Editor’s Note: A case for irrational exuberance

Some readers are telling us there is a bubble in the luxury market. We got this note last month that the three signs are:

1. A daily dose of superbroker Dolly Lenz appearing on CNBC
2. A Red Hook condo selling for $1,250 per square foot
3. Michael Shvo on the latest cover of TRD

To address that last one: It’s true, the bad-boy broker was on our cover in August 2006, in the midst of that historically hot market, before appearing there again last month, reborn as a developer with plans for soaring towers.

Whether that is a sign of an exuberant market, or irrational exuberance (remember that term?), remains to be seen.

Another sign of the hot market was The Real Deal’s Real Estate Forum & Showcase last month in Miami. The event drew more than 4,000 real estate professionals, there to see three star-studded panels featuring the likes of billionaire Richard LeFrak and developer Don Peebles, as well as dozens of exhibitor booths for new condo projects (see page 68). If you don’t know by now, real estate in Miami is booming (it is a city that does boom and bust pretty well), with more than 280 towers planned and price records being topped regularly. It was the biggest event that The Real Deal has ever hosted, bigger than our events at Lincoln Center in New York during the last boom market.

So the market is clearly going full throttle. Perhaps the time to get worried is when, like during the last cycle, people on panels say, “I think prices will only keep going up,” and otherwise assume the cyclical nature of the market is no longer a reality, which I haven’t seen them saying quite yet.

But as our reporter E.B. Solomont points out in her story “Will the luxury ‘bubble’ pop?” on page 20, concerns about overbuilding in that segment of the market are not merely being whispered anymore.

“I tend to think we’re kind of at the top of what really should be produced now,” acknowledged Related Companies’ Bruce Beal during a recent ULI panel in New York.

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All this building has meant good times for the city’s new development marketing firms and divisions, which are tasked with selling out new condo projects and leasing out new rental buildings coming to market.

In our cover story, we rank the biggest new development marketers in the city. The numbers are a far cry from our last survey in 2011, in the middle of the downturn, when there were far fewer units and rentals dominated the scene. Corcoran led the pack this time around, with more than 61 projects coming to market since 2013. Halstead and Douglas Elliman followed in second and third place, respectively.

All told, the top 15 firms brought to market nearly 16,000 units throughout the city during the period we surveyed. Check out the story by Rich Bockmann on page 55.

Elsewhere in the issue, we take a look at some of the residential and commercial brokerage firms in the city that offer the best perks, from technology to training to benefits. See page 48.

We also go inside the world of Elliman honcho Howard Lorber in a profile starting on page 36. Arguably the most powerful player on the New York City residential brokerage scene, Lorber is doubling down on real estate, investing in around a dozen new development projects his firm is also brokering (he is getting a first look at projects throughout the city as a result of heading a brokerage firm, taking advantage of his unique position). And he has been expanding New York’s biggest brokerage both nationally and internationally in recent months.

Finally, check out our new tongue-in-cheek take on the winners and losers in New York real estate last month on page 124, and read our examination of how leasing at One World Trade Center is shaping up, as the historic tower opens this month and Condé Nast starts to move in. It’s a milestone in the transformation of Lower Manhattan that will transcend any boom or bust cycle, and it’s tremendously exciting. See page 44.

Enjoy the issue.