Top Ten Stories of 2003

What really mattered in New York real estate in 2003? Here’s our list of the year’s top 10 most important and compelling news stories:

1. Downtown Rebuilding

Since a year ago, we’ve seen the opening of a new PATH station, designs for a memorial, the first steel beams for tenant floors at the new 7 World Trade Center and a five-month struggle between two star architects to come up with the design for the iconic Freedom Tower unveiled last month. The tight deadlines for construction laid down by Gov. Pataki in April will insure quick progress in the year ahead.

2. Low Interest Rates

Buyers flocked to residential real estate in New York last year, fueled by interest rates that dropped to 40-year lows in June. With 30-year mortgages at around 5.8 percent, demand continues to be hot, though inventory has been on the decline for the past six months.

3. Office Market in Doldrums

The sluggish economic recovery held down demand for office space in the New York area in 2003. Much of the lack of demand was a result of weak hiring. Leasing activity was 25 percent behind last year in Downtown in November, and availability was at the highest level in Midtown since 1994. Midtown South fared better, though, and economic picture appeared to be brightening as the year drew to a close.

4. CB Richard Ellis Acquires Insignia

CB Richard Ellis became the world’s biggest commercial real estate company when it bought Insignia Financial Group for $431 million in February. The merger catapulted CBRE into the No. 1 position in New York. Since the merger, a few top brokers, including Woody Heller and Richard Baxter and Ron Cohen have departed for rivals.

5. Prudential LI Realty buys Douglas Elliman

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Dottie Herman, head of the largest real estate company in Long Island, acquired the 92-year-old Douglas Elliman for $71.75 million from Insignia Financial Group in March. The combined company totaled 50 offices and more than 2,000 agents from New York to Montauk. Since taking over, Herman has expanded the number of brokers in Manhattan by 25 percent and has $150 million earmarked for expansion.

6. Macklowe buys G.M. building

Developer Harry Macklowe hit the high point of his career when he beat out two dozen other bidders and bought the General Motors building for $1.4 billion in August, the top price ever paid in the U.S. for an office building. Overall, investment sales were white hot in 2003, largely due to low interest rates.

7. Bank branches and big-box stores in NYC

Banks flocked to New York from other parts of the country to open bank branches in 2003. Competitors like Washington Mutual, North Fork Bancorp, Commerce Bank and Wachovia entered the fray in an attempt to cash in on the lucrative market. National big-box stores coming to Manhattan was another new trend, with Home Depot signing a lease for 110,000 square feet on West 23rd Street in Chelsea. Target is reportedly looking nearby.

8. REBNY’s 72-Hour Rule

The move by the Real Estate Board of New York in January requiring its members to share listings with all other members within 72 hours represented a significant shift towards opening the Manhattan residential marketplace. Company heads hailed the move as a “huge stride forward” and a “quantum leap” in terms of progress.

9. Time Warner Center opens

The $2 billion project – currently the largest in the country, and the biggest construction effort in New York since the World Trade Center – opened its doors when the Mandarin Oriental Hotel checked in its first guests in November. The 2.8 million square-foot building will also house Time Warner’s headquarters, Jazz at Lincoln Center and luxury apartments. The retail component opens in February.

10. $45 million apartment sold

The most expensive apartment sale in New York City history took place in July when a British financier agreed to pay $45 million for a 12,600 square foot apartment at the Time Warner Center. The purchase included an 8,400 square foot unit on the entire 76th floor and 4,200 square foot half-penthouse on the floor above. Robby Browne of Corcoran represented the buyer.