly outside the window, and you create the illusion of light coming in.”

Other properties prone to purgatory include walk-ups — particularly those on the upper floors, which are typically coveted by only a narrow subset of buyers. “Usually it’s a younger person who’s just out of school who’s maybe already lived in a walk-up building,” said Jill Sloane, a senior vice president of Halstead. But buyers accustomed to living in an elevator building or those with young children are much less interested.

The problem posed by a different sort of walk-up — the penthouse apartment, often one added later, that must be reached by a flight of stairs after an elevator ride — can occasionally be surmounted, literally: “Sometimes with rich people, what happens is they figure out a way to bring the elevator up to their apartment,” said Ms. Ruden of Prudential Douglas Elliman.

Brokers say apartments with tenants living in them, particularly messy tenants, are hard to sell, as are those owned by divorcing couples when one spouse is not in favor of moving and attempts to sabotage everything from showings (like canceling them at the last minute or loitering on the premises) to appraisals (pointing out the apartment’s every fault).

Overly customized apartments (“I’ve seen stuff like bathroom tiles bearing the faces of the owner’s kids,” Mr. Miller said) or overly improved apartments (a glorious renovation in a rundown building) do not fare well.

Maintenance much higher than $1.50 per square foot in a full-service building can also dull a buyer’s appetite, as can a prohibitively high flip tax that handicaps a seller’s willingness or ability to negotiate. A flip tax is money collected by a co-op board from a seller; it can be based on the number of shares held, although it is often a percentage of the sale price or of the seller’s profit. Although very high flip taxes can have a negative impact on a sale, the opposite could be true for a more modest flip tax, Mr. Miller pointed out, because it helps the building finance future capital improvements.

Ms. Sloane is currently listing a $499,000 one-bedroom co-op in move-in condition in a brownstone on West 88th Street. It has 12-foot ceilings, a $521 maintenance and a whopping 33 percent flip tax. It was on the market for eight months with two other brokers and after a $100,000 price reduction, has been listed with Ms. Sloane since June. She said it has received no offers.

Fortunately for sellers, it’s tougher nowadays to be disqualified on the basis of location. “There are no neighborhoods anymore — it’s just Manhattan,” said Ms. Ramirez of Halstead. “People have their preferences, but it’s just, ‘Find me a great apartment.’ Whereas in the past everything was advertised ‘East of Lexington.’ ”

While brokers contend that the one sure way to make lemonade is to lower an apartment’s price, sellers beg to differ. Much like parents who are blind to their children’s double chins, owners who were grateful to lay their hands on an apartment — any apartment — during the recent boom resist the notion that today’s buyers may be less willing to overlook its drawbacks.

“I have an apartment I absolutely love,” said Caroline Dawson, 30, who paid $379,000 two years ago for a duplex in a walk-up building on West 49th Street between Ninth and 10th Avenues. The 700-square-foot apartment has two full baths, high ceilings on the second level and a bedroom and sitting area in the partly-below-ground basement.

Ms. Dawson, who certifies fitness instructors, is moving to New England and has put the apartment on the market in May for $499,000. Her broker, Ms. Sloane, cited its ground-floor location as a turnoff for many buyers. “There’s been lots of interest,’’ she said, “but no one has pulled the trigger.”

Ms. Dawson said she didn’t look beyond the low maintenance (now $490 a month) and certain aspects of the apartment’s aesthetic appeal when she bought it, failing to consider how the ground-floor issue might downgrade the duplex’s charm.

“I never once considered the resale value of the apartment,” she said, pointing out the positive aspects of a basement bedroom insulated against the summer heat and winter chill. “Maybe I should have.”

 

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August 2006 Manhattan real estate feels pinch from stock market Link between Dow, New York real estate hard to pin down, but both now in rockier straits By Lauren Elkies    In normal conditions,…... Read more >

August 2006
Manhattan real estate feels pinch from stock market

Link between Dow, New York real estate hard to pin down, but both now in rockier straits

By Lauren Elkies 
 

In normal conditions, investors turn to stocks when real estate offers little promise, and head for property when equity returns taper off.

However, the last few months have shown an unwelcome correlation between two generally separate investment arenas: The benchmark Dow Jones Industrial Average of blue chip stocks sagged 4.3 percent from mid-April through mid-July and, at the same time, most key real estate market indicators sagged in New York City. Inventory rose and time on the market increased, though high-end properties kept median prices fairly constant.

But pundits differ on how stock market performance affects real estate prices.

How it affects New York real estate purchases is a bit more clear. It's more about the volume than its direction, said Jonathan Miller of appraisal firm Miller Samuel.

"It's a big misconception that the directions of indexes allow you to anticipate the real estate market," he said. "It's the churn, the volume of trades, that would likely have more of an impact on real estate."

Greater trade volume generates greater profits, and in a city where high-end real estate is bought and sold by the titans of finance, there's a link between yearly bonuses and apartment purchases.

"I think when you look at Wall Street, the first thing to zero in on is income and jobs," Miller said. "When everybody makes more money, it affects real estate purchases."

While the stock market is not on pace with last year's, the economy is doing quite well, said Susan Wachter, professor of real estate and finance at the Wharton School of business at the University of Pennsylvania. Indeed, the number of private sector jobs nationwide increased by 368,000 in June, according to a report released by Automatic Data Processing, a payroll services company.

Real estate established itself as a separate asset class in 2000, following the collapse of the stock market and the end of the technology boom, said Frederick Peters, president of Warburg Realty Partnership.

"Certainly [the market] affects real estate purchasing," he said. "It doesn't affect it precisely the way it used to." Before the crash, the real estate market would imitate the stock market six months later, Peters said.

"People, when they're unsure about the stock market's future, they want something they can see, touch, feel," said Gregory Heym, the chief economist for the brokerages of Terra Holdings, including Brown Harris Stevens and Halstead.

The Dow Jones Industrial Average and the average Manhattan apartment sale price have seemed to rise together over the years, a chart (below) by Miller Samuel shows. But Miller noted that there is no correlation between the two graphs; their similarity is coincidental, he said.

While there's uncertainty about what bonuses will be in December, people in the finance industry are more preoccupied with the amount Federal Reserve Chairman Ben Bernanke will raise interest rates, Heym said. Some economists worry that the Fed will overinflate interest rates.

At the end of June, the 30-year fixed mortgage rate was 6.8 percent, up from 5.8 percent at the same point last year, but still nearer to historic lows than prohibitive highs.

Rising interest rates don't just affect mortgage payments, but also affect the overall economy, which in turn affects real estate, Peters of Warburg said.

"I think the issue with interest rates is what are they a reflection of," Peters said. "To the degree that interest rate changes are a reflection of the Fed concern with inflation and to the degree that concern with inflation could slow down the whole economy, it definitely affects my industry."

Generally, economic factors work in concert and affect both the real estate market and stock market, rather than creating a direct correlation between stocks and real estate.

"Fluctuations on Wall Street always affect real estate buying," said Steven Spinola, president of the Real Estate Board of New York. "How Wall Street goes, so goes New York City real estate."

Sometimes the financial market does not seem to have any relationship to the real estate industry.

"The greatest increase in real estate was when the market was doing nothing between 2002 and 2005," said Ron Gallen, a Manhattan financial counselor. "That was an unbelievable boom."

On Wall Street, (bonus) size matters

Of course, bonus size is driving real estate purchasing decisions for Wall Street bigwigs -- and this year's dividends climbed to a record level.

The yearly payouts by Wall Street firms contribute more to decisions affecting New York real estate than the movement of the market, said Ron Gallen, a Manhattan financial counselor.

"The record bonuses are making people buy higher-priced apartments," said Debbie Baum, senior associate broker at the Corcoran Group.

Bonuses have "empowered those people that got really big bonuses to go ahead with the real estate they were already hoping to buy," said Frederick Peters, president of Warburg Realty Partnership.

A real estate purchase does not always immediately follow receipt of a bonus.

"People that are getting these bonuses and are buying real estate may not buy the first year," said real estate appraiser Jonathan Miller. "They have it in their purchase arsenal."

 

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Running the real estate numbers ragged Oft-quoted facts and figures about New York markets require second look and a critical eye By John McMurray In early summer, the Real Estate Board of New York issued…... Read more >

Running the real estate numbers ragged

Oft-quoted facts and figures about New York markets require second look and a critical eye

By John McMurray

In early summer, the Real Estate Board of New York issued a press release saying that median sale prices for Manhattan condominiums rose by 22 percent in the first quarter of 2006 relative to one year ago, while sale prices for co-operatives were up by 5 percent during the same period.

Although the figures in the REBNY release are correct to the extent that transaction data is available, those numbers don't tell the whole story about getting a correct interpretation of real estate data.

In Manhattan, where the majority of co-op sales data is private, most prices are not made public. So price data for co-operatives is often incomplete (though that looks likely to change under a bill expected to be signed into law by Gov. Pataki making co-op sales data public), and the numbers that circulate are inadequate. At the same time, median price figures can vary widely from quarter to quarter since one very large sale can raise the median significantly. Price-per-square foot is a much more reliable indicator, though that figure, too, is often not available for co-op sales.

"Whenever a market report is released, it's always possible to take a single statistic and harp on it," says Greg Heym, director of research and chief economist for Halstead Property in Manhattan. "People may say, 'Look, this area of the market is slowing, and here's the number that shows it.' That's why it's always important to use statistics like average or median price in conjunction with other indicators to get an accurate idea of what's happening."

Also, in Manhattan, many commercial brokerages do not use standardized neighborhood boundaries. As a consequence, the vacancy and rent data which brokerages publish in their respective real estate reports can differ widely over what may not be the same turf.

According to Maria Sciola, senior managing director for national research at Cushman & Wakefield, "When you see variations between companies, it's usually due to how the geographic boundaries are assigned and how spaces are defined. Do they include all buildings? Is it just buildings over a certain size? Is it only buildings that have space available? Answering those questions differently can yield different results. Even with these variations, though, companies agree on the overall direction that things are going 99 percent of the time."

Relying on national housing data can also be problematic to home buyers, says Frederick Peters, president of Manhattan-based brokerage Warburg Realty.

"Buyers should always rely on regional data because we're just too big a country for what's going on in Spokane or Miami to be germane to our market," Peters said. "After the oil bust, the Texas housing market was in the doldrums for decades, but that had no impact on what was going on in Manhattan. You also need to make distinctions about why people are buying and selling. A market where second-home purchasers and investors are putting no money down is very different from Manhattan, where people are regularly putting down 50 percent when buying co-ops."

Peters also believes that the news media should be vigilant in specifically defining the housing statistics that they discuss. Moreover, in writing about April closings, for instance, Peters contends the media should stress that those closings are really an indicator of housing activity two or three months earlier. By not doing so, Peters feels the media hypes the data as being inappropriately current.

"Making that distinction doesn't require rocket science," he says. "Nonetheless, it's rarely acknowledged."

In housing data, statistical variations abound, and the average buyer can feel overwhelmed. "You can never have too much data or too much information when it comes to housing," says Sciola. "The challenge is being able to interpret it."

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A REWARDING MARKET FOR SAVVY BUYERS AND SENSIBLE SELLERS 2006 Mid-Year Market Review By: Frederick W. Peters, President, Warburg Realty Partnership New York City in the first half of 2006 has seen a stable…... Read more >

A REWARDING MARKET FOR SAVVY BUYERS AND SENSIBLE SELLERS
2006 Mid-Year Market Review

By: Frederick W. Peters, President, Warburg Realty Partnership

New York City in the first half of 2006 has seen a stable active market with little real price growth over the last quarter of 2005. Supported by a strong national economy and local job growth fueled by a busy Wall Street, and controlled by rising interest rates and buyer caution regarding overpricing, this market has rewarded the careful buyer and the sensible seller. Well priced properties have sold briskly, many in overbids, as have both the highest end new construction in the luxury areas and those projects whose less traditional locations have been offset by reasonable pricing. Overpriced properties on the market in every part of the city have languished, causing sellers to lower these prices to more reasonable levels in order to become competitive. This phenomenon has been misinterpreted by the press, who tout it as an indication of a weakening market. It is not.

Certainly the market is much different from that of late 2004 and early 2005. We do not have runaway price increases. Every property, no matter its quality or provenance, does not attract several bidders who feel they must offer the asking price to even get into the game. As sellers continue to ask overly ambitious prices for their properties, they linger longer in the marketplace. Inventories rise. Thousands of new condominiums move into the marketplace, boosting the stock of available properties still more. Reports are no longer about the bubble bursting, but about gradual deflation, making buyers already fearful about making a mistake even more anxious.

Actually today’s residential market is filled with buyer opportunities. In the one bedroom and small two bedroom markets, ambitious sellers have priced many properties beyond their value. As a result there are many choices for the buyer, who can leverage one property against another to make sure he or she gets the best possible price. Buyers, who in recent years have been reluctant to make offers because they felt anything below the full price would fail to interest the seller, should now be prepared to negotiate. If a property has lingered on the market, it is frequently possible to offer 10% to 15% below the asking price and get a seller response. As rents have stabilized and increased, and landlords have become less flexible about giveaways, buying is once again a better and more intelligent financial option for many consumers eager to both build equity and get a stakehold in the New York market.

The family apartment market has expanded to every corner of the city. Conversions in northern Manhattan, new condominiums and conversions in Harlem, high rises appearing along the Broadway corridor between 90th and 106th Streets on the Upper West Sides, and cranes on every corner in midtown both East and West, in the East Village and on the lower East Side, in Tribeca, in Williamsburg and Greenpoint in Brooklyn, are all adding inventory to the options available for this demographic group. Families are being courted everywhere. While the prices of the traditional pre-war five, six, seven and eight rooms co-ops on the Upper East and West Sides have held firm and even risen slightly, there are opportunities at a wide range of different prices in the neighborhoods mentioned above, as well as Brooklyn’s exquisite brownstone areas, Long Island City, and for the adventurous SoBro, the newly rechristened South Bronx. And each, with its new and renovated housing stock, pocket parks and gradually increasing influx of services, is attracting its own enthusiasts.

