Montauk: Surf Lodge's spillover effect
Montauk brokers say interest from trend-seekers could help blunt slowdown
August 01, 2008 12:57PM
By Gabrielle Birkner
Joan Hegner of Corcoran said the Surf Lodge could draw buyers from other parts of the Hamptons.
The phenomenon that is the Surf Lodge — a new hotel, restaurant and bar that is bringing young professionals to the South Fork's easternmost enclave — could prove to be a boon for the Montauk real estate market.
Some East End brokers say the venue, which was written up on the front page of the New York Times' Sunday Styles section last month, is bringing a new generation of prospective entrepreneurs and summer residents to Montauk, a community that prides itself on being more rustic, laid back and affordable than its neighbors to the west.
Backed by a group of five investors and transformed into an upscale space with chef Sam Talbot of reality TV fame heading up the kitchen, the Surf Lodge has already established a reputation as this summer's Hamptons seen-and-be-seen hangout.
But now, many brokers are wondering what spillover effect this trendy new nightspot will have on Montauk real estate values. Some say new interest from buyers could help blunt the impact of the downturn in the market.
"The success they're having this dramatically, this early on, is going to attract new investors — no question about it," said Joan Hegner, a senior vice president at Corcoran who works out of the brokerage firm's Montauk office.
A residential rental broker for two of the hotel's investors, Hegner said that she has already been approached by Surf Lodge patrons who have expressed interest in buying in Montauk.
She said sales at the highest and lowest ends of the residential market in Montauk — properties being sold for more than $5 million and those with mid- to high-six-figure price tags, respectively — have been strong. However, sales of homes listed at between $1 and $5 million, and especially those in the $1 to $2 million range, have suffered in the past year amid the downturn in the
housing market.
"There is much more inventory than there was last year, and there have been a lot of price readjustments," she said.
She noted that the current climate could very well prompt more residents of
ritzier Hamptons communities to come to Montauk in search of housing deals. In addition to the softening market in the Hamptons, prices in Montauk tend to be significantly lower.
"It's an exciting time," said Kathleen G. Beckmann, a veteran real estate broker who owns an eponymous Montauk-based firm. "Surf Lodge's club atmosphere is bringing a new clientele to town: younger people who are finding and falling in love with Montauk. Some of them will become buyers."
A partner in Surf Lodge, Steven Kamali, predicted that the Surf Lodge would also bring to Montauk "an uptick in commercial sales and retail development." He added, "Any time you create something unique, you inspire others to follow suit."
Kamali's fellow investors are Robert McKinley, Jamie Mulholland, Jayma Cardosa and Steve Kasuba; these backers are also behind the Cain and GoldBar clubs in Manhattan.
Retail leases in Montauk range from $25 to $50 square foot, according to brokers familiar with the commercial landscape there. By contrast, retail space can exceed $200 a square foot in the prime areas of East Hampton village, said Lee Minetree, a vice president at Corcoran.
The prospect of growth in Montauk's commercial sector, which already has a Calypso and several other high-end boutiques, has elicited skepticism from some locals who worry that their relatively tranquil community — there are no stoplights, or Starbucks — will go the way of flashier East End areas, explained Lexa DiSpirito, a real estate broker and a lifelong Montauk resident.
"Surf Lodge is attracting a different crowd," she said. "Different isn't bad — as long as people come here and appreciate it, and they don't chew it up."
DiSpirito, who works for the Tuma Agency —the real estate firm started by her father in 1952 — said the publicity that the Surf Lodge has brought to Montauk "comes at a very good time," given the downturn in the housing market. She said that Montauk's increasingly stylish status could help blunt the impact of the softening real estate market there.
"It's nice to see that there is new energy coming in, that Montauk is no longer the red-headed stepchild of the Hamptons," she said.
To be sure, the Surf Lodge is neither the pioneering nor the sole force that is transforming Montauk's image. In recent years, several other tired motel properties have been renovated and reopened as residences or chic hotel lodging: A portion of the former Panoramic View Hotel has been converted into two- to five-bedroom residences, with prices starting in the $2 million range; and the Shepherd's Neck Inn has been remade as the Solé East, a 67-room hotel with rates ranging from $240 to $600 a night.
Meanwhile Andrew Farkas, the department store scion who purchased the Montauk Yacht Club for $34 million in 2007, has already spent million of dollars refurbishing the 35-acre resort and marina. Also last year, a 5.6-acre portion of artist Andy Warhol's estate sold for $27 million, a record-breaking price for a Montauk residence, according to brokers.
The hype surrounding Surf Lodge and other developments in Montauk has been good for business, said an owner and the general manager of Solé East, David Ceva.
"It's bringing a lot of people who didn't even know about Montauk," said Ceva, who predicted that the hamlet's high-end hospitality industry would continue to grow in the coming years.
