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The Sizzling
Luxury Market .
By JOSH BARBANEL Published: February 25, 2007
THE unseasonably warm January real
estate market was particularly heated among the wealthiest,
who, brokers say, lavished their hard-earned and inherited
money on ever more expensive co-ops, condominiums and town
houses.
“It’s not just the Wall Street bonuses — there is just so
much liquidity in the market,” said Kirk Henckels, the director
of Stribling Private Brokerage, who has just released a report
on the luxury residential market. Mr. Henckels’s report looks
back to 2006, but he and other market observers say that the
high-end market has been setting a pace for the rest of the
market in the new year and that the trends have continued
into February. Although some analysts worry about high inventories
of unsold apartments, especially new condos, Mr. Henckels
says the high-end deals have produced some spot shortages,
in prewar co-ops, for example. The Stribling report points
to 2006 as a record-setting year in co-ops, especially those
costing more than $5 million — the price range where if you
have to ask, you probably can’t afford it. For the first time,
the total prices of Manhattan co-ops selling for $5 million
or more passed the $1 billion benchmark, with buyers spending
nearly $1.4 billion, up from the $980 million tallied in 2005.
There were 11 co-op sales at more than $20 million last year,
up from four in 2005, the report said.
And the steady stream of closings in January already filed
with the New York City Department of Finance shows the luxury
market has remained strong. Although some sales are not reported
for many weeks or even months, the records show that 38 January
sales of co-ops, condos and town houses for at least $5 million
were reported as of mid-February, with a total value of $382
million. In January 2006, only 16 such sales, worth a total
of $124 million, were reported by mid-February.
The sales so far this year include the $27 million purchase
by Frederick R. Adler, an investor, of a three-bedroom condo
at the Ritz-Carlton New York at 50 Central Park South, as
well as the three separate apartments bought by Franck Ruimy,
an investment fund manager, in the tower designed by Richard
Meier at 165 Charles Street, for a total of $17.7 million.
The list excludes the $18.5 million sale by
Elizabeth Ross Johnson, an heir to the Johnson & Johnson
fortune, at 1 Central Park West, the Trump International Hotel
and Tower — because it was resold the same day for $21.25
million, a transaction that was included.
Figures compiled by Gregory J. Heym, an economist
at Brown Harris Stevens, show that the positive momentum continued
into February. He found that in the first 20 days of February,
the number of contracts signed for apartments that cost more
than $2 million nearly doubled, to 153 contracts from 80 the
year before. He put the total value of these contracts at
more than $566 million, up from $307 million the year before,
an 84 percent increase.
Mr. Henckels said that there were still many
large apartments available in new and newly converted buildings,
but that the supply of older co-ops on the market had been all
but depleted, at least until the spring, when many new listings
typically appear on the market. “The store is empty,”
he said.
Related Deals at Related Companies
WHEN it comes to buying and selling real estate,
executives at the Related Companies — the builders of
the Time Warner Center and scores of other projects across
the country — seem to like to keep their transactions
in the family.
In December, Stephen M. Ross, the chairman of
Related and the new chairman of the Real Estate Board of New
York, took title to the 8,900-square-foot, full-floor penthouse
atop one of the swankiest addresses in New York: 25 Columbus
Circle, the south tower of the Time Warner Center, according
to city records.
No price was listed on the transaction, apparently
because Mr. Ross was both the buyer and a principal of the
company that sold the condominiums.
The next month, Mr. Ross sold his co-op at 965
Fifth Avenue for $10 million, but not to just any buyer, and
without listing it for sale through the system set up by the
real estate board, according to a real estate professional
who searched for the listing. The buyer was Bruce A. Beal
Jr., one of Mr. Ross’s top lieutenants. Mr. Beal, an
executive vice president at Related, oversees acquisitions
and development for the company in New York and across the
metropolitan area.
Mr. Ross is not the only Related executive to
buy into the company’s projects.
In 2004, Robert Puddicombe, a company executive,
bought an apartment on the 70th floor of the Park Imperial
at 230 West 56th Street, then a new mixed office and condominium
building built by Related. He paid $329,950 for what was listed
as a 1,107-square-foot, one-bedroom penthouse, with terraces
and one bath. According to the offering plan, it was one of
the smallest apartments in the building.
But in the almost three years since that purchase,
the description of the unit has changed. Two weeks ago, Mr.
Puddicombe sold the apartment on West 56th Street for $6.425
million, a nifty return of nearly 20 times what he paid for
it. But from the listing, it was no longer the same modest
one-bedroom.
The apartment, sold by Elizabeth Sample,
a senior vice president at Brown Harris Stevens, was described
in the listing as having 2,100 square feet of space, two bedrooms,
three baths and two gas-burning fireplaces. The buyer was Kevin
McGovern, a venture capitalist, who was looking for a pied-à-terre
a few blocks away from his Manhattan office.
Ms. Sample said Mr. Puddicombe bought essentially
raw space at the top of the building in 2004, with ceilings
of at least 24 feet, and built an exquisitely finished second
level within that space, containing an additional bedroom
that opens onto a 29-foot-wide terrace that is planted with
grass and has a garden as well as a view of Central Park.
She said the lower level of the apartment has 14-foot ceilings,
and the ceilings in the upper level top out at 10 or 11 feet.
City tax records, not always up to date, still
show the size as 1,107 square feet and list a market value
of $92,588 on the apartment.
Last November, shortly before he sold his 56th
Street apartment, Mr. Puddicombe bought another apartment
for $940,900 on East 96th Street, in One Carnegie Hill, another
project developed by the Related Companies.
The company said it does not comment on the
private real estate transactions of its employees.
A Condo Big Enough for a Freshman Class
MIKHAIL KURNEV has built 2,000 college dormitory
rooms across Lower Manhattan, but when it came to his own
home, he opted for a place uptown, with a little more space.
Mr. Kurnev this month bought a loft-style, full-floor condominium
in Loft 67, at 219 East 67th Street, the former offices of
the Christie’s East auction house, according to city
records.
Mr. Kurnev is president of Coalco New York,
a division of Coalco International, a diversified development
company based in Russia, with extensive aluminum holdings
and real estate investments around the world. Coalco New York’s
portfolio includes more than 30 percent of New York University
student housing, as well a number of luxury residential developments.
The condo in Loft 67 has 4,655 square
feet of space, a 50-foot terrace and floor-to-ceiling windows,
according to Loy Carlos, a broker for the Corcoran Group who
represented the developer. It was sold as “raw space,”
not a daunting challenge, perhaps, to an experienced real
estate developer.
Source: http://www.nytimes.com
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