The Real Deal New York

As prices skyrocket in Williamsburg and Greenpoint, the artists and trendsetters who initially fled to those areas from Manhattan are finding they must move once again in search of cheaper rents. For those in the market for affordable loft space, the gritty Red Hook area is becoming an increasing draw.

The Brooklyn neighborhood, traditionally isolated because it has no subway line, is soon likely to become more integrated with rest of the city through two giant retail projects and water transportation that will ferry passengers to and from Manhattan.

Along the waterfront, sailors, prostitutes and crime bosses once ran the docks in an area that is fast becoming a bastion for developers, retailers and artists seeking affordable commercial space. Even HBO s hit series, “The Sopranos” filmed this past October, detailed the once sketchy neighborhood that served as a home to real-life mobsters. Earlier, Red Hook was the southern terminus of the Erie Canal, with a maritime history dating back to the 1700s.

Today, developers are embracing the working-class heritage of the mixed industrial and residential area. At places like 64 West 9th St., in a new building whose architects are the late Nat Kirschenbaum and Frank Sellito, developers converted an industrial building that once housed the Larsen Bakery in its former life.

“The space is useful for artists because it is affordable, and space like that has been in strong demand but very scarce,” said Getz Obstfeld, who developed the property along with business partner John Lonuzzi. Obstfeld said that as more and more people get priced out of other gentrifying areas of Brooklyn, Red Hook is becoming a trendy alternative. “There are lots of people that need the open space that factory spaces provide, and a lot of them have gravitated towards Red Hook. It s become a relatively trendy community because the artists coming here are trend makers.”

Space at the building runs about $12 a square foot, with 10 duplexes occupying the first floor and the basement and eight apartments on each of the upper floors. There are four vacant apartments left. Apartment sizes range from 1,220 to 1,873 square feet, and run customers between $1,700 to just under $2,000, some of the cheaper housing left in Brooklyn.

Other blocks that are being converted are located on Commerce Street, Coffey Street, and Columbia Street.

As far as the building s style, Obstfeld said the building reproduces the old-school architecture once found in Brooklyn s mill buildings. The building also has a retro sign out front that reads “Red Hook Bakery” in old-fashioned lettering.

“We built a building that emulated the construction methods of the nineteenth century mill buildings that everyone loves so much and for good reason, because they create a great deal of wide open spaces, wood timbers that are warm and friendlier than the kind of construction methods today.”

Obstfeld also points out that the space is legitimately residential no small problem in Red Hook. “A lot of spaces in the area are converted illegally, and you ve got people living under commercial leases and those people are there at their own risk.”

Despite new projects, one obstacle that stands in the way of further development in the area is the lack of subway lines. Red Hook is set on a triangular grid, so residents must depend on bus transportation. The one-mile peninsula at the edge of Brooklyn is also cut off from the rest of the city by the physical barrier of the Gowanus Elevated Expressway and the Brooklyn Battery tunnel.

But water transportation may be a way around that isolation. Tom Fox, president of New York Water Taxi, will extend his services to Red Hook next year, according to long-time Red Hook developer Greg O Connell. The service would coincide with the opening of a new 52,000 square foot Fairway Supermarket slated in a Civil War-era warehouse at 480 Van Brunt Street. Last year the City Council agreed to allow the supermarket in the Van Brunt property, which will also house at least 40 units of affordable housing.

“It s probably one of the most exciting thing that has ever happened to transportation in the city, said O Connell, who is involved with the Fairway project. “In June of next year, [Fox] will be able to pick up from the Fairway building for commuter trips and on the weekends. He ll then extend that, so people will be able to come and shop by water taxi.”

Some long-time residents have voiced concern over the new super store, but O Connell said the project will bring jobs into the neighborhood.

“The people who are worried about it will be the first ones lining up outside the store, I think,” he said. “There aren t any grocery stores over in Red Hook, and it s something that is definitely needed over there.”

Under an even more ambitious plan, Swedish retailer Ikea is also seeking to build a store in Red Hook. The company said it s 350,000 square foot project, if it makes it through the public review process, could bring 600 jobs to the area. The store would be at the intersection of Van Brunt and Columbia Street, and would include a 5.5 acre esplanade. The project would also incorporate ferry service to and from Manhattan. Ikea hopes to start construction by the summer of 2004 and open by the summer of 2005.

Despite Obstfeld s comparison of Red Hook to Williamsburg, O Connell doesn t see many similarities. “Williamsburg is much different than Red Hook,” he said.

“The socio-economic condition is much different. Also, here you have a greater density of multi-story loft-like buildings, and the neighborhood is a triangle with water on three sides.”

O Connell also points out that Red Hook is a small community. There is a population of around 12,000 people living in housing projects in the area, and 4,000 in the back part of the neighborhood. According to the Red Hook Civic Association, median income is around $10,500. Ninety percent of the residents are African-American and Hispanic.

O Connell also said that the area is also home to many small businesses, with a 60 percent increase in businesses moving into the area. Culturally, the area is home to events like the Red Hook Waterfront Arts Festival in May, which features spoken word, dance, and music, and a monthly reading series at the century-old Sunny s Bar.

With the new Fairway, Ikea, water taxi service and high-end lofts, the neighborhood may never be the same.

The move by the Real Estate Board of New York earlier this year requiring its members to share listings with all other members within 72 hours was hailed as a “huge stride forward” and a “quantum leap” in opening up the Manhattan residential marketplace.

The move came after failed attempts over the course of several years to create a multiple listing service for Manhattan brokerages that would gather all listings for consumers and brokers, similar to what is seen in most other communities in the country. While the new system doesn t go quite the whole way towards such a service, most heads of major firms said they are content with where things stand.

While there have been few political developments at least overtly since the beginning of the year, there has been forward movement, quietly, with advances on the technology side helping to create a more open and efficient marketplace.

Douglas Elliman and Corcoran the two giants of New York residential real estate – recently signed on to a computer system that will enable them to send their listings electronically to other firms using a single database. The days of firms e-mailing listings to one another, or in even more archaic fashion, faxing them to one another, are slowly being phased out. Corcoran was hooked up to the system a few months ago; Douglas Elliman went online last month.

“The difference in terms of promptness andécorrect dissemination of information is enormous,” said Frederick Peters, president of Warburg Realty Partnership, Ltd. “Now, it s not all a mad scramble. You don t have dozens of people in back offices entering in [redundant] information.”

Corcoran and Douglas Elliman joined the R.O.L.E.X. system, which shares data between nearly all of the biggest firms and around 80 companies total. Another system, OLR, serves around 75, mostly smaller companies. The Manhattan Association of Realtors operates an MLS system, in addition to other smaller players.

While listings can be shared between the different systems (via e-mail), there have been efforts to get everyone on the same page. Heads of larger companies appear to mostly back growing the R.O.L.E.X. system, which has also drawn the support of the Real Estate Board of New York. The Manhattan Association of Realtors (MANAR), a chapter of the National Association of Realtors, meanwhile, is pushing for a citywide multiple listing service similar to those found around the country, which could be accessible both by brokers and consumers. MANAR, which was founded in 2001, is an upstart compared to the powerful trade organization REBNY, with around one-eighth the number of total broker members.

Several company heads said the 72-hour rule had been a giant step forward, and that there isn t a need to make more major changes right now.

“I think the new system we have and the new agreement we have is a quantum leap forward,” said Diane Ramirez, president of Halstead. “I don t think we need to do more at this point.”

Ramirez said the system is effectively a multiple listing system, though without the capacity to present listings to the consumer. “It s in essence what the MLS will do, without the functionality of that,” she said.

Andrew Heiberger, CEO of Citi Habitats, said the 72-hour rule was “a huge stride forward and a great accomplishment.” He said he ultimately believes there should be a full MLS that also involves “promotion to consumers.”

“Some of the older and larger firms feel they have some sort of advantage the way things are now,” he said. “But the technology exists for this to happen.”

Heiberger added that he s not going to rush down that road anytime soon. “I have a bad taste in my mouth about being a pioneer, because of the last three efforts,” he said.

Elizabeth Stribling, president of Stribling & Associates, said it makes sense to focus on fine-tuning the current system rather than undertaking a new plan.

“I think the majority of people have the view, rather than throw the baby out with the bathwater, let s get the baby in good shape, she said. “It s been many years getting to R.O.L.E.X. Most of us feel we should get the mechanics working, and complete that first.”

“I think what we have now is terrific and it s working, and we ll continue to respond to what our members want,” said Stephen Spinola, president of REBNY. “I don t think we need to jump any steps here. It s quietly functioning.”

