Rental Housing Virgins Storm Manhattan

[NYTimes] 8/24/06
It’s late August, and an annual Manhattan roundelay is winding down. The new college graduates have been pouring into town from all over the country since June, short of money and time but long on hope, specifically the hope of finding a safe haven on this island, which is to say a legal rental for under $1,500 a bedroom. (Williamsburg and beyond is a bridge too far for much of this crowd.) With vacancy rates at 0.78 percent, and rental prices up 15 percent over last summer, “these apartments are in high demand and usually disappear within 24 hours,” said Gordon Golub, senior managing director at Citi Habitats, the largest rental agency in the city.
“Year by year for the past three years,” he continued, “there has been more and more hiring by large firms at the entry level. And so within a tight rental market, this particular market is extremely tight.”

Getting Homes Sales Info Via Cellphone

[NyDailyNews] 8/23/06 Recently Sold Homes service tracks sales, prices on the spot
Stand in front of a property you like and Smarter Agent beams sales data - such as address, type of home, price and date sold - on the 10 closest homes sold within the past three years.

Jonathan Miller, president of real estate appraisal firm Miller Samuel cautioned buyers to be careful about making snap judgments based on sales data.
"So much of public [data] is wrong or incomplete," he said. "If misused it can be misleading."
The service, he said, "will satisfy people who want immediate gratification, but it won't replace a broker."

The service currently provides addresses and price information, without offering square footage, taxes or other specifics.
Home buyers seeking more instant gratification should stand by for two more services in the works from Smarter Agent. The company plans to offer real estate sales and rental listings by the end of the year.

Forging into those areas in the city depends on Blumberg's ability to sign agreements with New York's major brokerage firms. Blumberg said he's now in talks with big real estate agents in hopes of gaining access to their listings.
How big of a market there is for any of these services remains to be seen. Since launching last month, Smarter Agent has signed up "hundreds" of customers Blumberg said, but he declined to be specific.

Bubble Sitting

[CNN Money] 8/11/06

Convinced home prices will fall? So are a lot of other Americans.
Some - known as bubble sitters - are acting on their conviction. They're cashing out by selling their homes and renting, figuring they'll return to the market after prices have fallen.
Bubble sitters also include those people who have never owned a home and are waiting to take the plunge, along with folks who are relocating and holding on to their cash until the market in their new hometown softens.
Many experts have labeled the majority of U.S. housing markets either overvalued or severely overvalued, but is it wise to count on prices falling?

Roulette or sound reasoning?
Bubble sitting has contributed to softening in housing markets, especially in new homes. Builders have reported slowing sales and they're offering numerous incentives, rebates and discounts in order to move inventory. Just this week, builder Toll Brothers announced they expected sales to decline substantially for the year.

"With many potential buyers on the sidelines right now, we believe there is growing pent-up demand that will come into the market once buyer sentiment improves," said CEO Robert Toll.
He does not, however, think bubble sitting works. "It's very hard to pick a bottom,"

Bubble sitters might argue, though, that it has worked for new home buyers this year. They are, after all, receiving discounts and incentives that were nearly non-existent last year.
Dean Baker, an economist and co-director of the Center for Economic and Policy Research, is a bubble sitter himself, having sold his home a couple of years ago. "It is a very bad time to buy. Prices are heading down," he said.
Baker also predicts that the markets that have run up the most will suffer the worst turndowns. He compares it to the tech bubble when Nasdaq stocks rang up the biggest gains before the pop and fell the farthest from their highs after it.

Even though he did it himself, Baker says most people should not sell in anticipation of getting back into the market at a lower price. "I don't think people want to speculate on their homes," he says. "But if they're selling for another reason - if they're downsizing, for example, because their children have moved out - they should cash out and rent for a while."

A colleague here at CNNMoney.com is a perfect example of someone who Baker thinks could take advantage of plunging home prices. The colleague is moving from one New Jersey suburb to another with a more respected school system. He's selling and renting. That way, he hopes, he can wait out the bubble and scoop up a property from a motivated seller at a big discount next year. "He's playing a bit of roulette," says Jim Gillespie, CEO of Coldwell Banker, who doesn't think even that scenario justifies bubble sitting. "Look at the history of prices in this country. [Postwar prices] have never gone down."
While that may be true on a national level, it's also true that home prices in individual markets have fallen during periods after 1945. (See"When booms go bust".)
"My advice is don't do it," Gillespie said. "If the Feds stop raising rates, mortgages will start to go down and prices will recover."
Factors to consider before making a move
But Bernice Ross, CEO of realestatecoach.com, says that there's a lot of downward pressure on home prices. Foreclosures and delinquencies have risen and, in many of the hottest markets, interest-only mortgages will be adjusting upwards, making it difficult for some owners to keep up with monthly payments.
That will open up buying opportunities, but also will draw more professional investors into the mix. These, she says, are "not emotional buyers. They're crunching numbers, looking for cash flow."
If professionals enter a market, they could help support prices, making them less attractive for bubble sitters, not to mention that the entry of professionally investors will indicate that the market has fallen as far as it is likely to go.
John Bredemeyer, speaking for the Appraisal Institute, an association of professional real estate appraisers, says anyone considering bubble sitting should take three basic factors into account:
Where the market is heading: Says Bredemeyer. "You need to know what your market is doing. (This is where a professional appraiser comes in.)"
It matters little if California crashes when you're buying in Iowa. Local economic conditions such as factory closings and population changes, count as much as or more than national trends.
What your reason is for buying: Bredemeyer says cashing out and buying later is usually not a good idea - the costs of selling and repurchasing is going to kill you, even if prices do fall.
But, says Bredemeyer, "If you feel you're sophisticated enough to time the market, go ahead, but go in with your eyes open."

What your time horizon is: The value of bubble sitting also depends on how long you intend to live in a house. If you're planning to be there for five years or more, it make sense to buy as soon as possible. Time smoothes out any price bumps - over long periods prices nearly always go up - and the tax advantages may help make it cheaper to buy than rent.