The luxury end of the residential market has never been more active. Here there is never quite enough inventory along the fabled avenues and streets of the city’s most elite neighborhoods. Wall Street executives, hedge fund pioneers, and the wealthy from South America, Europe, Russia, Korea, China, and around the world wait anxiously for a new alternative and then rush to see it, once again bidding against one another to secure their piece of the top of the rock. The very large co-ops and condos in the most desired buildings are quickly bought up for prices at $4000 per square foot and higher, while the ultra luxury townhouse market is depleted. For these properties 2006 has been a record breaking year.

For the consumer the current market is difficult to penetrate. The press reports stable or slightly increased prices but uses increased inventories and slowing rates of increase to predict a downturn. The national economy is strong, but the Federal Reserve fears inflation and interest rates have mounted steadily for a year and a half.

At Warburg we recommend sticking to fundamentals. Do not buy if your goal is to double your money in twelve to eighteen months. New York real estate is a great investment, but it is best to have a time horizon of at least three to five years. There are a range of options, from introductory units to the most luxurious, in almost every neighborhood. Do your homework, both on line and through your broker, to determine which area and property type best suits your needs. Buy and sell in the same market. In our experience, those who try to sell at the top and buy at the bottom only outwit themselves 99% of the time. And don’t think of your home primarily as an investment. This is the world’s greatest city, with an extraordinary diversity of neighborhoods, of ethnic groups, of arts and culture, of restaurants, schools, and experiences. More than anything else, your home in New York is your passport to the richness of life in this amazing place.

 

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Are There Enough Buyers to Go Around? By JOSH BARBANEL CONDOMINIUMS have become a familiar sight in Manhattan in the last couple of years, punctuating the skyline from Battery Park to Harlem and most…... Read more >

Are There Enough Buyers to Go Around?
By JOSH BARBANEL

CONDOMINIUMS have become a familiar sight in Manhattan in the last couple of years, punctuating the skyline from Battery Park to Harlem and most neighborhoods in between.

But as these condos are marketed — each carrying sky-high prices and a competitive list of amenities — and still more are breaking ground, it is hard not to wonder whether there are enough buyers to go around.

Not only are there thousands of condos currently on the market, but a review of building plans submitted by developers to the state attorney general's office shows that this building binge has not yet slowed down and may produce a supply of new apartments that could be around for a while.

So far, applications have been submitted for more than 24,000 condominium apartments since January 2004, 7,000 of them in the first half of this year alone. This increase in filings comes as supply in the current market has been rising steadily, with broker listings nearly doubling since 2004. And since many developers list only a sampling of apartments in new buildings, the numbers of apartments available for sale is probably significantly larger than the inventory listed with brokers.

Still, despite caution by some lenders and some customers, many others, including condo developers, brokers and buyers who are still signing contracts and putting down hefty deposits, say they have an abiding faith in the resilience of the market in Manhattan.

Sales slowed sharply at the beginning of the year, when buyers hesitated because of the uncertainty about the direction of housing prices. But now brokers say that the pace is picking up, and they are seeing a slow but steady stream of visitors to sales offices and of contracts signed for new apartments.

Asking prices on new developments are no longer rising sharply, but confounding skeptics, they have remained fairly steady, at prices that are higher than buyers ever imagined five or 10 years ago. Developers say they are, for the most part, holding the line on prices, convinced that they have produced the right product for the right market.

"How strong is the market for $2 million apartments? Extraordinarily strong," said Gary Barnett, the president of Extell Development, which is currently marketing six condominium projects across Manhattan. "The market for $3 million and $4 million apartments is strong, too."

He said that the rising prices for land, soaring construction costs and careful reviews by lenders would eliminate weaker projects now under development, especially those by inexperienced developers, limiting the growth in supply over the next few years.

Jeffrey Jackson, the president of Mitchell, Maxwell & Jackson, an appraisal company, said he had been consulted on half a dozen projects that may be postponed or converted to rentals.

The Manhattan market is subject to the same laws of supply and demand as the rest of the country. But the bullish view of the Manhattan real estate market is based on the belief that it is unique. The first tenet is that it is a magnet for wealth from across the country and around the world. The second tenet is that there is a strong demand for larger apartments with higher ceilings, open views and well-designed kitchens and bathrooms — the type of apartments that have not been built in large numbers in a generation.

While rising interest rates may reduce the purchasing power of middle-income buyers, the market for the affluent will remain strong, brokers say, as the local economy remains solid; incomes for hedge fund managers, investment bankers and law partners remain high; and buyers from across the globe continue to view New York as a good place to invest.

"There is a tremendous amount of demand, and there is little housing in New York," said Stephen G. Kliegerman, the director of marketing development for Halstead Property. "There is a desire to live in New York City, and as fuel costs go up, even more people will want to live here."

Or as Mr. Barnett of Extell put it, "New York is the epicenter of the world, and everybody wants to own something here."

Of course, even the Manhattan market has had its low points. Park Avenue palaces faced foreclosure in the Depression, and town houses on the West Side sold for a pittance in the 1950's. In the 1980's, after a wave of apartment construction and conversions, many developers faced foreclosure. And the terrorist attack in 2001 sent rumbles through the market.

Frederick W. Peters, the president of Warburg Realty, said that he had experienced several downturns over the decades and likened the experience to driving off a cliff. And he does not see that occurring now. "The fact that we have experienced minimal price growth for a year suggests that the market has slowed down," he said. "The 'driving off a cliff' experience doesn't seem to be happening."

Jonathan J. Miller, an appraiser and the president of Miller Samuel, said he believed that many prospective buyers were ready to act but were holding back because of market uncertainty. At the same time, he said, Manhattan developers were holding the line on prices, confident that the new condos were worth their high prices.

"There are a lot of buyers, with money to spend, on the sidelines," Mr. Miller said.

Susan Petri, who works in communications for American Express, said that she and her husband have been shopping for a condo and that they found the same high prices at every place they looked. "This is New York — the demand will always exceed the supply," she said. "Everyone wants to live here."

But her husband, Roland, was more skeptical. They are trying to decide whether to settle in New York, where she now works, or in Scottsdale, Ariz., where he practices emergency medicine. He observed that the amenities touted in buildings in Manhattan were not that different from those found in new homes in Scottsdale and wondered whether they should wait to see if prices came down.

Julia Bohan said she carefully researched the housing market, systematically comparing prices per square foot, before signing a contract a few weeks ago to buy an apartment at the Ariel East, one of the two glass towers facing each other across Broadway at 99th Street. But in the end, she said she relied as much on intuition as cold, hard facts.

Two years had passed since her husband died, and she was in contract to sell their Upper East Side apartment, with a wraparound terrace and park views. The sale price was high enough to enable her to spend about $2 million at the Ariel for about 2,000 square feet of space, and put away some money for tuition, too. The apartment had lots of space at a better price than she found elsewhere in Manhattan.

"It is scary to do it alone after being married for 15 years," she said, "But I really feel confident that it is a solid investment. And it feels right, too.

During the years when prices were rising sharply and apartments were scarce, buyers were conditioned not to ask for concessions. If the price was too high, they would walk away. Today, Mr. Miller has this advice to buyers: "Always try to negotiate. Developers may be more open than in past years to negotiating. You have to ask."

Pamela Liebman, the president of the Corcoran Group, agreed but added that the developer's response would depend on "the mind-set of the building, how the building is doing."

"We have buildings where we have not done one penny of negotiation," she said.

During the ultrahot seller's market a few years ago, some developers would submit weekly or even daily amendments to offering plans, raising prices on new condominiums. Price increases come less frequently now, and a few developers have filed amendments lowering prices, though they attribute that to pricing errors, rather than to a faltering market.

At the Avery, which Extell is building on Riverside Boulevard at West 65th Street, buyers learned that many of the closing costs would be picked up by the developer, up to a total of 3.7 percent of the purchase price. But that's down from the 5 percent offered a few months ago.

Mr. Barnett, the Avery's developer, said that close to half of the apartments were now sold and as sales continued, help with closing costs would end entirely.

At 170 East End Avenue, Skyline Developers' 19-story glass tower near 87th Street, brokers were saying earlier this year that sales were slow. Orin Wilf, Skyline's president, disputed this but added, "We have been negotiable on our prices."

"We feel that our sales have been very steady because we are willing to work with customers," he said. "If a customer walks into our sales office and wants to spend $5 million on an apartment, and the apartment they want is $5.4 million, over 99 percent of the time the deal gets done."

He said that he had not offered to pay closing costs and expects prices to tighten in the future. "At almost 50 percent sold, we plan on doing less negotiations and more selling at higher prices."

When sales were slow at the Ariel East, Extell filed an amendment with the attorney general lowering prices on 42 apartments, with cuts ranging from $5,000 to $260,000 for one sixth-floor apartment. But prices on some upper-floor apartments were raised.

Mr. Barnett said that the price cuts were made because apartments in the Ariel West building had been selling faster, and that he wanted to encourage buyers to consider Ariel East. He said that when the price changes at the two condominiums were combined, prices actually went up.

At another smaller project, the Abbey, a former parish building on East 16th Street being converted to condominiums, most of the apartments sold for the asking price, or close to it. But according to property records, one apartment, a duplex on the top two floors, sold at a discount of $500,000, or about 27 percent below the asking price. Eight of 31 apartments are still listed as available.

The developer, Herbert Hirsch, said that he became convinced that a sloping triangular roof limited the use of some of the top floor of the duplex, so he reduced the price to account for this. He said buyers were out there looking but were worried by press accounts about the market and were postponing purchases.

"From the developers' standpoint the market talks to you," he said. "The market tells you what your property is worth, to the extent that people come through and love your product and pay the prices."

The New York Times reviewed condominium plans for larger projects — those with at least 30 units or those valued at more than $20 million — filed with the attorney general's office, which oversees all co-op and condominium offering plans for their compliance with state laws. But in addition to apartments, the listings of condominium units provided by the state often included retail stores, storage lockers and parking spaces, sometimes even wine cellars. So to get an accurate estimate of the number of apartments in the pipeline, those filings were compared with records from the New York City Buildings Department.

The review found that applications for 24,400 apartments in 240 larger projects in Manhattan and 5,000 apartments in 75 projects in Brooklyn had been submitted since January 2004. Of these, by the middle of June more than 13,000 had been approved for sale in Manhattan and 2,900 in Brooklyn. It is not known how many of these apartments were actually built and, if built, how many have been sold.

What is known is that the 24,400 applications far exceed the number of apartments actually on the market.

Last week, a report by Prudential Douglas Elliman put the current inventory at 7,640 apartments, both co-ops and condominiums, up from 3,922 in 2004. In recent years, the total number of annual apartment sales in Manhattan has been estimated at 10,000 to 12,000.

The filings with the attorney general's office also show that many newer projects, including conversions of rental buildings, are also in the works. There were 10,800 apartments in large Manhattan projects still awaiting approval for sale, including the 7,250 apartments in 59 projects submitted this year. About 2,300 apartments in Brooklyn are also awaiting approval for sale. If all these apartments are actually built, they could weigh on the market for several years to come.

But many developers said they believed that the condominium market was beginning to correct itself, and that the weakest projects may never get built. Banks, worried about overbuilding, have tightened up on financing. The boom in construction has pushed up land prices and construction costs, making fewer projects profitable.

In the meantime, some developers are not cutting prices no matter what. At 165 Charles Street, Izak Senbahar thought he had his finger on the pulse of the market when he put up a 16-story glass building designed by Richard Meier along the Hudson River, next door to two other Meier projects, and set prices as high as $20 million for the 31 apartments.

But last October, after about half the building was in contract, sales stalled. Not a single contract was signed for about six months, until April 2006.

Mr. Senbahar received a series of offers below the asking prices and could have sold out long ago, said James Lansill, a senior managing director of the Sunshine Group, which is marketing the building. Even brokers urged him to cut his prices, but he would not.

"He placed his bet and stuck with his bet," Mr. Lansill said. "He had a belief in his goal that is unwavering. He just said when the building is completed, people are going to come and buy this."

After vacant apartments were used for an exhibition of modern furniture earlier this year, sales took off once more, Mr. Lansill said. Since April, he said, five apartments have been sold, leaving five apartments available.

Two of those five apartments are being combined into a larger unit, he said, and a price increase was just filed with the attorney general's office.

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A Slower Market, With Wall Street Fizz By STEPHANIE ROSENBLOOM FOR four years, people feasted on Manhattan's robust real estate market with a kind of bacchanalian revelry, so when prophesies of a bubble…... Read more >

A Slower Market,
With Wall Street Fizz
By STEPHANIE ROSENBLOOM

FOR four years, people feasted on Manhattan's robust real estate market with a kind of bacchanalian revelry, so when prophesies of a bubble began circulating last year, many braced for the worst.

Today the state of the market is certainly more sober and measured. The pace has slowed, there is more inventory and buyers are taking time to shop around. And while some brokers report a significant bump in sales thanks to record Wall Street bonuses estimated at $21.5 billion, others say they have not noticed so much as a blip. Still, two months into 2006, a death knell has yet to chime.

In many ways the new year ushered in a better environment for buyers. There is more inventory to peruse (up 35.6 percent over January 2005 according to Jonathan J. Miller, president of the Miller Samuel appraisal firm). Properties are staying on the market longer (137 days in the fourth quarter of 2005, up from 96 days in the final quarter of 2004, according to Miller Samuel).

At most price levels, buyers are likely to enjoy more attention from their broker and more elbow room at open houses. And many sellers have accepted that the market is no longer red hot — and have priced their apartments accordingly. Brokers can schedule appointments in advance and show a half dozen properties instead of asking clients to make split-second decisions.

"Buyers find it much more comfortable," said Patricia Cliff, a senior vice president and the director of European sales for the Corcoran Group. "They can comparison shop."

Gone, too, are the sellers who put their apartments on the market solely to cash out. Those whose apartments are on the market today tend to want to do business and are often willing to negotiate.

"The problem was you really could not differentiate between serious sellers and those that were testing the market," said Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman, referring to 2005.

Buyers seem to be more cautious now, a feeling that manifests itself in a desire to view as much inventory as possible.

