Sales volume didn’t seem to decrease at the turn of the year. Data by company UrbanDigs show that as of January 1, 2013 there were 21% more pending sales (meaning sales that are about to close and for which a contract has been already signed) of Manhattan condominiums, co-ops and townhouses versus the same day last year. The area with the highest increase is Harlem/Morningside Heights with a jump of 117% year over year.
The supply is tight. Active listings fell 29 percent year-over-year in Manhattan. Therefore bidding wars are not unusual.
Retail in the Heart of SoHo
A relatively small deal (if we are talking Manhattan commercial real estate) can tell a lot about the regained strength of the market. 529 Broadway is located at the intersection with Spring Street, a shopping Mecca. PropertyShark.com shows that it has about 43,888 square feet of development rights. It is and will be, of course, retail space. The owners, the Goldstein family, were already receiving high offers during the pre recession years: $85…$105…and later $110 million. But Abe Goldstein, the person in charge of managing and controlling the building, didn’t sell. The family thought they could get more.
They were right. As 2012 was about to end, the Goldsteins decided it was time to sell in case capital gains tax would go up the next year.
By mid December there was still no deal. Then Jeff Sutton, who was leading the partnership with Joe Sitt, Bobby Cayre and the Adjmi family to acquire the building, called Abe Goldstein and told him that they agreed to his terms. In fact, that was the most critical part of the deal. Mr. Goldstein wanted the entire cash amount wired before closing to his title company without a contract! The agreed upon price: $150 million and change. This is very unusual but points to a strengthening market.
But yet, everything went smoothly and the buyers, incredibly, closed without any proper due diligence. The new owners are in the process of planning the redevelopment of the space and engaging luxury retailers that will become their new tenants.
Co-ops Vs Condos
The Real Deal Magazine reports that Co-ops, which require the buyer to go through a rigorous board approval process, are losing ground to condo buildings that offer an unmatched range of amenities, such as concierges, in-house restaurants, room service and swimming pools. Beginning in 2003, with the Mexican financier David Martinez’s $54.7 million purchase of a penthouse at the Time Warner Center, condos have held the record for highest sale prices. And condos command a higher price per square foot than comparatively-sized co-ops.
In the past, 740 Park Avenue, where the city’s financial elite rubbed shoulders with the crème-de-la-crème of international buyers, was the richest building in New York. But it was overtaken by 15 Central Park West, the Robert A.M. Stern-designed luxury condominium developed by the Zeckendorfs—the most profitable building in the city’s history.
Big Apple Schools
As New York City families pour into what were once almost exclusively commercial areas, the education industry has become a major player in Manhattan’s office-leasing market, the Wall Street Journal reported. Since 2005, the leasing footprint of the schools, universities and other educational services has increased 47 percent to 8.1 million square feet from just 5.5 million square feet as of November, according to CBRE data cited by the Journal.
The most significant area of educational-leasing activity has occurred in Midtown South and Lower Manhattan, which reflects the residential push into historically commercial neighborhoods.
“As far as our records go back, which is to the 1970s, there has never been an increase like this [in educational leasing], and it’s directly related to the increase in population growth and the increase in value of properties,” Bruce Surry, CBRE executive vice, who worked on the firm’s “Taking the Office Market to School” report, said.
This is it for today, my dear friends. I am always available to answer your questions and provide you with more information on New York City real estate.