Pam Liebman, chief executive of Corcoran, said her company has its wagon hitched to the industry organization. “The Corcoran Group is very supportive of REBNY, and would not endorse any plan REBNY is not a part of,” she said.

Dottie Herman, CEO of Douglas Elliman, declined to be interviewed for the story. A spokesperson at the company said Herman was still getting thoroughly acquainted with the listing system in Manhattan after taking over at the helm of the company late this summer.

David Michonski, Chairman and CEO of Coldwell Banker Hunt Kennedy and MLS President for MANAR, said the 72-hour rule and the current system for exchanging listings doesn t go far enough.

“It s still chaos out there,” he said. Michonski added that it is the consumer who is being shortchanged by not having a full MLS system that would expose properties to a greater number of people. “We need an MLS to truly satisfy our responsibility to get the maximum exposure of properties,” he said.

Esther Muller, founder of the Academy for Continuing Education and Secretary of MANAR, said that a full MLS system would mean “not only sharing listings in Manhattan, but with rest of country and the rest of world” because it would be connected to other such MLS systems.

One of the key factors that has played a part in determining what systems companies are using today is cost both in terms of past investment and current expenses.

The R.O.L.E.X. system, for example, serves as a means to transmit data between companies, but it doesn t usurp a company s own listing system, the way a multiple listing service might.

“We have all spent a fair amount of money on company systems that we love,” said Ramirez, adding that companies don t want to just abandon investments that for some have run into the hundreds of thousands of dollars.

Larger companies are continually developing their systems Douglas Elliman, for example just unveiled a revamped Web site last month. Top companies also introduce “bells and whistles” – like sending text-messages to prospective buyers on their cell phones about upcoming open houses in an effort to woo customers. Neil Binder, principal at Bellmarc, said having a multiple listing service might mean companies are more complacent about developing their technology. “Since there is no uniform standard, all the larger firms are continually improving their technology,” he said.

Binder also noted that the multiple listing service was initially set up in communities throughout the country years ago when there was a “lack of technology” in general and costs were prohibitive. Now, that barrier doesn t remain. “Technology costs are not out of line now,” said Binder.

Still, spending on new technology can be a challenge for smaller companies. “For smaller firms, developing their listing systems can be a daunting task if they don t have a computer department,” Binder acknowledged.

As a result, many of the smaller firms have turned to systems like OLR, a Web-based system that companies can use partly in lieu of developing their own in-house listing systems.

Heiberger, whose company uses OLR as a backup system for its own in-house proprietary system, said for the bigger firms, “it doesn t matter which service you are on. For the smaller firms, it is important.”

Eric Gordon, who has been designing listings technology since the 1980s and rolled out the R.O.L.E.X. (RealPlus Online Listings Exchange) system in the beginning of 2002, said there is an effort underway to get more small companies to sign up.

The system serves nearly all the big companies, including Corcoran, Douglas Elliman, Halstead, Bellmarc, William B. May, Stribling, Sotheby s and others, and also has around 40 to 50 firms with one to five agents, he said.

Gordon said REBNY requested that he introduce technology last year to provide smaller, less advanced companies with a sort of in-house system that would also allow them to hook up to R.O.L.E.X. Such “shared system” packages run $100 a month, he said.

Meanwhile, Bob Bodger, director of information technology for Douglas Elliman, said going online with the new system last month would save considerable manpower in his department, as well as make for more accurate and timely listings.

Four listings personnel at Douglas Elliman s offices at 575 Madison Avenue had to manually retype in thousands of listings coming in by fax and e-mail from other companies. Now it can be done at the touch of a button.

“The time change is drastic,” said Bodger. “It s a very good thing.”

A small group of Manhattan brokers is pushing to try to get the rest of the city s brokers to sign onto their multiple listings system.

The Manhattan Association of Realtors, a chapter of the 900,000-member National Association of Realtors, wants to form a citywide MLS system similar to what is in place in most other communities around the nation.

One of the main advantages, they say, is that Manhattan properties would get wider exposure because they would be connected to other MLS systems throughout the nation. Properties would also be listed on Realtor.com, which nationally draws 75 percent of those who go online to look for real estate, they say.

“It s in the best interest of the consumer and clients,” said Esther Muller, the secretary of MANAR and founder of the Academy for Continuing Education. “It s not only sharing listings in Manhattan, but with rest of company and the rest of world. Companies are losing money because they are not on the MLS system.”

So far, involvement in Manhattan is small. The group has 40 member firms, but only two out of the largest 15 companies Fenwick-Keats Realty and Coldwell Banker Hunt Kennedy. The two-year-old group has around 400 members, much smaller than the 3,500 total brokers that are members of REBNY, which counts all the top firms in Manhattan among its members.

The organization, which unveiled a revamped MLS system last month, recently moved into new offices and received a dedicated lobbyist assigned to represent New York from the state Realtors association.

David Michonski, MLS President for MANAR, said the plan is to grow the organization slowly and “continue with the gradual increase in people joining the MLS.” But he said he is also hopeful that one of the big companies, Douglas Elliman or Corcoran, might join. Jeff Wolk, President of MANAR and a co-principal of Fenwick-Keats, said he also hopes to eventually see “MANAR and REBNY joining forces together.”

Michonski and Wolk said they were particularly hopeful about wooing new Douglas Elliman CEO Dottie Herman to join the organization, because she has a background as a member of the National Association of Realtors and because 2,000 agents at Prudential Douglas Elliman on Long Island belong.

Stephen Spinola, president of REBNY, said he was “willing to work with any organization that wants to work with us.” He pointed out that most members of MANAR are also members of REBNY, but that “most of my members have no interest in NAR. We believe we set the standard.”

Michonski pointed out that having a central consumer Web site would cut out the need to advertise so heavily in The New York Times. “If we ever had a recession, we would have the MLS in a heartbeat.”

Under the Real Estate Board of New York s 72-hour rule, brokers are required to share listings within three days. Company heads say there has been general, if not perfect compliance with the rule, while a few have raised concerns about the issue of enforcement.

Neil Binder, principal of Bellmarc, said he thinks there has been “substantial compliance” on the part of brokers in abiding by the rule, though there is no way of knowing for sure, he said.

Others were less uncertain.

“I haven t heard of any problems,” said Pam Liebman, CEO of Corcoran, adding that her company doesn t necessarily wait 72 hours before sending out listings. She said Corcoran would be supportive of shortening the time period for sharing listings even further.

“Barbara [Corcoran] was one of the early proponents of co-broking,” she said.

Frederick Peters, president of Warburg Realty Partnership, Ltd., said agents have been “pretty good” about sharing their listings within 72 hours.

Andrew Heiberger, president of Citi Habitats, said listings are typically being shared later than three days, though it hasn t been a major issue given the current market.

“I d say realistically five to seven days sharing is what is happening now,” he said.

Giving an agent time to hold on to a hot listing without sharing stops the bidding-up process during that period, some say. “But that hasn t been a problem because there have been no bidding wars,” Heiberger said.

In the end, Heiberger called attempts to make sure brokers share their listings “unenforceable.”

Stephen Spinola, President of REBNY, acknowledged that “everybody allows for the fact that maybe the other person is holding back” in terms of sharing listings in a timely matter.

He said that REBNY had gotten “no formal complaints” about the sharing of listings. When the board s Residential Interfirm Forum unanimously adopted the 72-hour rule last November, it said that failure to comply could result in a reprimand or suspension of membership.

David Michonski, Chairman and CEO of Coldwell Banker Hunt Kennedy, said he “admires” REBNY for the 72-hour rule, but says there is “no teeth” as far as regulating the rule. “There is no recourse for people who don t comply,” he said. Under an MLS-type model, brokers are actively fined or suspended from the organization for not sharing listings, he said.

Binder said he doesn t think undertaking punishment would be a good way to insure people share their listings in a timely fashion. “Once you start putting in teeth, then you create anger,” he said. He also said that it might lead to punishment of those who inadvertently forget to post listings.

“I think the spirit is to share our listings,” said Elizabeth Stribling, president of Stribling & Associates, “We all want to get them out and make a sale.”

It wasn t hard for Stephen Ross to keep a close watch over the construction project that marks the pinnacle of his career so far.

From his office at the corner of 59th Street and Madison Avenue, the Chairman of The Related Companies needed to only hoist the binoculars sitting on his desk to watch the panes of glass being added to the nearly complete Time Warner Center at Columbus Circle.

The $2 billion project currently the largest in the country, and the biggest construction effort in New York since the World Trade Center will open the first of its many doors when the Mandarin Oriental Hotel checks in its first guests on Nov. 15.

