Category Archives: NYC Real Estate

Manhattan real estate will continue to hamper New Jersey housing recovery

As a by-product of Manhattan real estate market, what happens in the city usually at some point spills over to the northern New Jersey market. When Manhattan real estate does well New Jersey prospers.  Conversely when Manhattan hits the skids as it did when the market crashes in 2008, the New Jersey market tanks. This is usually how it goes in New Jersey…”usually” being the key word.

We’re still waiting for this to happen in New Jersey…and we’ve been impatiently waiting for years and there’s no light at the end of the tunnel.  And worse, there’s more bad news for us to the west of the city.  Why has the New York City real estate prospered so much while the Bergen County, New Jersey market (except for new rental projects) still languishes after so many years.

The Modern…new ultra luxury glass residential tower in Fort Lee, New jersey

Here are a few reasons:

As a recent New York Times article points out…

Real Estate in Manhattan Set Records in 2014…

It was a banner year for Manhattan real estate. In 2014, buoyed by sales of ultraluxury apartments in new developments, the real estate market rebounded to surpass its previous peak, reached in 2008, when the financial crisis hit, according to Jonathan J. Miller, the president of the appraisal firm Miller Samuel.

The average sales price reached a new high of $1,718,530 last year, surpassing the record set in 2008, when the average sales price for the year was $1,591,823, according to Mr. Miller, the author of a report for Douglas Elliman Real Estate.

Big-ticket closings also helped the average price per square foot climb to a record $1,297 for the year, above the previous high of $1,251 per square foot in 2008.

The median apartment price, which measures the middle of the market and is less affected by high-end sales, was $940,000 in 2014, just behind the record of $955,000 set in 2008, according to Miller Samuel.

The better the market is in New York City the worse it seems to be for the suburbs 

“It was an extremely strong year,” said Sofia Song, the head of research at Urban Compass, which reported record dollar volume in the fourth quarter of 2014 with approximately $5.4 billion in closed deals. “Properties were being snapped up faster and at higher closing prices than the 2008 market peak.”

This is what’s happening with the housing market in Bergen County:

  • Single family home sales decreased 6% in 2014…decrease of 368 homes on a sales volume of 5564 homes
  • Multi-family home sales decreased 3%…decrease of 88 units on a volume of 2655 units

And this is what’s happening with the Manhattan housing market:

Dottie Herman, the chief executive of Douglas Elliman, reported half of all apartments in the fourth quarter sold at or above list prices, the highest percentage in six years.

Pamela Liebman, the chief executive of the Corcoran Group. “And there’s really no sign of things slowing down.”

The number of contracts signed in the fourth quarter, 3,216, was the highest since the fourth quarter of 2006, when 3,246 were signed, according to the Corcoran Group. Co-ops accounted for 58 percent of signed contracts this quarter, the highest co-op market share since the third quarter of 2009.

And the real killer…”at least twice as many new condominium units are scheduled to hit the Manhattan market this year as in 2014, the most since 2007, leading some real estate watchers to predict a tempering of price growth and slower pace of sales. “It is anticipated that the market will likely see a price adjustment,” in the first quarter of 2015, Urban Compass stated in its report.

All of this points to problems for a New Jersey real estate recovery:

  • If prices in Manhattan stabilize or even decrease fewer city lovers will be inclined to make the exodus out of the State.  Even with the super quick inflation, city residents haven’t fled in mass numbers to the much cheaper burbs…at least not to the single family market
  • As long as people continue to invest in new ultra luxury condos in the city the New Jersey ultra-luxury market will continue its downward spiral
  • And the real kicker is that with all of the new rental buildings being built along the New Jersey waterfront with their amazing designs and amenities and sexy locations, this has become huge competition for homes that are for sale, and will surely take a major bite out of the sales numbers…and prices.

