Wednesday, August 29, 2007

Long Island City Condo Development-O-Rama! Hunter's Point

Powerhouse (Shiny outside), Powerhouse (not so shiny inside)

10-63 Jackson Site, Hunters View (11-17 49th Ave.)

One Hunter's Point (5-43 Borden), Casa Vizcaya(10-63 46th Rd.)

The Foundry (2-30 51st Ave), 10-50 Jackson Ave.

5th Street Lofts (509 48th Ave), East Coast- Phase 3- Condos!

East Coast Phase 2- Rentals

Things are really exploding out in LIC. I took my monthly walking tour of Hunters Point today, and I was impressed with how quickly condo construction is progressing. There were also a couple of new, upscale retail stores open on Vernon Blvd. Looks like Rockrose is going full steam ahead with East Coast phase 3, the condo. With little fanfare, the foundation is in, and they are working on the 2nd floor. Enjoy the photos- all pictures taken on August 29th, 2007. More articles to come on individual developments.

Tuesday, August 28, 2007

Brompton vs. Lucida, Round 5, Lucida above Grade, Brompton on 14th fl!

Well, the Brompton continues to improve on it's lead, as they are now working on the 14th floor, however, The Lucida is now at least above ground! It's been almost 5 weeks since I last reported on this epic duel, and The Brompton has added 5 stories, so, at that rate The Brompton should be topping off by the end of October- pretty impressive! Brompton has also begun to add some of it's sandstone looking base. Looking at the Brompton diagonally across the street from Papaya King, it is an impressive sight. It looks larger and more masculine in real life than it does in the renderings. Still, I think it will be a welcome replacement to the hodge-podge a seedy stores that once occupied the spot. Although The Brompton has not gone full-scale on the marketing just yet, it appears to be selling quickly, and yes, prices have already seen their first couple of rounds of amendments.

The Lucida, on the other hand, is finally moving up. I'm sure residents of The Ventana are thankful, as it seemed that Lucida had some of the thickest bedrock in town to pile drive away at- it's got one solid foundation, that's for sure. The building has finally begun it's ascent, and is above grade, just like it's sales effort, which has been above grade for some time now!

In case you haven't heard, it looks like H+M, Sephora, and a massive Barnes and Noble will occupy the retail space at Lucida. The Brompton, on the other hand, will be far more subdued on the retail front, with, you guessed it a bank to occupy the retail space.

Monday, August 27, 2007

High over The Highline: Balazs' Standard Hotel takes shape

One word, wow! That was my reaction as I wandered the meatpacking district last week as I was waiting for my car to finish being detailed at the Chelsea Carwash. The pictures say it all with this impressive structure straddling the highline at between Little West 12th and West 13th (Washington and West Street). This is the future Andre Balazs Standard Hotel...look like it will be anything but standard!
High Line Construction Chronicles (May 15th, 2007,
High Line Construction Chronicles (January 9th, 2007,
More projects, lots more people to come (The Villager)

Friday, August 24, 2007

Secrets of 15 Union Square West...Future Condo, Past Jewel

It's a building that has always been a curiosity to me, that bland white brick monolith on the corner of 15th and Union Square West. After all, on a square with so much history and brilliant architecture, there seems that there would be no place for such a bland, worthless structure. What I never realized, until I searched deeper, is what lies beneath this lifeless shell. For just a moment and in very little pieces, history is making a final cameo appearance on the Square.
It turns out that underneath that bland white shell is what used to be a wonderful cast iron building, which from the 1870's til 1905 housed the original Tiffany's. After Tiffany's left for 37th Street and Fifth Avenue, the building became a clothing factory and eventually the home of Amalgamated Bank, named for the Amalgamated Clothing Workers Union (it's called Union Square for a reason). Turns out that since part of the exterior was crumbling, during the 1950's Amalgamated decided to put the plainest of white brick shells over the exterior to prevent injury and liability. That shell has stood about as welcoming as the fortunately defunct NY Coliseum at Columbus Circle until this year. Last year the building was sold by Amalgamated for $80 Million to Brack Capital, who has been stripping the building to the original steel frame which looks to be in exceptional condition considering that it's nearly 131 years old. As the hideous white brick is stripped there are glimpses of the original Tiffany building facade peaking out here and there. That facade is making it's final, brief curtain call, but not all hope is lost. The developer, who, is adding 7 stories and making a condo of it, is well known for preserving history. Brack did a wonderful job restoring the Cass Gilbert building at 90 West Street to it's original glory, and promises to acknowledge the building's architecture and historical significance. Whatever they do, I'm sure it will be a major improvement.