It s vision of a different sort the kind looks to the future, rather than out the window which has Ross, 63, convinced that New Yorkers will flock to retail at the first vertical mixed-use facility of its kind in the city. The 2.8 million square-foot building will also house Time Warner s headquarters, Jazz at Lincoln Center and luxury apartments.

Ross, who started his career as a tax attorney, founded Related three decades ago, turning it into the second largest owner of rental apartments in the country. But it has been his work on large-scale mixed-use development projects which combine office, retail, apartment, hotel and arts space – in recent years that has raised the stakes for the company. Along with Boston developer Kenneth Himmel, Ross built a 72-acre development in West Palm Beach prior to the Time Warner project. He may be building something Downtown next. “We re certainly looking at it,” he said.

The Time Warner Center will have a big impact, Ross predicts. “Until it is open, I don t think people will understand the importance of the project,” Ross said. “There is no other building like this that has so many uses, and people haven t seen the finishes yet.”

But the challenges appear sizable, particularly for retail. The idea is to make Columbus Circle, formerly a no-man s land between midtown and the Upper West Side, into a destination address. There is also the hurdle of getting New Yorkers to discard their usual tendency to shop only at ground level stores. Every previous attempt at vertical retail in New York has failed, but Ross thinks the six-level, 350,000- square foot Shops at Columbus Circle will buck the trend. The shops are set to open Feb. 4, and are already 95 percent leased.

Some retail experts have their doubts. Alan Victor, executive vice president of the Lansco Corporation, said, “the jury is out. Vertical retail like this has not worked to date. And Columbus Circle itself funny as it sounds might be a physical impediment, because you have to go around the circle. But if anyone is going to make it work, it s these guys.”

Robert K. Futterman, chairman of the firm bearing his name, said the project will be “incredibly successful, because of the level of design and the integration of the facility.”

Ross said layout is key. “It ll work because it s all about how you lease the upper floors,” he said. “We put Jazz at Lincoln Center at the very top. It s the most expensive, and also the most dramatic and exciting. This will drive people up the building.” Retailers, including Whole Foods and Equinox, will also benefit by catering to a surrounding area that lacks for services. “The area has been underserved,” Ross said. “But if you look at the demographics, it s very upscale and incomes are very high.”

Despite predictions for his building s success, Ross doesn t see other mammoth projects with vertical retail springing up all over Manhattan. “This is a unique site,” he said. “I don t know if there is any other site, other than the World Trade Center, because of all the traffic it gets, where you could do this.”

The project will also alter the face of the Columbus Circle, a unique area in its own right. “It s the only traffic circle in New York, so this is going to be a special spot that doesn t exist anywhere else,” said Ross. The Circle is being renovated as part of a $21 million project that includes adding trees, landscaping and decorative paving. Ross said the Time Warner Center complements the Circle. “I think when people go in the circle and see how the lower portion of the building really emphasizes the circle, they love that.” Next door, a revamped Two Columbus Circle will be the future home of the Museum of Arts and Design (formerly the American Craft Museum). “The character of the neighborhood will change,” said Ross. “Other buildings will upgrade, because they ll want to benefit from the high number of people in the area.”

The Center itself will serve as a “showcase” for Time Warner and other companies, but befitting its location, advertisement will be more subtle than in Times Square. The glass prow of the building on 58th Street will serve as space for possible digital displays by Time Warner, including telecasts.

“It might be one telecast, not a series of them,” said Ross. “It might just be color a lot of times, or art forms.”

The building will also serve as a display area for various other building “sponsors” including technology company Samsung, and unannounced car and finance companies. The building will even have its own fleet of chauffeur-driven cars that will be visible throughout the city, as a result of an affiliation with a major car company. “People will know the cars are from the Time Warner Center because of the uniforms of the drivers, or possibly because of the color of the cars,” said Ross.

As far as office space, Ross won t have to settle for only a view of the building after this year, because Related and Apollo Real Estate Advisors, which also developed the Center, plan to take a total of 106,000 square feet of office space there for their headquarters. Ross said the companies considered taking space all along, despite recent reports. Time Warner will occupy 865,000 square feet in the south tower of the building, with some operations moving in by spring. Another 105,000 square feet was bought by the media company, which it may market or hold on to for expansion.

Despite setbacks including a fire in April in Jazz at Lincoln Center that caused $100 million in damages and delayed the opening of the retail center until after the Christmas season Ross said the project has gone rather smoothly. “We would have been right on time but for the fire,” he said. Ross said the developers of the project are getting a “major portion of our equity back” before the project is even finished through a recent refinancing and through selling a stake in the retail space and underground garage earlier this year.

As for the binoculars, Ross said while watching the construction process over the last several years, he has been surprised how quickly it has all gone up. “To look out my window now and see almost a complete building there,” he said, “it s amazing. You wonder, where did the time go? What have I done over the last three years?”

The answer, of course, is put up other new buildings. Related recently completed the Park Imperial on Broadway between 55th and 56th Street, and is in the process of completing the Westport on 10th Avenue and 56th Street, one of 16 highly-branded luxury rental buildings in Manhattan operated by Related Rentals. For the company as a whole, Ross said four new projects are set to get underway in the coming year and that there is more than $1 billion in various stages of development in New York, Boston, Miami, Chicago, California and other locations. Around 1,500 employees work at the company, overseeing a real estate portfolio valued at more than $15 billion.

For Ross, the path to becoming the developer behind a super-luxury project that will boast Manhattan s most expensive apartment (sold for $45 million) and the most expensive hotel built here in the last decade has been gradual.

Ross grew up in Michigan, and began a career as a tax attorney in Detroit. “I was practicing law and doing tax planning and structuring deals for real estate developers, and I took a liking to it,” he said. “I saw the opportunities.” After a short stint in investment banking, he founded Related before turning 30 years old, spending his first 10 years cutting his teeth on affordable housing.

Ross s firm ran into trouble in the early 1990s, before Ross restructured more than $100 million in unsecured debt, which cost him a chunk of the company, which he sold to partners.

Around the same time, the company shifted more of its focus towards building and acquiring high-profile Manhattan luxury apartment buildings.

Outside of work, Ross serves on a number of charities and boards, including an appointment last month to the board of the Guggenheim Museum. Modern art is fine, but what does he think about jazz? “Am I a jazz fan? I guess I will be.”

Midtown saw a rise in its class A office vacancy rate in September, while Downtown experienced a slight uptick and Midtown South remained unchanged, according to a recent report.

The increased vacancy in Midtown was partly due to new construction coming online, in particular 650,000 sf at 300 Madison Ave., the CIBC Tower, the report by Colliers ABR said.

Conflicting economic data made it hard to form an overall picture of the marketplace, however.

“There are many opposing indicators giving mixed signals about the direction of the economy,” the report said. “This obviously reflects on the New York real estate market, which remains topsy-turvy.”

One trend is the increasing number of tenants entering the marketplace because their lease is about to expire, or because they think that they can get a good deal because they believe the bottom of the market has been reached.

“There is some anxiety now to renew or new lease while rates are low and space plentiful,” the report said.

In particular, tenants seem to be grabbing up sublease space. The Colliers report said sublease space in Manhattan is at 9.6 million sf for class A space today compared to around 10.4 million sf a year ago. Cushman & Wakfield, in its third quarter report released earlier, also noted that sublease space was being gobbled up.

The C&W report said there was 14.3 million sf of space on the market at the end of the third quarter, compared to 15 million sf at the end of the second quarter and 16.3 million sf at the end of 2002.

Jim Delmonte, C&W s director of research in Manhattan, said part of the decline is a result of companies taking space off the market because they expect job growth in the next year.

Removing space is “a sign of a market correcting itself,” said Drew O Malley, principal and director of brokerage services of Trammell Crow in New York. “The next step would be for these companies to acquire some direct space.” The Colliers report concludes that if the U.S. economy picks up steam and if hiring improves, Manhattan could see a healthy decrease in the overall vacancy rate by the fourth quarter of 2004.

Another factor in tenants looking to sublease space recently is the availability of relatively long deals. “There are longer terms available,” said Delmonte. “A good number of companies were taking more space than they needed at the height of the market back in 2000, so if they signed a lease for ten years there are still seven years left. Many companies also don t want to undertake major capital expenditures and are taking advantage of already built-out space, O Malley said.

In terms of different areas, “some of the better located sublease space in the better buildings has moved quickly,” said O Malley. “There are only smaller pieces of space now in the Plaza District.”

However, direct space is up sharply from a year ago, with 10.9 million sf on the market last year versus 14.7 million sf today, the Colliers report said.

