While a panel discussion hosted by Conde Nast Portfolio today had a far-reaching title, “The Impact of Today’s Economy on the U.S. Real Estate Market,” it mostly focused on the fate of two major West Side projects that developers Vornado and Related hold dear: Moynihan Station and Hudson Yards.
Steven Roth, Vornado’s chairman and CEO, did most of the talking at the Four Seasons Pool Room, and was joined by Stephen Ross, Related’s chairman and CEO, and superbroker Dolly Lenz, a Douglas Elliman vice chairman.
Earlier this year, Roth and Ross asked the Port Authority to provide funding for their joint proposal to transform Penn Station into Moynihan Station. And last month, Ross’s Related beat out Roth’s Vornado for the winning bid to develop the MTA’s Hudson Yards.
Although Roth was in good spirits about losing the bid for Hudson Yards to Ross, his friend and rival, he joked about the project’s daunting future.
“Winning is defined in results 10 years from now,” He said. “[Ross] will do great; I hope he lives through it.”
The rail yards on which the planned towers will rise, together with the planned extension of the 7 subway line, will require $3 billion of investment and six years of work before ground is ever broken on the first building. Roth said that Related is one of the few developers with the ability to undertake such a large investment of time and money before reaping any returns.
Roth defended Madison Square Garden’s owners, the Dolan family, who were widely criticized for their decision to kill plans to move the arena across Seventh Avenue to make way for Moynihan Station. That decision has been a major headache for Related and Vornado, which plan to develop new office space around Penn Station.
“Dolan and MSG are not the bad guys,” Roth said. “They made a decision, because they saw that the government wasn’t stepping up [to help finance the project], or because funds were not available.”
Roth spoke about the rapid appreciation of retail rents on New York City’s most prized strips, saying that prices have risen to almost three times what they were four years ago on Madison and Fifth avenues’ prime Midtown sections.
The discussion ended with a question for Lenz about how high residential prices will go for trophy properties. Lenz said that the nation’s next home price record will “definitely be in New York,” citing units at 15 Central Park West with resale asking prices of $80 million and beyond — even one that was “quietly” marketed with a $150 million price tag.
Lenz expressed a bit of skepticism about the highest end of Manhattan’s market, calling such extravagant sales prices “like Monopoly money,” and describing an Upper East Side three-bedroom with an asking price of $25 million as “an alright apartment.”
She was also bullish on the Hamptons market, mentioning two homes selling there for about $65 million.
“They’re asking that high for off-water properties,” she said. “And they’re not even close to the water.”