Steel out, Concrete In: Construction Costs Force Changes

[Real Deal] 7/06

In 2003, Richard Bassuk, president of Singer and Bassuk Organization, penciled out the costs for a residential project on Fifth Avenue and 26th Street. Construction costs were between $175 and $180 a foot. Three years later, when he arranged the financing for a project across the street, construction costs had doubled to at least $400 a foot.Market watchers say construction costs have gone up 30 percent in the past year alone -- and if the prices continue to rise, it may bring the condo industry to a stall.

Certainly, lenders and developers are losing enthusiasm to take on new projects. More desirable now are conversions, which require less materials and labor than new construction. Some developers are also changing the materials they use -- goodbye, steel, and hello, reinforced concrete.

***

Cost of copper spiked
"With Sundari, there have been surprises, cost increases that not only surprised me, but dozens of others," said Heiberger. "The increase in costs of steel, concrete and sheetrock -- those three line-items have gone up, along with labor."Spikes, from concrete to copperEconomic development in China, which is increasing demand for raw materials, is partly to blame.

According to a construction cost index by the Engineering News-Record, which tracks the construction industry, the price of cement increased by 8 percent from this time last year, and the price of steel increased by 8.4 percent during the same period. Concrete is 15 to 18 percent more expensive today than a year ago, says Chris Zegler, vice president of New York construction services at Turner Construction.

Also seeing a substantial increase is the cost of copper, used for both plumbing and electrical construction; Turner reported national costs of copper wire increased by over 100 percent since the end of March.Contributing to the national demand for construction materials is the reconstruction in areas hit by Hurricane Katrina in 2005. The demand for oil is further aggravating the issue, pushing prices up in fuel costs and oil-based construction materials.

With land prices running $300 and $400 a square foot in many cases and construction costs as high, it's easy to see that developers don't have an extraordinary amount of wiggle room to charge less than $1,000 a square foot for condos and still turn a profit, according to observers.Labor painsLabor costs are another consideration.

***

Labor pains
Condo conversions like Heiberger's Greenwich Club Residences require fewer materials, but labor remains a high line-item cost across the board."Three years ago, the New York market was still recovering from September 11, and subcontractors didn't have a full book of transactions," said Bassuk. Now demand for subcontractors is so high it has many development budgets in the red. "Subcontractors are extremely busy and while you can still get subcontractors to perform in time, it has been over the budget," Heiberger said. "The demand is so great that, effectively, there is a labor shortage."

Unfortunately for developers, it will take fewer condo development starts before the demand for subcontractor services levels off, said Bassuk. "When [subcontractors] don't have an unlimited amount of work, they'll start to adjust their pricing," he added.

Little leewayIn the meantime, developers are the ones adjusting their sale prices to include the rise in costs -- with hopes that the demand will still be as strong when these condos hit the market.According to Heiberger, some investments likely to fail were secured last summer with little financial leeway for construction costs. "Some developers can't just raise the price to make up for the short-term shortages," Heiberger said.There have been a few deals so tightly budgeted that the rising construction costs will strangle financing, says Heiberger. "

But three out of a hundred developments is not an epidemic amount of bloodshed spread."At investment banking firm Sonnenblick Goldman managing director and principal Rick Swartz said he has seen projects get put on hold because of the increases in construction costs combined with the slowdown perceived in the rising of prices. (Swartz declined to name particular projects.)

Investors still entering the market are spending more time looking over alternatives and exit strategies. According to Bassuk, more investors are considering mixed-use developments."The appetite for aggressive development has slowed down.

Investors haven't gone away, but they are putting their money elsewhere," Leary said. Although Leary maintains the rate of return is currently at 6 to 7 percent, demand is lessening and the new development will likely slow down due to lower profit margins.

***

Receding rentals
The prudent attitude toward new construction is more likely to lead to a rental crisis, said Heiberger. Having already lost units to condo conversions, the rental housing market now has a less than 1 percent vacancy rate.An estimated 7,500 rental units pulled offline for recent condo conversions will not be easily replaced, sources noted.

While rents have risen, they haven't kept pace with land and construction increases -- and those skyrocketing costs should slow new rental developments.For the next two years, the pipeline has a majority of condo developments in the works but close to no rental developments, Heiberger said.

As a result, Heiberger believes in the next two years there will be a trend of people moving from rental to condo housing to avoid elaborate rent increases."If you pencil out the costs of construction, land, and soft costs to do the deal and see what it will be to rent the property, it will not cover the costs," he said. "You'll lose money because of the construction costs. It's prohibitive and preventing new projects from coming out the pipeline."

***

High costs spur change in building materials
Architect Steven Kratchman, who runs his own firm, has noticed a switch from steel to reinforced concrete in residential development in Manhattan. "In the initial costs, reinforced concrete is more expensive," says Kratchman. However, he notes, "concrete builds faster. In a week's time, developers can put up three floors versus two floors."

At the same time, building with concrete uses less space between floors and the sum of saved space means developers can add more floors to their developments. As a downside, reinforced concrete lacks flexibility when tenants want to combine apartments, which becomes a rather costly procedure.

In some smaller condo developments, developers are building wood-frame structures and using cold-rolled steel bent into the construction of the walls. According to building codes, these materials are acceptable for limited use in buildings with three to four stories. But while developers can save money by going this route, it is at the cost of quality, according to Kratchman.

Andrew Oliver, managing director at investment banking firm Sonnenblick Goldman, says developers are more willing to cut back on the exterior of the building by using less glass than to compromise on finishing out the units inside condo developments. Buyers want a nice-looking building, but living in top-quality units is more important, he said.

Manhattan Apartment Prices Dip during July & June

[Daily News] 8/22/06 Manhattan apartment prices dropped in July from June, according to one new market report, with the median drifting down 6.4 percent to $747,750. The average sales price also dropped, according to the report from Halstead Property, from $1,309,044 in June to $1,151,793 in July. Still, July marked at least the 18th month in a row that the average sales price of a Manhattan apartment stayed above $1 million, according to reports.