Midtown

The Midtown Class A vacancy rate climbed to 11 percent in September compared to 10.3 percent in August, the Colliers report said. The increased vacancy was partly due to new construction coming online, in particular the 650,000 sf at 300 Madison Ave. In addition, blocks of space were added in the Rockefeller Center, Plaza and Penn/Garment submarkets. New construction could provide for a further uptick in the Midtown vacancy rate in the open months of 2004, when 7 Times Square will be completed with up to 900,000 sf available. Asking average rents in Midtown for class A office space fell to $50.51 per sf in September from $51.14 the month before.

Midtown South

The Midtown South class A vacancy rate held steady in September at 7.2 percent, with little change among either direct or sublet availabilities.

Asking average rents in Midtown South for class A office space fell to $31.78 per sf in September from $31.94 in August. However, rents were up compared to June, when they stood at $31.20.

Downtown

Downtown saw a slight uptick in its vacancy rate to 12.9 percent in September, compared to 12.7 percent in August, according to the Colliers report. The report did not include, however, Cadwalader Wickersham & Taft s lease of 450,000 sf at 1 World Financial Center.

The class A average rent increased very slightly in September, to $34.89 per sf up from $34.86 per sf the month before.

Overall, average asking rents have been flattening recently, with the Manhattan class A rate closing September at $45.26 per sf, down from $45.46 per sf in August. Since the beginning of the year, asking average rents have fallen five percent, versus a 10 percent drop for the same period last year.

Will we soon see buildings around the city marked with gold foot-high letters declaring “Trump Jr.”?

Two Trumps the Donald himself and his, son, Donald Trump Jr. played host to a crowd of brokers and others during an open house recently at the nearly completed Trump Park Avenue, formerly the Delmonico Hotel.

Trump s latest project, at 502 Park Ave. and 59th Street, also the marks the first development in which Don, 25, has been a major part.

“My son wanted to use the word “Jr.” on the outside of the building,” Trump told a gathering of 150 or so invited to preview an $18 million apartment, “because its been so successful. But I said you can t do that.”

Prices at the building, which Trump said was 35 percent sold as of last month, range from $800,000 to $30 million. The $18 million apartment on the 21st floor that was being previewed included six bedrooms and 7,500 square feet of space.

Don, who got his undergraduate degree from Wharton (like his dad) and did some work at Trump Place, said he was eager to take on the conversion of the Delmonico, acknowledging that pre-war retrofitting is not a typical Trump approach.

“The project is almost un-Trump-like,” he said. “But the quality is Trump-like.”

The building is 32 stories, and the top two floors have been combined to create a duplex that will sell for $30 million. The unit has two large balconies, facing north and west, that provide supposedly spectacular views of Central Park and the George Washington Bridge, in an area not usually known for views. “You re getting the Park Avenue location and views,” Don said.

While the elder Trump stayed true to the prewar feel of the building nickel faucets instead of brass – Don said the developer couldn t resist one characteristic touch. Two seven-story modern looking curtain walls add 2,000 square feet of space on the north and west side of the building. “It s a little bit of a Trump touch,” he said. The building has a total of 140 units.

While Don said he favors “setting up initial deals” rather than sales, Trump sales director Laura Cordovano pointed out that “he s a natural.” Don s next project will be an enormous mixed-use plan that his father is planning in Chicago that was announced in September. The 2.4 million square-foot, 90-story building will include 326 condos, a 174-room hotel, 350,000 square feet of office space and first-floor retail space. It is planned for a site in the heart of downtown along the Chicago River currently occupied by the Chicago Sun-Times.

Back at the Trump Park Avenue, the elder Trump announced that brokers who sell $10 million worth of apartments there get to spend a weekend with Trump at his Palm Beach compound, Mar-a-Lago.

Trump also held a drawing for a member of the crowd to “spend a weekend with the legendary Donald Trump.” The prize was won by Corcoran CEO Pam Liebman. No word on when she ll be taking the Donald up on his offer.

Woody Heller says he has always been “change-averse.”

The investment sales power broker, best known for his sale of the Chrysler Building and Citigroup Center, spent nearly 20 years at Jones Lang LaSalle before joining Insignia/ESG in 2002. He would have likely stayed there for a long time, too, were it not for the company s massive merger with CB Richard Ellis, and a situation in which two CB brokers had the exclusive right to handle the firms property sales in New York.

Heller, who joined Studley in late September, is learning to live with change. There is plenty more ahead in the commercial real estate world in New York, he said. Not the least of which are his plans to turn Studley, a tenant rep firm, into a powerful investment sales “boutique.”

Heller, one of only a handful of brokers who handle the sale of most major assets in the city, joins a firm that has also seen some major changes. This past December, Studley s 45 managers and brokers pooled equity to take over the firm from Julien J. Studley, who had founded the company nearly five decades earlier.

Now, the new ownership, led by chairman Mitchell S. Steir and president Michael D. Colacino, is looking to expand business beyond tenant representation. The new business lines Studley is likely to pursue include refinancing, joint ventures, and Heller s domain, investment sales. Grabbing Heller, who has closed more than $4 billion in deals and was widely expected to go to Cushman & Wakefield, was a major coup.

Among Heller s biggest deals was the April 2001 sale of the 1.6 million square foot pitched-roof CitiGroup Center in Manhattan for $725 million, and the 1997 net lease of New York s Rhinelander Mansion to Polo Ralph Lauren for a then record $1,300 per square foot.

As head of the company s Capital Transactions Group, Heller is hoping to step up Studley s presence where it has other offices in Washington, Chicago and Los Angeles. Heller said some work is being done in at least two of those markets now, but “it s in a different end of the market” than what he d like to see. He s hoping to find top investment sales professionals for those locations, but acknowledges that “it s going to be enormously difficult” to lure star brokers away from established companies. So far, the New York capital transactions group is just Heller and two of his associates, Carly Borg and Will Silverman, who came with him from CB Richard Ellis.

In growing its investment sales business, Heller said Studley will be able to use its leverage on the tenant rep side, a different model than many other firms. “There are three types of leverage,” said Heller. “There is investment bank leverage, then there is we lease and manage the building leverage, and there is the general relationship leverage the Steve Siegel approach,” he said, “where we know everybody well and we re likely to identify opportunities early. ” The fourth type of leverage, which applies to Studley, is leasing leverage. “Where there is limited tenant demand, owners are very sensitive,” he said, adding that tenants “create value in buildings.”

Heller s departure from CB Richard Ellis came after he found there was little room at the company for a top sales broker like himself, since brokers Darcy Stacom and Bill Shanahan, who came from the CB side of the deal, have exclusive rights to handle all office property sales at the firm in the New York Tri-state area. Only a few days after Heller s departure, investment sales brokers Richard Baxter and Ron Cohen, who were also affected by the CB duo s exclusive rights, left for Cushman & Wakefield in what Cushman U.S. president Bruce Mosler called “a big coup for us.”

Some observers think that might be it as far as major changes among top investment sales brokers for the immediate future. “It looks like the game of musical chairs has stopped and everybody has their seats for the time being,” said Drew O Malley, principal and director of Brokerage Services for Trammell Crow in New York.

While Heller didn t comment on other investment sales brokers moving, he said it would be “naive” to think that there won t be big changes afoot among commercial companies in general. With the CB Richard Ellis merger, he said, “once you put those forces into play, they are very hard to stop.” The merger raises big questions for Cushman & Wakefield and Jones Lang LaSalle, the next biggest companies, which have now been relegated smaller by the merger. “Does Cushman & Wakefield sit tight, or do they try and react and do something else?” said Heller. “I wouldn t be surprised if they do something else.”

There was a period, right when The Staubach Company first started up operations in New York six years ago, when every time founder and football great Roger Staubach would show up in town from Texas, it would be an occasion for a photo op.

Now, however, the Dallas-based company has a strong foothold in New York and no longer needs to rest so squarely on the quarterback s laurels. In September, the tenant rep firm opened up its second New York office and has expanded to 55 employees. In a city where it is difficult for “outside” real estate companies to break in, the firm has even secured business from New York City and New York State itself.

In fact, it is partly Staubach s business with the city and the state that is helping it to thrive here, and branch out beyond tenant rep work. While corporate outsourcing, which has been a factor since the early 1990s, continues to grow, government outsourcing is an increasing trend. Municipalities and the federal government are increasingly following in the footsteps of U.S. companies in outsourcing their real estate needs.

“The municipal side is a fast-growing business for us,” said Peter Hennessey, one of the three managing principals who started Staubach s New York office, coming from Cushman & Wakefield. “We see a lot of potential growth.”