Example:  The Modern…Fort Lee, New Jersey

As just published in the New York Post…

Fort Lee is the new New Jersey

The New York Post tells the story of The Modern in Fort Lee, New Jersey…the areas newest and most spectacular ultra luxury rental building, and why people are attracted to this iconic new 40 story building.  And this is just the tip of the iceberg for what is to come of the real estate market along the Hudson River waterfront in New Jersey.

Those of us who have followed Steve Pozycki over the years will understand why no one will ever duplicate the design and quality of The Modern in New Jersey…unless of course he decides to build another building. SJP also duplicates this incredible attention to detail in their new 500,000sf Waterfront Corporate Center 3 on the Hoboken waterfront.

Fort Lee luxury tower reflects housing rebound

The Modern…website

NJBIZ Power 50: #5 Steven J. Pozycki — SJP Properties

SJP Properties inks lease with e-commerce startup Jet.com at new Hoboken building

SJP Properties, Thomson Reuters ink major expansion deal in Hoboken

Also see:

And this is only one developer and one residential rental project in New Jersey.

How can the suburban real estate market withstand the competition from so many new rental buildings. It’s a case of the new vs the old. Guess who’s going to win?

The big lie about the LG project

New York wants to  control New Jersey development laws
New York wants to control New Jersey development laws

As I drove back to New Jersey across the Tappan Zee Bridge I noticed thousands of homes and numerous high rises that have been built all along the Palisades (all in New York I might add) and are clearly visible from the NY side of the eastern banks of the Hudson River.  There are even homes and retail buildings that have been built on piers way out into the water in Piermont New York and all along the base of the Palisades…all in New York.

And homes continue to be built on at the base, into and on top of the Palisades  every year…and most are visible to anyone who chooses to stare at them. People want those views and they pay a premium for the views from these office and retail buildings and from the homes and apartments.

The New Yorkers who are protesting the LG project want the views to themselves and want to deprive New Jersey residents of the same.  They want us only to have a street level view of trees…and only as we pass by them while in a car or on a bike.  They want the great view while leaving us with a crappy roadside view

All of this has happened and continues to happen along the Palisades in New York by New Yorkers. A bit hypocritical don’t you think?

There is a wide splice of this vista that all the noise is about that is already protected from development…people don’t want to live there companies don’t want to relocate there and the property is worthless for development.

What we really have here is that some New Yorkers want to spread out their vista of what they don’t want to see.  They want to change the game.

We already have in place building and zoning restrictions and NOW these outside groups want to spread these restrictions to other areas that adjoin what is already covered.

It’s basically… Wherever it can be seen, we don’t want to see it.

Just imagine if this type of “vista or visual’ zoning existed in Manhattan there would be little or no high rise buildings…especially around Central Park! No One57…or any other buildings around Central Park.

The most expensive real estate in the world isn’t available for anyone in North Jersey to see because of trees.

This will Never happen in New Jersey because of no one wants to be in New Jersey bad enough!

One57: Tell me this isn't a spectacular view from Central Park
One57: Tell me this isn’t a spectacular view from Central Park
New Yorkers die to have a view of highrises. View from One57
New Yorkers die to have a view of highrises. View from One57

These groups really want the public to mistakenly believe that when the LG building is built….”high rises everywhere will immediately begin popping up all within their vista that we want to protect”.

Sorry this will never happen,                                 so get over it!

Home design ideas from tribeca

Here’s another of my favorite luxury condos for sale in Tribeca.

This incredibly appointed home is located at 45 Walker St, and is listed by two of the hottest brokers in Manhattan:

  •  Shaun Osher…founder of Core NYV , one of the best brokerage firms anywhere
  • Emily Beare who lists and sells some of the hottest real estate in all of Manhatten.  She’s everywhere…on tv and in the news

Besides the fact that this 4,800sf condo is listed for a cool $6,750,000, the unit is designed to perfection…and in a taste that you can’t help but love.  It’s cool, elegant, sexy, warm and inviting all at the same time.