Although gauging the Manhattan market by month is difficult, the Halstead numbers for July gel with other data that show a market this summer continuing to ease off the record pace of 2005. The number of Manhattan apartment sales in the second quarter ending June 30 dropped 3.5 percent from the first quarter to 1,934, according to appraisal firm Miller Samuel. That marked the lowest second-quarter sales level in five years. And listing inventory on the island expanded 10.7 percent quarter over quarter to 7,640 units. The number of days it takes to sell an apartment rose to an average of 144 days in the second quarter, up nearly a week from the first few months of 2006

Got Amex? You may have condo down payment

[Real Deal] 8/06

American Express deal lets buyers in West Side project put payment on their cards

The condo market is going South... Pacific. Developer and building owner the Moinian Group has made it possible to buy a $1 million condominium with no cash down -- and take a free round trip to Tahiti while waiting for the closing.

The perks are the result of a new agreement with American Express that allows the purchaser of a unit at the Atelier at 635 West 42nd Street to charge the down payment to an Amex card -- and rack up the resulting reward points.As long as a buyer replaces the cash in his or her account before the end of the first monthly period, the program is an opportunity to float the entire down payment for 20 to 30 days, while earning a reward points bonanza.The points on a 20 percent down payment on a $1 million apartment will earn eight continental U.S. round trips in coach, four to Hawaii, three to Europe or two to Tahiti or Nairobi.According to Angelo Kakolyris, an American Express representative with the company's establishment services group, "Our cardmember base is obsessed with award points. Our mandate is to provide them as many ways as possible to use their card and redeem points."

Buyers at the Atelier can apply their monthly maintenance charges to the card as well. Along with the Related Companies, Moinian is one of the first building owners in New York City to allow tenants to charge their monthly rent to their Amex card. However, Moinian is the first to offer this incentive for a condo purchase.The charge program can act as a kind of bridge loan for the down payment on the condominium.Beyond the first month, of course, the finance charges that kick in can be much higher than a normal mortgage interest rate -- up to 18.24 percent, depending on the terms of the particular card.

The Moinian/Amex program comes at a point in the market where the pace of condo sales is slowing and inventory is increasing.But Elad Dror, director of residential properties for the Moinian Group, insists that even though the program will set the company back 2 percent on down payments and monthly maintenance, it was not instituted because of any downturn in sales.It's an extra convenience for our buyers and residents," he said.American Express charges venders in most industries a transaction fee of 2.95 percent, but reduced the rate to around 2 percent for Moinian in an effort to break into the condominium market in New York City.

New Time Warner Eatery Open from 7:00am - 2:00am

[NYPost] 8/22/06
When Related Cos. honcho Kenneth Himmel launched Time Warner Center's galleria in 2003, some brokers sniffed that New Yorkers wouldn't shop or dine in a mall.

That view now seems quaint. The 350,000 square-foot atrium is thriving. The only weak spot was the third- and fourth-floor restaurants; V Steakhouse closed, Charlie Trotter backed out of a deal, and Bouchon Bakery took a long time to open - leaving the place to pricey Café Gray and ultra-pricey Per Se and Masa.
But Michael Lomonaco's new Porter House (where V was), due by October, and chef/owner Marc Murphy's Landmarc, planned for spring, will change all that. Landmarc especially will liven up the joint with service from morning until the wee hours.
"Landmarc's popular price point will complement Time Warner's existing group of eateries," said Lansco honcho Alan Victor, who represented Landmarc with Lansco's Tom Duke.
Landmarc leased 10,630 square feet. Murphy would not comment on terms, but asking rents on the third floor are $100 to $150 a foot.
Murphy said his new place, a grander version of his popular TriBeCa original, will be open from 7 a.m. to 2 a.m. "Even before we got going with the lease, I already had my design team working to see if I could get enough people in there," to justify the long opening hours.
Murphy concluded his moderately priced, 270-seater is just what Time Warner Center and the neighborhood need.
He said he was recently looking through the windows with Related Cos. suits when one of them jokingly apologized for the fact that the new 15 Central Park West condo would block the restaurant's view of the park.
"I said, 'Hey, are you kidding - I'm getting 3,000 more customers,' " Murphy recalled.
Lansco, along with the Auber Group, also negotiated the galleria's first replacement for an existing tenant - fashion retailer Bebe's impending move into 6,764 square feet previously occupied by Joseph Abboud.
Victor said Abboud wanted out of its lease, but, "The only way Related was going to let us off hook was if we came up with an acceptable replacement tenant." Asking rents on the galleria's main floor run as high as $350 a foot.

Buying Any Home in the Country

8/22/06 [WSJ] Some Web sites are expanding the choices of would-be homebuyers by letting them make offers for homes that aren't listed for sale. Buyers can make unsolicited offers for any house in the country, basically, through the sites.

The Plaza: Selling A Way of Life

I am including the Eastern edge of Central Park South in our little coverage area because I think Central Park South all the way over to the Plaza Hotel offers the same lifestyle possibilities that now exists at the buildings surrounding Columbus Circle. One can't have a lengthy discussion about how well 15 Central Park West is selling without bringing up the Plaza Hotel Condo Conversion and what that is doing for the entire area. For example, I suspect that our soon to be new neighbors in the Plaza will shop at the same Whole Foods - Time Warner. Welcome to the neighborhood!

[IHT] 5/31/06 The moment Barbara Girard read that The Plaza hotel was converting a large number of its rooms into luxury condominium apartments she was determined to move in, undeterred by asking prices ranging from $6 million to $36 million.

"There was really no choice - it is No. 1," she said, from the New York Palace Hotel, where she is living until her Plaza apartment is ready. "There is no place in the world like The Plaza."

A native New Yorker, Girard remembers teas with her mother at The Plaza's Palm Court. Years later, she took her own daughter there. She was married at the hotel in 1963, and she and her former husband were frequent diners at its famous restaurants, Trader Vic's and the Oak Room.

In the past three years hundreds of hotel rooms in New York have been converted into condominium apartments, including space at some of the city's most historic and elegant hotels. The list includes The Plaza, the St. Regis, The Stanhope and the St. Moritz. About 1,200 rooms were converted in 2004 and in 2005, up from about 200 in 2001 and in 2002.

The conversions have been spurred, in part, by intense market demand for luxury real estate, as well as for homes that come with a broad range of hotel-like services, such as housekeeping, room service and someone to park the car. The demand for such hybrid residences has far surpassed the expectations of market analysts and even those of the most optimistic developers.