Staubach secured contracts with both the city and the state two years ago, which can be extended indefinitely through renewal clauses. The company handles a 4.5 million square foot New York State portfolio, and a 20 million square foot City of New York portfolio along with CB Richard Ellis. Staubach is also close to signing a contract for an 11 million square foot municipal portfolio in another state, and is trying to secure three other government projects totaling 20 million square feet. Around 8 to 10 percent of the company s business in New York involves this type of work, versus around 6 percent for Staubach as a whole, Hennessey said.

Hennessey said municipalities are outsourcing real estate functions because of decreasing tax revenues. As a result, many are cutting back on staff costs that occur behind the scenes cutting inter agency services rather than services that the general public sees, like garbage collection or police services.

The feds are getting in the mix, too. According to a recent story in The Wall Street Journal, the federal government is taking a hard look at its real-estate portfolio, which has an estimated value of $335 billion. Many departments and agencies are either selling unused space or forming public-private partnerships to make better use of their properties.

But John Davis, executive managing director of global corporate services at CB Richard Ellis, said there was still a long way to go in terms of getting government on board. “It hasn t been as broad-based as you d expect yet. In the U.K., for example, it s more aggressively done.”

In its work for New York State, Staubach had 75 days last year to complete a strategic study on 4.5 million square feet of space within the city. The goal was to come up with a plan for how space could be used more efficiently. “When we looked the portfolio, we found the rents they were paying were 15 to 18 percent below market rate,” said Hennessey. In order to keep overall costs at a static level, Staubach suggested that the state boost the occupancy of some of its buildings. “That way, when the leases came up for renewal at market rate, they wouldn t be hit with a sudden dramatic cost increase,” he said. The company also suggested a “universal space standard” for employees, which meant spaces for workers that were smaller(“not everyone liked that,” Hennessey said), but more efficient.

Doing deals for government is different than doing leasing deals for companies in the private sector. The government generally wants brokers not only to find them space, but also to provide a broad range of services, from architectural work to project management. By outsourcing the work to a private company they can avoid having to go through time-consuming public processes.

Listing inventory in Manhattan has been on the decline for six consecutive months, a recently released report said.

In the third quarter, apartment inventory experienced a drop of 13.8 percent, a trend that has been gaining momentum, according to Jonathan Miller, president of the appraisal firm Miller Samuel Inc. and the author of the report, the Douglas Elliman Manhattan Market Overview.

Inventory in Manhattan dropped to 5,224 apartments in the third quarter, compared to 6,058 apartments in the prior quarter, and was down 4.4 percent compared to the prior year quarter.

Listing inventory had previously peaked in March of this year and has declined for each month since, including a 7.1 percent drop from August to September. “This percentage decline in listing inventory grew nearly every month during this period, seeming to gain momentum,” the report said.

David Michonski, chief executive officer of Coldwell Banker Hunt Kennedy, said his company s listing inventory was up 36 percent year-to-date compared to the same period last year. But it s still 10 percent below what it was by this time in late 1999 or 2000. Given supply and demand, that means prices will stay high, he said. “There is this perception out there that the market is weaker than it is,” Michonski said. “But (people) are going to be surprised because the inventory just isn t there.”

The Miller Samuel report also found that the average sales price of a Manhattan apartment crossed the $900,000 threshold for the first time ever in the third quarter, reaching $916,000. The jump was a six percent increase over the $864,860 average apartment price seen in the prior quarter, and an 8 percent increase over the prior year, the report said.

For the first time, also, the average price per square foot exceeded $700. At $704 per square foot, that average was a 6.8 percent increase over the prior quarter average of $660 per square foot, and up 8.8 percent compared to last year.

Median prices, however, were relatively unchanged. The median sale price (the exact middle of all sales) was $575,000, the same as the result in the previous quarter, though it was up 10.8 percent compared to last year. The lack of change in the median sales price is likely attributable to the relative stability of apartment mix and the surge in sales of luxury apartments, especially at the upper end, according to the report.

The report also found days on market reduced in the third quarter. The average days on market was reduced by five days to 137 days, compared to the prior quarter average of 142 days. The average listing discount declined to 3.8 percent from 6.5 percent in the second quarter, but was up from the 1.8 listing discount last year. The average days on market will likely continue to drop going forward because of declines in inventory, the report said. The same will likely hold true for listing discounts.

Ken Malian, senior executive vice president and sales director of Douglas Elliman s Tribeca office, said for all of Douglas Elliman s downtown offices – which includes up to Gramercy Park and Chelsea and over to the East Village – purchase amounts have been only 4 percent downward off the asking price. In Tribeca, final purchases have been just two percent off asking, he said.

Looking at different neighborhoods, the Miller Samuel report saw increases in price per foot in the east, west and downtown markets. The downtown market averaged $651 per square foot in the third quarter, a 2.2 percent increase over the prior quarter figure of $637. The east side market posted the largest gain, 7 percent, with $732 per square foot compared to the prior quarter average of $684. The west side increased 3.1 percent to $722 per square foot from the prior quarter average of $700.

Luxury market

The report also looked at the luxury market, defined as the top ten percent of all co-op and condo sales, finding that nearly all price indicators underwent double digit gains. The average sales price increased 13.6 percent to $3,461,532 from the prior quarter average of $3,047,690, and up 10.6 percent compared to last year s third quarter.

Median sales in the luxury market saw a similar pattern, rising 14 percent to $2,695,00 from $2,365,000 in the prior quarter and up 12.3 percent compared to last year. The average size of a luxury apartment in the third quarter, 2,702 square feet, was essentially unchanged from the prior quarter average of 2,692 square feet. This shows that the growth in price levels was not a result of larger apartments, as was seen in the prior quarter.

The average days on market stabilized for the third straight quarter, the report said. The length of time it took to sell an apartment held at 172 days, virtually unchanged from the 171 days seen in the second quarter and the 173 days in the first quarter of this year. The report also found that the average listing discount declined as market conditions improved. The discount dropped to 8.9 percent from the 9.8 percent seen in the previous quarter, still significantly higher than the 3.4 percent level seen last year during the third quarter.

Co-op market

In the co-op market, prices set records for the second consecutive quarter, the report found. The average sales price of a co-op rose 2.7 percent to a record $796,174, up from $775,052 in the previous quarter and up 9.4 percent compared to last year s third quarter. Average price per square foot also set a record at $660, up from $631 in the prior quarter. Median price reached a record high as well, increasing to $492,000 from $479,000 in the prior quarter, and up 15.8 percent compared to last year.

For the second consecutive quarter, supply decreased and demand increased for co-ops. The number of co-op apartments for sale dropped 17.1 percent, with 3,470 units in the third quarter compared to 4,185 units in the previous quarter. The current number is the lowest level of co-op inventory seen over the last year. As listings inventory declined, the number of sales rose to 14 percent over the previous quarter and up 4.2 percent over last year at this time. The number of sales, 1,524 units, was the second highest quarterly average in more than five years. It took 137 days, or nine fewer days than last quarter, to sell a co-op apartment.

Condo market

In the condominium market, average sales price and average price per square foot were at record levels. The average sales price increased 10.4 percent to $1,147,055 from $1,039,331 over the prior quarter and up 6.5 percent compared to the third quarter last year. The current average price per square foot was $789, up 10.7 percent compared to last quarter. The median sales price increased 1 percent to $767,500. Sales surged 12.2 percent, with 800 units compared to 713 the quarter before, and inventory was down 6.4 percent. The greatest gains were seen in the entry-level market, with the average sales price of studio and 1-bedrooms increasing 27.4 percent and 12.1 percent respectively over the prior quarter. The average days on market held at 137, two days longer than the prior quarter.

Forget “Manhattan to Montauk.”

How about “Park Avenue to Palm Beach to Peconic Bay?”

The Corcoran Group is branching out to Palm Beach and the Hamptons in hopes of capturing more buyers in the second home market.

NRT Incorporated, Corcoran s parent company, bought Cook Pony Farm Real Estate in East Hampton and Paulette Koch Real Estate in Palm Beach, Fla.

Both companies signed an agreement last month merging their operations under the leadership of Corcoran. The acquisition of Cook Pony Farm brings to an end a 50-year-old real estate firm, which has 160 agents and 10 offices on both forks of eastern Long Island. A recent report by Suffolk Research Service Inc. showed Cook Pony Farm as having the most sales in the Hamptons during a nine-month period from July 2002 to February. Paulette Koch Real Estate has around 30 agents, and there are plans to expand that number by 20, according to Corcoran CEO Pam Liebman, who added that the new acquisitions will be fully integrated with Corcoran.

“We will have one company, one Web site, one leadership,” she said.

