If there's one thing driving the Tribeca residential market right now, it may very well be the lack of a market. Indeed, brokers and market analysts say the neighborhood's inventory, which is roughly 30 percent lower than it was at the peak, is influencing how almost all properties are being perceived and how quickly transactions are taking place.
While even slightly overpriced apartments are still sitting on the market, when a property is priced right, particularly if it's a two-bedroom or larger, it's getting snapped up fast.
One broker said, "Two-bedrooms up to $1.9 million are [typically] trading in under two weeks with multiple offers.
"Open houses for [those] two-bedrooms … are packed," he said, adding that he recently had nearly 30 potential buyers at a third open house.
Of course, part of the reason there is so little inventory is because, unlike a few years ago, there are virtually no large new developments on the market in Tribeca today. That's because many of the planned projects in the pipeline stalled or failed when the economy soured, and because it's extremely difficult to get funding for new projects.
Meanwhile, while families are still flocking to Tribeca (look no further than the fact that noon to 3 p.m., aka naptime, is the hardest window to show properties), some say singles are becoming more interested in the area as it has become more populated with hot destinations like the new bar Weather Up and Sean Avery's 77 Warren.
Still, prices have remained relatively flat in the last year and a half, and some sellers are stubbornly resisting price reductions. For more on which apartments are selling best and worst, which parts of the neighborhood have the most celebrity buzz (it's no longer just Northern Tribeca) and what the current development pipeline looks like, we turn to our panel of experts.
Senior Vice President, Warburg Realty
What are you seeing in terms of sales prices in Tribeca compared to the recent past?
We are pretty much at a place where things have leveled out. The average co-op price in Tribeca is probably around $1,000 to $1,200 [a square foot]. In terms of the [fancier] condos … like the Summit, 101 Warren, and Artisan Lofts at 143 Reade, they are anywhere from $1,500 a square foot to as high as $2,000 a square foot. … I think to a degree that a lot of the sellers down here -- and I am kind of generalizing -- are still somewhere back in 2007. We'll see a lot of things that have been on the market for some time and haven't sold. In the cases where something is moving quickly, it's all about being priced well.
What's the biggest challenge of selling in the Tribeca market?
Clearly our biggest challenge is dealing with the sellers that don't want to get out of [their pricing] zone. If you put an apartment on the market at a certain price … you'll know within 30 to 60 days if you are getting any kind of activity or offers. If it is not moving within that time frame, you have got to make a price adjustment.
Warburg Realty’s TriBeCa Office Hosts
New Art Exhibit at 100 Hudson
New York, NY -- Warburg Realty Partnership's TriBeCa office is proud to announce its newest art exhibit featuring pieces by New York-based painter Sharon Florin and photographer Rachel Hudgins. The office located at 100 Hudson Street will host an opening party at 6pm on September 30, 2010 to celebrate the artists and their work. Warburg Realty, one of Manhattan's leading luxury residential real estate firms, is a long-time supporter of the arts-- especially local artists-and is pleased to provide an opportunity for these artists to feature their artwork. The artists will donate 10 percent of any sales to the Manhattan Youth Recreation and Resources, Inc also based in TriBeCa.
"As a member of the TriBeCa community we are proud to support and foster the creative spirit, which is at the heart of this neighborhood," said Karen Gastiaburo, Senior Vice President and Sales Manager at the TriBeCa office. "As a firm, Warburg is thrilled to continue our tradition of offering local artists the opportunity to feature and sell their work to visitors of our gallery space."
Urban landscape oil painter Sharon Florin is a realist painter, and has spent the past 30 years recording the streetscapes and buildings of New York. She is recognized for her ability to capture the texture, detail and light of the city as it appears in the reflection of the skyline and building architecture. Florin has selected more than 15 works of art to appear in the show.
Joining Florin is photographer Rachel Hudgins. Her work is all about storytelling. With 20 years in the entertainment industry producing feature films and as a photographer, her still images have a cinematic and narrative quality. She is renowned for her work with children, which is often described as humorous, timeless and warm and honest. The exhibit will feature nine pieces of her work.
The TriBeCa office will host the exhibit from September 30, 2010, to January 7, 2011 and visitors are welcome to see the works during office hours.