"We are not just selling real estate. We are selling a way of life, and the response has been overwhelming," said Ian Schrager, the hotelier and developer who converted part of the Gramercy Park Hotel to condominiums last year. "It's the ultimate luxury: an effortless, carefree way of living in a modern, complex, hectic city."

Hotels with cachet are especially easy to sell, said Bjorn Hanson, a hospitality consultant at PricewaterhouseCoopers. "Purchasers are showing they put value in being associated with these brand-named hotels," he said. "Saying, 'My apartment is at the X, Y or Z,' matters to them."
For ordinary travelers, the boom in conversions has meant fewer rooms and higher prices at New York's classic and better-located hotels. Some much-loved hotels with lots of character and moderate price tags, like the Empire, near Lincoln Center, and the Wyndham, just off Central Park, are closed for condominium conversion and will reopen as apartments next year.

The Plaza will not say how many units have been sold (without a single completed unit yet to show), but the oak-paneled sales office is brimming with clients, all of whom were screened before they were allowed to make appointments.

adding modern touches, such as a wireless console in each apartment unit will be a command center for myriad mundane tasks like controlling heat and ordering theater tickers; it also will display the hotel entrance on a video camera so residents can see whether guests or a car have arrived.

"We see ourselves as a bridge between what The Plaza used to be and the 21st century," said Miki Naftali, the president of Elad, who set out to buy The Plaza a couple of years ago and would not take 'no' for an answer.

College-Town Real Estate the Next Big Niche?

This is a relevant article because we have two massive college campus upgrades/expansions underway in the area - John Jay College and Fordham University. The schools and their students are going to have an impact in shaping the community.

For some unhappy neighbors, this may conjure up images of ceaseless parties and beer cans galore. But some investors see something more propitious: a steady stream of revenue, for starters, and growth potential for years to come.

“The student housing market is a good niche opportunity today,” said Kenneth T. Rosen, chairman of the Rosen Consulting Group, a real estate and economics research company in Berkeley, Calif. “The demographics are excellent, and the demand is great.”
College enrollments have been on the rise as the baby boomers’ children — sometimes known as the “echo boom” generation — come of age. This group, born from 1982 to 1995, is about 80 million strong. Yet the supply of on-campus housing is becoming increasingly limited.

Student housing has already proved profitable for many investors. The capitalization rates — meaning the initial yields — can often exceed those on conventional multifamily homes, industry experts say.

But as student housing becomes more widely accepted by investors — and more expensive to buy — the gap is expected to narrow. Markets where land is in short supply — like New York, Boston, Chicago and parts of Florida and California — are already considered hot markets, according to Mr. Reid. Austin, Tex., is another favored spot.

The bulk of the estimated $160 billion student housing market remains controlled by independent companies and investment groups that operate mostly regionally. Institutional and individual investors can participate in some deals, usually for a minimum investment of $50,000 to $150,000.

Wall Street has been slower to catch on. “The capital markets weren’t quite sure how to look at this product type,” Mr. Reid said. “They still had what we could call more of the ‘Animal House’ view of what student housing was.”

But in the last couple of years, three real estate investment trusts specializing in student housing have emerged — GMH Communities Trust, American Campus Communities and Education Realty Trust — making the sector more accessible to passive investors with less money to invest. (Equity Residential also has some student housing properties in its portfolio.)

Born in Boom, What these Condos Sell for Now

[Real Deal] 8/26/06
Back in the days when developers needed only to announce a New York condo project in a hot neighborhood or a design by a celebrity architect, buyers snapped up fresh units amid the city's real estate boom.As the go-go days recede into pricey memory, these developments, which transformed both the housing market and the geography of many neighborhoods, have, in fact, stood the test of (a short) time, and are still fetching healthy resale prices. We investigated the fates of condo developments and found that after the buzz faded, re-sales still boomed, according to figures provided by the brokerages that marketed them.

Clinton West 516 West 47th Street, Midtown West
The project by GPG Equities sold its 148 units within eight days of opening. The development features studios, one- and two-bedrooms with bamboo flooring and energy-efficient air conditioning and heating systems. The $80 million condo opened in June 2005, with prices ranging from $320,000 to $775,000, according to the Corcoran Group. Re-sales have averaged 23 percent, or $120,000, higher than their buying price, according to Corcoran.

The Orion 350 West 42nd Street, Midtown
The 61-story condo tower by Extell Development was the first in a spate of condo towers built on far West 42nd Street. Opening sales in February 2005 ranged from $409,000 to $1.5 million, according to Corcoran. Re-sales in 2006 have averaged 38 percent, or $205,000, higher than buying prices.

Related Companies Growth Through Government Subsidized units

[WSJ] 8/22/06 Developer Stephen Ross of the Related Companies fuels his formidable real estate engine partly through carefully gathered government subsidies. Ninety percent of the 37,700 apartments that Related owns in 16 states, including New York, are government-subsidized units.

New York Ranked 49th in Housing Growth

[NYSun] 8/22/06 The Arizona county that contains Phoenix added more housing units than all of New York State last year, according to numbers released by the U.S. Census Bureau yesterday.

New York added 33,666 housing units, an increase of 0.4% of its total housing stock, from July 2004 to July 2005. That makes it second-worst among the 50 states in percentage housing growth, trailing only Rhode Island.

A senior policy analyst at the Regional Plan Association, Alexis Perrotta, said she would not characterize New York's housing growth as slow.
She said most of the housing growth in states like Florida and Arizona was likely to be single family housing that she said is "barely possible" in most downstate New York areas, which are mostly built out.

"That is plain old suburban growth which is not possible in our region. We already did that. We did that 60 years ago," Ms. Perrotta said.

In total number of units built, New York ranked 20th. Florida added nearly 247,000 units of housing, followed by California and Texas. States like Minnesota, South Carolina, Georgia, and Wisconsin also beat out New York.

Still, the number of new housing units reported in New York City is an increase of about 31% over the previous year measured by the census, 2003 to 2004.
A spokesman for the city's Department of Housing Preservation and Development, Neill Coleman, said the city is sticking by its estimates, which are based on the number of building permits filed each year. He noted that last year more building permits were filed than in any year on record since 1972, and so far in 2006 building permits are being filed at a similar pace.