NRT, a unit of Cendant Corp. and the nation s largest real estate brokerage firm, has shown a voracious appetite for acquisitions since its entry into the real estate business in 1995, including the two recent purchases. In the past five years, NRT has acquired 50 firms per year and now is more than twice the size of the next largest residential brokerage, Minneapolis-based HomeServices of America. The company says it now has a hand in one out of every four residential real estate transactions across the nation.

Frederick Peters, president of Warburg Realty Partnership, Ltd., said the recent acquisitions appeared to make sense. “This is a logical extension of the [Corcoran] brand,” he said. “It s logical to extend it to where people from New York are going to be.”

He said Corcoran may have made a move in the Hamptons because of Douglas Elliman, whose reach now stretches to from “Manhattan to Montauk”, as its slogan says, following its merger with Prudential Long Island Realty earlier this year.

“Corcoran and Douglas Elliman have always been obvious competitors, ” said Peters. “With Montauk to Manhattan, Corcoran would want its own franchise.”

But Liebman said the deal had been in the works prior to the Prudential-Douglas Elliman merger.

“We started looking to expand quite a while ago,” she said. “This is about what s going to be best for the consumer.”

The National Association of Realtors reports that the second-home market accounts for nearly $50 billion in sales annually, a fact on which NRT and Corcoran have seized.

“We have found that a significant number of our New York City clients tend to gravitate toward the Hamptons and Palm Beach for their second homes, and in some cases, their third homes,” said Liebman.

Many of those second and third home buyers are baby boomers.

“Over the next 18 years, there will be $10 trillion in wealth transfer to boomers,” from the generation above it, added Bob Becker, president and chief executive officer of NRT. “We are extremely bullish.”

Both Melanie Ross, president and chief executive officer of Cook Pony Farm Real Estate, and Koch of Paulette Koch Real Estate company, will be vice presidents of sales for Corcoran in their respective areas.

Until he decided to sell his country home in the Catskills, Randy Florke had been perfectly content with his career as an antiques dealer in Greenwich Village.

Florke gave the listing for the historic home to a local broker in Sullivan County, but was surprised when the 22-acre property–which was photographed for Metropolitan Home– just sat on the market. Florke decided to put an ad for the $135,000 property in the window of his Greenwich Village shop.

A real estate career was born. “I got full asking price in cash in seven days,” said Florke, who proceeded to open up a brokerage, Rural Connections, in his Manhattan storefront to sell cheap fixer-uppers in Sullivan County, two hours from the city.

Thanks to the increasing popularity of the Catskills – everyone from celebs like David Bowie and Moby to the model Giselle Bundchen have moved in recently, along with New Yorkers fleeing from the Hamptons business is booming.

Florke s company sells around 15 homes a month, not bad for only six agents “I sell about 90 percent of the property myself,” adds Florke. The median price in the area has jumped from $150,000 five years ago to around $250,000 today.

“It s been good now for around five years,” he said. “There s been so much publicity and exposure. Also, since Sept. 11, people have been more interested in getting outside the city.”

Florke s competitive advantage, of course, is that he is able to access New York buyers in a way that companies in the Catskills can t. He gets plenty of business as a result. “All the key brokers up there, if something comes up, they call me,” he said. “They know it s better to get it quickly off their plate.”

While Florke has experienced success, other Manhattan brokers aren t following him, he said, though agents at top companies provide referrals.

“Physically, its too far,” said Flocke, who drives up to show homes every weekend and once or twice on the weekdays. “It s the same reason I only specialize in one county and don t sell apartments in Manhattan.”

Florke said most of his clientele are people who want a bigger place in the city but can t afford it. Instead, they decide to buy a country home.

“Eighty percent of people who walk through my door want something larger in Manhattan, but have been priced out of the market,” he said.

Jeffersonvillle, Callicon, Narrowsburg and Livingston Manor are among the most popular areas in Sullivan county. (Ulster, Delaware and Greene counties make up the rest of the Catskill region). New Yorkers are drawn by the rolling hills, farmland, quiet lakes and rivers, and sleepy, charming towns. “There is also a wonderful community spirit that everyone enjoys,” said Phyliss Chock, a broker at Stone Realty in Roscoe, who moved to Sullivan County from Manhattan 20 years ago. Chock said that far from being isolated at their country homes, many weekenders get involved in such activities as farmers markets in the area.

Chock believes that three years ago marked the beginning of a major influx of city dwellers into the area and helped contribute to a “great renaissance” in several towns. “It happened for a number of reasons,” she said. “There was a lessening of inventory in Orange County,” that forced people farther out into the country. “A lot of people just got sick of the commute to the Hamptons,” she said.

Chock also said that an incredible 90 percent of her overall business comes from the New York City area, as well as a percentage from New Jersey. “And I think that s true of most brokers here,” she said. Locals “do not buy at the same price levels or volume as people in New York,” she added. She said that brokers in the area don t “experience co-broking on any major scale from New York City.”

Growth that the area has experienced largely come through word-of-mouth. “Friends decide to visit their friends who already own here, and they end up buying themselves,” she said. The Internet has also helped, said Chock, though some agents have been slow to adopt technology.

Chock estimates that prices have risen some 20 percent in the last year alone, and it s getting harder and harder to find bargains. “We don t have that much of an inventory market right now,” she said, adding that homes in the $75,000 to $200,000 price range are particularly scarce. “There is less available in the low-end market,” agrees Florke. “Lots of New Yorkers bought that stuff.” Chock also said that the publicity the area has received has caused some sellers “not to price realistically.”

Florke maintains that the current interest in the area is not just a fad that will fade away. “There is a base there and there is a critical mass and it will never go backwards,” he said. “Even if the economy takes a nosedive, it s still the most affordable area two hours from the city. The places that get hit hardest in a bad economy are the tony areas.” He added, however, that the area could be hurt if apartments became so affordable in the city that people wouldn t be looking for extra space in the country.

As far as working as a broker in the country, Florke, who grew up in Iowa before moving to New York to work as a model, acknowledged that it isn t for everyone. “You have to know about construction and renovation,” he said. It also helps to identify with the locals, he said. Florke calls himself “just a dirt farmer from the country.”

Florke carries that country attitude to his New York offices. “I ve kept it pretty small,” he said. “I ve got a window and an office on Perry Street. It s not slick.”

The kitchens and bathrooms may be state-of-the-art. The views may be terrific and the on-site amenities plentiful, but if that high-end condo you are marketing today doesn’t offer spectacular services, it’s going to be a hard sell.

With new developments like One Beacon Court, the Ritz-Carlton at 50 Central Park South and the Residences at Mandarin Oriental in the Time Warner Center, set to open by Thanksgiving, the bar has been significantly raised for high-end condo living.

On-site hotel-style concierge service in particular — allowing you to call from the airport to have food waiting for you, have the beds turned down or the apartment cleaned — will be the new gold standard.

At One Beacon Court, part of the development being completed on the old Alexander’s store site on the Upper East Side, prices will top out at $26 million, and residents will have access to full concierge services. “The concierge will go the extra mile for you, which means if you want theater tickets or to throw a birthday party for your 16-year-old daughter, they can organize all of it,” said Rosita Sarnoff, a senior vice president at Stribling & Associates. But she said it’s the 65 units above the Mandarin Oriental at Time Warner, which will share services with the most expensive hotel built in the city in the last decade, that will be “above all else.”

“You’ll have hot and cold running service,” she said. “You’ll have every amenity that you would have in the top hotel in the world.”

Part of the reason for providing the hotel-style services is that residents at top buildings are also likely to have homes elsewhere, and are constantly on the move.

“Frequently it’s one of several residences for the owner, and people are looking for service because they don’t want to do everything themselves,” said Hall Willkie, president of Brown Harris Stevens. “If it’s a part-time residence, they are going to want these services which have typically never been available in a residential condo building before.”

Many of these concierge services and access to personnel are included in the common area charges, but Willkie says, “the man standing behind the desk doing the calling for you is included, but if a maid comes to clean that is an extra charge, as are any tickets or services the concierge arranges for.”

High-end amenities don’t end at concierge services, of course. Indeed, in today’s condo market, everything from technology to gyms to high-end appliances are also an absolute requirement.

“All luxury condominium developments today have those amenities; they are necessities, not luxuries, in today’s buildings,” said Louise Sunshine, Chairman and Chief Executive Officer of the Sunshine Group.

Willkie said brokers would find it difficult to do deals in a particular building without these amenities. “If they aren’t there, brokers would lose out,” he said.