Check out the photos and see some of the details that you can sneak into your own design here in Tenafly , Alpine and Cresskill.

I love love love the deep plum walls and dark wood flooring.  It’s a sexy combination that I can’t wait to use.

And for you suburban realtors …check out the quality of the photos and the staged rooms.  You can’t tell me that this doesn’t make a world of difference compared the the low quality stuff we see here in the burbs

Bringing some of the city into the suburbs does wonders for increasing your homes value.  And it won’t look like a knockoff of your friends and neighbors homes.  In itself this is a big plus for everyone who wants to be different, and a few steps ahead of the crowd.

See the listing:  45 Walker Street, 4

50.9 million reasons why luxury Manhattan real estate is still going strong

ImageThe record setting 5-minute $50.9 million sale of a Chelsea penthouse is another sign that the luxury market in Manhattan is as strong as its ever been.

According to listing agent Vickey Barron of Douglas Elliman, the deal sets a new record for the most expensive home sale downtown.

Set in the Walker Tower this office converted art deco building is the new talk of the town…only one of the 47 units still remains for sale at $47.5 million.

Check out the article at the WSJ…Downtown Manhattan Penthouse Sells for a Record $59.9 Million

After the $50.9 million sale why did they raise the price?

Is it a wonder why the New Jersey luxury market is still sucking wind? In towns like Alpine, Saddle River, Englewood and Tenafly, you can’t sell a home priced above $3 million if your life depended on it…unless there’s a huge price chop.And forget the luxury condo market in New Jersey…if there is one.

Everyone’s putting their big bucks where the market is the hottest…Manhattan and every place surrounding it…in New York.

Word has it from the experts on Wall Street that the New York market has another 50% increase in it’s long term pricing.

Can it happen?

Will New York Billionaires Save The New Jersey Luxury Home Market

Location is everything when it comes to real estate.  And nothing shows this more than the article in this Sunday’s New York Times titled…Billionaires’ Club Is Set To Grow…The demand for high-end homes is also expected to rise.

 “The buying seems to draw traction from the fact that there will be so many more newly minted rich people hunting for properties. Over the next 10 years, some 95,000 more people around the world are expected to see their wealth grow to at least $30 million, according to a forecast by Knight Frank, a London-based real estate company, which puts the current number of such people at 189,835.”

The article ties in an expected worldwide explosion of billionaires, to an already exploding ultra-luxury residential market in  key cities, like New York City.

With what is happening in NYC and other major cities, translate into the same trend for the Bergen County, New Jersey market, which is (used to be) tightly intertwined with what goes on in New York City?  Do the mega home sales that we’ve all heard about happening in Manhattan spill over into our market, as it used to.  Or are these sales, and the overall strength of the NYC residential market taking away sales from the neighboring suburbs, and hindering our recovery.

Their assumptions may be true for specific locations like Manhattan…but it’s not the case in Bergen County, New Jersey, where the number of luxury home sales, are down 60% from the peak, and the dollar volume has seen a 67% hit.

The numbers show that luxury home sales and ultra-luxury home sales are being clobbered in Bergen County.  And I would be willing to bet that some of this is attributed to the boom that’s happening in the city on the other side of the Hudson.

Screen Shot 2013-03-12 at 11.13.50 AM

Some Facts:

There are 94 luxury homes for sale in Bergen County (priced above $3 million):

  • 21 luxury homes are for sale in in Alpine
  • 12 are in Cresskill
  • 8…Englewood
  • 9…Franklin Lakes
  • 22 are located in Saddle River
  • 7 in Tenafly
  • The remainder are scattered throughout other towns in Bergen County

The Scary Part:

  • 94 homes for sale priced above $3 million
  • In 2012 only 25 homes were sold in this price range
  • Sales in 2012 decreased by 23% from 2011
  • From the peak year of luxury home sales in 2006 compared to 2012, sales of luxury homes decreased by a whopping 60%
  • The dollar volume of sales at the peak compared to 2012 decreased by 67%

And there’s no end in sight to this downturn. The demographics are working against the high-end market, and high taxes. And the ego to purchase one of these suburban monsters isn’t there in the volume that’s needed to turn things around.