An editor of the City Journal, Nicole Gelinas, said that New York State's tax policy is affecting migration, and is keeping population growth down and stunting housing starts.

More Days on the Market

[NYPost] 8/22/06 --
Although the average price per square foot of a Manhattan apartment hit a record $1,083 in the second quarter, the number of units on the market is at its highest in more than 10 years, according to Miller Samuel, the real estate research firm. The inventory in Manhattan rose from 3,922 units at the end of 2004 to 7,640 in the second quarter.

"We have a classic stand-off between buyers and sellers in New York," said Miller Samuel CEO Jonathan Miller. "Housing inventory is at the highest level since the late 1980s and demand has cooled off."

In the second quarter of last year, it took 102 days to shift a unit on average. By the second quarter of 2006 this had soared to 144 days.

Boat Sculpture at Lincoln Center

Hit Factory Condo Conversion

[Digitalprosound.com]Located near the heart of Manhattan at 421 West 54th Street , the six-story building has been completely renovated. But the marketing broker has not missed the opportunity to use the property’s musical heritage as a hook.

Among the artists who recorded at The Hit Factory New York were Paul Simon, Whitney Houston, John Lennon (who was shot while returning from a mixing session at the Hit Factory), Bruce Springsteen, The Eagles, U2, Beyonce, Aerosmith … and on and on. The last record to be recorded in the Hit Factory New York was Dream Theater's Octavarium.

Nonprofits Certainly Profit from Property Sales

[Knowledge Plex] 6/29/06
Nonprofit organizations are among the largest owners of real estate in New York. Many such organizations are now seizing the opportunity to gain significant profits by selling property and air rights.

The nation's oldest Jewish congregation, Congregation Shearith Israel Synagogue, at 18 W. 70th St. and Central Park West, is planning to develop a nine-story mixed-use building. The first four floors of the building at 10 W.70th St.would serve as classrooms and meeting space for the synagogue, and the top floors would be developed as residential full-floor condominium apartments.

Staging Strategy Shifting

8/18/06 [WSJ] Another sign that it's a buyer's market out there: Sellers across the nation are installing fancy artwork in their homes temporarily -- the odd Dali or Calder, or a work by an emerging artist -- to catch the eyes of would-be purchasers. This art-heavy movement is seen as a shift in the strategy of staging.

Parking Garage Guide

NYCity Resources:

1)Wow! checkout www.mug.com which has an interactive map featuring all of New York City's parking garages with daily and monthly rates!

2) www.menupages.com for menus and phone numbers of all your favorite restuarants area restaurants.

Hotel at 6 Columbus

60 Thompson’s parent company, Thompson Hotels (run by brothers Jason, Lawrence, and Michael Pomeranc), is planning to open its second Manhattan hotel in this fall. The 88-room Midtown property’s design will be a contemporary take on 1960’s mod, with teak and chrome being the primary materials for furnishings, along with a pony-skin lined elevator and a showcase of Guy Bourdin’s fashion photos. Two luxury penthouses—at more than 1,000 square feet each—will have double-height ceilings, fireplaces, and kitchens. In 2007, the hotel group will open a third property on Allen Street.

A Very Thorough Summary of New Developments

[Developer's Group]
People from around the world are coming to Columbus Circle, a location that was blighted for 20 years and at one point was discussed as a possible home for a Kmart and a Sports Authority. Today it is home to a mixed-use complex where retail sales are exceeding $1,200 a foot and residential condominiums sell for prices in excess of $2,700 a square foot.

The president of Swig Equities, Kent Swig - who last year in partnership with YL Real Estate Developers and Serge Hoyda purchased the Sheffield, a residential building less than two blocks from the center - said, "The center has had the greatest influence in changing an area in the past 20 years. It has actually made Columbus Circle a circle, and brought residential, retail, and hospitality. The center is the gateway to the Upper West Side from Midtown west. Today, the region on West 57th and Eighth Avenue is a better location at West 57th and Avenue of the Americas." The center energized the neighborhood resulted in a massive number of new residential and retail developments.

Across from the center, on the former site of the Mayflower Hotel and adjacent lot, a joint venture of Zeckendorf Development, Goldman Sachs Whitehall Street Real Estate Funds, and an affiliate of Global Holdings are developing 15 Central Park West. The development will include 43-story and 23-story buildings with 202 units of condominium apartments between 61st and 62nd streets. On the Broadway side of the building, four floors of retail will rise. According to the trade, residential condominiums are selling at prices of more than $3,500 a square foot.

Last month, Brack Capital and Continental Equities received a building permit to start the foundation work for the Element, a 34-story glass condo tower with 198 homes. The tower will be rising on 59th Street between West End and Amsterdam avenues.

Brack Capital is also involved in the conversion of two buildings on the Upper West Side. They include the conversion into residential condominiums of the classic pre-war rental building at 230 Riverside Drive and the 16-story Hotel Olcott at 27 W. 72nd St., a half block from Central Park.

The hospitality industry in the area is also booming. According to the trade, occupancy and average room rates have exceeded expectations at the Mandarin Oriental and the Hudson Hotel, which is across the street from the Time Warner Center. This summer, the Pomeranc family, which owns the Thompson Hotels, expect to complete the renovation of 6 Columbus Circle, a 90-room suite hotel across the street from the center. And last month, Madison Equities announced plans to break ground this summer for a 500-room hotel on West 55th Street and Eighth Avenue.

The hotel will be next to the 46-story tower that sits atop the Hearst Magazine Building, which was built in 1928. Later this year, the first owners are expected to move into the Hudson, an 18-story, mixed-use building at 225 W. 60th St. between West End and Amsterdam avenues. There will be 100 condominiums on the fourth to 19th floors of the tower. The first five floors will provide student housing for Lander College for Women, of Touro College.

Construction has begun on the site of the former Gasteria gas station on West End Avenue between 59th and 60th streets. On this site, Apollo is planning to construct a residential condominium building of approximately 270 units. The first residents are expected to move in this June to a senior affordable housing rental building on the other side of the street at 33 West End Ave.