"Even if they see the apartment and are in love, they want to see what is out there before they put in an offer," Ms. Teplitzky said.

Indeed, many brokers think a new class of educated buyers has emerged, one that refuses to overpay and has a good grasp on property values. "People are taking notes, pictures with their cellphones, coming back the next week and asking for building financials," said Richard J. Ingenito, an associate broker at Bellmarc Realty. "These buyers seem to really know their stuff."

That buyers do their homework, are able to see more inventory and have time to deliberate also means that fewer deals fall through because there are fewer last-minute cases of cold feet, Ms. Teplitzky said. She pointed out, however, that this is not the time to buy something with the intention of selling it next year. "This is a market you're in for the long haul," she said, meaning five to seven years.

Marc Marin, 39, a management consultant who signed a contract on his first apartment — a two-bedroom co-op on the Upper West Side — last week, did not know if it was the best time to buy, but he figured he would be living there for a while and would not be distraught if the market dips.

Brian Lewis, a senior vice president at Halstead Property, said Mr. Marin searched for apartments for about two months and bought his place on Riverside Drive, which is in the $900,000 range, for below the asking price.

"It never gets easier, it seems," Mr. Marin said. "You just need to take the plunge."

Taking the plunge felt a lot better now than it did six months ago, he said, adding that buying in 2005 was somewhat intimidating. "I was feeling a little bit more power in this market," he said. "You had some negotiating room."

While that may be good news for buyers, it can mean more work for brokers. "I feel like I'm showing like mad and it takes forever to get an offer," said Sarah Smith, a sales associate at Warburg Realty.

Ms. Smith, like other brokers, said the calmer market makes for a more pleasant work environment, though the offers she is getting are lower than they had been in recent years. Her open houses have been busy, yet she has not noticed an influx of Wall Street bonus money.

In January, State Comptroller Alan G. Hevesi estimated that Wall Street bonuses would be a record $21.5 billion in 2005 (the previous record, in 2000, was $19.5 billion). The average bonus was also estimated to be a record $125,500, up from $114,300 in 2004.

"We are so dependent on the money from Wall Street," said Mr. Lewis. "If Wall Street is a shark, the real estate industry is the thing that cleans its teeth."

Bonuses tend to trickle down and jump-start activity across the board. But not everyone is feeling the ripples of the lush payouts. Mr. Ingenito of Bellmarc said that while he has had about 30 to 40 people at recent open houses, he has not noticed a major impact from Wall Street money.

"There are a lot of people waiting to see what will happen," he said. "If it looks like interest rates will go up rapidly, that should change."

Many buyers are content to play wait-and-see, hoping prices will fall. Not surprisingly, no broker predicted that prices would continue to decline. Still, brokers have certain historical markers on their side.

Ms. Cliff noted that the New York market is so insulated that even after Sept. 11, 2001, it came roaring back. "To wait on the sidelines and try to second-guess the market, I think, is always a very dangerous game," she said.

Ray Kiswani, a senior vice president at Bellmarc, explained that in the previous three years, buyers thought that deliberating about an apartment for a few months would cost them 5 to 10 percent in price increases. Therefore, they were willing to borrow from their parents or from their retirement fund to seal a deal. Now, they do not feel they have to act quickly to avoid a price penalty.

"Today, the market is stabilized, and it's very unlikely a major change will occur in the next few months," Mr. Kiswani wrote in an e-mail message. "Therefore, buyers — understandably — feel a couple of more months simply won't make a significant difference."

That attitude could potentially backfire, though, if you want to buy in some of the new luxury buildings where Wall Street bonus money has been spent in the last few weeks.

"The bonus season came around and it was a great year for a lot of people," said Tim Wright, a 26-year-old stockbroker who is living in a rental. He said he "fell in love" with a one-bedroom, one-and-a-half bath apartment that he bought at the Link, a 210-unit, 44-story condominium tower being built in Hell's Kitchen. It is expected to be completed by late 2006. Opening prices for one-bedrooms (about 600 to 1,000 square feet) are $650,000 to $1 million.

Mr. Wright did not fret about the state of the market because, as he said, "If I held off to time the market and the place sold out, I'd probably regret it."

He described the Link sales office as "mobbed" and the competition as "fierce."

"There is almost no negotiation," Mr. Wright said. "Say it's a million and you want to pay $850,000, they can say 'go for a walk' because they're going to sell to someone the next day for $1.2 million."

Dolly Lenz, vice chairwoman of new development marketing and investment sales for Prudential Douglas Elliman, said she has seen a "big bump" from bonuses in the last three weeks at the Cipriani Club Residences at 55 Wall Street. "A flurry just came as they got paid," she said. More than half of the units in contract at Cipriani are from Wall Street bonus money, she said, adding that at a recent open house, nearly 50 people showed up for tours.

At the Hudson, a 20-story condominium on the Upper West Side that is scheduled for occupancy this spring, about half of the 40 contracts that have been signed are with Wall Street bonus spenders, said Ramona Mahtani, the director of sales and marketing for the Developers Group, which, along with Halstead, handles the sales and marketing.

Richard Cantor, a principal at Cantor & Pecorella, a sales and marketing firm that is handling sales in 10 new buildings around Manhattan, said some buyers are surprised there is activity in the market. He said that those who viewed apartments and then waited weeks to make an offer have sometimes wondered, how could it be sold?

Thomas Elliott, vice president of marketing and design at El Ad Properties, the developer of several condo projects, including the Link; the O'Neill Building, at 655 Sixth Avenue, between 20th and 21st Streets; and the Grand Madison, at 225 Fifth Avenue, between 26th and 27th Streets, said the feeling at some sales offices is that "the party's not over yet."

Still, property is not being snapped up as it was a year ago. Ms. Smith of Warburg said sellers should be realistic. "Don't have supercrazy expectations," she said. "The consumer is just not putting up with it."

Mr. Lewis of Halstead, who said a property will sell if it is marketed and priced well, recently helped the owners of a two-bedroom, one-and-a-half bath co-op on the Upper West Side get the price they wanted (around $810,000) by putting their apartment on the market for $789,000. Some 47 people arrived at an open house and now a contract is signed for more than $800,000.

Mr. Lewis told the couple what he said he tells all of his clients: "You can choose to play pool where the ball used to be, or you can play pool where the ball is now."

 

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Remembrance of springs past Seasonal anticipation for a deal-making spring comes with question: how busy will it get? By Tom Acitelli, March 2006   Spring blossoms this month, and its arrival will,…... Read more >

Remembrance of springs past
Seasonal anticipation for a deal-making spring comes with question: how busy will it get?

By Tom Acitelli, March 2006
 
Spring blossoms this month, and its arrival will, as always, bring change to the Manhattan housing market.

"There'll be a lot more choices for buyers than anything they've seen in the last two or three years [this spring]," said Jeff Wolk, president of brokerage Fenwick Keats. "There'll be a little more tug of war between buyers and sellers."

Spring might be the most memorable season in the Manhattan market, a collection of months after traditional winter lulls, when deals start to happen again with greater frequency and the market's tone can be set for the entire year. This spring may be especially telling, following a winter that marked the end of the housing boom nationwide and in the city, and which comes on the heels of a record Wall Street bonus season in December and January. Past springs, then, especially those that followed a tough winter, could provide lessons for the coming one.

Data shows that from the first quarter (winter) to the second quarter (spring), sales in Manhattan generally pick up -- often significantly.

Only in three of the last 10 years have sales from the first to second quarter declined, according to appraisal firm Miller Samuel. In 1996, the number of closed sales deals dropped 18.6 percent; in 2001, it dropped 10.1 percent; and, in 2000, sales dipped nearly 2 percent. In the other seven years, sales shot up by double-digit percentages from the winter to the spring. In 1999 and 2002, sales jumped more than 30 percent, according to Miller Samuel; last year, they increased 12 percent.

Overall, over the last 10 years, on average, sales in Manhattan have increased 10.6 percent from the winter to the spring, and, over the last five years, 11 percent.

Much of this sales activity that shows up in springtime is actually fomented in the winter, as deals recorded as closed during the second quarter of the year are often hammered out the quarter before. That means this spring may owe much to the current winter.

"The first quarter is generally our busiest time," said Frederick Peters, a broker since 1980 and president of Warburg Realty Partnership. "When you're talking about springs being strong, you're talking about first quarters being strong."

The first month of the first quarter of 2006 saw median and average sales prices for Manhattan
apartments scratch the levels of the summer of 2005, increasing over both December as well as January of last year, according to a report from Halstead Property.

The average sales price in January was $1,277,568, an increase over the year-end 2005 price of about $1.1 million -- and the highest price since June, Halstead reported, when it was more than $1.3 million. The median sales price for a Manhattan apartment in January was $750,000, up from $699,000 at the end of 2005.

Although handicapping the market month-to-month can be difficult, the Halstead numbers jibe with the trend in rising Manhattan sales prices borne out by year-end reports that showed an uptick in average prices from the third to the fourth quarter of 2005, after sizable declines the quarter before.

Generally, all sizes of apartments in locations throughout Manhattan experienced year-over-year price increases in January, according to Halstead. Two-bedrooms on the East Side, for one, ended January with a median sales price of $1.5 million, 30 percent higher than the median in January 2005. Studios and one-bedrooms on the West Side each ended January with median sales prices 29 percent higher than January 2005, and Downtown studios had a median price of $410,750, Halstead reported, a 31 percent increase over last January.

The number of new listings throughout Manhattan was also up in January, according to Halstead, except for apartments with four bedrooms or more on the West Side and Downtown. Fresh listings for studios, one-, two-, and three-bedrooms increased in January over December.

Based on the winter activity so far and the precedent that sales usually pick up in Manhattan in the spring, should brokers be bracing for a flurry of deals in April, May, and June? Probably, market observers say -- but not on the scale of the most recent springs.

"You never thought the spring of '04 could top the spring of '03, and then it did," Wolk of Fenwick Keats said. "And you never thought '05 could top '04, and then it did. I think now, for the first time in two or three years, we won't be outdoing ourselves."

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Warburg moving Tribeca, Greenwich Village offices By Tom Acitelli Warburg Realty Partnership will be moving both of its lower Manhattan offices to new locations by spring. The firm's temporary Tribeca…... Read more >

Warburg moving Tribeca,
Greenwich Village offices

By Tom Acitelli

Warburg Realty Partnership will be moving both of its lower Manhattan offices to new locations by spring.

The firm's temporary Tribeca office on Vestry Street will find a permanent home in an approximately 2,000-square-foot, office at 100 Hudson Street this month. It will support 21 brokers.

Warburg's Greenwich Village office, now at 795 Broadway, will move to a 2,750-square-foot storefront office at 65 West 13th Street by the spring, where 31 brokers will be based.

"Each of them has a different raison d'étre," Warburg president Frederick Peters told The Real Deal. "The Tribeca office is just a response to the fact that we wanted to be in Tribeca, and we saw it as an opportunity. The Village office, our lease was coming up, so we thought either we're going to renew it or we were going to do something else. And we decided we actually wouldn't mind having a little more space."

No stranger to office expansion in Manhattan, Warburg has since late 2004 opened locations in Harlem and the Upper East Side as well as the temporary location in Tribeca, which opened in September.

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The Telltale Party By Anna Bahney December 25, 2005   MOST people don't like to think about their real estate broker throwing back drinks and gyrating on a dance floor to ''It's Raining Men.'' But…... Read more >

The Telltale Party

By Anna Bahney
December 25, 2005

 
MOST people don't like to think about their real estate broker throwing back drinks and gyrating on a dance floor to ''It's Raining Men.'' But like the holiday party, it happens once a year, ready or not.

For a buyer or seller looking to discover what a firm values, its demographic, its ''personality'' (let alone its quotient for fun), much can be gleaned from the annual holiday party. While the success of the soiree is no indication of whether these real estate professionals can close a deal, the parties do give an indication of how the company may treat clients based on how they treat one another -- and themselves.

Some are over the top, like the $100,000 party given by Prudential Douglas Elliman, at which more than 1,000 guests stormed the Four Seasons 10 days ago. Others were intimate affairs at a broker's home, a traditional dinner party at a private club or a laid-back hangout session at a downtown lounge not yet open to the public. Still others involved draining mozzarella and singing drag queens -- although not at the same time or place.

Bellmarc Realty

Bellmarc was the early entrant, kicking the season off on Nov. 29 with a by-the-book holiday party at a TriBeCa party space, complete with holly-themed name tags.

A buffet dinner featured four kinds of pasta, baked chicken, filleted fish, carved roast beef or turkey. Dancing followed, heavy on Motown and ebullient wedding favorites like Kool and the Gang's ''Celebration'' and Aretha Franklin's ''Respect.''

This was a festive affair, not too showy, not too stingy.

And not surprising, because Bellmarc is a ''just right'' kind of company. With about 220 agents, it is squarely in the middle of the 10 largest companies. The agents tend to be older, ranging from about 30 to 70, many on their second or third career.

Most of the agents have accents that leave no doubt they grew up in New Jersey, Long Island, Manhattan or Queens -- like the owners of the firm, Neil Binder and Marc Broxmeyer.

People whispered that the party was held so early in the season because it was cheaper to rent the space.

But by the looks of the dance floor at TriBeCa Rooftop, awash in bodies swaying, shaking and twisting, no one thought it was a bad deal.

Gumley Haft Kleier

On Dec. 7, Michele Kleier, who co-owns and co-manages the boutique firm Gumley Haft Kleier with her husband, Ian, was host to a cocktail party for 40 people at the nine-room Park Avenue prewar apartment where they have lived for the last 25 years.

A beaming Mrs. Kleier greeted guests in the foyer flanked by her two smiling daughters -- and vice presidents at the firm -- Sabrina Kleier Morgenstern and Samantha Kleier Forbes. Each of the three held one of the family's Maltese dogs -- Lola, Roxy and Dolly -- bedecked in red and green collars.

There was a lot of cheek kissing and puppy nuzzling.

It felt more like a book party than a holiday event (and not just because the three Kleier women are writing a book about being a family-run David against the consolidated Goliath firms). The parlor and living room were filled with chic-looking middle-aged agents and their spouses. There were some younger brokers looking like Junior Leaguers and some real estate reporters happily munching food.