Technology is one key amenity that makes an apartment easier to sell. Sarnoff said the Time Warner Center is an “ultra-smart building, which means it’s wired for everything.” Features include a special internal TV service. Sunshine points out that condo owners will also have the technology to broadcast from their own apartments, meaning, for example, that a diplomat could broadcast a program back to his home country while sitting in his living room.

Ismael Leyva, residential architect for the Time Warner Center, included media rooms in many of the apartments.

“What I try to do is give the latest in communications to the apartment for the Internet and all the other services.” He counts “entertainment suites” and private screening rooms among the most highly desired amenities.

At One Beacon Court, the project on Lexington and 58th Street, Sunshine said the technology being provided by Sony is “far above what developers used to do.”

Other amenities serve as a way to allow owners to extend their living spaces outside the limits of their own apartments, particularly through athletic facilities. Eric Ozada, a vice president at William B. May, harkened back to the opening of The Promenade on East 76th Street back in 1988, when it was one of the first residential buildings in the city to offer the kinds of services that have since become standard. The building has a health club and a pool on the top of the building. Ozada points out that “very few buildings have pools located on the 38th floor because it is the most expensive floor and you need triple height for the pool because you need one floor to go below the pool level for the water.” A roof garden, children’s playroom, conference room and full health club are also open 18 hours a day.

In another project, Leyva is working on a building in the heart of the financial district which has enough athletic components to make it sound like it is shooting to be the next Chelsea Piers. “It’s a 400-unit planned conversion to loft apartments with bi-level high ceilings,” he said. “We are putting in a squash court, basketball court, climbing wall and a bowling green.” Those features don’t come cheap, however. “Not too many people have these amenities because you need double high ceilings for basketball courts” he said. The price range will not be as high as the Time Warner Center, Leyva said, “but it’s going to be up there.” The Time Warner Center itself will sport the city’s largest hotel spa; a 14,000 square foot facility spread over two floors.

Other amenities found in the city’s top apartments can help insulate residents from the insecurity of the outside world. The threat posed by failing power grids and citywide blackouts are considerably lessened at the Time Warner Center, which has its own generator. “People have definitely been asking about that,” said Sarnoff.

At the Promenade, “Whenever there is a strike by workers, the building signs a statement that whatever the workers and the labor union agree upon, it will be accepted, so the building never faces a strike,” Ozada said.

While most amenities enhance quality-of-life in one-way or another, some appear perhaps a tad frivolous. Douglas Wagner, president of Benjamin James real estate agency, points out several high-end amenities, including “electric towel warmers, heating and cooling systems that you can call in and adjust from your cell phone, and faucets over the range so you can fill your pasta pot with out having to move it off the burner.”

Will these features increase the value of an apartment? Probably not, said Sarnoff.

Kitchens are another story. Even if they never set foot in the kitchen or know how to boil a pot of water, many owners still want the best. “People love high-end kitchens,” said Sarnoff. “They may never use them, but they love the idea.”

Condominium buildings with high-end amenities and services are no longer exclusive to particular sections of the city.

“New York is changing and because there are no empty lots anywhere, most new buildings are being built in locations that at one time weren’t considered so fine,” said Willkie. “The Time Warner Center, for instance, is on Columbus Circle, but none of us ever thought you’d want to live on Columbus Circle.”

With all the high-end amenities offered by recent condo developments, where does that leave co-ops? Most brokers say that’s comparing apples and oranges. “The most prestigious, most valuable spaces in New York are the big old co-ops, but that is a different market,” said Willkie. “That is more primary homes, where the financing and everything is very controlled. In a condo, you are buying real estate, you can leverage it, you can let your daughter stay there, or you can rent it.” Sarnoff said that you won’t get the same sort of hotel-style concierge services in a co-op, but adds that of course people are still “looking for an address, a brand, the large rooms and the prewar detail of Fifth Avenue or Central Park West.”

First, there was the buyer who produced an exhaustive list of two dozen questions after agreeing to a price for an Upper East Side co-op. Then there was the buyer who disappeared on two separate occasions one time for a week-long vacation on the day she was supposed to sign a deal.

Margaret Maile, a new agent at Corcoran, saw all types of buyers and sellers during her second month on the job. Her first deals as an agent came in a flurry – two signed contracts, a pending deal, and an exclusive – between early September and early October. All while trying to squeeze in time to work on her Ph.D. in decorative arts at the Bard Graduate Center on the Upper West Side.

The Real Deal is continuing to tell the story of Maile and two other new agents (Richard McDonough of Douglas Elliman and Leslie O Shea of Stribling Associates) as they get their start in real estate. This is the second monthly installment of their stories.

“I m on the phone until 10 p.m. at night with buyers and up at 6 a.m.,” Maile said of her busy schedule. “I m reading books for school on the subway and composing essays in my head.”

Maile s first exclusive, a one-bedroom co-op at 11 Riverside Drive, came courtesy of her mentor, after Maile did staging and arranged for repair work for the apartment. After an “ugly” bidding war, the apartment went for $350,000 in cash to a woman in her 70s who just had a stroke and was moving into the city to be closer to one of her children.

But Maile said it is the work she s done so far representing buyers which includes one signed contract that has really shown her how each deal is complicated in its own way.

After finding a one bedroom co-op on the Upper East Side for a single woman who recently got an MBA, Maile ran into problems. The woman had reached an agreement on price, but had then went on to draft an exhaustive list of 26 questions about the building. “If I went to the board or the managing agent, they might think she was trouble right away,” said Maile. The listing agent expressed similar concerns. Finally, the deal fell apart for other reasons, but Maile said she had to tell the detail-oriented buyer that “I thought condos were a better match. She agreed.”

Another of Maile s experiences with a buyer proved more successful, but no less complicated. The buyer “wouldn t answer phone calls” when she was supposed to appear to sign a contract for a 430 square foot apartment on East 50th Street and 2nd Avenue, then later calling to say the apartment was too small. She then made a successful offer on a bigger one-bedroom apartment on East 82nd Street, only to disappear for a week of vacation. “I felt humiliated the first time she did it,” said Maile. “I thought, if she does this again ” But the buyer finally “got courage” and signed a contract for $350,000. Maile also has a pending deal for a one-bedroom apartment at 93rd Street and Riverside and an exclusive listing for an apartment in the Bromley at 225 West 83rd Street.

“I m learning things for sure,” said Maile. “I m seeing that each deal is unique. I m also surprised how much flux there is. One day you might have three deals and the next day two fall through and the next day you have three again.”

Leslie O Shea, a New York native who decided to switch to real estate after a career in marketing, was benefitting from her extensive social contacts during her first full month on the job at Stribling & Associates. By early October, she had undergone a month of one-on-one training at the company and was closing in on her first exclusive. The prospective seller was a friend of O Shea s who she met at a backgammon tournament at the University Club two years ago. The pair have been friends since, and O Shea recently learned the friend was mulling over a job transfer to her native country. Intense talks ensued – “we talked 15 times over the weekend” and O Shea sent out a listing contract for the friend s Upper East Side apartment on the day she sat down for an interview. O Shea faces competition from a broker at a another big name firm who “owns the building,” but O Shea thinks she has the upper hand. “This other broker has really been after her,” she said. “But I think I won her trust.”

O Shea is also currently working on behalf of five buyers, three of which she knows through social connections a friend who is the CEO of a medical device company, a couple she met up with at a dinner party recently, and another friend in public relations, who was in the process of getting a job to work for Dick Grasso just before his recent resignation as chairman of New York Stock Exchange.

O Shea, who is also planning a series of dinner parties and cocktail parties this fall to let people know that she is working at Stribling, said she feels more comfortable working with people she knows. “People who know me, trust me,” she said. “I tend to serve as a confidante.”

Richard McDonough, who gave up a nearly two-decade career as an operations manager at Bloomberg LP to become an agent at Douglas Elliman, said he was thrilled to be done with his old 9-to-5 routine.

“People say I look happier,” said McDonough, who finished his company training in late September. “I don t bite my nails anymore.” Since he now has time in the morning, McDonough recently signed up as a class parent for his son s kindergarten class. He also recently conducted business while driving down I-95 in a convertible on his way to Florida (he was driving his mother s car home to her). “It s great that if you plan ahead you can take a chunk of time to do something. And I m more productive now,” because he is creating his own business rather than waiting for someone to hand orders to him.

McDonough recently landed his first exclusive, for a one-bedroom rental on West 72nd Street, as a result of a referral from a friend. “Even though it s not a sale, it s good practice for a sale,” he said, adding that this will be the first time he will put together a listing and schedule an open house. When that first sales exclusive comes, McDonough, who served on his building s co-op board for two years before becoming an agent, said his experience will help him get people in a building. “I can answer, How will they look to the board? ” he said.