The 13-story building will provide 120 seniors with affordable large studio apartments. 1221 1250 1324 1261Across from this building, a 25-story residential tower is rising on a site known as the West 61st Street apartments. A total of 211 rental units will be available at favorable rents. Twenty percent of the units, or 43 units, will be available to families earning 50% or less than the area's median income, which last year was $62,800. A total of 27% of the units, or 57 apartments, will go to individuals or families earning no more than 165% of the area median income.A total of 110 units, or 53% of the apartments, will be offered to tenants at market rates.

Last November, Hudson Waterfront Associates, along with Donald Trump as a limited partner, sold three residential rental buildings and approximately 14.3 acres of undeveloped land between 59th and 65th streets on the West Side rail yard to a joint venture of Gary Barnett's Extell Development Company and the Washington-based Carlyle Group.

Mr. Catsimatidis and a partner own an office building at 1790 Broadway, across from the Time Warner Center. Mr. Catsimatidis told this reporter that they are marketing the site to a developer who might be willing to pay $1,200 a square foot for the site and convert the property into a residential condominium. In December, West End Enterprises, an affiliate of LHL Realty, made a presentation to the land use committee of Community Board 7. The developer is planning to construct a residential development at 229-251 W. 60th St. and 218-240 W. 61st St. The developer plans to construct 300 market-rate rental apartments in two towers, one 27 stories high and another of 17 stories.

Additionally, the developer would be constructing a nine-story tower with 41 luxury condominium apartments. Numerous projects are being planned on the Upper West Side and close to the Time Warner Center. Properties that include office buildings, residential rental apartment houses, and former hotels are planned to be converted into residential condominiums. This area, as well as all of Manhattan, is emerging in the 21st century.

59th Street Enclave Makeover

[WiredNewYork] 6/01/2005

Some of the neighborhood's most glamorous projects are shaping up around West End Avenue and W. 59th Street, an industrial enclave that's about to get a makeover.On that corner, work is starting on a 31-story condo tower. Directly east, a 35-story glass tower is planned on an acre of land, with indoor and outdoor swimming pools and basketball and tennis courts. Moshe Dan Azogui's Brack Capital is developing this site with Continental Equities - whose co-founder Jane Gol is a city planning commissioner.

North of these locations, two projects are gearing up between W. 60th and W. 61st streets, just east of West End Avenue.At 245 W. 60th St., Larry Ginzberg is planning a complex with 380,000 square feet of apartments. The proposed design has a 29-story tower and shorter companion buildings. East of that, behind a blue construction fence, developer Stan Listokin is starting an 18-story apartment tower with a twist. The base of the building will serve as a new campus for Lander College for Women, which is part of Touro College. Further north, West End Avenue is a solid double row of apartment houses - or almost solid. On one of the only spots with a single-story retail building - the corner of W. 70th Street - a 26-story residential tower is planned.The developer is American Continental Properties.

The Redesign of the Harmony Atrium

[NYSun] 6/13/06

The plans seem to be quite different, with the Morphosis plan relying heavily on the high-tech digital displays that crop up elsewhere in the Lincoln Center redesign,and the Tod Williams Billie Tsien plan emphasizing more old-fashioned, physical experiences.

Thom Mayne, the founder of Morphosis and winner of the 2005 Pritzker Award - architecture's Nobel Prize - described their plan as being "one smooth, fluid space of movement, part traditional architectural and part information." Curved walls and ceilings would become surfaces for L.E.D., computer, and video displays. "The whole space is basically made up of information," Mr. Mayne said.

Tod Williams Billie Tsien's plan, by contrast, would create a space where a person could sit down for a glass of wine before going to a Lincoln Center performance. Mr. Williams and Ms. Tsien want to build the "world's largest coffee table" - a 20-by-40-foot table made out of the same polished travertine as Lincoln Center's main buildings. Visitors could sit at it (or on it) to have a bite to eat; for live performances, it would become a stage. They also want to create the "world's largest solari board" - the kind of information board, with its distinctive clicking sound, found at train stations. The board would sometimes display Lincoln Center information, sometimes visual designs programmed by artists.

Despite the possibility for computerprogrammed designs, the Tod Williams Billie Tsien plan is decidedly lower-tech than the Morphosis plan. "What draws people to Lincoln Center is the ability to see people physically doing something, whether it's dancing, playing an instrument, or singing," Ms.Tsien said. "Especially in Times Square, there's all these digital crawls and huge images on the side of buildings, and after a while you don't see it anymore. We thought we would make something that's happening physically - a sort of mechanical thing."

Cool Building Amenity!

[NYPost] August 17, 2006 -- As if your local movie theater weren't having a hard enough time as it is, Towne Centre, a new rental building in Englewood, N.J., is attempting to one-up it.
Not only will the building offer a 30-seat, stadium-style theater with all the acoustics offered at the local multiplex, but moviegoers will also be treated to free popcorn and beverages.
In addition, there's an event coordinator responsible for organizing Friday-night screenings, kids' movies during the daytime and the viewing of big events like the Super Bowl.

----------------
It will be interesting to see how having movie theaters & screening rooms in buildings will play out over time. Will everyone use it equally? Will residents who don't use it that much rebel and not want to have to pay higher monthly common charges to support a theater?

Market Update

Lenny Holler of Preferred Empire Mortgage's Weekly
Market Update 8/21/06

RATES DOWN SHARPLY AS INFLATION MODERATES

"Inflation reports for the week were more moderate than expectations helping the stock and bond markets to surge. Tuesday's report on July producer prices (PPI) showed an increase of only 0.1% with core inflation down 0.3%. Wednesday's Consumer Price Index (CPI) provided more good news regarding the prospects of inflation. The 0.2% increase in core inflation in July was a reduction from the 0.3% readings of the previous four months, an indication that inflation may have slowed, if the trend continues. Industrial Production, New Residential Construction and the Index of Leading Indicators all came in weaker than expected giving further proof that the economy is moderating."

Coops & Condos Upto $1,000,000

3/1 Year Arm 5.750% (Down)
5/1 Year Arm 6.000%
7/1 Year Arm 6.125% (Down)
10/1 Year Arm 6.500%
15 Year Fixed 6.250% (Down)
30 Year Fixed up to $417,000 6.250% (Down)
30 Year Fixed $417,000-$1,000,000

interest only products on Arms* Add .125% - .25% to rate

Condo She Wrote

Ok this news is a little old but I want to bring this blog up to date so we are a comprehensive resource for the area. Watch out Windsor Park because everywhere Angela Lansbury seems to go someone gets murdered.