Partygoers sipped wine and ate chocolate-dipped clementines and cheesy jalapenos on tiny biscuits as Billy Joel and Frankie Valli played on the sound system.

Just as one would expect at a party held amid Kleier photographs, family and friendships are central to the company. They are the company. Ms. Kleier has been in real estate for 27 years, and in addition to having her daughters close, many of the brokers are old friends.

Brown Harris Stevens and Halstead

Brown Harris Stevens's annual party was held on Dec. 7 at Au Bar, a velvet-roped celebrity magnet in Midtown off Park Avenue, which reflected the company's idiosyncratic mix of the traditional and the trendy.

While there are agents at Brown Harris Stevens who have developed long relationships with prominent New York families, there are also young brokers who handle newer clients. Everyone's clients share one trait: wealth.

In a parlorlike party space, where several courses of food were served, including sushi, pastas, salmon and desserts, the younger agents gravitated to a dance floor with music ranging from rock to rap.

Expressly for the firm, and not for spouses or guests, the party was also attended by some principals of the parent company, Terra Holdings, including members of the Zeckendorf family.

Halstead, also owned by Terra, had a very similar party, held at the same place on a different night. Just a little bit later, for a crowd just a little bit younger.

Warburg Realty

Each Warburg agent donned a red apron on arrival at the Tuscan Square restaurant in Rockefeller Center on Dec. 12. They were assigned a culinary station -- fish, meatballs, mozzarella, tiramisu -- and worked with one of 10 chefs to learn how to prepare the dish for the dinner.

The party was in keeping with the creative and academic background of Warburg. Its president, Frederick Peters, has a master's degree in music from Queens College and went to Yale as an undergraduate. He likes to keep the firm ahead of similar-sized ones, and Warburg was the first to open a luxury property office in Harlem.

Jane Bayard, a vice president there who was charged with creating the party, said that she tries to come up with a new idea each year for the company's 150 agents.

''We're not a mega-giant, so we can have a warmer atmosphere,'' Ms. Bayard said. The best part, she said, was that ''we weren't talking real estate all night.''

Citi Habitats

The soiree for about 1,000 was held at the enormous and ornate Cipriani Wall Street. With a supper club theme, it felt more like a senior prom than an office holiday party.

The decoration committee did some impressive work with the palm-tree table-toppers with feathers for fronds and a silken trunk lit from within. There were hors d'oeuvres and a buffet dinner of sushi, shrimp, pasta, salad and grilled beef.

Gaggles of young women wore strapless, backless or deeply plunging formal dresses in all manner of black, red and sequin. The men, who also came in packs, were no slouches either, wearing velvet pinstriped blazers and black suits.

Professional swing dancers performed to ''Boogie Woogie Bugle Boy,'' inspiring some flirty shimmying by agents on the dance floor, before the band retreated to dance fare with a cover of Madonna's ''Holiday.''

A projection screen above the stage flashed pictures of those overachievers who made the real estate equivalent of the honor roll, earning the ''Top Sales Agent'' and ''Top Rental Agent'' titles. There were pictures of the company's extracurricular activities like team sports and service projects. It was shown without the accompanying misty-eyed Alphaville version of ''Forever Young'' playing in the background. Which is unfortunate because Citi Habitats is forever young, made up of a seemingly endless supply of new agents, and the turnover is high.

Agents tend to be in their late 20's or early 30's, which speaks to attracting the young people that are the firm's bread and butter. For many people arriving in New York fresh from college, Citi Habitats is their introduction to Manhattan real estate.

Stribling & Associates

Elizabeth Stribling loves throwing a party, and like the firm that bears her name she does so with a strong sense of tradition.

It is held each year at the same Upper East Side private club. There are cocktails and a buffet dinner. For the last five years, the event has been decorated by Renny Reynolds, a Park Avenue-based designer who has created spectacular spaces through flowers from Studio 54 to the White House.

This year the party took a Caribbean island theme, with oodles of orchids, parasols, pretend iguanas and lanterns with printed birds. Sheer fabric was hung across the room, giving it what Mrs. Stribling called a ''warm magic carpet feel.''

''It demonstrates her personal style,'' said Kirk Henckels, the director of Stribling Private Brokerage. ''I would never use the word 'classy'; I would say classic.''

Mrs. Stribling personally greeted the agents and staff members who arrived with their significant others. Some of the firm's 200 agents come from prominent Upper East Side families with educations from schools like Chapin and colleges like Smith and Vassar, while others are from Dubai, United Arab Emirates; Paris; London; and South Africa.

''People said I looked like a snowflake,'' Mrs. Stribling said, describing her glittering white gown with lace and silver sequins that was made for her by Pilar Rossi.

Dwelling Quest

The Dwelling Quest identity -- a hip, independent, boutique firm -- could be read in the party's invitation, which was a slick e-vite with stylized pictures of candy canes and a red drink in a martini glass. The firm has 80 agents spread out over three locations, in Midtown, Harlem and Brooklyn, but the sensibility of the firm, as well as the location of the party, is very downtown.

It partied in a new cafe in west SoHo called Giorgione 508 (owned by Giorgio DeLuca, co-founder of Dean & DeLuca), which would not be open to the public until a week after the party. The vibe was low-key hangout, with the men in dressy open-collared shirts and the women in clingy knitwear as music by the Killers, the White Stripes and Moby played.

Since the company is growing -- both the Brooklyn and Harlem offices opened this year -- Daren W. Hornig, its chief executive, said planning a party is a delicate balance.

''If you do too much,'' Mr. Hornig said, ''people say, 'Why did you spend so much money on one night when you could have put it back into infrastructure?' If you do too little, people say, 'You don't appreciate us?' ''

JC DeNiro & Associates

From the mountain of coats piling up in front of the quickly fogging windows, to the scented candles set on filing cabinets and the wrought-iron decorative pieces bedecked with garlands and tinsel, this party had the welcoming effects of coming into someone's home.

But it was held in the JC DeNiro & Associates' office at Ninth Avenue and 21st Street in a storefront designed by Christopher Mathieson, the managing partner of the company, with the attention many give to their own homes.

Without the budget for a big flashy party, this firm used its people and its creativity to pull together an elaborate and attractive party.

The catering crew handily balanced convection ovens on top of desks and put glass Pyrex pans on top of printers, setting up their kitchen in a raised and open office space in the back. Another open office became a stage where a D.J. set up his gear, playing high energy club music and tracks from the new Madonna album. Throughout the evening two drag performers, Sherry Vine and Hedda Lettuce, tag-teamed the stage for stand up and singing.

The agents, who seemed to be friends as much as colleagues, mingled amid the festive wrapping-paper detritus of a secret-Santa celebration. They were invited to bring whomever they wanted -- friends, boyfriends, girlfriends, spouses, parents -- and each category was represented.

Prudential Douglas Elliman

By 9:30 p.m., the doorman at the 52nd Street entrance to the Four Seasons had abandoned his duties to Julian Niccolini, an owner of the restaurant. Mr. Niccolini announced to the two dozen unhappy guests jammed into the vestibule with their fur coats that it would be a half hour wait.

For those fortunate or patient enough to get inside, the party was on corporate holiday overdrive. Hundreds of men in charcoal suits lifted glasses and screamed over the music at hundreds of women in formal gowns, cocktail dresses and pantsuits. Suits slid past, the guests with plates of lobster and curry in one hand, a cellphone in the other, trying to make their way through the sprawling venue.

Everything about the party said big -- the venue, the band, the buffet; the personalities, the crowd, the noise. And that was fitting, because the company is among the top in the city in terms of numbers of agents.

In Manhattan, the ''big 10'' firms are more like a fuzzy 11 or 12, with the companies changing rankings depending on the measurement, and who is measuring.

Typically, firms floating around the top include Prudential Douglas Elliman, the Corcoran Group, Halstead Properties, Brown Harris Stevens, Coldwell Banker Hunt Kennedy, Bellmarc Realty, Stribling & Associates, Warburg Realty, Fenwick-Keats, Citi Habitats, Sotheby's International Realty and Manhattan Apartments.

A study done by the trade publication the Real Deal last April showed how they ranked in various categories. At that time it was Corcoran for the highest dollar sum in total listings ($2.79 billion), Sotheby's for highest median price per listing ($5.09 million) and Fenwick-Keats with the highest percentage of brokers without listings (63.1 percent). Douglas Elliman had the highest number of listings and the most brokers.

Last year, Gloria Gaynor performed at the Douglas Elliman party. This year the hired band performed Ms. Gaynor's signature song, ''I Will Survive.'' But the dance floor hit its peak during a cover of Bon Jovi's ''Living on a Prayer.'' Perhaps a telling shift in the market place?

Coldwell Banker Hunt Kennedy, the Corcoran Group, Manhattan Apartments

These three firms are having their holiday party in January, a trend started by Corcoran a decade ago because the holidays are too heavy with competition for people's attention. Coldwell Banker Hunt Kennedy will have a different kind of party this year, a black-tie event with dinner and dancing at the Doubles Club at the Sherry-Netherland Hotel.

Manhattan Apartments, which seems to be trying to keep up with everyone else, doesn't know what kind of party it is going to have, but it will have one, it promised, on Jan. 11.

Corcoran will take over Cipriani Wall Street on Jan. 10 with a ''God and Goddess'' party. The party, which will include models in period costume, also reflects the company's inherent competitive spirit.

''Every year they try to outdo themselves,'' said Lara Berdine, vice president of public relations. ''The agents have pretty high expectations.''

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REBNY toasts brightest and best at annual “Oscars” Dubbed the industry Oscars, this year’s Real Estate Board of New York Residential Deal of the Year awards had all the ingredients of the annual…... Read more >

REBNY toasts brightest and best
at annual “Oscars”

Dubbed the industry Oscars, this year’s Real Estate Board of New York Residential Deal of the Year awards had all the ingredients of the annual Hollywood spectacular – and some.

The ladies dressed in their finest Dior and the men donned tuxedos to pay tribute to the most promising, most accomplished and most respected in the business at a gala event held in the Puck Building ballroom, where all talk was of the high drama surrounding the 2005 Deal of the Year.

Halstead Property broker Sandra Lauer found herself embroiled in a saga straight from a big screen blockbuster involving an FBI sting, money laundering and tabloid headlines. Over the course of 13 months, she worked diligently to sell a two bedroom Manhattan co-op, for which the client misrepresented the true ownership. Despite this and several other serious setbacks, Lauer ultimately managed to consummate the deal.

She explained, “the deal involved a client selling a two bedroom co-op which he transformed into a one bedroom without Board approval.

“There was misrepresentation by the seller as to the true ownership of the property, which resulted in demand that that the seller pay a five-figure donation to a charity to clear up the stock certificate ownership issues. The deal ended up involving a much publicized FBI sting for money laundering and my concern was that my conversations had been taped by the FBI and that I, an innocent broker, was being drawn into a series of federal investigations.”

Despite two failed bids on the property, Lauer’s professionalism, expertise and perseverance ultimately enabled her to close the deal for which REBNY recognized her this year.

“You have to persevere and know that you are doing things the right way, no matter what everyone else is doing,” said Lauer after the ceremony.

“The most important thing to me has always been my reputation to do everything with integrity. That’s the way I conducted myself in this transaction and I think that’s why I was able to close.”

Despite the drama of the past year, Lauer admitted her moment in the spotlight made it all worthwhile.

“The event itself really was like the Oscars and winning the REBNY award is an extremely big honor. I know how many transactions occur in a year and to receive this kind of recognition truly humbles someone.”

Two of Lauer’s co-workers also stepped up to the podium that night to receive awards.

Halstead’s senior vice president Christine O’Neal took home the second place award with Barbara Schwartz, of The Corcoran Group. The two co-brokered a deal that involved a labyrinthine series of events that ultimately led to a successfully brokered transaction.

And Halstead’s Pasquae Strippoli won for Rental Deal of the Year for the successful negotiation of a deal that was actually two deals for the same apartment and involved a high ranking UN diplomat.

“The fact that Halstead made such a strong showing at REBNY’s Deal of the Year demonstrates our agents’ command of the real estate market in New York City,” stated Halstead president Diane Ramirez.

The third prize sales award went to Shel Joblin and CB White of Stribling & Associates, and Carrie Chiang and Mark Baum of The Corcoran Group.

Edward F Johnson of Brown Harris Stevens Residential LLC, received the Most Promising Rookie Salesperson of the Year Award and Jane Bayard, of Warburg Realty Partnership was presented with the Henry Forster Award.

Bayard joins an illustrious group of real estate’s finest who have previously earned what is regarded as a lifetime achievement award, including Elizabeth Stribling, president of Stribling & Associates, Hall Wilkie, president of Brown Harris Stevens, and her colleague, Frederick Peters, president of Warburg.

“What’s nice about receiving this award is the respect it gains for the firm. Fred Peters won the award about 10 years ago, so I feel good about winning it for both myself and for the firm,” said Bayard, whose life is steeped in the real estate traditions of Manhattan.

Her father, Harold Uris, the well known builder, was enormously generous in an effort to improve the quality of life for the city he felt gave him so much.

Bayard herself has been active in residential sales since 1976, and has sold in almost every major co-op on the Upper East Side.

In 1991, she assumed her current position as partner and executive vice president at Warburg Realty Partnership and she continues her family tradition in real estate, as well as serving the city in the charitable fashion her family embraced.

Reflecting on her long and productive career, Bayard commented, “I think it’s a very competitive industry and there are a lot of brokers who feel its an easy way to make money, but they don’t do their jobs properly and they clutter the industry. The good ones are very good, though, and it’s a pleasure to do business with them.”

In recent years, Bayard has allowed her sales career to take a back seat to her involvement with the management of Warburg, which has grown from two to five offices in the past year.

“We are hiring new brokers and working with more developers. It’s very exciting to be involved with a company that is growing. And I have to say, it is exciting to rub shoulders with people who are so well respected in the industry.”

Paying tribute to the 2005 award winners, Steven Spinola, president of the Real Estate Board of New York, said, “With the continued strong activity in the residential market, the selection of these awards becomes increasingly difficult each year.

