The Real Deal New York

Ofer Yardeni offers grim prediction about NYC resi market

Stonehenge CEO says bubble about to burst; would "happily" short 57th Street if it were a stock
November 07, 2014 01:07PM

Don’t say developer Ofer Yardeni didn’t warn you. The Stonehenge Partners chief executive says  the residential market is a bubble that’s about to pop. 

“If real estate was a publicly traded company and I could short its stock, I would very happily short 57th Street,” Yardeni said at the New York City Real Estate Expo, according to the New York Daily News.

“The market there has stopped,” the developer said. “It hasn’t just declined 5 percent or 10 percent. It’s just stopped.”

Yardeni’s Stonehenge owns more than $2 billion worth of assets in the city.

The developer said that while luxury towers continue to sprout up, nobody is exactly sure if enough foreign investors will buy up the properties. Roughly 7,000 new luxury condos are expected to hit the market over the coming years, according to Corcoran Sunshine Marketing Group’s projections, according to the newspaper.

The developer also called the High Line “completely overrated” and said that new condo projects on the Upper West Side are struggling as well. [NYDN] — Claire Moses

  • RE Maven

    The Big O knows his stuff

  • PJ

    He just wants the condo market to tank so that he can pick up more rental product.

  • Voice of Reason

    Sales in one building, One 57, have “stopped” because it’s ~80% sold with only the least desirable units remaining at pricing that has escalated substantially since sales launch. 432 Park may have slowed due to too many full floor units (total $ matters more than $/RSF at a point) and similar price hikes. More importantly, any savvy buyer is waiting for two new projects to launch sales in 2015.

    Yardeni is at best a renovator whose investors own $2bn of real estate and TRD is just searching for a headline. Nobody knows how this will play out; predicting a fall from unprecedented heights isn’t terribly novel.

    • Char4Dew

      I too think he is looking for his name in print – NY real estate has always had its cycles

  • Avoid Stonehenge – They are destroyers of neighborhoods. Ruthless Hounds !

  • v70

    “new condo projects on the Upper West Side are struggling as well” – That is strange since I know of only one new development other than Riverside.

  • Sharmooootah

    The Gov’t should have been providing additional rental housing in NYC and Brooklyn from years ago. This is an intentionally inflated market caused by the illegal influence the landlord community have gained through their political donations. The USA has become like Mexico, with corruption, cronyism and nepotism running rampant.

  • Graveshift

    Ofer is just frustrated his ex acquisition team is outbidding him on every off market deal over at Thor Resi. But 57th St is overrated. Lets be real.

  • Hy Schermer

    I think he is 100% correct.

  • ragingagainst

    The High Line is overrated. Especially the massive mid-block structures on 28th and 29th streets. The neighborhood will always be a traffic clogged waste-land bordered by the Chelsea Houses housing projects and the Post Office annex with no nearby subways and few connections to the rest of Chelsea. I predict very high turnover there as renters and buyers realize the hype they mistakenly bought into about how great the tourist clogged High Line would be.

  • WhizKid

    I don’t mean to offend anyone so don’t take the following personal, I just study data.

    My macro model has NYC entering into a period of decline in Q1 2015, in terms of rate of change (second derivative, aka deceleration).

    (The divergence in NYC vs Case Shiller 20) + USD Appreciation + Global growth slowing + De Blasio 4% Pied tax talk = Change in Risk/Return relationship (sentiment)

  • joseph cohen

    No believe it or not he is right, how many buyers do you think are out there that can afford these condos who have not already purchased one, two or even three. The same thing is happening in South Florida. These developers are now thinking very hard and are a little bit panicked because they did not base there developments off of economics but off a short time hype of what the city was going through. Once the international buyers stop or find a new destination to buy luxury condos in, what do you think is going to happen? do you think actual new York residents are going to just start buying left and right, when they can barely afford to pay rent. People getting confused on what agents are claiming they are selling and have under contract compared to what is really going on. Yes they have some building which are sold out or almost sold out, but we are talking future and what is in the pipe line is not going economically work.

  • Para

    Let’s be frank, 57th Street isn’t all that. Coupled with the fact that you can still find a full-floor in a pre-war on Park and 5th, the market has to bottom out when you’re talking about 7,000 new luxury units. 7,000!

    Ofer certainly stands to gain from the bursting of the residential bubble.