Broker Plays Starring Role in Tribeca Real Estate
Despite nearly 30 years in the business, Warburg Realty senior vice president Karen Gastiaburo never set out for a career in the industry. That changed once she realized real estate was about relationship building – a skill served well by her background in theater.
Ambitious and outgoing, the aspiring actress began in the business in the industry as a temp. With a positive attitude and the ability to mesh well with all types of people, she wore hats in the financial, sales and managerial ends of the business as well as, over time, established herself as one of the leading real estate experts in Tribeca – where she has overseen a Warburg sales team for the last five years.
Her career began in the early 1980’s after she took some clerical work at William B. May while she was a student.
“I had just started school and I originally tried to kick off a career in theater. I ended up at William B. May because I was doing temp work as so many actors do,” Gastiaburo said. “But my career in theater helped me so much in this industry. You have to be a chameleon in this business.”
It helped her so much that William B. May invited her back for a permanent position, where she spent the next 24 years. But it was not until she advanced to the financial end of the company where she began to consider sales.
“I was the person issuing the checks and I saw these nice-sized checks and thought maybe I could do this,” Gastiaburo said.
In the mid 90s she obtained her real estate license, focusing on her administrative and office duties by day and learning sales by night. And that same day she earned her license, a friend entrusted her with the sale of their Columbus Circle apartment. She ended up selling the unit within a week of her first open house.
In 1998, the company tapped her to spearhead a new sales office in Tribeca. “I was delighted. We opened a small little office at 51 Hudson, and when we started we didn’t have one broker.”
But under her guidance, the office grew exponentially and became a mainstay in the Tribeca market. One of her most challenging deals during her time there included the sale of a Watch Street townhouse. She noted that while apartment sales have their own challenges, they paled in comparison to the lot, egress and other issues that arise when handling a townhouse transaction.
More than two decades into her career at William B. May, “family drama” at the firm prompted Gastiaburo to consider other options. Leaving the company she had spent her entire life at proved “jarring” and she even thought about leaving the real estate industry all together – until she met with Warburg Realty president Frederick Peters.
When Peters told her he wanted to expand his firm by opening a Tribeca office, she knew she had found the right home. And in 2006, Gastiaburo continued to serve the neighborhood she had grown deep fondness for and opened yet another Tribeca office, though this time for Warburg Realty.
“I love coming down here,” said Gastiaburo who lives on the Upper Westside. “We’ve got a beautiful office, we have a great crew and I had a lot of say when the office was being built.”
Throughout her many years in Tribeca, Gastiaburo has seen plenty of new developments, but one thing she believes makes the area unique is the fact that with so many landmarked properties, the market has been able to retain its charm. She’s also seen new money in Tribeca.
During the boom years between 2002-2007, she recalled a flurry of wealthy young professionals eyeing home ownership in the market known as a thriving arts community and playground for celebrities. In fact, she had two hedge fund clients in their 20s looking to buy apartments between $10-$12 million.
“It was just mind boggling. We saw a lot of young financial people making lots of money – and spending lots of money.”
Boom years or not,, Gastiaburo and her brokers are keeping busy and that’s mainly because they understand that selling real estate is about selling yourself and building relationships. She emphasizes the importance of letting clients see the human elements of a sales person and that allowing some personality to show, only strengthens the trust between a broker and client.
While today’s market isn’t mimicking the 2002-2007 rush, Gastiaburo did say resurgence in activity has optimism in New York’s housing sector.
Appreciative of the flexibility real estate affords her theater endeavors; the former stage actress continues to put her artistic stamp on her day job. Many of her top brokers have come from the theater/arts world and Gastiaburo is always fishing for an opportunity to display art in the office: the office is home to a gallery that changes quarterly and tenement models built by PS 150 students are currently on display.
“And when the dust settles a little bit, I’d certainly like to dabble and go back and do some theater,” said Gastiaburo who has been involved with a Manhattan-based theater and done some voiceover/commercial work on the side.
In her free time, Gastiaburo enjoys travelling abroad as a means of relaxing, recharging and adopting a more global perspective. Past trips include excursions to Peru and India.
As Chelsea changes, its roots remain
Author: Kaitlin Ahern
With the High Line open and a boom of new developments, Chelsea remains an artsy neighborhood true to its industrial past.