“But that is to the credit of this year’s recipients, who have stood apart as New York’s top performing brokers. Each of the winners deserves recognition for their hard work, ingenuity and creativity.”

Spinola called Bayard “a true professional and role model to others in the industry.”

“She built a career from the ground up, rising from a salesperson to broker and then climbing the management ladder to become Executive Vice President of Warburg Realty.

“Jane has always been involved with REBNY, serving in many capacities for the last 15 years from the Education Committee to the Ethics Committee and beyond.  She has a great reputation among brokers and is well known for her integrity and creativity. She is an ideal recipient for this award.”

The proceeds raised at the gala will be donated to the American Cancer Society Hope Lodge New York City, Project Find-Find for the Aged and the REBNY Foundation Katrina Relief Fund.

Proceeds also will benefit REBNY’s Member In Need Fund, which was created in 1997 and has already helped nine member brokers overcome financial difficulties since its inception.

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For Choicest Apartments, Many More Choices WHEN developers opened new buildings for sale in New York a year ago, brokers jostled for appointments, buyers camped out before open houses and people made…... Read more >

For Choicest Apartments, Many More Choices

WHEN developers opened new buildings for sale in New York a year ago, brokers jostled for appointments, buyers camped out before open houses and people made decisions to part with thousands of dollars in a matter of minutes. One sales agent famously sold five luxury condos from the back seat of her BMW in a day.

The frenzy has died down, but the buildings keep going up.

With close to 16,000 units being built in Manhattan alone this year and next, and another 23,700 planned, according to Yale Robbins, a real estate publishing company in New York, there is much to choose from, especially at the high end, where a disproportionate amount of building is going on.

The plentiful options mean that buyers can now return to a sales office repeatedly to examine floor plans before writing a deposit check. Where some buildings might have sold three or four apartments in a day, now developers are happy to sell that many in a month. And some buyers even feel bold enough to offer less than the asking price, though few developers are biting.

"I just feel like people are waiting to pull the trigger," said Ariana Meyerson, project manager at 225 Fifth Avenue, a 192-unit building with $1 million one-bedroom apartments. "They are waiting to see where the market goes."

Some brokers predict that sales will slow more as newer apartments, often with fancier amenities than the building down the street, come on the market. "I do think that there is going to be product sitting on the market a year from now," said Michael Shvo, a broker who markets new developments.

Citywide, developers applied for building permits representing 15,870 new units in the first six months of this year, census figures show. Last year they applied for 25,208 units, the most since 1971. A large proportion of the newest units are being marketed as "luxury" apartments, a term that has come to mean anything from $600,000 studios in Brooklyn to $40 million penthouses on Central Park West.

The bounty of choice includes the planned condominiums at the Plaza Hotel and in the Stanhope Hotel on Fifth Avenue near the Metropolitan Museum; chic new apartments designed by the French architect Jean Nouvel at 40 Mercer Street in SoHo; and the Philip Johnson-designed units at the Urban Glass House on Spring Street nearby.

"We do have a healthy amount of developments coming on stream," said Kirk Henckels, director of Stribling Private Brokerage in Manhattan. "And if there is one question mark" looming about the state of the market, he said, "that may be it."

Although condo prices are still increasing, brokers said buyers are being shrewder about what they are willing to pay. Six months ago the luxury market was so heated that "you could basically put a 3,000-square-foot coal chute on the market and three people would try to buy it," said Frederick W. Peters, president of Warburg Realty. Now, he said, buyers were being more selective about location and quality.

Stacey Silverman, 41, has been looking for a two-bedroom apartment in a new development for the past six months. She has yet to put down a deposit. "I think there is a lot to choose from, and there is more coming on the market," she said. "So I'm taking my time."

Some developers have not caught on to this new reality. "Sellers are in denial that the market has shifted," said Jonathan Miller, a New York appraiser. "On projects that appear to have stalled, the developer kept ratcheting up the prices systematically - which was the norm for the past few years - until it was priced out of the market."

Some new developments are still selling briskly, even at the superluxury end of the market. The developers of the condominiums at 15 Central Park West have had no trouble selling 74 units worth $650 million in the two months since the sales office opened.

William Zeckendorf, a partner in the development, said 12 of 16 penthouses, including one at $45 million, were under contract. A prominent Wall Street investor lost out on a duplex penthouse when he tried to buy at a discount and another buyer offered full price, Mr. Zeckendorf added.

But brokers said the scramble at 15 Central Park West, designed by Robert A. M. Stern in the spirit of such grand buildings as the San Remo and the Dakota, was largely a reflection of its irresistible location, lavish amenities and old-world charm.

Alex and Luba Rabey were not even looking to move from their apartment at the Grand Millennium on Broadway when they heard about 15 Central Park West. Mr. Rabey, a 65-year-old consultant, said they were attracted to the building's particular vantage on the park, its gym facilities and its 11-foot ceilings. They have signed a contract to buy a $4.87 million three-bedroom apartment.

Name architects have not necessarily spurred sales at either the Richard Meier tower at 165 Charles Street or Charles Gwathmey's undulating glass building at Astor Place. They are both in downtown locations that some brokers said wealthy buyers do not prefer.

The tower at 165 Charles Street, the third to be designed by Mr. Meier overlooking the West Side Highway, has been on the market for over 18 months. Out of 31 units, 24 have sold, including a $20 million penthouse. One broker who asked not to be named because she did not want to criticize a building where she might bring clients said it should have sold out by now. Izak Senbahar, the developer, said, "It's a very specialty product that sells at its own speed."

Despite extensive media coverage and a model apartment sponsored by Esquire magazine, the Related Companies, developer of the Gwathmey building, has sold only 24 of 39 units there. David J. Wine, vice chairman of Related, said he was perfectly happy with those numbers, given what buyers were paying: $1,400 to $2,600 a square foot.

But, he acknowledged, "buyers, at those numbers, because they have more choices, are being more cautious about where they buy."

Even at less lofty levels, buyers are hesitating. "It's taking longer to sell out buildings," said Richard Cantor, a principal at Cantor & Pecorella, a marketing firm that is handling 1,500 units in 10 new buildings around Manhattan.

It has taken 10 months to sell 43 of the 79 units at Beacon Tower, a high-rise condominium in the Dumbo neighborhood of Brooklyn, despite the lure of a Zen garden, a gym and high-end kitchens. Steve Rutter, who handles marketing of new developments for Corcoran Group in Brooklyn, said the developer, Leviev Boymelgreen, closed down the sales office for part of the summer because sales were sluggish, and reopened after Labor Day. Only four apartments have sold since then.

So far, nobody is predicting a glut or that prices will collapse. That is partly because today's building boom pales in comparison to the one that took place in the 1980's (developers built 125,623 units in Manhattan from 1985 to 1991, Mr. Miller, the appraiser, said). That building spree exacerbated the effects of the stock market crash and a severe recession, and median prices fell as much as 45 percent.

Since 1999 builders have put up only 13,374 units, about a tenth of what was built in the 1980's.

This time around, Mr. Miller pointed out, developers have focused on the upper third of the market, making it vulnerable to the impulses of one group of buyers.

For the moment, many remain in the game. Ali Akansu, a professor at the New Jersey Institute of Technology, recently bought an $815,000 one-bedroom apartment in Bryant Park Tower, a 94-unit condominium that will sit atop a hotel. He said he figured that it would be a good investment, and that maybe his college-age daughter would move in at some point. But when he was looking, he said, he saw several other projects that he deemed overpriced.

 

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‘MANHATTAN’S PREMIER BROKERS’ Manhattan is known for its real estate deals with jaw-dropping price tags, like Doris Duke’s 20,000 square-foot mansion (the last private mansion left on Fifth Avenue)…... Read more >

‘MANHATTAN’S PREMIER BROKERS’

Manhattan is known for its real estate deals with jaw-dropping price tags, like Doris Duke’s 20,000 square-foot mansion (the last private mansion left on Fifth Avenue) on the market for $50 million, the $70 million penthouse at the Pierre, three swank townhouses on Sutton Square for $42 million, the new terraced duplex penthouses at 15 Central Park West – and count on these elite residences being brokered by some of Manhattan’s superstar brokers.  With some 28,000 licensed brokers and agents selling real estate around town, these prestigious few remain at the pinnacle of their field year after year.  They are highly regarded, tremendously sought after, and always award-winning.

Who They Are

Manhattan’s top five power brokers are Prudential Douglas Elliman’s Dolly Lenz, Corcoran’s Robert Browne, Carrie Chiang, and Sharon Baum; and Brown Harris Stevens’ Kathy Sloane.

Managing Director Dolly Lenz is Prudential Douglas Elliman’s number-one broker nationwide (she garnered more commissions in 2004 than any of their 58,000-plus brokers and agents across the country).  Lenz has sold more than $4 billion worth of property in her 20-year career, at the rate of $400 to $450 million a year.

Sharon Baum, a senior vice president and director of the Exclusive Properties Division at Corcoran, has repeatedly reigned as their number one since joining the company in 1991.  A longtime specialist in luxury living, she’s brokered upward of a billion dollars of Manhattan’s most exclusive townhouses and residential buildings.

Carrie Chiang, also a senior vice president at Corcoran and director of the International Division, is sought after for her impeccable reputation.  She has consistently brokered deals to the tune of $100 million a year since signing on with them in 1990, making her a Corcoran number-one broker many times over.

Senior Vice President Robert Browne was honored as the number-one broker for Corcoran in 2004; he is known for closing some of the largest deals in Manhattan’s history.  Like Chiang and Baum, he is a perennial member of Corcoran’s $100 Million Circle, surpassing that number time after time.

Brown Harris Stevens’ Kathy Sloane was named Broker of the Year in 2004 as well as the top-producing broker, breaking all previous records.  With the firm since 1986, this senior vice president and managing director has brokered more than a billion dollars in real estate.

 

The Boutique Firms

Some premier boutique firms are Gumley Haft Kleier, Fox Residential Group, R.P. Miller & Associates, Inc. and Leslie J. Garfield & Co.

During the last 25 years Michele Kleier, President and Chairman of Gumley Haft Kleier has brokered more than a billion dollars of real estate.  She oversees more than 40 brokers, including her husband Ian Kleier, who is co-president of the firm, as well as her two daughters Sabrina and Samantha.  Kleier’s client roster includes Barbra Streisand and Katie Couric.

Barbara Fox founded her company, Fox Residential Group, in 1989.  Sixteen years later, with 40 brokers onboard and a client list that includes Robert Redford, Fox brokered more than $350 million in properties in 2004.  Despite the growth, Fox maintains a hands-on approach.

Reba Miller has been in real estate for more than two decades.  Establishing her firm, R.P. Miller & Associates, Inc. in 1998, Miller herself has brokered real estate in excess of $500 million for an impressive client list that spans the globe.

Leslie J. Garfield of Leslie J. Garfield & Co., Inc. specializes in townhouses.  An industry leader since the mid 1970s, last year, gross sales were more than $100 million.  Recent transactions include the Vanderbilt Fabbri mansion, both Jasper Johns homes, and the Richard Avedon residence.

Marketing the Newest Developments

When it comes to the latest and hottest new developments, top marketers include Louise Sunshine, Adrienne Albert, Richard Cantor, Dana Pecorella, Michael Shvo and Laura Cordovano.

Louise Sunshine, long associated with developments designed by world-famous architects, established the Sunshine Group in 1986.  Well-regarded in markets throughout the country, she was an executive vice president and partner at the Trump Organization before opening her company.  Current projects include 170 East End Avenue, 165 Charles Street, 205 East 59th Street, and 50 Gramercy Park North.

Adrienne Albert founded The Marketing Directors Inc. in 1980.  With its impeccable reputation well beyond the streets of New York, her company is a major player in development projects in cities including Los Angeles, New Orleans, Washington D.C., Boston, Philadelphia, and Houston, garnering sales in excess of $14 billion.  Current projects include 455 Central Park West, 200 Chambers Street, Sutton 57, Park Avenue Place and 1600 Broadway.

Richard Cantor and Dana Pecorella of Cantor & Pecorella, Inc. are marketing consultants and exclusive agents to some of Manhattan’s premier residential developers.  Cantor & Pecorella, Inc. and its predecessor Richard Cantor, Inc., has negotiated more than $1 billion in gross sales of co-ops and condos, and the rental of over 3,000 luxury apartments and lofts.  Current projects include 555 West 23rd Street, 1 York Street, Rutherford Place at 305 Second Avenue, 225 Fifth Avenue, and 325 Fifth Avenue.  They are also the marketing consultants for The Plaza.

After five record-breaking years brokering high-end, high-profile transactions at Prudential Douglas Elliman ($300 million in 2003 alone), Michal Shvo created SHVO Marketing in 2004.  Current projects are luxury towers like Bryant Park Tower, Fultonhaus, 20 Pine Street, and 16 West 19th Street.

Representing more than $1 billion in sales, Laura Cordovano has played a significant role in marketing and sales.  She first joined the Trump Organization in 1982, working with Donald Trump on Trump Tower and Trump Plaza.  She then went on to work for other Manhattan developers such as Peter De Savary (St. James’s Tower), Donald Zucker (30 East 85th Street), and Zeckendorf Realty (515 Park Avenue).  In 2003, Laura returned to the Trump Organization as director of sales for Trump Park Avenue.

What It Takes

So what does it take to be a member of this club aside from a highly competitive spirit? Is there a commonality among the best and brightest when it comes to character, personality, and work ethic?  Prudential Douglas Elliman’s CEO and president, Dottie Herman, says it takes determination, attentiveness, loyalty, long hours, and hard work.  “Real estate is a difficult business, and to be at the top, one has to be on call 24/7 and really understand the market and the inventory.  A good property doesn’t last, so to be able to know what’s available makes a broker stand out in a crowd.”  Barbara Corcoran, the founder of the Corcoran Group, who is famous for her tell-it-like-it-is attitude, said the classic sign for her of a top broker is the fear in their eyes.  “After finishing up their most successful year, they’re scared that they will never reach such success again and that their career is all but over.”