[NYTimes] 2/19/06 THE actress Angela Lansbury has signed a contract to buy a two-bedroom apartment with a balcony at the Windsor Park, a former hotel being converted into condos with interiors designed by the architect Charles Gwathmey. Ms. Lansbury agreed to pay close to $2 million for the apartment, which is at 58th Street and Avenue of the Americas.

The Windsor Park is being developed by Yitzchak Tessler and Meyer Chetrit and marketed by Corcoran Sunshine Marketing. While work is continuing on some floors, the first buyers started to close in late January. The building has 103 apartments, including two penthouses designed by Mr. Gwathmey, which are under construction on the roof. Seventy apartments have been sold but the penthouses are still available. They cost $13 million and $16.25 million. Ms. Lansbury declined to comment.

Why Robin Likes Columbus Circle West

I went to the sales offices for 10 West End Avenue and the Element. It was hard for me to picture the area even though I am a veteran Westsider. It's not like anyone casually spends a lot of time on 11th Avenue/West End unless they park their car over there or work for BMW. It was difficult to imagine where the new buildings were going to be with respect to each other. I had to walk over there and see for myself.

Once you walk over there you realize it's really not that far from Columbus Circle, only three avenues away. I am closer to Central Park there then if I bought something on Second Avenue. Columbus Circle West (CCW)'s luxury and amenities being offered are to die for and the prices are very reasonable when compared to other condos. Tax abatements, which phase out over a 10 year period, take the bite out of the monthly carrying charges.

This will be such a high-end area because there are a lot of abandoned garages and warehouses that can be torn down and turned into luxury highrise towers. It's already happening.

What I like about Columbus Circle West is it will integrate nicely into the area.

Photo taken 8/20/06 - Currently under construction. Scheduled to open March 2006.

Great Pizza!!! John's on the South East Corner of 58th/Ninth Avenue

Follow the Retail: 1775 Broadway - Newsweek Building's Retail Vacancy

1775 Broadway's Retail is currently vacant. In fact A lot of first floor retail vacancies are dotting the high50s/low 60s on the West Side due to newly jacked up rents. It will be interesting to follow the retail coming into what is becoming arguably one of the most high end areas of Manhattan because of it's proximity to both the Time Warner Center, 5th Avenue/the Plaza Hotel and Midtown Manhattan.

WHYM is Delicious

WHYM at 889 Ninth Avenue- one of Hell's Kitchen's (sorry I prefer the authentic grittiness of the old name 0ver Clinton) newest editions by the same folks who brought you "Eatery" also in Hell's Kitchen. They offer Free Delivery and serve brunch 10am-3pm on weekends.

I have to say I truly love this restaurant. Their Onion Tart is awesome and generally all of their food is really delicious. I highly recommend Whym.

Trend: Engineered Wood

A lot of the new developments going up in our area such as the 10 West End Avenue & the Element Condominium at 555 W. 59th Street are using "engineered" wood for their flooring.
What is engineered wood? Why not choose solid wood to match the real marble and granite surfaces in some of Manhattan's sexiest new residences where it appears no expense has been spared in the interior design materials?

Engineered wood products are preferred over solid wood in many applications due to a certain comparative advantages:

1)Because engineered wood is man-made, it can be designed to meet application-specific performance requirements.
2)Large panels of engineered wood may be constructed from small trees.
Small pieces of wood and wood that has defects can be used in many engineered wood products, especially particle and fiber-based boards.
3)Engineered wood products are often stronger and less prone to humidity. Humidity induced warping than equivalent solid woods, although most particle and fiber-based boards readily soak up water unless they are treated with sealant or at least paint.
4)Engineered wood products are more expensive to produce than solid lumber in terms of time, money, and energy, but enjoy economic advantages when manufactured in large sizes due to the rarity of trees suitable for cutting large solid-wood panels. [Wikipedia]
5) Engineered wood looks fantastic!

Sheffield Conversion

The End of The Fabled Insider Deal [NYTimes] 9/04/05

THE residents at the Sheffield, a 50-story apartment building near Central Park, believed their King Midas moment had finally arrived. Their building had just been sold for $418 million, and the new owners wanted to convert the rental building into a luxury condominium. They had heard the El Dorado tales of how renters sometimes got amazing deals when their buildings converted. Some insiders had bought their apartments at two-thirds or half the market price. And many tenants of the 845-unit Sheffield thought they were about to join those lucky few. But they soon learned a bitter new reality of Manhattan real estate: the insider deal is all but dead.

The building's new owner, Swig Equities, released a preliminary offering plan in July that spelled out the price of every unit. The average asking price would be $1,358 a square foot. That's $301 higher than the average price across Manhattan, according to data from the Corcoran Group. In the Sheffield, at 57th Street and Eighth Avenue, asking prices hinged on views and altitude. A one-bedroom on the 30th floor was listed at $877,100, according to the preliminary offering plan. A 550-square-foot studio on the 49th floor cost $1.3 million. A one-bedroom on the top floor now occupied by a rent-stabilized tenant was $1.9 million. "They were pretty much off the charts," said David Cohen, a 14-year resident. But it may be the tenants, not the prices, who are out of step with the Manhattan market.

In the heyday of rent regulation, stabilized tenants could use their low rents and lifetime occupancy rights to pressure landlords into offering discounted insider prices. Otherwise, tenants could simply refuse to go along with the conversion, sitting in an apartment that would fetch hundreds of thousands of dollars. But many buildings now converting, like the Sheffield, are dominated by market-rent tenants who enjoy none of those rights or leverage. And with the price of land and existing buildings continuing to climb, developers said they could not afford to offer those tenants 25 to 50 percent discounts off the market price. "In our buildings, if an insider wants to buy, we don't offer any discount," said the developer Izak Senbahar, who is president of the Alexico Management Group. "If they leave, they leave. The market is the market, and we feel the market is strong."