Long known as Manhattan’s gallery district—home to the highest concentration of art galleries in the country, if not the world—Chelsea has been the preferred corner of the city for the creative and somewhat offbeat for nearly a century. Though not underdeveloped, the area showed considerably more resistance to development than the city’s denser areas. In light of recent happenings, though—including new zoning laws and a popular new park by name of the High Line—Chelsea, and specifically West Chelsea, is seeing some changes. And though these developments are pushing it into a more commercial direction, the area has still managed to stay connected to its roots, maintaining the edgy vibe that’s long separated it from other Manhattan neighborhoods.
Stretching from 16th Street north to 30th Street on Manhattan’s West Side and roughly bound between 10th and 11th Avenues, West Chelsea saw its beginnings as farmland in the early 1800s. Like many other areas of New York’s developing metropolis, its rural charm faded as the neighborhood evolved.
But there is where many similarities end.
An influx of population provided the workforce, and the area’s natural amenities—including, most notably, its proximity to the Hudson—wrote the rest of the story. By the beginning of the 20th century, Chelsea had become an industrial hub—a neighborhood of factories, warehouses, and piers – and a center for silent films, marking the beginning of Chelsea’s affair with the artistic crowd.
The combination of these influences essentially laid the groundwork for the neighborhood’s personality. Factories and warehouses have since become art galleries and off-Broadway theaters, and, more recently, a certain rundown railway line has undergone a reported $85 million renovation into the city’s first elevated park.
Originally constructed in the 1930s, the High Line’s purpose was to remove dangerous freight traffic from the streets of what was then Manhattan’s largest industrial district. The 30-feet-high tracks span from Gansevoort Street north to West 34th Street, between 10th and 11th Avenues. Saved by the Friends of the High Line organization in 1999 and transformed into a model of innovative landscaping and modern design, the park’s first section opened last June between Gansevoort and 20th Streets, in the Meatpacking District, though most of the line is located in Chelsea.
In many ways the High Line is reflective of the neighborhood itself, evolving from industrial center to an offbeat modern marketplace of culture that’s been attracting a lot of attention lately. “I think the High Line has opened up the door to Chelsea,” says Karen Gastiaburo, senior vice president and Tribeca sales manager for Warburg Realty Partnership. “People are focusing in on those parts of town [by the High Line] and doing things to make it more liveable and pleasurable.”
Take the renewed interest in the area spurred by the High Line, combine with a city-ordered rezoning of the West Chelsea neighborhood in 2005 meant to “encourage and guide the development of West Chelsea as a dynamic mixed use neighborhood,” and you’ve got the two-part catalyst that’s steered the area into more commercial waters than ever before. A flood of lively ethnic restaurants and trendy clothing boutiques have earned this area’s recent prestige as an alternative shopping destination. And in the past five to 10 years, Chelsea has seen a building boom, especially in the form of high rise luxury buildings. Many of these new developments artfully echo the area’s industrial past through their architecture and aesthetics.
“The High Line has gentrified the area without changing its flavor,” says Alan Sands, senior vice president and associate broker for Corcoran Group Real Estate and a member of Friends of the High Line. “About five years ago there was a boom of developments, which has brought more people, shops, and restaurants, but it still has that industrial, gallery feel to the district. The architecture and look hasn’t totally changed.”
One example is the property at 456 West 19th Street, an 11-story boutique condo building developed by architect Cary Tamarkin. The structure houses 22 duplex residences, each with double-height living areas, ranging in size from 1130 to 3000 square feet. Among those are four penthouses, located on the building’s top four floors, each featuring six-foot-wide fireplaces and large private terraces (1100-1800 square feet), which “mirror the waves of the neighboring Hudson River.” Prices for the residences start at $1.5 million, with penthouses priced from $6 million. About half of the units have High Line views, and most have views of the river as well.
“I think the type of person that’s attracted to West Chelsea is one who appreciates the fundamental beauty of the neighborhood,” says Millie Perry, director of sales for the building under Stribling Marketing Associates. “The feedback I’ve gotten from buyers is that they’re drawn by the exterior beauty of the building. They love the way it blends in with the industrial elements of the neighborhood, but it’s also a classic brick building with these stunning windows.”