William Lie Zeckendorf, an owner and co-chairman of Terra Holdings, New York City’s largest residential firm and parent company of Brown Harris Stevens and Halstead Property, LLC, said power brokers love what they do.  “They are bright.  They relate well to their clients as well as their peers.  They are instinctive when it comes to matching a buyer with the right apartment.  They can also work quickly through rejection in order to move on to the next deal.”  Coldwell Banker Hunt Kennedy’s CEO David M. Michonski says he can spot a power broker among the newcomers within minutes of a first introduction.  “For me, it’s a combination of extreme likeability, clarity of expression, and an astute business sense.”  Elizabeth Stribling, CEO of Stribling & Associates, agrees with that, but adds that a top broker never gives up.  “They also have to be extremely organized and focused.  Be a real professional with up-to-the-minute market analysis and a cutting-edge ability to negotiate.  They also have to have the determination to conclude each deal, no matter what obstacles present themselves.”

Frederick W. Peters, president of Warburg Realty, summed it up: “In short, these power brokers are consummate professionals.  They’re knowledgeable, confident, extremely smart, dedicated, and hardworking.  They’re in the office by 8 a.m., often earlier, and they’re still on the phone or showing well into the evening.  They’ve devoted years to learning the ropes, so pricing, negotiation, and board preparation is second nature.  They do the research, know the economy and how it will affect the real estate market.”

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Warburg’s Crowning Glory   Warburg Realty Harlem, a division of Warburg Realty Partnership, has been appointed the exclusive sales agent for The Crown Condominium, located at 110th Street and Second…... Read more >

Warburg’s Crowning Glory
 

Warburg Realty Harlem, a division of Warburg Realty Partnership, has been appointed the exclusive sales agent for The Crown Condominium, located at 110th Street and Second Avenue in East Harlem.

The newly constructed nine-story luxury development will offer 30 residential condominiums and three retail stores to be marketed by Brian Thornton and Chris Halliburton. Frederick W. Peters, President of Warburg Realty, made the announcement.

Commented Peters, “The Crown Condominium offers the high-quality living buyers are coming to demand and expect. We are thrilled this developer and others have turned to Warburg’s luxury service, experience and professionalism to market these new properties.”

The Crown Condominiums will provide a combination of one- and two-bedroom luxury homes. Prices range from $249,000-$720,000 with the units available for occupancy in Fall 2005.

This is an exciting time for Warburg, with the planned opening of its newest storefront office in TriBeCa, as well as the overwhelming success of its Harlem and Real Property offices.

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There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South.  Others- albeit the…... Read more >

There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South.  Others- albeit the pricier ones- are in duplex-only buildings along Manhattan’s toniest avenues, while others may be offered up as “townhomes.”  And while duplexes may offer a dramatic and unique alternative to simplex dwellings, it’s important to remember they don’t automatically translate into roomier digs, or even sunshine-all-day penthouses.

Truth be told, they can be smaller than the more common one-level apartments.  “Townhouse and duplex residences give the illusion of more space and the feeling of living in a traditional home,” says Stribling’s vice president Linda Melnick.  But fair warning: one floor can very well be below street level. Interestingly enough, less space and windowless living rarely deters eager duplex buyers.

From to-the-max luxury living at Trump Park Avenue (a duplex can set you back some $30 million), buyers will find a myriad of choices, with the lower-floor dwellings fetching less dollars than their penthouse cousins.  On the other hand, no matter the location, features might include private entrances, private elevators, double-height ceilings, and personal outdoor space.

So what exactly is the allure? Warburg Realty president Fred W. Peters suggests, “Duplex living confounds the cookie-cutter expectations of the apartment dweller.  It is both glamorous and mysterious to enter an apartment foyer and see not just walls and windows but stairs.  Not only is it more like a house, but it also makes the totality of the space unknowable at first glance.  Both architecturally and emotionally, a duplex is always exciting.”

Here are some of our favorites:

Designed by Costas Kondylis, The Link at 52nd Street near Ninth Avenue is a well-appointed paradise. “We’ve tried to capture the fun and excitement of living in one of the city’s hottest neighborhoods by creating a building predicated on cutting-edge design and attention to detail,” stated Elad president and CEO Miki Naftali.  Starting at $2.9 million, the three-bedroom townhouses have huge terraces and unparalleled views of the Hudson River.  Loaded with plenty of extras, the building offers a lobby-level garden, fitness center and lovely 2,500 square feet interior garden. 

Consider one of the Adam Kushner-designed multi-level homes at Baxter and Canal Streets. Bells and whistles here include chromotherapy bathtubs, kitchens clad in steam ovens (read: healthy cooking), computerized refrigerator ovens that move cooled food to oven cooking, Internet refrigerators, and the coolest robotic garage.  “Kushner takes 21st-century design to a new level,” says Elliman’s managing director of new home developments Andy Gerringer.  “These homes will appeal to hip, young, computer-savvy professionals who relish time-saving, tech-friendly services.”  Price: about $3.24 million. 

The stylistic penthouse duplex at 79 Barrow near Hudson Street is so extraordinary that it’s been featured in Architectural Digest and on Fox News.  A labor of love also from Kushner, this two-bedroom masterpiece serves as the Kushner family home.  For $2.95 million, the lucky buyer will get 1,400-plus square feet of living space and terrace and roof access.  Notable features include log-cabin walls, exposed brick, a steel stairway, and an in-floor Jacuzzi.  The custom-designed kitchen has under-counter fridges and freezers, custom-cut drawers, and top-of-line appliances. 

The Lumiere on West 53rd Street near Ninth Avenue has 10 duplex townhouses and 6 duplex penthouses.  The penthouses have enormous terraces (as much as 1,300 square feet) with hot tubs.  (The townhouses offer the option of installing a hot tub on the terrace.)  Starting at $1.25 million, all have private entrances and none offer less than 1,144 square feet of indoor living space.  Topping the building amenity list is a Fresh Direct delivery-type refrigerated room at lobby level, a tree-lined garden, and a well-equipped fitness center. 

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The Industry Leaders:  Frederick Warburg Peters Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan.…... Read more >

The Industry Leaders: 
Frederick Warburg Peters
Frederick Warburg Peters is President of Warburg Realty Partnership, one of the oldest and most respected luxury residential brokerage firms in Manhattan. A graduate of Yale College with a Masters and extensive pre-doctoral work in music, Frederick entered the real estate business as a residential agent in 1980. After working as a Manager at Albert B. Ashforth for a numbers of years in the late 80’s he acquired and renamed the 95-year old firm in 1991.

During the past 15 years, Peters has expanded the company from 60 to 130 brokers and from one to four locations. In addition to leading the firm’s strategic initiatives he continues to work as a broker for two reason: he loves the thrill of making a deal, and feels it keeps his finger on the pulse of the marketplace, making him a more valuable resource to the firm’s agents. It is this daily involvement that enables Peters to insure that Warburg’s core philosophy providing extraordinary service and forging strong relationships between its professionals and the customers, clients and communities they serve is consistently fulfilled, and that the firm’s position as an independently owner major player in the New York City marketplace is maintained. Always attempting to think one step ahead, he has recently opened the first major luxury brokerage office in Harlem at Frederick Douglass Boulevard and the first office devoted to the sale of Real Property at 30 East 76th Street, in addition to Warburg’s existing Upper East Side and Greenwich Village locations. This trailblazer approach has consistently set the firm apart from its competitors and warranted Peters’ reputation as one of the most-quoted experts in the Manhattan residential real estate industry.

Peters’ dedication to the industry is also seen in his involvement as a Co-chair of the Board of Directors of The Real Estate Board of New York’s Residential Division and a member of REBNY’s Board of Governors. In 1996, he was the recipient of the Henry Forster Award, a lifetime achievement and contribution-to-the-industry award.  

The Deal Makers: Wendy Greenbaum
Wendy Greenbaum, began her real estate career in 1980, and joined Warburg Realty Partnership (previously Ashforth Warburg Associates) as one of the original eight partners in 1991. Her membership in this elite group combined with her 25 years in the industry, has warranted her reputation as a formidable dealmaker with enormous skill and experience. Year after year she’s among the top five performers at Warburg Realty, a success her client’s attribute to the direct approach and clear understanding of financial intricacies, enabling her to guide them through the most complex transactions.

Not surprisingly the majority of Ms. Greenbaum’s new business can be attributed to referrals, generated by a large network of satisfied customers who time and time again refer to her as the consummate professional.

In 2004, Ms. Greenbaum was the top performer for the firm, representing buyers and sellers in more than 20 real estate transactions throughout Manhattan.  

Rising Stars: Sarah Fiszel
Sarah Fiszel began her career at Warburg Realty Partnership in July 2001, after graduating with a Bachelor of Science from Cornell University in May 2001, joining a growing number of young Ivy Leaguers choosing residential real estate as their first career. At the time, it was unprecedented for Warburg to hire a real estate salesperson straight out of college, and she continues to be the youngest salesperson at the firm. Her intense passion for real estate was fostered by a constant exposure to the business from an early age. Both of her parents Renee Bross, Managing Director, and Richard Steinberg, Senior Managing Director, are two of Warburg Realty Partnership’s most notable brokers and have been in the business for over 20 years.

Mrs Fiszel works both alone and in partnership with both of her parent. Together they have created an entity capable of covering the entire real estate market by providing a strong and experienced team for all of their clients. She has developed a specialty serving professionals in the hedge fund community who require absolute efficiency, privacy, and expert knowledge of the current real estate market. In the last six months, Mrs. Fiszel has independently either closed or is in contract for $35.2 million of Manhattan properties, and presently had $17 million of exclusives listings. One of her most noteworthy deals in 2005 is the sale of two penthouse apartments at One Beacon Court for a total of $24.6 million, marking that as the highest single sale in Warburg’s history.   
 

 

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There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South. Others—albeit the pricier…... Read more >

There’s a glut of duplex apartments all over town. Some can be found in pre-war greats such as the Century on Central Park West and Gainsborough Studios on Central Park South. Others—albeit the pricier ones—are in duplex-only buildings along Manhattan’s toniest avenues, while others may be offered up as “townhomes.” And while duplexes may offer a dramatic and unique alternative to simplex dwellings, it’s important to remember they don’t automatically translate into roomier digs, or even sunshine-all-day penthouses.
 
Truth be told, they can be smaller than the more common one-level apartments. “Townhouse and duplex residences give the illusion of more space and the feeling of living in a traditional home,” says Stribling’s vice president Linda Melnick. But fair warning: one floor can very well be below street level. Interestingly enough, less space and windowless living rarely deters eager duplex buyers.

From to-the-max luxury living at Trump Park Avenue (a duplex can set you back some $30 million) to more modest-but-perfectly-wonderful duplex digs at the Boulevard on the Upper West Side (one recent listing came in at less than a million), buyers will find a myriad of choices, with the lower-floor dwellings fetching less dollars than their penthouse cousins. On the other hand, no matter the location, features might include private entrances, private elevators, double-height ceilings, and personal outdoor space.

So what exactly is the allure? Warburg Realty president Frederick W. Peters suggests, “Duplex living confounds the cookie-cutter expectations of the apartment dweller. It is both glamorous and mysterious to enter an apartment foyer and see not just walls and windows but stairs. Not only is it more like a house, but it also makes the totality of the space unknowable at first glance. Both architecturally and emotionally, a duplex is always exciting.”

Here are some of our favorites:

Designed by Costas Kondylis, The Link at 52nd Street near Ninth Avenue is a well-appointed paradise. “We’ve tried to capture the fun and excitement of living in one of the city’s hottest neighborhoods by creating a building predicated on cutting-edge design and attention to detail,” stated Elad president and CEO Miki Naftali. Starting at $2.9 million, the three-bedroom townhouses have huge terraces and unparalleled views of the Hudson River. Loaded with plenty of extras, the building offers a lobby-level garden, fitness center and lovely 2,500 square feet interior garden.

Consider one of the Adam Kushner-designed multi-level homes at Baxter and Canal Streets. Bells and whistles here include chromotherapy bathtubs, kitchens clad in steam ovens (read: healthy cooking), computerized refrigerator ovens that move cooled food to oven cooking, Internet refrigerators, and the coolest robotic garage. “Kushner takes 21st-century design to a new level,” says Elliman’s managing director of new home developments Andy Gerringer. “These homes will appeal to hip, young, computer-savvy professionals who relish time-saving, tech-friendly services.” Price: about $3.24 million.

The stylistic penthouse duplex at 79 Barrow near Hudson Street is so extraordinary that it’s been featured in Architectural Digest and on Fox News. A labor of love also from Kushner, this two-bedroom masterpiece serves as the Kushner family home. For $2.95 million, the lucky buyer will get 1,400-plus square feet of living space and terrace and roof access. Notable features include log-cabin walls, exposed brick, a steel stairway, and an in-floor Jacuzzi. The custom-designed kitchen has under-counter fridges and freezers, custom-cut drawers, and top-of-line appliances.

The Lumiere on West 53rd Street near Ninth Avenue has 10 duplex townhouses and 6 duplex penthouses. The penthouses have enormous terraces (as much as 1,300 square feet) with hot tubs. (The townhouses offer the option of installing a hot tub on the terrace.) Starting at $1.25 million, all have private entrances and none offer less than 1,144 square feet of indoor living space. Topping the building amenity list is a Fresh Direct delivery-type refrigerated room at lobby level, a tree-lined garden, and a well-equipped fitness center.

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In Buying A Home, You Are What You Do By TERI KARUSH ROGERS CONSCIOUSLY or not, Manhattanites tend to subscribe to the you-are-what-you-do-for-a-living notion. So perhaps it's not surprising that from…... Read more >

In Buying A Home,
You Are What You Do
By TERI KARUSH ROGERS

CONSCIOUSLY or not, Manhattanites tend to subscribe to the you-are-what-you-do-for-a-living notion. So perhaps it's not surprising that from the vantage of real estate brokers who shepherd, coax, bully and pander to them, an apartment-hunter's behavior can play out in striking sync with his or her occupation.

Take Wall Street types, dissected with greatest avidity by real estate brokers asked to serve up generalities. While bubble phobia is hardly uncommon in this market, it haunts financial professionals the most, brokers say.

