Residential trends vary by nabe, panelists say
May 28, 2009 12:00PM By Sara Polsky
Clockwise from left: Joseph Moinian, Sam Chandan, David Von Spreckelsen, Robert Levine, Jeffrey Levine and David Lowenfeld spoke at the New York Real Estate Summit yesterday."We have found a difference in neighborhoods in terms of closings," said Robert Levine, president and CEO of RAL Companies & Affiliates, at a residential market panel at yesterday's New York Real Estate Summit, hosted by The Real Deal columnist Michael Stoler. The Real Deal was a sponsor of the event.
In Chelsea, Levine said the buyers are more "viable" than in other neighborhoods. RAL's Loft 25 project was already priced low compared to neighboring properties, Levine said, so RAL Companies has had no difficulty closing deals. The Upper East Side, where RAL's projects include the New Yorker condominium at 1474 Third Avenue at 83rd Street, has been the company's most challenging neighborhood in terms of sealing deals.
The company has had less trouble in Brooklyn. At RAL's One Brooklyn Bridge Park in Brooklyn Heights, about 90 of the 126 units in contract have closed, another 20 may fall through, and the remaining condo unit buyers are trying to renegotiate, Levine said. The units are selling for an average of over $1,000 per square foot, he said.
Another panelist, Philip Eisenberg, CEO of New Jersey-based Urban American Management, shared the view that the Brooklyn market has remained relatively stable. And in the Bronx, the company's properties have vacancies, but only in units that are awaiting rehabilitation. In Queens, on the other hand, rents have fallen 10 to 15 percent, and to close deals, the company is paying broker fees and offering a month's free rent, he said. Eisenberg did not identify specific buildings.
In Manhattan in particular, buyers are focused on negotiating prices, said David Lowenfeld, executive vice president of World-Wide Holdings and developer of a school and residential project at 57th Street and Second Avenue. Lowenfeld said he met with a number of buyers at the building, where units average $1,850 per square foot, who wanted to revisit the closing price of their unit.
At another development, Toll Brothers' 303 East 33rd Street, negotiation-minded buyers have come into the sales office with offers 70 percent below asking prices, said panelist David Von Spreckelsen, a company vice president.
"They're not really that serious," he said. "We don't get to the point of qualifying them."
On the flip side, overvaluation is a danger in Midtown Manhattan in particular, said Sam Chandan, president and chief economist of Real Estate Econometrics, who spoke on another real estate summit panel yesterday.
"As we approach the peak of an asset price cycle, there is a far greater likelihood that you will overpay for your assets closer to the center of the city," he said.
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Comments
Anonymous
Why would you pay for something today that you know will be worth less tomorrow?
Comment #1 Posted By: Anonymous 05/28/09
Anonymous
Spreckelsen, the Toll Bors. guy, will wish he would have taken those 70% off offers when he had them.
Comment #2 Posted By: Anonymous 05/28/09
Anonymous
because #1 in a year it will most likely be worth much more than today.
Comment #3 Posted By: Anonymous 05/28/09
Anonymous
Which year do you mean? 2020?
Comment #4 Posted By: Anonymous 05/28/09
Anonymous
I think he means 2035
Comment #5 Posted By: Anonymous 05/28/09
Anonymous
No Jobs = No Mortgage = No Sale = Lower Property Values
Comment #6 Posted By: Anonymous 05/28/09
Anonymous
What nonsense! What is Lowenfeld talking about? There is no building at 57th and second! The school still needs to be torn down. There have been NO SALES! Who is paying $1,850 and asking for renegotiations? My guess is that they are referring to 255 East 74th Street. Very different project. Nonetheless, very poor reporting on Real Deal's part.
Comment #7 Posted By: Anonymous 05/28/09
Anonymous
Von Sprinkles ran out of pixie dust years ago to get sales. 303 East 33 is picking up where the Charleston barely left off and there's no market left in that location. Murray Hill is not destination residential for sales. Just ask the Jasper.
Comment #8 Posted By: Anonymous 05/28/09
Anonymous
303 East 33 is destined to be an albatross
Comment #9 Posted By: Anonymous 05/28/09
Anonymous
its all about quality residential product in Lincoln Square- values will hold better than the rest of the markets surrounding
Comment #10 Posted By: Anonymous 05/28/09
Anonymous
Anyone who ever went to Lowenfeld's sales office wishes they could "revisit" their decision to go there in the first place.