A bit north lies the six-story property at 525 West 22nd Street, developed as the first condo building in the area in 1997 and renovated in 2008. According to Sands, who represents the building for Corcoran, the structure is a rare find in that the layouts of each residence are different. “The developer only did the kitchens and bathrooms, then people did their own thing with the rest of the apartment once they moved in,” Sands explains, adding, “There’s a lot of warmth in the building that’s not being recreated in today’s world.”
What’s more, the eastern wall of the building actually fronts the second section of the High Line (in fact, a third floor apartment was once a loading dock), which means many of the residences will have stunning views of the park when the second section opens this year.
But the gem of the property is Penthouse A, with 3600 square feet of space and 1100 square feet of private rooftop terrace, which is currently listed at a cool $8.495 million.
“In 1997 it wasn’t an art district, but the unit itself has a gallery feel,” Sands says. “It has the original cement floors and exposed brick interiors, 12-foot high ceilings, and floor-to-ceiling columns. It fits in well with the Chelsea area.”
In terms of real estate, pricing has been very strong in the neighborhood, Gastiaburo says. Many of the new luxury developments have high price points, from $1500-$1700 per square foot, which is above the average city neighborhood, she says.
With more properties in development over the next five years or so and the addition of the two northern sections of the High Line, Chelsea is on track to become one of the city’s more lively residential neighborhoods. But as it evolves, its roots will likely stay intact.
“The area has changed, but the flavor has been maintained,” Sands says. “It’s certainly a destination, and the High Line has opened it up even more to New Yorkers who weren’t aware before of the beauty and uniqueness of the area.”
Recently, in an effort to better assist my agents in our current market, I decided to implement a “word of the week” at our office sales meetings. I started with the word “fear.”
I wanted to know what my agents were feeling. Instead of being fearful, as I thought they might be, they described themselves as being somewhat contemplative, but often in the position of consoling and comforting some of their clients who were fearful.
Comfort often comes simply from knowing we are not alone. Now, more than ever, it is time to unite, to be compassionate, lend a helping hand, give some advice. This is important not only for us as brokers, but as people in the community we work and live in.
We are all personally changed by our current conditions. Let us hope and have faith that this change will inevitably be for the better. We are all affected; we are all in this together.
Trying times in Tribeca
Tribeca was recently singled out in a report by Forbes.com, which called 10013 "America's most overpriced zip code," and brokers there are, in fact, seeing fewer buyers willing to pay those steep prices.
"We are definitely seeing things slowing down," said Karen Gastiaburo, senior vice president for Warburg Realty in its Tribeca office. "Buyers are taking their time; no one is in a hurry. They want to see what's going to happen with their jobs, with the upcoming election."
The Forbes report was based on a price-to-earnings estimate — with earnings generated from rental listings aggregated by the Web site hotpads.com. In other words, how much a property costs versus what it could bring the buyer on the rental market. Tribeca's 36.3 price-to-earnings ratio means that homes there are selling at a vast premium compared to similar rental properties.
But in fact, according to data from StreetEasy, Tribeca isn't selling much at all. The Web site noted that 139 sales closed in the second quarter of 2008, down from 212 sales in the second quarter a year earlier.
Blame the credit crunch. Even if an offer is made and accepted, buyers can expect to wait at the banks, which are now scrutinizing more mortgage applications, said Gastiaburo. "We are seeing banks change their minds mid-stream, and buyers are having a rough time getting a mortgage," she noted. Gastiaburo cited a client who was purchasing a Tribeca property for about $2 million and had signed a contract, but was held up by a bank changing their pre-approval process.
"I'm seeing that it takes three to six months to get an accepted offer. It's not like four years ago when things sold like crazy off the shelf, when you blinked your eye and something got sold," she said.
"We've had clients in contract on $3.5 million with 90 percent financing," said Ken Malian, senior executive vice president for Prudential Douglas Elliman. "Then the bank pulled back, and the buyer had to come up with an additional $450,000 to close."
In the last couple of months Gastiaburo has seen people pull out of deals in new construction buildings. "Because there's a large gap of time from when you buy and are looking to close, I've seen many cases where things have shifted. People have lost jobs and can't afford the apartment." Occasionally a buyer can get someone else to buy in and do a flip, she noted.