  • In 2012 the most expensive home sale in Bergen County was a $20 million home located in Alpine…a 40% discount from the asking price
  • The next most expensive home sale in Saddle Rive was $6,000,000.  This home was for sale since 2005 and was listed in 2010 at $9,250,000.  It finally sold at a 35% discount…and this was a fairly new home in an incredible subdivision.

The most interesting fact with luxury home sales in Bergen County is that out of the 25 homes that were sold above $3 million, only 1 home was sold to a foreign buyer outside of the United States, and only 5 homes were sold to people outside of New Jersey, and 4 of those were from New York. So much for all the talk about international buyers purchasing homes in our backyard.  Yes, real estate is local!

“In the end, the global luxury property market is functioning in its own universe, seemingly removed from general real estate trends. It “remains relatively impervious to these trends and more closely follows the luxury goods market,” Christie’s International Real Estate said in a study released this week.”

Christie’s International…you missed what’s really happening in northern New Jersey…but why let the facts get in the way of hyping the market.  And don’t think that what is happening in Alpine, New Jersey is irrelevant, because for the past bunch of years, Alpine has been one of the most expensive zip codes in the Country.

National stats and reports, have noting to do with what’s really happening right in your own back yard

Remember, real estate is local!

Northern New Jersey luxury market getting clobbered by NYC luxury sales

Why is New York City having a banner year(s) selling incredibly expensive ultra luxury homes (and everything else for that matter), and Bergen County, New Jersey is having another only soso year…and a another horrible year for the ultra expensive end of the market.

Usually when NYC condo sales and prices skyrocket, and rents increase, buyers start flocking out of the city to the New York suburbs. Bergen County has always reeled in a huge portion of the exodus….but that’s not happening now.

The Iconic New York by Gehry building

Sales of ultra luxury homes in Bergen County are down 47% in 2012, and 2010-2011 wasn’t any better. But sales  of ultra luxury units (trophy properties) in Manhattan have been booming the past several years.

The New York Times reported that Kiefer Sutherland recently sold NYC his townhome for $17+ million, which is just a drop in the bucket compared to all of the trophy sales that have been happening north of $50 million.  Yet in the affluent New Jersey suburbs, the high end of the market is gasping for air.

Even luxury home sales in the Hampton have hit the breaks.

The end effect, is that the NYC housing market is further killing the suburban market…and the effects are painful for the suburbs.  A lack of buyers leaving NYC coupled with an incredible number of rentals in the planning stages, and already under construction will make things  even more painful for areas on the other side of the Hudson River.

All these new rental projects in Jersey City, Hoboken, Edgewater and Fort Lee, and in NYC will have a devastating effect on suburban home sales.

Looking ahead, if the suburbs don’t learn real fast how to compete for buyers, then they’ll start failing.  And it will happen fast:

  • Downtown’s are already failing
  • taxes are rising and home prices aren’t
  • the market above $1 million is hurting
  • Very few single family homes are being built
  • The suburban office market isn’t recovering

These aren’t good signs. And there’s nothing pointing to things getting any better in the future.

More on this later.

Check out the Kiefer Sutherland article…Big Ticket: Sold for $17.5 million

Also check out…New York By Gehry

Every record penthouse sale, hurts NJ luxury market

Every blockbuster New York City penthouse sale, is another blow to the New Jersey ultra luxury market…and the deal that was just signed is a whopper of a deal.

The NYTimes reports:…A mystery buyer has agreed to pay a record price in New York of more than $90 million for the duplex penthouse at a Midtown tower, the building’s developer said Thursday.

Gary Barnett, president of Extell Development Company, said the buyer, who declined to be named or to disclose his country of origin, bought the 10,923-square-foot penthouse on the 89th and 90th floors of One57, the building currently under construction at 157 West 57th Street.