"They always think that they're buying at the top, and they want to buy at the bottom," said Charles Russell, a senior vice president at the Corcoran Group who has worked on Wall Street as a petrochemicals broker. "Every Wall Streeter I've worked with in the last five years, they say, 'I don't want to buy now, the bubble is about to burst,' and then they come back to me a year later and have to pay a million more for the same apartment."

Quantification is the name of the game for finance workers. "Some bankers, every time they look at an apartment they like, they say, 'We've got to go home and put it on the spreadsheet,' " said Mitzie Lau, a Corcoran sales agent, echoing her peers. "It is very funny because you start thinking: 'What else do they do with their life? Do they put everything on a spreadsheet?' "

Ann M. Kim, an agent at Halstead Property, said all her finance clients look for the same information. "When it comes down to putting their money in something, they're going to look at the yield basis, how much they're going to rent the property for if they were to move out, and what type of return they're going to get if they're going to own long term," she said.

In drilling down through the quantitative bedrock, this type of buyer can be oblivious to the gut appeal of a place. Bruce Bennett, another Corcoran agent, recalled the middle-aged private banker to whom he showed a two-bedroom, $1.1 million apartment at Fifth Avenue and East 35th Street in January. The client peppered him with questions about the building's reserve fund, price per square foot and amperage in the kitchen.

"This guy was buried into the listing looking into the numbers," Mr. Bennett said, but the client ignored the high-quality kitchen renovation and the south- and east-facing windows spilling sunshine into the corner dwelling. "I said, 'Have you noticed the view?' " Mr. Bennett recalled. "You have a Fifth Avenue address and Fifth Avenue view. He looked over and said, 'Oh, yeah, I guess that will be good for resale.' "

Those who toil at hedge funds amass fortunes by leveraging little-known information. Perhaps as a result, they suffer from a "need-to-know-more syndrome" - as in more than the broker - when hunting for real estate, said Frederick W. Peters, president of Warburg Realty. He compared this typically young group with the similarly youthful mergers-and-acquisitions bankers he dealt with in the 1980's.

"I'm not suggesting that the younger guys are disrespectful," Mr. Peters said. "It's more that they're sure they know what is going to happen." He offered his merchant-banking clients, in their 40's and 50's, as a study in contrast. "When I deal with people who are a little older, they're more comfortable knowing what they know and letting me know what I know," he said. "They don't sweat the small stuff. They just decided that they want what they want and they're prepared to pay what it costs to get it. The whole issue of winning isn't in the picture so much."

The propensity among the hedge-fund set for making large bets - combined with the Monopoly-money feel of overnight fortunes - can translate into bidding-war gusto. Not so for lawyers, whose comparatively thin bank accounts accrete more incrementally and whose jobs often depend on negotiating a meeting of the minds.

"The idea that there's anything that should be non-negotiable is extremely hard for them to deal with," Mr. Peters said. "A market like that of the first quarter, in which for many properties you only get to negotiate up, that's very hard for them." He added, "The main thing about lawyers is they tend to be kind of hypervigilant, since they're trained to think about every contingency, and it's very hard for them to turn that off when they're dealing on their own account. So my experience with lawyers is that you have to get every detail nailed down."

In general, some brokers say, older lawyers who have achieved major career milestones are easier to work with, just as older Wall Street executives tend to revel less in a masters-of-the-universe persona than do rising stars. "They know what they have to spend, what they want, and they'll negotiate but they're not unreasonable," said Susan Gerard, a broker at Halstead. "The ones who can be the most unreasonable are the junior associates who have just gotten a taste of a good salary but haven't quite made their mark yet. I find they can be a lot more demanding. They can have a whole laundry list of demands that are not always rational."

On the bright side, lawyers excel at providing the sort of minutiae required for board packages, unlike those in the creative fields, who are said by brokers to be less practical-minded - a minus when it comes to closing a deal, but a plus when finding a property to buy.

"Creatives are often more open on where they will go," said Kathleen M. Sloane, a vice president and director at Brown Harris Stevens. "They're more apt to say: 'Can you find me a penthouse in Hell's Kitchen, or one anywhere that's quirky? We don't care about the location; we care about being at the top of the building and having light.' They would be willing to buy the penthouse to which the elevator doesn't go. They're willing to make sacrifices in their lives."

The subset of creatives known as celebrities can be surprisingly pleasant to work with, brokers say, once the phalanx of money managers and advisers is pierced and communication occurs directly with the client. Perhaps because they're accustomed to listening to advisers, this group is said to be more trusting. "With people in finance, when the selling broker says they have another offer, the person in finance will always say, 'Do you believe that?' " said Wendy J. Sarasohn, a senior vice president at Corcoran "whereas the creative people will trust it."

Buyers from the media industry often try to "scoop" their broker with unpublicized information about recent sales. Ms. Lau of Corcoran says: "I think they do that because that's part of what they do every day, so even in their personal life they do the same thing. They always try to feel more justified and validated by something you don't know already." On the positive side, she said, "If you get one media person you get a whole bunch, because they tend to talk a lot with their friends."

Doctors tend to be viewed by brokers as an amenable if not particularly high-flying group, with location - near their practice - among their biggest concerns. After a typically half-hearted attempt to negotiate a lower commission, they tend to undertake a deliberate search.

"They are very good about seeing all the apartments and they remember very well the details," Ms. Lau said. "And then what they usually do is they tell you why they pass on the apartment rather than the other way around. It's sort of like a diagnosis. But once they find something they like, they really stick to it, because they've analyzed all the facts, but it takes them a little longer."

Yet once the diagnosis is made and a contract is signed, said Andrew A. Fine, president of the real estate brokerage A. Fine Company, doctors don't want to deal with the details. "They tend to think about things for a long time," he said. "And they seem to have an attitude that once they go into contract, they really don't want to deal with the details. They just want to snap their fingers and have it done."

Teachers pose a different kind of frustration for brokers. "Teachers are kind of hard because they like to study everything," Ms. Lau said. "I mean, they sometimes make you feel like you're the dumb one, because they take so long looking at a neighborhood that they even remember lines of the apartments and names of buildings and their numbers." On the other hand, she added, "Once they find something they like that they can live with, they will not be nickel and diming the price."

On the subject of nickel-and-diming, such behavior is also infrequent among captains of industry, according to Leighton Candler, a senior vice president at Corcoran whose clients include a fair number of such figures. Not that this crowd moves very often. "When you're in one of the rare, beautiful pieces of real estate in Manhattan, you don't give it up until you've found the one perfect thing that's a little different," Ms. Candler said.

Stereotypes are just that, of course, with many exceptions to the rule. But the canniest brokers recognize that one person's stereotype is another's marketing tool. Mr. Bennett of Corcoran said he positions properties according to buyers' occupations.

"If I know they come out of heavy-duty strategic, financial or analytical background, I start talking about what the building's financials are, the requirements financially they'll need to get into the building," Mr. Bennett said. "If it's a person who is a touchy-feely kind, you know, who works in entertainment or creative writing or that kind of stuff, then I will go into the sunlight and the spaciousness of the space and how oversized the windows are." He added, "When you position yourself that way, people end up thinking that you're very much connecting to them and listening to them."

And what of brokers turned buyers? Does their up-close view of others' peccadilloes translate into model buying behavior? Not by a long shot, says Mr. Peters of Warburg Realty, who has often observed the imperfect metamorphosis among his own agents.

"In general, the minute you put them in the position of being a buyer or a seller, they behave exactly like a buyer or a seller, and everything they know about the market goes completely out the window," said Mr. Peters, who has watched agents become huffy over routine board questions that suddenly seem invasive. "I say that to them all the time - 'You're acting like the client you wish you never had.' "

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An Iron Bubble: Housing Market Isn’t Deflating by Michael Calderone Russian-born finance billionaire Leonard Blavatnik isn’t used to being rejected. So when the board at 927 Fifth Avenue told him…... Read more >

An Iron Bubble:
Housing Market Isn’t Deflating
by Michael Calderone

Russian-born finance billionaire Leonard Blavatnik isn’t used to being rejected.

So when the board at 927 Fifth Avenue told him that he couldn’t buy Mary Tyler Moore’s 5,740-square-foot prewar co-op on the eighth floor, even with $18.5 million in hand, it must have smarted.

Soon insult was added to injury, when the board of Central Park West’s San Remo co-op board told Mr. Blavatnik that he couldn’t buy and combine three units into a massive aerie overlooking the park.

It’s just one way the real-estate market in Manhattan is different from the rest of the country. Elsewhere, who would turn away an investor with money to burn?

These days, though, the real-estate talk in Manhattan is the same as everywhere else: It’s all about the Real-Estate Bubble.

The chatter reached a summit when, on May 25, The New York Times ran a front-page news story about the bubble, followed two days later by Op-Ed columnist Paul Krugman’s gloomy economic forecast. The Princeton professor jumped right into the current real-estate fray, the "final, feverish stages of a speculative bubble."

As in many other "bubble" articles, Mr. Krugman focused primarily on nationwide housing statistics.

But what plays in Peoria, Miami or Syracuse may not play here. And when it comes to watching real estate, there are only three factors to consider: location, location and location.

That, at any rate, is the story the Manhattan real-estate world is eager to tell.

They say the tendency of co-op boards—a major force in the Manhattan market as nowhere else in the country—to weed out speculative investors is a major factor. So, too, are the city’s low crime rate; steady increases in population and immigration; and mounting construction costs. These factors, they say—and not the kind of speculative distance from real value—are what have been driving Manhattan’s real-estate values to dizzying heights. And while it won’t last forever, neither, they say, will it come crashing down on our heads like it did in the late 1980’s.

The Co-op Board

One study, conducted in September 2004 by Business 360, an economic-research firm regularly hired to issue assessments for corporations and investors, confirmed something New Yorkers have long believed: that Manhattan real estate operates on a fundamentally different economy from the industry in the rest of the country.

Training its focus on Manhattan, the study found that over 80 percent of co-ops in the United States are located in New York; what’s more, co-op apartments make up about 80 percent of New York’s residential real-estate market.

"One thing that makes the New York market different is co-op boards," said Frederick Peters, president of Warburg Realty Partnership. "There’s built-in protection in the co-op market against the kind of panic selling which is one of the byproducts of a bursting bubble."

Co-op boards don’t like financial "adventurers"; prospective buyers’ long-term financial security is as important as their bank balance at the time of purchase.

And the boards like it even less when investors come in to rent out or "flip" apartments—meaning they have no plans to occupy the place themselves, only to turn around and resell the place at a higher price than they paid themselves.

"The situation in New York is different in the sense that we don’t have the rampant speculation, the property-flipping," said Jonathan Miller, president and chief executive of Miller Samuel, a real-estate appraisal and consulting firm. "It pales in comparison to what is going on nationally."

Unlike in other hot markets, New Yorkers are primarily buying property for personal ownership rather than to turn a quick profit.

In the heavily investor-driven South Florida market, which has been a major focus of recent coverage, Mr. Miller believes that roughly 60 to 70 percent of sales are speculative purchases.

"I know Miami is a highly speculative market," said Pamela Liebman, president and C.E.O. of the Corcoran Group. "This is not Miami. This is people who want to be here. It’s not a flipper mentality in New York."

Indeed, in Manhattan, investors represent less than a quarter of apartment buyers, and most homeowners will ride the ebbs and flows of the market from the safety of their living room.

"People feel secure; they’re willing to invest their money," said Michele Kleier, president of Gumley Haft Kleier. "You’re buying something that, worse comes to worst, you’re going to live in."

The activism of New York’s co-op boards is one reason the Manhattan real-estate market seems to correlate so poorly to the stock market.

"[T]here has always been a propensity to correlate the housing market to the stock market, and they’re fundamentally different," said Mr. Miller.

For one thing, real-estate transactions take significantly longer than stock transactions. Co-op boards present difficulties regardless of capital that no stockbroker would present. And devalued stocks cannot provide a roof and four walls in the event of an economic downturn.

"Real estate has intrinsic value," said Mr. Peters. "Unlike tech stocks, there is always a there there."

But the more speculative the purchases—the greater the proportion of investing in real estate to actual home buying—the more the resemblance holds up.

"Up until 2000, it was the conventional wisdom that real estate followed the market," said Mr. Peters. "Real estate really is functioning as a separate asset class which doesn’t parallel the stock market."

In the past few years, many records have been shattered, especially in the high-end market, with Rupert Murdoch’s $44 million purchase of Laurance Rockefeller’s penthouse triplex at 834 Fifth Avenue being just the latest example.

But high demand—as long as it’s coupled with a limited inventory— can create a hot market without inflating a bubble.

Indeed, one of the downsides of this booming market has been the response time granted to potential buyers, who are forced into bidding over the asking prices, in many instances without time for careful consideration. There is some speculation that this could lead to an increase in shoot-from-the-hip stock-market-style speculation in real estate.

"In a normal market, it takes four to five months to sell an apartment in New York City," said Jacky Teplitzky, executive vice president at Prudential Douglas Elliman. "In the first quarter, it used to take 24 hours. Or 48 hours."

"It’s not just buying a few shares in G.E.—for the vast majority of us, it’s the most significant investment you are going to make in a lifetime. Now more than ever, in this turbo-charged market, people believe they have to bid instantly," said Sylvia Shapiro, author of The New York Co-op Bible.

But even then, the feverish sell-offs that characterize a stock-market crash seem unlikely.

"It’s an asset that takes, at a minimum, 60 to 90 days to trade," Ms. Liebman said. "The cycle of selling it doesn’t lend itself even to be spoken of as a bubble. You don’t have thousands of houses crowding the market because, one night, someone said the market crashed."

I Am an Island

Full-scale housing busts have occurred here before. But the bust of the late 1980’s happened under very different circumstances.

That crash was catalyzed by excessive condominium conversions during the Koch years. When the stock market dropped by a quarter (over 500 points) in October 1987, the supply of condominiums far outweighed the demand.

In today’s market, however, there is still a constrained supply.