"Tenants in buildings that are predominantly rent-stabilized have far more say and power than in buildings like the Sheffield, where only 95 of 845 units are stabilized. Stabilized tenants have the right to remain in a building indefinitely and can prevent a landlord from realizing profits on their units. They can sometimes even act as a bloc to prevent a developer from selling the 15 percent of units necessary to get final approval for a conversion. But the tenants remaining in the 750 market-rate units at the Sheffield have little power to broker a deal. Their leases do not have to be renewed, and the landlords have no special incentive to try to woo them to buy. Greg S. Kirschenbaum, the director of residential operations for Swig Equities, said that offering insider prices was unnecessary in a building so dominated by free-market units, and would artificially depress the asking prices when they hit the open market. "If there was an insider price, I'd be competing against myself," he said. "

"At the current offering prices, Swig's $418 million purchase of the Sheffield would bring in $848 million after all the apartments and commercial units are sold. Kent Swig, the principal of the company, said the location would be a prime asset. "We have dramatic views of Central Park," Mr. Swig said. "We're situated right at the foot of Columbus Circle." Mr. Kirschenbaum said the company expects the attorney general's office to approve the Sheffield's preliminary offering plan within nine months. Mr. Swig would not discuss his plans to renovate or market the building, saying the company needed six months before announcing its vision for the building. But already, the conversion process has sown animosity throughout the building. Tenants say that Swig is not renewing leases and has neglected maintenance issues in the building. "A lot of people are discouraged and are just moving out in droves," said Nancy Rovelli, the president of the tenants' association. "We were all excited. We thought we'd be able to buy our homes. We had no idea."

Flashback 2003

[Daily News] 4/30/03

Hearst house The Hearst Corp. kicks off construction of its $500 million, 36-story add-on to its corporate headquarters today. The project will add a futuristic glass-and-steel tower atop Hearst's 76-year-old stone landmark. London architect Norman Foster designed the addition, which will transform the squat, six-story building into a 42-story office tower. Foster ranked among the acclaimed architects tapped last year to submit design proposals for Ground Zero but was passed over in favor of Daniel Libeskind. Some 200 employees have already started vacating the building, 959 Eighth Ave., at W. 57th St. Good Housekeeping - the magazine and its famed "institute," where products are tested for the seal of approval - moved to another Hearst building, 250 W. 56th St. Top Hearst execs will move to the 10th and 42nd floors of 1345 Sixth Ave., at W. 54th St.

Theater District Will Get Taller if Not Richer

[NYTimes] 8/06/06
"During the city’s real estate boom, theater owners have started capitalizing on a special zoning arrangement created eight years ago that lets them sell their unused rights to add to their buildings’ height. Developers can transfer these air rights to other sites in the theater district and construct taller buildings than would otherwise be allowed. "

“There was a promise that was made to the theater community and the public, and I think it should be kept, and I think it can be,” Mr. Goldstein said"

"They feared that empty theaters and a paucity of new plays signaled worsening prospects for high-quality drama."

"The city’s response was to change zoning rules in 1998, allowing the owners of 25 Broadway houses to transfer their air rights anywhere within a 34-block zone north of 40th Street between Avenue of the Americas and Eighth Avenue. (Normally, air rights can be transferred only to contiguous building sites.)To transfer development rights from a theater to a distant site, the buyers were required to pay an extra $10 per square foot on top of the regular purchase price for the air rights."

"But until this year, no theater owner had taken advantage of the air-rights provision. In the past eight years, attendance has rebounded"

Few lots in the theater district can accommodate big buildings without a transfer of air rights. So, lately, developers have been knocking on the doors of the theater owners."

Retail Site Available at 940 Eigth Avenue

Grubb & Ellis marketing Columbus Circle office/retail property [AllBusiness.com] 6-28-2006
"940 Eighth Ave., a four-story office/retail property located near Columbus Circle, is currently being marketed for sale by Grubb & Ellis investment specialists, Vin Carrega and Neil Helman, and independent broker, Ephraim Hirsch. Located on the easterly side of Eighth Avenue between West 55th and 56th Streets, 940 Eighth Ave. is strategically positioned in a rapidly evolving, growth district of Midtown Manhattan.

940 Eighth Ave. comprises approximately 19,000 s/f of rentable space plus basement. The top three floors each offer 5,000 rsft, while the ground floor retail measures approximately 4,000 rsf..
The entire street level can be made available within a short time of possession, and is perfect for a retailer looking to take advantage of the street traffic generated by nearby Lincoln Center, the Time Warner Center, Times Square and several new residential developments to the west and south.
A 400,000 s/f hotel planned for the former Hearst site less than a block away will also feed the traffic volume around the property.

According to Helman, the availability of 940 Eighth Ave. is an "opportunity to acquire an asset that provides both a stable income from the office component and the ability to reposition the ground floor by retaining one or two retailers interested in high volume foot traffic in an extremely solid, improving neighborhood."

Commercial RE Update

NY Gallery Building Trades for $69 Million [CoStar Group] 8/16/2006
Sitt Asset Management sold the nine-story office building at 24 W. 57th St. for $69 million, or approximately $627 per square foot. The new owner, APF Properties, is a real estate investment firm that has properties in New York and Germany. Built in 1920, 24 W. 57th St. is an 110,000-square-foot office building with ground floor retail space. Located in Manhattan's Plaza District between Fifth and Sixth avenues, this property comes with 30,000 square feet of air rights. The building's tenant roster includes Timberland Co., Bellini Shoes and Reece Galleries. Ralph Sitt, principal of Sitt Asset Management, represented Sitt Asset Management. Berndt Perl, principal of APF Properties, represented APF Properties.

Slim Pickings for Real Estate Vultures

Bargain Hunters in Manhattan Still Aren't Finding Much to Fead On [CNN Money] 8-07-2006
"There are so many circling Manhattan this summer that they may be canceling each other out. Any little price weakness attracts them and the competition they provide keeps prices from decreasing...

Pam Liebman, CEO of the Corcoran Group, a brokerage that specializes in Manhattan, Eastern Long Island and Florida properties, says she has seen no price fall off to date in Florida. "Buyers may be negotiating more, but sellers are mostly holding firm," she says. "There's been a drop in sales volume but not in prices."