McDonough is also searching for apartments for a number of buyers, and “almost went all the way” in early October. A couple with children put down an offer for a two-bedroom co-op on Sutton Place, making it to the best-and-final offer stage before losing out. Telling the family they lost “is the worst call you have to make,” said McDonough. “Now, we ll take a couple days breather and start fresh.”

In 1999, local preservation groups in Carnegie Hill rallied against the construction of a 17-story apartment tower over a Citibank branch on Madison Avenue and 91st Street.

Among the residents affected by the proposed new development was Woody Allen, whose garden behind his townhouse would likely have been cast in shadow by the new building. During several rounds of hearings by the Landmarks Preservation Commission, which included a short film by Allen on behalf of the cause, the building s height was reduced to 10 floors.

Now, Allen and the building are parting ways. In September, the director put his massive Carnegie Hill townhouse on the market for a whopping $27 million, nearly twice as high as the second-priciest property for sale in the area. The double-wide townhouse has 22 rooms and six bedrooms over five floors.

Meanwhile, the once-disputed condominium at 47 East 91st St. is nearing completion. \”Occupancy should be in around eight months or so,\” said Daniela Kunen, a managing director at Douglas Elliman. The new building has full-floor apartments with five bedrooms, with prices starting at $5.4 million and going up to $14.5 million for the penthouse duplex.

While Kunen said the 10-story building is \”going to be low\” and that the style is \”in keeping with the 1920s prewar charm in the area\”, the debate that previously surrounded it highlights many of the fundamental qualities of Carnegie Hill, one of the city s most expensive communities. (Other recent projects include The Gatsby, at 96th Street, finished last year, and The Metropolitan, which is being completed at the eastern edge of the neighborhood.)

Carnegie Hill is roughly bounded by 86th and 98th Streets, and Fifth and Third Avenues, and features a low skyline with lots of light. Its village-like feel makes it \”more of a neighborhood than any other area in Manhattan,\” said Kunen, who has lived and sold real estate there for the last 22 years.

\”Once you get there, you feel you re away,\” said Pamela Barnes-Moses, managing director of Corcoran s Carnegie Hill office. \”You don t feel the hubbub of downtown.\” Others say the area s \”old-world feeling\” makes it \”a bit like the Left Bank.\”

The area, above all, is a family neighborhood. There are many public and private schools, including the highly ranked P.S. 6, Spence, St. Bernard s, Dalton, Nightingale-Bamford, the Convent of the Sacred Heart and St. David s. Barnes-Moses said the most demand for apartments in Carnegie Hill comes from \”the 35-to-50 year-old group who have expanding families,\” a slightly older group than the average family in the city. That s likely a result of the higher prices for apartments in the area.

Not that there are many apartments to choose from. Cornelia Zagat Eland, executive vice president for sales at Stribling & Associates, said inventory for family apartments is currently very low. \”You can count it on one hand,\” she said. \”There is just not the inventory to meet the need.\” For the small number of apartments that are being sold, some of the prices have been \”sensational,\” she said. \”These are family apartments, not necessarily grandoise and still needing work, and they have gotten astonishingly high prices.\”

Barnes-Moses pointed out that for a while, some categories of apartments were sitting on the market, but that has changed. \”For a while, estate sales were sitting nine room apartments where everything needs work,\” she said. \”In the springtime, things started to get busy again. We had such a busy summer.\” Now, \”if it s priced properly, it s sold right away,\” she said.

Kunen said the average price going east from Carnegie Hill, from Third Avenue or so, currently ranges from around 800 to $1,200 a square foot. Inside Carnegie Hill, she couldn t provide an average, but said two examples were representative. One was a 3,200 square foot apartment on Park Avenue in the 90s that was in poor condition and requiring gut renovation 90s that sold for $3 million, or $937 a square foot. The other was a 3,800 square foot apartment in good condition on Park Avenue in the that went for $5.8 million, or $1,526 per square foot.

The average size of an apartment in the neighborhood is between 2,000 and 3,000 square feet, because many apartments were built in the 1920s at a time when apartments were in more direct competition with townhouses as a place for the wealthy to live. The area has been a prime spot for the well-to-do since the days of Andrew Carnegie, who gave the area its name. Carnegie built a 64-room brick and limestone mansion at the corner of 91st Street and Fifth Avenue in 1902, which is now the Cooper-Hewitt museum.

Two new projects, both condominiums, are now being completed in an area that lacks for them. 47 East 91st St., which was scaled down after community concerns by Allen and others, is a needed addition to the neighborhood, said Eland. \”There is a place for that kind of thing,\” she said, saying it would serve buyers with big incomes who don t necessarily have the assets to pass co-op boards in the area.

Another project, The Metropolitan, is being completed at 90th Street and Third Avenue. The 32-story building is \”selling quite well,\” Barnes-Moses said.

While the project, which includes one-to four-bedroom apartments, is being marketed to families, agents seemed divided about whether families will make up the bulk of buyers there. Barnes-Moses said two recent deals included a wealthy couple from out-of-state buying a pied-a-terre there, and a young man who bought an apartment.

The quiet neighborhood has a mix of sophisticated restaurants and informal places that welcome kids, as well as plenty of baby shops and other retail. Doing errands is perhaps more social than the rest of the city. \”The shopkeepers know everyone,\” said Kunen. It s also not uncommon to run into celebrity residents like Paul Newman, Bette Middler Kevin Kline, or even Woody Allen – at least as long as his townhouse remains on the market.

It s possible residential real estate may be an unintended target of Do-Not-Call legislation, but trade organizations like the Real Estate Board of New York are advising members to abide by the regulations.

After nearly two weeks of court-ordered delays, the Federal Trade Commission began taking complaints earlier this month from people who have placed phone numbers on the national Do-Not-Call registry.

The plan went in to effect 11 days later than the FTC had hoped to begin enforcing its anti-telemarketing registry because it was blocked by a series of federal court decisions.

Under the regulations, telemarketers and other sellers now risk a fine of up to $11,000 for calling a number on the list. Additionally, sellers must update their registry every three months and synchronize their calls with that list.

Since business-to-business phone calls are exempt, the new rules have not been a concern for cold calling in commercial real estate. But residential real estate, and unsolicited calls to FSBOs, are being affected by the new regulations, said Michael Slattery, senior vice president for research at REBNY.

Slattery said Do-Not-Call regulations appear to apply to for-sale-by-owner calls because “the fact that someone is selling a house, it may not mean that they want further services.” Even if the phone number is publicly available, Slattery said, it still could be covered under the new regulations.

Calls may be exempt, however, if an agent is calling on behalf of a specific buyer. “If you are calling because you represent a potential buyer, it would probably be an acceptable phone call,” he said.

Neil Binder, principal of Bellmarc, thinks the law might not even apply to residential real estate at all in terms of FSBOs, but is waiting for clarification from the courts.

“I m not sure our industry is covered under the regulations,” he said. “The intent was to prevent unsolicited cold-calling. But if you are putting out your property for sale, the mere fact that you put out an ad creates a distinction.” Slattery said other REBNY members have also pointed out they think the regulations are aimed more at “frivolous calls” for magazine subscriptions and similar solicitations.

Arguments on the constitutionality of the regulations are scheduled in federal court on Nov. 10. Although a final legal resolution may not come for some time, the FTC has indicated it will aggressively carry out enforcement.

Slattery said many agents expressed concern about mistakenly calling someone on the list and running afoul of the new rules.

“There has been a lot of concern because people don t want to be in noncompliance,” he said. “There are pretty hefty fines for repeat violations.”

But he said the fines are not geared to “inadvertent calls, but rather to those that flaunt the list. As long as you demonstrate a procedure for checking against the list, you should be OK,” he said.

In downloading the registry from the FTC s Web site, data for five area codes is available for free, and beyond that there is a $25 charge per area code.

Calls exempt from the registry for a specified period of time include situations where a company has already established a business relationship with the person they are calling. “If you have a prior business relationship, that gives you 18 months leeway where you can continue calling,” said Slattery. If a consumer makes an inquiry or submits an application to the company, the company can call for three months.

As far as calling people who have signed up for the list but have not yet appeared in registry, Slattery said the FTC has been “good about telling people there is a wait.”

In addition to potential fines, what affect the new regulations will have on the bottom line of companies remains unclear.

“I don t have a sense that it will affect the level of business activity the industry is engaged in,” said Slattery. “But firms will have to implement a set of controls.”

Binder said Bellmarc pursues FSBO business, but he couldn t estimate how much revenue it brings in.