Behind the Numbers

Running the Real Estate Numbers Ragged [Real Deal] August 2006
Oft-quoted facts and figures about New York markets require second look and a critical eye
"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."

John Jay Campus Expansion

[John Jay] The new facility will be 600,000 gross square feet and will increase the campus overall space by 36%. The new building will create a more unified campus that will provide space for classrooms and lecture halls, modern forensic science, instructional research laboratories, administrative offices, faculty offices, student activities as well as campus and academic support services. Some of the features include a main entrance on 59th street and secondary one on 11th Avenue (that includes a street level cafe); moot court, black box theater for students; consolidation of student services on the entry floor; academic quad floor plans that will promote faculty and student interaction; science center; outdoor campus commons, new "smart classrooms"; computer labs, indoor and outdoor dining and lounge space for students and faculty; dramatic public space throughout the building; and a new Theater lobby.

Extell's Latest Project: Rushmore - Avg. Pr/sqft $1,600

Not bothering to catch its breath, Extell announces new condo project [City Realty] 4/04/06
"The Extell Development Company this week launched its marketing campaign for The Rushmore, a condominium apartment tower on Upper West Side property it recently acquired from Donald Trump and a consortium of investors from Hong Kong. The new project is located at Riverside Boulevard and 64th Street and presumably will have a 80 Riverside Boulevard address since it is one block south of the Avery at 100 Riverside Boulevard on which Extell only began marketing this year.

The Avery is a 32-story building with 274 condominium apartments priced from about $850,000 to more than $3,000,000. An advertisement in Quest, a monthly magazine that was distributed yesterday, indicated that one- to five-bedroom apartments at The Rushmore will range from approximately $1,000,000 to over $6,000,000. No indication was given of how many stories The Rushmore might have, or how many units, but presumably it will about the same size as the Avery.

The building will have twin towers atop a seven-story base and has been designed by Costas Kondylis. The Rushmore will have a 24-four concierge and doorman, a garage, a swimming pool, an atrium with adjacent reading room, a “Grand Salon with catering capabilities,” a billiards room, a “Kid’s Creative Studio and Playroom, a La Palestra Spa & Fitness Center, and “Abigail Michaels lifestyle managers, a member of Les Clefs d’Or.” Extell and the Carlyle Group paid about $1.8 billion recently to acquire 20 acres between 59th and 65th Streets from Donald Trump and a consortium of investors from Hong Kong who have been developing properties to the north along Riverside Boulevard that ends at 72nd Street. Extell and Carlyle are expected to erect six buildings on their property that overlooks the West Side Highway and the Hudson River.

Extell has recently become one of the city’s most active developers. Some of its other projects include the Orion on West 42nd Street, the Ariel East and West on Broadway at 99th Street, Altair 18 and Altair 20 in Chelsea, the W. Hotel in Times Square."

Ripples still cascading from Extell's 2005 splash

Image [NYSun]




The developer's parade of fresh projects sparks excitement - and some alarm [Real Deal] January 2006

"Extell Development Corporation galloped onto the New York City real estate scene in full regalia last year with a big land buy on the Upper West Side, and its high-profile arrival has many veteran market observers wondering how fast one firm can move."

"First was a residential purchase that topped the charts for New York City: Extell - a national real estate developer as well as construction and asset manager in office, retail and multifamily properties - paid a reported $1.76 billion for a swath of land on the Upper West Side owned by Donald Trump and several Hong Kong-based partners.The move triggered a high-profile lawsuit filed by Trump against his partners for undervaluing the property."

CB7 Trying to Restrict New Development Height Limits

CB7 Votes for Upper West Side Rezoning [Columbia Spectator] 6/06/06
Community Board 7 voted unanimously Tuesday in front of hundreds of Upper West Side residents for a resolution that is intended to maintain the architectural and demographic makeup of the neighborhood. The resolution, passed at CB7's general meeting held at the Jewish Home and Hospital on W. 106th Street, called for the rezoning of the area bounded by Central Park West, Riverside Drive, 97th Street, and 110th Street.

If the plan as it stands is passed by the City Council, then new developments will not be permitted to exceed heights of 120 feet on Broadway or 75 feet for the rest of the neighborhood.The vote came nearly one year after a CB7 meeting at which developer Gary Barnett of the Extell Development Company presented plans for two new luxury condominium towers to be built across from one another on Broadway at 100th Street. Since then, neighborhood advocates have worked with CB7 and elected officials to set in motion the rezoning process, which many feel would keep the sun visible and the current residents in place.