About half the inventory that's moving is in new developments. In the second quarter of 2007, 125 apartments sold in new developments, with an average price of $1.82 million. A year later that number dropped to 72, but the average price climbed to $2.37 million, according to StreetEasy.
Brokers are seeing some resurgence in closings for luxury units such as the Tribeca Summit at 415 Greenwich Street. Currently the building has 22 units in contract and eight still on the market.
"Deals are happening when sellers price their property realistically. If a property is overpriced it will sit on the market for a while," said Malian.
Sean Murphy Turner, a broker for Stribling in Tribeca, said condo apartments in conversion buildings like Artisan Lofts at 143 Reade Street and Sky Lofts at 145 Hudson are also showing some activity.
"Artisan Lofts has done very well this year with only a few units left to sell," she said. Turner is handling Sky Lofts, which a couple of years ago was ordered by the city to tear down the new penthouse on top of the building because it was built seven feet higher than permitted. The penthouse was then rebuilt. Turner said the building is now in its second phase, with 12 units coming on the market in the fall. A 7,400-square-foot penthouse there went on the market in the beginning of June and was expected to be in contract by the end of August. According to Turner, it's selling for $34.5 million.
Malian said that the small luxury units for sale in the new Pearline Soap Factory at 414 Washington Street are starting to get some attention. "We weren't seeing much action in the spring, but since then we've gotten offers and signed contracts. Activity has picked up from June and July."
As for re-sales in Tribeca, StreetEasy reports that there were 79 of them in the second quarter of 2007 with an average price of $2.65 million. This year there were 59 re-sales with an average price of $2.87 million.
"Sellers are not really lowering their prices," said Alan Miller, senior director at Eastern Consolidated. "Look at the re-sales at 200 Chambers where apartments are being sold by people who bought the units new about two years [ago]. They are going really well."
Some are seeing south Tribeca (especially an area below Chambers that used to be thought of as the Financial District) moving faster because of new amenities such as Whole Foods on Greenwich Street between Murray and Warren, which opened in July.
"South Tribeca is really growing strong, especially around Murray, Warren and Chambers streets," said Turner. "There is more value there, with Whole Foods and the close proximity to Hudson River Park. The area is enjoying a surge of popularity that didn't happen five years ago."
Heather Bise of DJK Residential said "it's particularly easy to sell to families" and noted that "there's Washington Market Park with its large playgrounds and gardens."
Bise said she sees more and more strollers in the neighborhood. However, not everything is selling. "I've been able to find units that are 1,800 square feet for under $2 million. The apartments going for $4 million are just sitting there," she said.
Fringe areas in Tribeca also seem to be selling slower, said Miller.
"The area east of Broadway, near City Hall and Chinatown, is considered the fringe. Right now there is a project on Franklin Street between Lafayette and Broadway that is moving very slow."
Some prospective buyers waiting it out to live in Tribeca have ended up renting temporarily.
Jackie Kurtz of Warburg said because the market has slowed, renters aren't moving out and into condos or co-ops as much.
"They are staying in their apartments longer and so not that many rentals are available," Kurtz noted.
Kurtz said that rents have gone up in what she calls a "normal" increase over the last year.
Gastiaburo said the rentals move pretty fast. "I showed two apartments last week in one building — they were two two-bedroom apartments, and a few days later they were both gone. I ended up renting a two-bedroom, two-bath over on Laight Street for $15,000 a month."
Even though it's generally a buyer's market, supply and demand keep units in Tribeca moving, said Miller, who took an optimistic stance.
"Tribeca has a limited supply of units and is historically landmarked with restricted zoning — it will never be overdeveloped with buildings that are 30 and 40 stories. It's not very hard to absorb the supply of units," he said.
Warburg Realty Partnership has scheduled a September opening of a Tribeca office.
The Tribeca office will be led by Karen Gastiaburo, former manager of the William B May Tribeca office. With over 23 years of residential real estate experience, Gastiaburo, was a natural choice for managing director of Warburg’s newest venture.
The Tribeca office will be the fifth location for the firm, the third to open in the last year, joining the existing 969 Madison Avenue, 795 Broadway, 30 East 76th Street and 2235 Frederick Douglass Boulevard Outlets.
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