Weekend Links

Hamptons housing correction? Corcoran's East Hampton head thinks so. (Curbed/The Beach)
Suprise! July home sales up, inventory down. (CNN)
Fall Preview: The Laurel Condominium/ 67th+First Ave (Curbed)
Trump vs. Soho residents. (Villager)
Manhattan sales up big in 2nd quarter. (The Real Deal)

This "surge" is not working, period!

Is the troop surge in Iraq working? Well, if you listen to the Bush administration, of course. Unfortunately, looks like the top Democratic presidential candidates are buying into the spin. I would urge Barack, Hillary and all Americans to look at the facts....summertime US troop deaths in Iraq are the worst ever, and our death toll is up 46% percent and counting over last summer. You call this progress?

Monday, August 20, 2007

A. Fine Company Sells to Starchitect Thom Mayne in Soho

A. Fine Company, Inc. is both pleased and proud to announce that it has represented Starchitect and Pritzker Prize winner Thom Mayne of Morphosis and acted as his broker for his purchase of a wonderful prewar loft in the heart of Soho. We had to stand idly by while our favorite blog was reporting rumors of the starchitect's apartment shopping in New York, when in fact, we had him in contract. Well, the deal has been sealed, and it's officially done (look for pr piece following soon), and the Maynes will take Manhattan this September. The Maynes had been working with several brokers over the past 3 years and decided on working with A. Fine after meeting agent extraordinaire Jeff Hairston Smith, who they saw as an 'anti-broker'. They also liked that we were a small company with exceptional and personal service.

What's it like to work with a Starchitect? Well, it was alot of fun, but it's not fair to mention just Thom, as I would figure that a fair amount of his success can be attributed to his wife and Morphosis exec Blythe Mayne. Together, they are the consummate power couple. Blythe is the ultimate negotiator, while Thom is Mr. Conceptual. Walk into a room with Thom and you'd think he was wearing 4-D glasses. You can clearly see that his brain is working on a different wavelength- he is seeing walls, angles, and lines that are not there, but you can tell that he is seeing them. But, when it comes to the bottom line, dotting the eyes and crossing the it's it all Blythe, and she is exceptional at it. When A. Fine Company is bought out some time in the distant future, I'm calling Blythe to negotiate terms for me! All said, I was most impressed by how this couple works together, they truly do as the cliche says "complete each other". It's no wonder Morphosis is a brilliant success. Welcome to New York, Thom and Blythe!