Read the entire article here…At over $90 million, sale of midtown penthouse sets a New York record

For every deal that goes to Manhattan, the suburbs lose another opportunity to turn around an incredibly horrendous luxury market that has been a major disaster, even before the big crash.  Entering the 5th year of an almost nonexistent market, really puts towns like Alpine and Saddle River in New Jersey on suicide watch.

Will the market in these towns ever see daylight? Or, are these homes just relics of a past lifestyle that no one wants to be part of anymore?

Bummer though that this deal didn’t break the $100 million mark.

Oh well, what can you do.

The Russians are coming! The Russians are coming! To buy your home?

This weeks real estate hype from New York City

I was in the process of writing another blog post about the Luxury home market (or lack of) in Bergen County , when I came across an article in today’s New York Times…front page) titled…Time to sell penthouse-The Russians have cash.

So I checked it out and found it to be interesting…but found it to be more sales hype than something earth shattering.  But nervous sellers will be flooding their agents in NYC with emails asking them what they’re going to do to snag some buyers from the REAL Evil Empire…but who we will learn to love, if they buy our ultra expensive homes, that few in our Country can afford, and are willing to buy.

The Cold War is over, and real estate agents everywhere love Russians!

The gist of the article is that a number of trophy apartments are being sold to extremely wealthy Russians…and that’s great news.

But does this really mean, that if it weren’t for the Russians buying these trophy homes, then there would be no trophy home sales?  And how long will this last?

Jill Sloane, a broker with Halstead Property, said, “Everyone knows they are the ones with the big money right now.” She added that when she heard that the penthouse at 15 Central Park West had sold for $88 million, “I knew it had to be a Russian.”

Does this mean that the Russians are the key to the success or failure of the NYC residential market?  And because I live in New Jersey, will this success spillover to the New Jersey and New York Suburban markets?

The billionaire buyers are flush with cash from the privatization of Russian state industries and from high prices on oil and other commodities, and are eager to park much of their fortunes outside the reach of the government of Vladimir V. Putin

What I think will really happen because of this article, is that the realtors in NYC and the suburbs will suddenly be telling all the homeowners who have their homes for sale…that the Russians and other foreigners are major purchasers of luxury homes, so they’ll concentrate on marketing to them.  Which really translates into…we’ll continue listing homes on the web as they always do.

This is going to be used more as smoke-and-mirrors sales babble.  Because in reality, but for the lucky few, nothing will come of this.

Homes sales in Tenafly, Cresskill, Alpine, Demarest, Englewood and Closter…are local.

  • 90%+- of home sales are to people who live locally…within 20 miles of your home
  • as you go further away from your home the sales to out of State buyers decreases dramatically.  And when you go out of the Country, your odds decrease even more of snagging a foreign buyer

New York City is an anomaly for what is happening in the real estate market, or for what Realtors will suddenly start pitching to consumers.

I can’t wait to see what all the NYC brokerage web sites will look like in Russian.

And for those homes for sale in Tenafly…it’s time to translate your listing descriptions.  How do you spell FDR and MEIK in Russian?

The Abingdon…in need of a marketing makeover

In an interesting shift how developers market their projects, a post in The Real Deal points out how one residential highrise in Manhattan is offeringtheir penthouse units first, and will work on selling the other units as a secondary task.

I’ve seen this before in other projects in the suburbs, where a developer tries “creating value” by trying to sell their most expensive units or homes first. It’s a big gamble. It’s easier for suburban home sites, because the developers can build a few ultra expensive homes and wait to see if there is a market for them.  And if not, then they can always less expensive homes. They can have a plan B…but highrise and mid-rise developers don’t have that luxury.

With a highrise it’s much different.  You have to build the entire structure in order to get to the penthouse floors…which are always on the upper floors of a building.  Though the Abingdon seems to be only six stories high, it is still a financial gamble for the developer to try this.