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Comments
Anonymous
what a load of bullshit, foreclosures are already taking place, price reductions of 30% on overpriced properties still do not sell. down the street from the surf lodge is a sign that states " almost bankrupt, 3 acres 1.35 million ". sam talbots restaurant is consistently late in paying vendors, and the horse tranquilzer wizard, special k, Kamali, will blow town immediately after labor day as will all of their chic customers. there are over 200 homes for sale on the montauk market and one hedge fund guy is finishing his oceanfront teardown with particle board and plywood. when the town's budget resets after september 30 you will hear the howling of desperate people willing to sell at prices not seen since 95 or just walking away. montauk became a ghost town again last winter and this year will be much worse. send your idiot reporter back out in a month and have him ask a few of the drunks at trails end about their newly discovered fabulousity instead of the fatuously self promoting real estate agents. sales at white's liquor store are strong, just ask David Ceva and Kathleen Beckman.
Comment #1 Posted By: Anonymous 08/05/08
Anonymous
by the way, those condos at the panoramic view are sitting unsold like stones with their home depot interiors and the myc continues to run prixe fee specials ala the shagwong and shagwong is winning.
Comment #2 Posted By: Anonymous 08/05/08
Anonymous
yes, the streets are paved with gold in montauk and it is only a matter of time before ralph, gucci, prada, vuiton and tahari snap up places surrounding pizza village, plaza sports, the dirty deli, and john's pancake house. i also understand that bergdorf's is taking over the montauk manor. all of this due directly to the opening of the surf lodge. thank you sweet jesus for sending us dipshits our savior dispensing red stripes.
Comment #3 Posted By: Anonymous 08/05/08
Anonymous
How can you publish this stuff with a straight face?
Comment #4 Posted By: Anonymous 08/06/08
Anonymous
Everyone just calm down and gather a little perspective. The Real Deal is a publication directed by Real Estate interests. The article is not supposed to reflect investigative reporting. Chill out. Enjoy the sea air. And try to stay off the hard stuff.
Comment #5 Posted By: Anonymous 08/06/08
Anonymous
John and Cindy are having a Bud sponsored fundraiser at Surflodge Labor Day. Paris said "see you there, bitches, it will be hot."
Comment #6 Posted By: Anonymous 08/07/08
Shelby
Calypso??????? are you for real. Even I know it is an outlet store for last years leftovers. Man are you real estate people desperate to completely sink the ship.
Comment #7 Posted By: Shelby 08/08/08
Moran
Every now and then one feels like they missed the boat because they didn't sell snake oil off the back of a waggon to everyone, but it feels good to walk down Main Street and laugh about the stupid litle things you messed up with. Love life and don't worry about the wanna bee Steve Rubells. Brian from Morans
Comment #8 Posted By: Moran 08/09/08
Anonymous
Good to see that people can read between the lines...wait until December when all these Wall Streeter see a big goose egg for a bonus! Considering the level of write downs these big firms have taken the bonus is a thing of the past for a few years. The brokers in Montauk are digging their own graves..stop drinking the kool-aid and get ready for a tough winter.
Comment #9 Posted By: Anonymous 08/19/08
embelan
I agree that the usual influx of $$$ from the bonus pool in not happening this year. People who hang at the surf lodge are going to be busy just trying to keep the shit they have and not even thinking about buying more.
Comment #10 Posted By: embelan 08/19/08
Anonymous
have you dudes tried surfing or yoga? Sure it's hype, but...chill, man...
Comment #11 Posted By: Anonymous 08/24/08
Anonymous
the greedy agents in Montauk "pocket" their listings, desperately hoping to sell them all themselves and don't cooperate with agents outside Montauk. Not only is that so 1960's, it's illegal and doesn't help sell properties. Maybe some day they will encourage other brokers and agents to sell their listings and business will get better and values will increase due to natural laws of demand.
Comment #12 Posted By: Anonymous 08/24/08
Anonymous
The Real Deal should now be asking the questions, will the faboulous owners be able to handle the mortgage payments during the 10 month off season, will the manager change her name from Summer to Winter, or Sand, or SoBe to reflect wherever she winds up next, will Sam make Montauk his permanent home because of all the fresh local fish, where have all the good looking people gone including the entire staff and when will this joke close for the sesason, why are home sales still stagnant in Montauk, why are local builders, tradesmen and landscapers competing for business in Riverhead, blah, blah, blah? Sometimes hype works, just ask all the real estate agents returning to their old restaurant and catering jobs, only to be told, sorry we are cutting staff as well.
Comment #13 Posted By: Anonymous 09/06/08
Anonymous
you should have seen the crowd out on friday night.....locals, drunk and in a fighting mood. Hell it looked like Liars.....Upscale after Labor Day...good luck
Comment #14 Posted By: Anonymous 09/15/08
Anonymous
Cannot wait for the 50% off Real Estate Sale.
Comment #15 Posted By: Anonymous 09/22/08
Anonymous
Please tell me you guys are immune from the volatile stock market. Tell me......................................................................................................please.
Comment #16 Posted By: Anonymous 10/10/08
Anonymous
Tomorrow we dump that cain. What has that old geeser and real estate agents got in common......................................................................................................... They both sound like Baghdad Bob......remember that fool.
