What Was Hot, What Was Not In 2011
The end of the year is always a time for reflection. Here is my list of some of the events and issues which made a real impression on me or our business in 2011:
1. Unbelievable real estate purchases, primarily by Russian oligarchs. These included the $40 million sale of a 4,000 square foot apartment at 15 Central Park West to Taiwanese tycoon Min Kao; the approximately $88 million pending sale of Sandy Weill’s 6,000 square foot apartment in another part of the same building to 20-something Russian fertilizer heiress Yekaterina Rybolovleva and her father Dmitry; and the $220 million sale of the penthouse at One Hyde Park, in London, purchased by Ukrainian billionaire Rinat Akhmatov. This provided an interesting context to one of the year’s great ongoing soap operas, the London litigation between Russians Roman Abramovich and Boris Berezovsky, which has provided a fascinating and appalling look into just how some of those fortunes were made.
2. The freak October snowstorm. Central Park was devastated by the loss of tree limbs as a result of the huge snowfall on trees which had not yet lost their leaves. A tragedy for all New Yorkers who depend on the beauty of the Park to keep us sane!
3. The Euro meltdown. The United States, a nation of immigrants, had been banded together for over a century before we attempted a Federal income tax, which is still contentious a century later! How could anyone expect that the Eurozone countries, which have been at war with each other on and off for millennia and have such distinct and antipathetical cultural identities, would band together and bail each other out easily when the economic lifting got heavy. We certainly have not seen the last chapter on this one.
4. China. Their manufacturing economy slowed. Their high handed internal governance is provoking more and more pushback from an increasingly informed and prosperous populace. They are our major bondholder. And they have a major appetite for New York City condominiums though not, like the Russians, of the $40 million variety. They prefer prices under $2 million, and they may buy several. We have learned that you may have to go to them, but their interest in investing in our coastal cities is as vast as their country.
5. Landmarked districts in New York City. A great idea gone a little awry. No one believes more than I in the preservation of our city’s diverse and gorgeous architectural heritage. But when sweeping districts begin to include gas stations and tenement buildings, something is not right. The population of our city is growing and we will continue to need sites for development. It is fair neither to the owners of the real estate nor the potential users of the more effectively deployed sites to bar them from development when there is no possible reason to preserve them.
6. Shadow inventory. There was a lot of talk a few years back about how all the condo inventory available in the city when the recession began would hang over the real estate market for years to come. It was always my feeling that absorption would bounce back and the big issue for us would be LACK of supply, not oversupply. And here we are! Buyers are snapping up that “shadow inventory” all over town, while the few new projects under construction, like Toll Brothers’ new building on 65th and Lexington, are selling briskly from plans while the buildings are still a year away from completion!
There’s more…but those are today’s highlights. With that I am signing off till 2012, and wishing all of my readers a wonderful holiday season!