"One of the factors that stimulates the market is supply and demand," said Daniel Douglas of the Corcoran Group. "Nobody told me about Manhattan getting enlarged. It’s a limited landmass. There’s a limit to the amount of things you can do."

Donald Trump’s theory is a bit different.

"That was driven by tax deductions," he said of the 80’s real-estate bubble. "This is driven by a market which is much safer. The late 80’s was driven by tax deals, and when they ended the tax deals rather abruptly, the market came to a screeching halt. The government actually made a big mistake, because it took down a lot of banks—a lot of people went down the tubes."

But he agrees with everyone else on at least one important factor that separates Manhattan from the rest of the nation: water.

"It’s a small little island surrounded by water," he said. "Anything on this island is going to become more and more valuable over time. In other places, you have stretches of land that go thousands of miles. Here, you have just a very small little island."

Unlike the housing market in Omaha, Neb., expansion must be vertical rather than horizontal. There are some areas slated for redevelopment—former factories becoming shabby-chic artists’ lofts—but Manhattan doesn’t offer developers miles of untapped land to build a few thousand McMansions.

"I think New York is a very unique marketplace," said Ms. Liebman. "We like to think of it as the capital of the world. It is an island. And it does not suffer from overdevelopment. We feel the demand in Manhattan is very strong and is still far outweighing the supply, which is causing the market to have a 23 percent increase in prices this year. Our company has had a record-setting sales month in March, April and now in May. All this talk of the bubble is purely fueled by the press."

But how long can the party really last? Will inventory always be in such short supply in Manhattan?

Some point to the fact that, last year, 25,208 new residential units were approved for construction granted—the most in over 30 years. Just 10 years earlier, only 4,010 were permitted. This is one area where there could be a substantial glut of new residences in the next few years, with the downtown condominium market viewed by some in the industry as a place to watch closely.

"There might be some concern down the road just because [downtown] has been the focus of development over the last five years," said Mr. Miller.

Indeed, most industry insiders agree that boutique condos, costing upwards of $2 million to $3 million, could be in jeopardy if supply begins to outweigh demand.

Recently, there has been property flipping in several new luxury-condominium developments (where savvy investors purchased sponsor units from floor plans), but that marks the exception rather than the rule.

"Because there is less financial scrutiny, [condo] buyers may have financial issues down the line," said Ms. Shapiro. "Co-ops are definitely better-protected than condos."

Slowdown Imminent

"There is no bubble! What has happened is, the incredible price escalation is a result of property being tremendously undervalued for a long period of time," said Leonard Steinberg of Prudential Douglas Elliman, a luxury property broker.

O.K., that might sound a bit crazy. But the Business 360 study concluded that the price of housing—still recovering from the early 1990’s decline—is indeed undervalued. The authors of the report predict that prices will rise about 10 percent per year through 2007, followed by a 5 to 8 percent annual gain through 2010.

There’s no question about it: That’s a slow-down.

"The experience we are currently having is a decrease in the rate of increase. The reason that leads to price reductions [is that] sellers invariably price ahead of the marketplace," said Mr. Peters.

While brokers may have obvious reasons to dismiss the rumors of an impending housing bust, many are willing to admit that the market has slowed down, which is admittedly not such a bad thing. Continuous double-digit gains, quarter after quarter, are a strong indicator that prices are inflated, and the market could then drop significantly. And although the percentage gain may drop a few points, it must be noted that there is still a net gain: Prices may rise, albeit not as quickly as in the previous quarter.

Another broker agrees that a slight slowdown isn’t the end of the world and should be expected in any market—but that, in such a case, properties would not be losing any value, only increasing in value at a slower rate.

"The market has slowed down, but what said has it slowed down from?" said Mr. Steinberg. "Has it slowed from a Ferrari to a Mercedes? Yes. It’s still going pretty quickly, it’s still going pretty actively, but it cannot be at full-throttle acceleration forever."
 

 

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Personality Profiles As talk of a real-estate bubble grows louder, difficult choices abound: How can you protect yourself and possibly even profit from what lies ahead? To advise some hypothetical New…... Read more >

Personality Profiles

As talk of a real-estate bubble grows louder, difficult choices abound: How can you protect yourself and possibly even profit from what lies ahead? To advise some hypothetical New Yorkers, we assembled a panel of experts: Frederick Peters, president of real-estate brokerage Warburg Realty; John Vessa, a financial consultant with Smith Barney’s Harbor Group; and Suze Orman, personal-finance doyenne, CNBC host, and author of The Money Book for the Young, Fabulous & Broke.

The Imminent Retirees
After losing a big chunk of their 401(k) money in the tech bust, this couple on the early edge of the baby boom invested in rental properties, buying a studio and a two-bedroom in the building where they already owned a three-bedroom worth about $1.8 million. That apartment is free and clear; the other two have mortgages. They’re counting on rental income to support their lifestyle in retirement.

Peters: Sell the bigger apartment and hold on to the studio. It’s judicious to have a little liquidity. And I think the rental market is going to remain robust, even if the market for sales cools off. If you can get $2,000 a month for the studio, that can be a nice piece of supplementary income.

Vessa: They were overly concentrated in tech stocks, and now they’re dangerously overconcentrated in real estate. If they’re reliant on rental income, an extended vacancy would cause a strain. So I’d advise reducing their real-estate holdings. How about selling the three-bedroom and moving into the two-bedroom to free up capital that can be invested to diversify their cash flow?

Orman: I don’t think they can really afford to own three pieces of property. They should move into the two-bedroom. They can either rent out the $1.8 million three-bedroom or sell it. They’ll get $500,000 of the profits free of capital gains, and pay 15 percent on the rest. They can pay off the mortgage on the two-bedroom—if their income is going to decline in retirement, the home-mortgage deduction becomes much less useful—and still have close to $1 million in the bank, but with no home-related expenses, save co-op fees.

The Splurger
A Wall Street kid bought a Tribeca loft for $3 million. He borrowed from family to scrape up the down payment, leveraged himself, and uses a significant chunk of his bonus to make payments throughout the year. His very low mortgage rate is fixed—but only for the next two years. If it rises by more than a couple percentage points and he doesn’t start making a lot more money, the monthly nut becomes unaffordable.

Peters: As a short-term investment, I’m not sure about a big Tribeca loft. I’d do a two-bedroom apartment, maximum. The current boom has been driven from the bottom. But there’s been a lot less construction of smaller apartments and a lot more construction of larger apartments. Once you get above $2 million, there’s more supply, especially downtown. If he wants to try to hold on to the property, he should convert to a fixed mortgage—the old-fashioned kind.

Vessa: This kid is really rolling the dice! He works in a high-risk industry in which bonuses fluctuate significantly. I’d encourage him to sell the loft and buy an apartment whose mortgage payments are more in line with his recurring salary plus a smaller chunk of his annual bonus.

Orman: He should sell—even if it means taking a loss. If the stock market turns sour, too, he could really be up the creek. These interest-only loans with teaser rates can be dangerous. If you’re paying 2.5 to 3 percent when going rates are 6, the difference is put on the back end. After a few years, not only will the interest rate rise, but he’ll start having to pay back principal. In a stagnant market, he’s got no upside and every risk coming at him.

The Expecters
A couple with a 3-year-old child—he’s in marketing, she’s a lawyer—has a small two-bedroom co-op in midtown worth about $750,000. But the wife is pregnant and they need more space. She plans to go back to work two years after the baby is born. They have about $200,000 in equity in their apartment and have saved up another $100,000.

Peters: They should plan to spend at least $500,000 for that third bedroom. But they shouldn’t rush. Getting past a co-op board with one income is going to be more complicated, and the baby does okay in the dining area for a few years.

Vessa: Even if prices come down, this isn’t the best time to be adding extra costs. Kids are expensive! They should budget for such items as private schools, camp, college savings, and child care. They may think they can afford the bigger apartment given their current expense level. But if they can’t afford it down the road without breathing room, they should consider staying where they are and making do.

Orman: They might be a good candidate for trading up. Sell the apartment, take the equity and the gain, and buy the most reasonable three-bedroom apartment you can find. Then take an option mortgage, which lets you change payments as your situation changes. For the next few years, they might go for the interest-only payment and switch to an interest-plus-principal or refinance when the second income kicks back in.

The Deeply Rooted
The last of the three kids just split for college, and the couple has a fabulous townhouse in Harlem all to themselves. They’ve lived there since the early eighties, have little debt on the house, and have no desire to move. But their home represents 95 percent of their net worth, and they’re worried that if it collapses in value, they’ll lose everything. Plus, with two kids in college and the third in graduate school, they’re strapped for cash.

Peters: They might not need the space anymore. But attachment matters, too. Harlem is a great investment. And if they sell, they’re going to pay a kick-ass capital gain. They should refinance and use some of the money from the mortgage to pay some college costs. Then use some to turn the ground floor into a rental apartment.

Vessa: The most reasonable course of action: Sell the townhouse, and downsize to a less fabulous place, perhaps in the same neighborhood. If they’re adamant about staying, they can still free up some capital by refinancing or taking a second mortgage.

Orman: They shouldn’t worry that their home represents 95 percent of their net worth, because it also represents 100 percent of where they go to every single night. Who cares what happens to the value of the home as long as it is paid for in full? Pay off whatever remains of the mortgage, since they’re not getting a tax break. Then they should tell their kids to take out student loans—rates are very low, and the payments can be tax-deductible—and redirect cash they’d spend on the kids’ education into diversifying.

The Discontented Renter
A single woman can barely afford the $4,000 a month she pays for a prime West Village one-bedroom. It’s where she’s been dreaming of living since she was a teenager in Dix Hills. She has about $100,000 in cash that she wants to use as a down payment. Brooklyn is out of the question. She’s been waiting for several years for the market to take a breather so she can jump in.

Peters: There’s always a problem with waiting around for prices to get better. We’re not always smart enough to know when it’s happening. People who wait for prices to improve often end up waiting for them to get even lower—and then they miss the bottom. So buy the best apartment you can comfortably afford now. Neighborhood snobs are getting more rare. We’ve seen people who would have been happy to live by Columbia wind up on 65th Street and First Avenue, and vice versa.

Vessa: The calculation isn’t just looking at the difference between monthly rent and a mortgage payment—there are closing costs and the carrying costs of ownership. If she really wants to own a piece of the rock, the rock may need to be either smaller, or outside Manhattan.

Orman: She should buy now. Find a place for $700,000 and put the $100,000 down—even if she thinks the market might fall further. As it is, she’s throwing away close to $50,000 a year in rent. That’s about 6 percent of the value of the home she can afford. So the worst she can do in the short term by owning is break even. And the housing market won’t drop 6 percent a year for several years in a row.

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Boom builds for housing  It doesn't matter whether it's near the Empire State Building or Eastchester Bay in the Bronx. Wherever they build it, people will come. The city's residential market has…... Read more >

Boom builds for housing 

It doesn't matter whether it's near the Empire State Building or Eastchester Bay in the Bronx. Wherever they build it, people will come.

The city's residential market has been going strong for so long - since a brief chill right after 9/11 - that buyers worry the bubble is about to burst, and their investments will lose value.

It hit record levels yet again in the first quarter of the year, with the average Manhattan apartment sale rising to $1.2 million, according to appraisal firm Miller Samuel.

But because of continuing low mortgage rates and a short supply of available apartments and houses, builders and brokers do not fear a market downturn this year.

"If people are thinking prices are going down, they're delusional," said developer Ran Korolik.

And he should know. At Lumiere, the condo project he's finishing at 350 W. 53rd St. near Ninth Avenue, he raised prices five times in the six weeks it took to sell 56 condos. He didn't even open a sales office. He started at $850 per square foot and ratcheted up to more than $1,000. That pushed the price of a two-bedroom apartment to $1.2 million.

The Bloomberg administration has sounded a rare note of pessimism about the residential market - by budgeting a drop in city tax revenue from residential sales and mortgages in the year starting July 1. The Office of Management and Budget bases its prediction in large part on a Mortgage Bankers Association forecast of a nationwide drop in mortgage refinancing and new-mortgage origination.

But experts said rates won't rise significantly and cause any slowdown until after January at the earliest.

And though the expected dip will lower tax revenues, they'll still be well above the levels for all but the last two years.

There is, however, one sign of moderation in the market. Among Manhattan's most expensive apartments, which cost more than $2 million, there's a slowdown in the pace of price increases, said Frederick Warburg Peters, president of brokerage Warburg Realty.

Last year, high-end sellers could charge 5% more than the last comparable sale and get their price - even if the prior deal was done only a week before, he said. This spring, they can get 1% more.

Still, bidding wars continue to occur. Broker Toni Haber of Prudential Douglas Elliman recently handled one for an apartment at W. 92nd St. and Riverside Drive that went for more than its asking price.

"There's a lot of frenzy, unless an apartment shows badly because it's really dark, or is in terrible shape, or if it's priced badly," she said.

New construction moves particularly fast. In five weeks, half the apartments at 250-unit 325 Fifth Ave. have been sold, and prices have been raised twice, said Steven Charno of Douglaston Development. So, available one-bedroom apartments now start at $800,000 instead of $660,000.

Developers Jeffrey Levine and Steven Fisch are just pouring the foundation of the 50-story skyscraper. The site's on the opposite corner of 33rd St. from the Empire State Building, in an untried nabe for condos - but buyers aren't deterred.

In three weeks, 20 of the 66 condos at Outlook Point Estates on Eastchester Bay in the Bronx have been sold, said project manager Sam Larca - from $525,000 two-bedroom units to a three-bedroom for $690,000.

"Every developer I see has a smile on his face," said Joshua Muss of Muss Development, who works in Brooklyn, Queens and Staten Island. Sales are moving swiftly at two new buildings at his Oceana complex on the boardwalk in Brighton Beach. A three-bedroom duplex at 125 Oceana Drive East sold for $2.7 million, the highest price to date among the 14 buildings in the gated community.

In the first week of marketing the apartments at Beacon Tower at 85 Adams St. in Dumbo, Corcoran broker Peter Noonan sold a penthouse for $2.4 million, or $1,344 per square foot - a record price for the Brooklyn neighborhood.

"I see no bubble in the real estate market," Noonan said.
 

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