The Real Deal New York

Tamarkin sees upside in down market

June 05, 2008 03:11PM
By Adam Pincus

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Cary Tamarkin, an unusual blend of architect and developer, is building
five raw, luxury condo units at the ten-story 397 West 12th Street,
just the east of a crumbling two-story story brick building owned by
the reclusive William Gottlieb Real Estate company. Tamarkin, who heads
Tamarkin Co., made his name by developing condo buildings with
unfinished units, such as 495 West Street. He discussed building around
an eye-sore in a hot neighborhood and also talked about how the credit
crunch will weed out wanna-be developers.

Your 12th Street building is adjacent to the Gottlieb parcel, where a Department of Buildings permit for a demolition originally issued in 2005 was renewed on May 13. What steps have you taken with the neighboring property?
It is falling down. I assumed and thought it had been condemned and they had started dismantling it … but there has been no action. I offered to buy it, I built my foundation away from it and I monitored it … but Gottlieb is very difficult to get on the phone. I also offered to net-lease it from them for 99 years. The offers were submitted by mail but I did not get any response.

Do you expect something to be built there? Is that is why your building was designed with no windows facing the parcel?
I have designed the building with the idea that someday something will be there.

With the easy credit flowing into real estate until last year, a lot of developers found it less difficult to build big, daring projects. Do you expect the number of architecturally ambitious projects such as yours on 12th Street to fall as the credit market tightens?
I think that is the case and because of that I think that hopefully [the project] is slightly less affected because it is unique stuff. These five units are so exceptional and so raw and so different that these buyers will not be significantly affected by the tighter credit market.

How are banks adapting to the new credit market?
Banks are willing [to lend.] At 456 West 19th Street we have a bank set up to give us mortgages.
How are sales going with the 12th Street project, and what are the prices?
Of the five units, two are sold — the top and bottom. It is all raw space, the remaining simplex on the second floor is $1,500 per foot; the third- and fourth-floor duplex is $1,800 per foot; and the fifth- and sixth-floor duplex is $2,200 per foot.

What is the premium on high-end architecture, either built out or raw?
It can be as much as a few hundred dollars per square foot.

What is the impact on the city of the mega-luxury, artful projects by architects like Richard Meier, Frank Gehry and Jean Nouvel?
I think all the interest in architecture is great for the city. It upped the ante. The only reason it happened is not because the developer is interested in raising the level of art appreciation, but because it makes them more money. It costs more to build but you make more in the back end.

Will there be fewer such projects as the credit market remains tight?
Things have to adjust to the new world … there has been a phenomenal construction streak (where) everyone wanted to be in real estate and everyone was a developer … that leads to a lot of crappy buildings and failed deals and competition for sites. A lot of that is going to be weeded out. I think that is the real estate cycle, and it has just been an inordinately long run. I welcome the cleansing aspect of the credit crunch. 

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