Comment #11 Posted By: Anonymous 05/28/09
Anonymous
#1- continue to rent, see how far that gets you
Comment #12 Posted By: Anonymous 05/28/09
Anonymous
The issue is not how many condo contracts fall out when looking at One Brooklyn Bridge, but rather how many remain unsold. That property is NOT selling at $1,000 psf. The only people who bought at that number entered into contract awhile ago. Those people entered with the grand illusions of the park etc- all of which remains a pipedream. why interview these guys? What else are they supposed to say other than "things are not great but we are moving product wo taking big cuts" All bs- they are getting crushed
Comment #13 Posted By: Anonymous 05/28/09
Anonymous
#12 - this just in... 0% of renters are underwater in their rental.
Comment #14 Posted By: Anonymous 05/29/09
Anonymous
#14- BREAKING NEWS- 100% of renters piss money down the toilet every month (and for an extra kick in the teeth, they get no tax advantage)
Comment #15 Posted By: Anonymous 05/29/09
Anonymous
I sure would rather spend $48k a year on rent than buy a place and lose 35-50+% on an apt! Plus don't forget when you buy a place and most likely using leverage to do it, which means that you owe on borrowed $, not a good thing as shown by the collapse of the market.
Comment #16 Posted By: Anonymous 05/29/09
Anonymous
#14- if renters are p--sing away money then what do you call payments for common charges or maintenance? Renting for $2,500 to $3,000 is an option many versus putting down $200,000 andy paying $2,500 month for RET and CC/Maintenance. Buying is typically a better option when you have a cash and you apartment retains or increases in value. You show me more than a handful of buyers who were able to protect their equity
Comment #17 Posted By: Anonymous 05/29/09
Anonymous
I'm with #13 on calling Levine's bluff - I've watched this building pretty closely and they've closed more like 75 units, maybe 85 if you throw in a few parking spaces... I believe there are 438 real units, so 438 - 75 = 363 or 83% to go... Nice monthly nut to cover the common charges and PILOTs on those puppies, plus the commercial units, while he waits - let's see how those $50/sqft rentals work out for ya.... Plus it was the BQE side and lower floor stuff which was finished pre-Lehman so it's the contracts on the expensive stuff that aren't performing. I'm also hearing that the construction loan wasn't extended for the 2 years that Levine keeps citing in the press, but 1 year which takes him to 1 Mar 2010 - tick tick tick...
Comment #18 Posted By: Anonymous 05/29/09
Anonymous
I look around at all of these new condos completed 2006-2008 and the retail space is empty in 90+% of them, That's got to be a big financial burden to the developers! They are hurting don't let them fool you.
Comment #19 Posted By: Anonymous 05/31/09
Anonymous
If you want the best deals now look at units owned by the seller for more than 5 years. They typically can tke a much lower price and still come out with a profit. At least for now that is... New construction developers and recent buyers are loathed to price below a profit margin. Why should you pay for thier mistake!
Comment #20 Posted By: Anonymous 05/31/09
Anonymous
I have a friend who live a ONe Brooklyn Bridge..she says only about 70 families at the most live there and if you include the combined units even less. She said people have to be crazy to buy into her building when it will most likely go bankrupt and then they will be able to buy during the firesale!
Comment #21 Posted By: Anonymous 06/01/09
Anonymous
to my renting friends (#1, 12, and even #17 who likely gets that buying makes sense). it's primarily a question of a) how long a hold period and b) buying right. eg, $4k/mo x 5 yrs = ~$250,000 in rent. ouch, and add $50k/yr. will you rent forever? so, b) buy right. negotiate the price, and of course, just like the stock market, r.e. prices will come back. like warren buffet says, bet on america
Comment #22 Posted By: Anonymous 06/03/09
Anonymous
#22 you are so right. Who are the people here? - they seem to be like a separate segment of the population - bacause the people I meet in the business - the sellers and buyers , seem to have a whole other philosophy.
Comment #23 Posted By: Anonymous 06/04/09