Thursday, August 16, 2007

Not as bad as it looks...for New Yorkers

Well it has been a tumultuous few weeks in both the stock market and credit markets, and if you watch CNBC 24 hours a day, you've probably already had a nervous breakdown, but not all is lost.
I'm not going to break out the crying towel because Wall Street has undergone a correction which hasn't even reached 10% since it's peak in mid-July. One thing that nobody mentions is that prior to it's peak, the Dow had it's longest rally without a correction since 1926. The historical return on the Dow is 10% annually, and if you look back with a long term perspective, at least the past several years, the Dow is doing just fine. There is no doubt that highly leveraged lenders are getting killed. Many of these lenders either lent with no collateral, or received higher ratings on mortgage loans because they lent 80%, then did an equity loan for 20%. Since they were reselling the 80%, and not disclosing the fact that the other 20% was not in fact collateral, the lenders were getting much higher ratings, all the way up to prime, when in fact the loan was far below prime, and precarious at best. In short, the mortgage industry has been allowed to run amok. The leverage allowed on repackaged mortgage securities is ridiculous and ought to be seriously looked at and reformed. When all of the short term panic, largely fueled by the media shakes out, the mortgage market will likely revert to the way it used to and should be done. Banks are now and will continue, in the short term, actually act responsibly. What a concept! Well qualified buyers that are willing to put 20% or better down on a property, seem to be having little difficulty obtaining loans. This brings me to the NYC real estate market.
First, let me say, that thus far, I have seen no impact on the Manhattan market with the exception of buyers and mortgage brokers having to make a few more phone calls to secure a reasonable mortgage. I have seen zero price erosion. There are several positive factors for the Manhattan market to consider. Most important is the cheap dollar. Foreign buying in New York should remain strong, as the New York market is still a bargain compared to markets like London and Tokyo. Second, global growth is, arguably at an all-time record at 5.2%, so foreign money should continue to flow. Third, condo construction projects are slowing down. There is a surge underway, but with the 421-a tax abatement only in effect for projects that have a finished foundation by June 2008, that is short lived. Since supply of new condos will likely dry up, demand does not have to increase in the near term. The biggest negative for the New York market is the Wall Street bonus picture, which is cloudy at best. For me, it all hinges on Goldman Sachs, which was responsible for 60% of all bonuses on Wall Street last year. Up until the last 3 weeks, Goldman had been having an exceptional year, well ahead of last. Three weeks does not a year make, so we'll see how the rest of the year shakes out. I would argue that the cheap dollar and foreign buying is a much larger influence, and has kept the NY market strong year round. You also have to consider the the Manhattan market is much more haves than have-nots. Qualified buyers spending $3 Million for a 2 bedroom apartment are generally much better insulated than a speculator in the Midwest with a 105% adjustable rate mortgage. Additionally, I would figure that the federal reserve, under pressure, will likely drop rates by at least 1/2 of a point between now and the end of the year to bail out both banks and the consumer. After this all shakes out, looks like New Yorkers will be getting a boost from lower rates. Just my opinion, time will tell.

Hey folks, I'm back

It's been a busy couple of weeks. I have been juggling an attempted vacation and doing alot of work shoring up deals set to close in the next few weeks. I'll report back on the mortgage market fiasco and the current state of the market shortly......

Saturday, August 4, 2007

Wells Fargo ups prime rates to 8%, threatening real estate market

Much has been made of the sub-prime mortgage mess over the past couple of months, and the shock waves continue and grow stronger. This crisis is growing and presents the biggest challenge to the insulated and robust New York City real estate market in quite some time. Unfortunately, the sub-prime mess is clearly spilling over to loans to people with above average credit and below average risk levels. The result is draconian measures suddenly adopted by the likes of Wells Fargo yesterday, which increased rates on 30 year prime jumbo mortgages from 6.875% to 8% overnight Thursday. Banks like Bank of America have already followed suit increasing it's rate to 7.94% according to The banks have increased rates to price in "increased risk premium". Unfortunately, if unchecked, and if other major banks follow suit, this is a self-defeating spiral. If all rates were to jump by 1.125%+ overnight, this would result in much lower national home sales, lower prices, and hence more defaults, more risk and higher rates. I can be sure that the Federal Reserve is taking a hard look at this liquidity issue this weekend and working on potential solutions, including lower the federal funds rate on short notice. This may be a reasonable short term solution to increase liquidity. At the same time, legislators in Washington should be looking at long-term solutions, specifically, curbing the amount of leverage banks and hedge funds can exercise in lending and repackaging mortgage loans. Once again it appears as if the irresponsible lending practices of banks and mortgage companies will cost the responsible homeowner and potential home buyer.
Optimistically, this spike in rates is a short-term overreaction on the part of lenders.
As New Yorkers, the greatest threats to us are higher rates and lower bonuses on Wall Street. As it stands Bear Stearns and possibly Lehman Brothers will see an adverse impact on earnings and bonuses if all goes with the current trend. At the same time, the jury is out on Goldman Sachs. If Goldman emerges unscathed it will be a big positive for the New York real estate market, as Goldman was responsible for better than 60% of the total bonus money doled out last year. If Wall Street can shrug off the mortgage mess and have a positive year, rates get back to normal, and bonuses are as good this year as last, the NYC real estate market will likely remain unscathed. These ifs have gotten bigger over the past week. Much hinges on the next couple of weeks and the actions of banks and the feds in regards to rates for prime borrowers. Time will tell..check back for updates.
Update 8/6- One of my valued clients managed to get a 6 3/4% 30 jumbo rate locked in today from Chase. Apparently not all are following the lead of Wells Fargo, which is a relief!