A couple of problems on the marketing end:

  • the picture in the article is ugly
  • when you google the Abingdon, you come up with everything but this project.  When viewers read something of interest they automatically start looking for more information, and when they can’t find it, or its too hard to find, they click off and go somewhere else.  The key to selling/promoting something online is to give buyers what they are looking for at the exact moment they are searching for it.  Making them work hard to find it doesn’t work anymore.  No one has the time for a complicated search
  • if you are trying to create value by pricing a unit so incredibly expensive and it doesn’t work, you could have a real flop on your hands

The biggest obstacle selling this will be the marketing.  If you can’t find it at the top of a google search, then it doesn’t exist. And I can’t find it.

That’s not a great way to try selling a few $20 million penthouses…and gambling your entire project on something that may be the best kept secret.

Developers need to understand that it’s all about marketing to your target audience, in  ways they have never done in the past.

Tell us what you think

Manhattan developer waits for the right tenant at the their premium price

An article in the WSJ.com…It’s Hardly a Ball for 11 Times Square talks about the risks associated with speculative office building…”especially during a real estate slump”.  Duh.  Having developed and built various projects, I always thought there was a risk no matter when you built, even during good times.  If I built something that I thought was the greatest project around, would others feel the same, and would they pay the price I wanted.  It’s a delimma that every developer faces when they build a project.  And the task is even more daunting when the project takes years to design, to get governmental approvals, permits and then to build it and start moving people in.

There’s also one more major factor that goes into developing projects and making deals: Ego.

And this is part of the gist of the article…how can a developer be so egotistical during a major slump in the economy to pass up a deal to lease space.  They think, isn’t something better than nothing?

Not always

11 Times Square by SJP Properties

The WSJ believes that the project, 11 Times Square by SJP Properties, should take what they can get when presented with a deal.

Tenants who looked at the new skyscraper but decided against it include the National Basketball Association, law firm Morrison & Foerster LLP and even restaurant chain Buffalo Wild Wings Inc., according to people familiar with the matter.

Prudential now faces the possibility of having to pour more cash into 11 Times Square. Its $720 million construction loan, held by a group led by PNC Financial Services Group Inc., must be repaid in May.

The crazy thing here is that most of the developers who build these massive projects are paid large management fees to build them, and the fees cover a portion of the money they put into the project.  So the overall risk isn’t insane.  And as anyone else in business would do, when the deal isn’t to “their advantage”, then the deal doesn’t get made.  And sometimes it’s not to the lenders advantage when deals don’t happen…and they get into plenty of arguments over this, it’s still usually the developers call.

Real-estate developers in Atlanta, Seattle and other U.S. cities also are struggling because of office buildings that hit the market as it was cooling. Some developers that began projects in 2006 and 2007 with no commitments from tenants have been forced to shrink rents, restructure loans or even hand the buildings over to lenders.

An SJP spokeswoman declined to comment. Prudential company officials say they feel good about the leasing prospects, and they don’t want to cut rents and sign long-term leases at low values. “To drop rents on a new, state-of-the-art building to make them comparable to buildings in Midtown that are an average of 75 years old doesn’t reflect what we believe to be the immediate value of the space,”

To the defense of SJP, they are far from stupid, and have proven themselves to be one of the most successful developers in the region.  A s the article doesn’t point out, you can’t always rely on the “brokers take” of the market, because they’re great a predicting the past, not the future.  If it were their money at risk they would be singing another tune. And then at times they don’t make any sense…

“It’s not that we’re under any pressure to lease it up within a specific time frame,”

It’s one thing to act confident when talking to the press, but it’s egotistical to make statements that anyone with a half a brain knows is laughable. Will SJP Properties and Prudential Financial call the brokers into their boardrooms to have a Trump-like conversation?

We hope SJP has better luck with their two new residential high rises in Ft. Lee NJ that they hope to start in 2012.