62nd Street - Update

Photo of now Vacant EMS Store at 61st and Broadway.

62nd Street:
Since June 6 when Apt. #4C, a one bedroom, went into contract nothing has been available for sale at the Allegro, 62 West 62nd Street. Could this be the beginning of the impact a not yet finishesd 15 Central Park West is already having on the desirability of 62nd street? In 2006 to date the average price per square foot at the Allegro has been $1,128/sqft. according to Prudential Douglas Elliman's Database.

The Harmony, 61 West 62nd Street, has several listings currently on the Market but that is rather typical of the building. The Harmony Atrium rehab and return of the Empire Hotel will have a huge impact on both the building and the Street.

According to 15 Central Park West's Sales Office:
-Building is Slated to open towards the end of 2007
-More then 70%
-Retail has yet to be determined (Nordstrom perhaps?)
-Retail slated to open end of 2007
-Avg. for more then $3,000+/sqft; Penthouses are asking $6,000/sqft
-They do have $1,000,000 studio sized apartments but you can buy one only if you are already a resident in tbe building
-12,000 sqft gym
-Private Club/Chef in building

Could the retail be changing hands at One Lincoln Plaza? I predict there will be a Starbucks there within the next 3 years. I hear as soon as their current rental contracts expire they will hike the rents up forcing the current local coffee (Lincoln Cafe) & Sandwhich shop (Bread Soul) out.

Any news on what will become of the retail space that used to be Eastern Mountain Sports on 61st Street?

Manhattan Market Data

Zip Code 10023 (Upper West Side) [Miller Samuel/NYTimes]
1st Quarter 2006

Studio
Avg. Sales Price: $464,107
Median Sales Price: $439,000
Avg. Price Per Square Foot: $902
Avg. Square Feet: 515

1 Bedroom
Avg. Sales Price: $715,084
Median Sales Price: $680,000
Avg. Price Per Square Foot: $937
Avg. Square Feet: 763

2 Bedroom
Avg. Sales Price: $1,732,916
Median Sales Price: $1,700,000
Avg. Price Per Square Foot: $1,202
Avg. Square Feet: 1,442

3 Bedroom
Avg. Sales Price: $3,873,700
Median Sales Price: $4,000,000
Avg. Price Per Square Foot: $1,415
Avg. Square Feet: 2,677

4 Bedroom
Avg. Sales Price: $4,341,667
Median Sales Price: $4,464,107
Avg. Price Per Square Foot: $1,044
Avg. Square Feet: 4,159

Let’s Make a Deal

Let's Make a Deal [NYTimes] 8/20/2006
"If negotiability can be measured as the difference between the listing price and the selling price, it was 3.5 percent in Manhattan during the second quarter of 2006, according to the Miller Samuel appraisal company. That is higher than the average of 1 percent that held sway at the height of the market in 2004, said Jonathan J. Miller, the company’s president, “but anything under 5 percent still means not much is happening.”

It is also a far cry from the 15 to 20 percent discount off list prices that was the norm during the early 1990’s, he added, meaning that it is not yet a market in which buyers can ask for and get huge concessions. "

The Best Guacamole in Manhattan

Friday afternoon at Rosa Mexicano 8/19/2006 (62nd Street/Columbus Avenue)

Co-op Vs Condo: The Smackdown Part I

Pro Coop:The Heroes of Housing Just Say No [NYTimes] 8/9/2006
"In California, more than 25 percent of new mortgages this year have been option ARM’s, up from about 5 percent in 2004, according to LoanPerformance, a mortgage data firm.

The main point of these innovations has been to sustain the housing boom by allowing a family that can’t really afford a house to buy it anyway. But clearly, this can’t last. Already, it has raised the risk of a sharp housing downturn and, eventually, of a recession. The Federal Reserve acknowledged as much yesterday by halting its campaign of interest rate increases.

So the housing industry is going to have to find a new business plan. Fortunately, there is one small sliver of the market — here in New York, as a matter of fact — that has kept its wits and can serve as a model. The trouble is that it’s not usually considered to be a model for anything. Indeed, it may be the most hated institution in New York."