Comment #17 Posted By: Anonymous 11/04/08
Anonymous
Well at least now that 7 Eleven is opening us poor people have a spot to hang and beg.
Comment #18 Posted By: Anonymous 12/08/08
Anonymous
surf lodge is covered in plywood, sam and special k blew, second house tavern closed without notice, harvest and ene off by 50%, rumors that shagwong will close for a month, cromer's to stay open year round, bye-bye,tuma real estate agency gone for good, million dollar listings quietly being offered for 100's of thou less if you hurry and bring all cash to the table, and that's for a motherfucking leisurama, property taxes through the roof but if we reasses, oh no mr. bill. after new years day, say hello to my little friend,the surf lodge's and bernie's spillover effect, wipeout
Comment #19 Posted By: Anonymous 12/29/08
Anonymous
Sounds like a lot of sour grapes by people who don't know Montauk, certainly don't love Montauk and could never afford to buy there. Too bad.
Comment #20 Posted By: Anonymous 01/02/09
Anonymous
Montauk is closed, a ghost town worse than ever but do not despair, the beautiful people will return by President's Weekend, their satchels filled with cash, to fight each other over summer rentals in anticipation of the Surf Lodge's grand reopening. Prices will double, maybe triple. Jamie, Special K, Summer and Sam will charter private helicopters to do a flyover and shower thankful locals with gold coins, redeemable for unlimited quantities of red stripes and red, red wine. Thank-you Sweet Jesus for letting Montauk catch this wave.
Comment #21 Posted By: Anonymous 02/02/09
Anonymous
Dark questions in Montauk? Will Second House Tavern reopen or default to Jimmy Hewitt? Will the Surf Lodge reopen or default to Jimmy Barnds? Will Gurneys be forced to cancel time shares and go on the auction block as investors scramble for any way out? Liquidation for the Montauk Manor, the Tower and Rough Riders as common charges escalate beyond owners ability to pay? The Beachcomber in receivership? Corcoran to close Montauk branch sending all agents scrambling to find new affiliation when Prudential is considering the same? Atlantic Terrace turning down an 11,000,000 all cash offer when 25,000,000 was dangled in their face by Prudential? Retail dead in the water as more new stores sit empty with not a prospect in sight? The total renovation of the Montauk Yacht Club for 40,000,000 with a budjet of 15 an hour, cash? Inlet Seafood asking 35,000,000? Welcome to Montauk circa 1993!
Comment #22 Posted By: Anonymous 02/07/09
Anonymous
To suggest that the Surf Club will drive real estate in montauk in the long term is absurd. People don't come to Monatuk for clubs and high end retail. They come for the beach and to enjoy the peaceful surroundings.
Comment #23 Posted By: Anonymous 02/15/09
Anonymous
Montauk's real estate market is on life support.The Tuma Agency has closed and currently there are 12 retail spaces sitting empty around main street. The Surf Lodge is struggling to make their monthly payments while swathed in plywood since october. Mr. Drexler would be lucky to get half of what he paid for the Warhol place if he wanted to sell now. The Panoramic has managed to move only a single unit. What a difference from this frothy, stupid, self serving article.
Comment #24 Posted By: Anonymous 03/13/09
Anonymous
Why don't you ditch this entire article? Montauk is dead in the water. Farkas took a huge dump in his pants and Madoff's place on the ocean is worth only 3 million according to today's NYPost. Walkaways will become common this fall as many families will be spending their final summers here without paying the mortgage, landscapers, pool companies and housecleaners.
Comment #25 Posted By: Anonymous 03/14/09
Anonymous
The Panoramic is offering wedding packages complete with catering. Just what you want on your secluded beach every weekend for 2.5 million.
Comment #26 Posted By: Anonymous 03/30/09
Anonymous
God you people are so full of SHIT. To quote a Montauk resident 'We've priced ourselves out of our own town'.
Comment #27 Posted By: Anonymous 04/29/09
Anonymous
maybe we could skip a couple of mortgage payments to do some renovations.... where has all the money gone, long time passing, when will special k learn, when will they ever earn, while cyril turns and burns.
Comment #28 Posted By: Anonymous 04/29/09
Anonymous
People...the Surf Lodge with its $16 drinks is ridiculous in Montauk but it is here...for now. Eventually as is the way with most "trends", it shall move up and out. Anyone even drinking Starbucks anymore? In the meantime, the people (summer and all year round residents) who truly love Montauk will toil to stay and maintain what they worked so hard to find. It may sound like bullshit but I still believe in the fishing town that I have grown to love. One idea might be that if some stores (e.g. the bakery??) dropped their prices from the ridiculous, they would actually attract more customers. Love what Aqua just did with the $6 apps! Sensible and still great food. They'll get my business versus $4.50 for a cookie!
Comment #29 Posted By: Anonymous 06/08/09
Anonymous
Comment #30 Posted By: Anonymous 09/16/09