It’s a young person’s world. And that is just as true in real estate as it is anywhere else.
The constantly buzzed-about millennial generation is shaking up New York City’s real estate industry — and with good reason. They are now bigger in ranks than the Baby Boomers and account for one out of five New Yorkers. And their spending power is expected to more than double in the next five years.
In this issue, we look at how the selfie generation’s tastes are impacting real estate decisions today — from residential development to the future of the office and hotel markets. See our story starting on page 32.
With millennials at the forefront of the sharing economy, co-living, co-working and anything else with “co” in its title is the name of the game. Soon, your cell phone and the clothes on your back will be your only necessary worldly possessions. Everything else will exist on the cloud or be obtained on a whim, through Airbnb, Citi Bike, WeWork, Uber and other startups. It’s telling that two-thirds of millennials don’t have landlines and that there is a co-working space that markets itself to “business nomads.” For this generation born after 1981, it’s less about possessions and more about the experience, less about permanence and more about flexibility, as E.B. Solomont and Katherine Clarke report in their cover spread.
That can mean less stability but potentially more money for developers and landlords.
Both shared office space and co-living allow landlords to charge more on a per-square- foot basis, a reality many are attempting to cash in on. Co-living, for those not in the know, is basically a glorified adult dorm (with some projects ironically housed in former SROs).
Meanwhile, we have a number of profiles in this issue on some of the biggest movers and shakers in New York City real estate — many of them 40 or under, another sign that the balance of power is shifting to the younger generation (even if some of them just miss the millennial cutoff of age 35).
At the ripe age of 36, developer Michael Stern is building the tallest residential tower in the Western Hemisphere at 111 West 57th Street, as well as the tallest tower in Brooklyn at 9 DeKalb Avenue. He faces increasingly tough market conditions but possibly huge financial rewards when those projects are completed. In our story on page 50, reporter Konrad Putzier notes that “if Stern succeeds, he will secure his place in the pantheon of New York’s most influential developers at a remarkably young age.”
Elsewhere, we explore the world of 31-year- old (millennial) Ryan Serhant, who has made the most of his reality TV stardom on the show “Million Dollar Listing New York” to become one of the top brokers in the city. Serhant has built a team of 40 agents while branching out into other TV and movie work. Just how has he been able to extend his 15 minutes of fame into something that seems a lot more durable? Check out the profile on page 44.
Finally, we take a look at the improbable rise of Raphael Toledano, a 26-year-old high school dropout who has become a major landlord in the East Village. Outrageously brash about his wealth — “I’m worth a fuckload of money, bro”— he has run into plenty of conflict and amassed many enemies. (In some ways he sounds like a millennial Donald Trump, minus the racism.) See page 70.
There is also plenty in the magazine on the weakening conditions in the high-end residential market. We have predictions from top developers warning of distress ahead, data showing the slowdown in the luxury sector is real and industry pros providing a glimpse into the softness in the rental market (page 92 and 102).
And it wouldn’t be the summer without a survey of the Hamptons market, which is also experiencing some sluggishness on the high end. See page 54.
Lastly, included with this issue is our second New Jersey Market Report, a 60-page look at real estate across the Hudson. From how hot northern New Jersey cities won’t, in fact, be “the next Brooklyn” to a ranking of top residential brokerages in the region, there’s a lot to feast on as you lounge (or maybe co-lounge?) beachside.