Bottomline: Co-ops guard against buyers being overleveraged!

V.S.

Pro Condo: Secret Plan Feared to Tax Mortgages on Co-op Homes [NYSUN] 8/1/2006

"The new state law requiring public disclosure of the sale prices of coop apartments, signed by Governor Pataki last week, may be part of a secret plan to raise taxes a billion dollars a year by extending the mortgage recording tax to co-ops."

Bottomline: Buying a Co-op may soon be getting a lot more expensive in New York State!

New buildings turn up the heat around Time Warner Center

Radical changes are in store for the far Westside [Real Gotham]
"where five new ground-up condominiums and several new rental buildings are currently in process between 66th and 59th Streets, west of Amsterdam Avenue. The most interesting of these condominium buildings are 555 West 59th Street (the Element), rumored to be coming to market as soon as this week, 10 WEA and the Rushmore (90 Riverside Boulevard), both of which will be available within the next two to three months.As Fordham and John Jay College expand their campuses to include several new buildings and this neighborhood becomes truly residential for the first time, these buildings will arguably be the “best buy” on the Upper Westside in the near future. Marketed at a discount to what will be the pricing for an additional eight projects planned for the Westside and Midtown West, they will likely enjoy a higher rate of appreciation than those condominiums in better established neighborhoods, like that of the neighboring Lincoln Center area."


New buildings turn up the heat around Time Warner Center [NYPost] 2/25/2006
"One of Manhattan's hottest neighborhoods is in such a state of flux that it doesn't even have a name yet. Perhaps it will become TiWa. For now, call it the Time Warner Center area or Columbus Circle. Or even Midtown West. Whatever you call it, it seems like it's where everyone wants to be.

The Time Warner Center at Columbus Circle is the area's anchor. The transportation hub is its heart - from the A, B, C, D, 1 and 9 trains at 59th Street and Columbus Circle to the N, R, Q and W trains at 57th Street and Seventh Avenue to the F train at 57th Street and Sixth Avenue. Central Park is its soul.

The neighborhood, which can be defined from 54th Street to 63rd Street from Broadway to West End Avenue, began to come into its own with the 2000 opening of the Hudson Hotel on West 58th Street. But the opening of the Time Warner Center and the Mandarin Oriental Hotel in 2004 is what really redefined the area."

More Information:
Element Condominium
10 West End

Rental Market Sizzles

NY Metro America's Most Expensive Rental Area 2006 [Forbes] 8/17/2006
"As in 2005 the New York metropolitan area, which includes New York City and its surrounding counties, topped our list, with an average price of more than $27 per square foot for a high-end apartment.
In Manhattan specifically, the average rent came in at a whopping $48.33 per square foot — an estimate supported by July figures from Citi Habitats, a New York City-area real estate agency. The median monthly rent for a studio apartment in Manhattan is more than $1,900, according to Citi Habitats. If it's a three-bedroom spread that you're after, prepare to fork over somewhere in the neighborhood of $5,000."


Rents Are Rising Rapidly after long lull [NYTimes] 8/19/2006
"Mike Gain, the co-owner of a property management firm in Seattle, took a step this spring that he had avoided for years: he raised rents."

"This kind of shift is under way in many cities across the country, including Atlanta, where rents actually fell from 2003 through the first half of last year, as well as Cincinnati, Dallas and Phoenix. The only region of the country that is resisting the trend is the Midwest, where industrial job losses and other factors continue to hold rents down.

According to government data, in both June and July average rents across the country were 3.5 percent higher than a year earlier, the steepest gains in almost four years. And it is feeding into a broader rise in inflation."

"In New York City, where a steady stream of young arrivals, limited space and rent controls limit the supply of available apartments, rents never fell as they did in many other cities. Now they are advancing at a much faster clip. "

Rental Market Sizzles [NYSun] 8/10/2006
"With the census projecting 1 million new residents moving into New York during the next 10 years, he added, "These people will have to live somewhere, and this dynamic is pushing rents up."

Ofer Yardeni, the managing partner and co-founder of Stonehenge Partners, a company that owns and manages more than 2,000 rental apartments in Manhattan, agrees.

"With vacancies hovering around 0%, demand for rental housing going through the roof, and rents being increased by over 25% in the last five months, owning a residential rental apartment building in Manhattan is a better investment than owning treasury bills," he said."


Looking for an Oversized one bedroom? 8/18/2006
At Glenwood's GrandTier, 1930 Broadway, across from Lincoln Center an oversized one bedroom that can be converted into a two bedroom is asking $6,095/mo.
Glenwood's Grand Tier

$6,095 X 12 = $73,140/yr

The Empire Hotel Returns

The Empire Hotel will Not be going Condo but instead will be returning to 44 West 63rd Street as (Gasp!) "The Empire Hotel". The Hotel is currently under renovation and scheduled to reopen January 2007. The retail will include "a dry grocer" (probably a clothing store), P.J. Clarke's Restaurant, a luxury spa and second floor steak house.

"Ten hotels closed for full or partial condominium conversions from April 2002 through 2005, accounting for a total of 2,415 guestrooms, or roundly 3.8% of the 2005 room inventory. These conversions reflect the strength of the Manhattan condominium market. We note that the condominium conversions were primarily limited to upscale residential neighborhoods, mainly around Central Park, where land and buildings are in short supply and condominium prices are high. These properties were all upscale or luxury in nature. Given the limited number of upscale/luxury lodging facilities available for condominium conversion, as well as the strength of the Manhattan lodging market, fewer conversions should occur in the next few years. The Empire Hotel, which was originally acquired for conversion to residential use, is currently being renovated and is slated to reopen as a mid-scale hotel by January 2007."
2006 Hotel Market Overview [HVS International]

"The property was erected in 1892 and had 375 hotel rooms. In was acquired in 1999, when it was known as the Radisson Empire Hotel, by Ian Schrager in a deal that also included the Barbizon Hotel on Lexington Avenue and 63rd Street. Schrager, one of the city’s more active hotel developers, eventually sold the property to the Chetrit Group that announced plans in 2005 to convert the building to 125 condominium apartments. "
[CityRealty]

Flashback 1980s

8/18/2006
Did you know that.. 62nd Street is no stranger to celebrity. "America's Prince" JFK jr. used to live with then girlfriend Daryl Hannah in the Penthouse of The Harmony House at 61 West 62nd Street back in the 1980s when it was still a rental building.

(Photo courtesy of CNN)

Sting Moving South to 15 Central Park West

Moving South [NYPost] 8/9/2006
Sting a. k. a Gordon Sumner has his $24 M Home on the Market at 88 Central Park West with Prudential Douglas Elliman anticipating a move to his $30 M digs being built at 15 Central Park West.

"The Sumners' new apartment, for which they're paying $30 million, is under construction at 15 Central Park West, just a few floors above the flat Denzel Washington bought. "

Lincoln Center To Transform Harmony Atrium

Lincoln Center for the Performing Arts has reached agreement in principle with the owner of Harmony Atrium, an indoor privately owned public space (POPS) located between Broadway and Columbus Avenue between West 62nd and West 63rd Streets, to transform the 6,900 square foot underutilized indoor space into a creative, interdisciplinary public venue that informs, entertains, and educates the public. The announcement was made today by Reynold Levy, President, Lincoln Center, Inc.
Lincoln Center To Transform Harmony Atrium Into Vibrant, 21st Century Public Space For The Arts

160 West 62nd Street

Douglaston Development is in pre-development on a luxury condominium project to be located at 160 West 62nd Street, next door to Lincoln Center and Damrosch Park. The project is being developed in conjunction with Continental Properties. The design architect is Cesar Pelli & Associates.
Upon completion, the project is anticipated to have 300 luxury condominium homes in a 55+ story glass tower, an outdoor garden for residents and a high-end restaurant. The second floor of the building will be dedicated to an extensive amenity package, including a designer spa, fitness center, pool, screening room, and business center.
Levine Builders will be providing construction management services for this project. [Curbed/Douglaston Development] 8/16/2006

Glimpsing Lincoln Center's Future

On 65th Street, Glimpsing Lincoln Center's Future [NYTimes] 8/17/2006
"It’s not so much the mounds of debris in Alice Tully Hall’s lobby or the churned-up pavement next to the Juilliard School that seem so startling these days at Lincoln Center for The Performing Arts. It’s what you will soon see for the first time in decades when you glance up from the middle of West 65th Street: the sky. "