Trophy-Property Tantrums

In mid-March, private

investor Peter Knobel sold his renovated mansion at 20 East 73rd Street for $17

million. The property is spectacular-a 22-foot-wide building located on a prime

block between Fifth and Madison avenues. And Mr. Knobel invested $7 million,

putting in a wine cellar and basement basketball court. But when he got such a

high price-and so quickly: it was on the market for seven weeks-those who track

Manhattan’s real-estate market were shocked.

It was the first time an

uptown townhouse had sold for more than $15millionsince 1999,accordingto

year-end 2001 and early 2002 market reports, and it was the first sale over $15

million to close in 2002.

While brokers and market

analysts insist that Manhattan real-estatepriceshave made an almost complete recovery in the past few

months, they agree there is one segment yet to rebound: Properties at the

tippy-top of the market, with asking prices over $10 million, are not selling.

“The mentality is not quite there for trophyproperties,” said

Kirk Henckels, director of Stribling & Associate’s private brokerage

division, and the author of Stribling’s “Luxury Market Report,” released in

March. “You wonder if high-end buyers don’t all go to the same cocktail party

and decide together whether they are going to buy. They act en masse.”

There are only about a dozen apartments with extravagant asking

prices of over $10 million officially on the market, including the British government’s

apartment at 4 East 66th Street, for $22 million; a condo at 515 Park Avenue,

for $23 million; hotelier Ian Schrager’s co-op at the Majestic, 115 Central

Park West, for $23 million; a 15-room apartment at 640 Park Avenue, for $18

million; Libbet Johnson’s condos on the 50th and 51st floors of Trump

International Hotel and Tower, 1 Central Park West, for as much as $41 million;

a 10-room co-op at the Pierre, 795 Fifth Avenue, for $15.5 million; a 14-room

co-op at 927 Fifth Avenue, for $13.7 million; and some condos at the AOL Time

Warner building under construction on Columbus Circle. “The pickings are slim,”

said one broker. “If people aren’t moving, it’s because there is not a lot on

the market.”

The high-end market doldrums are a brush-off to owners who would

sell their premier properties if they felt the market was ready for them. “I’m

representing two Park Avenue apartments for over $12 million, and although I’ve

gotten a few calls from people wanting to see them, we took them off the market

because the market wasn’t warranting the prices,” said Michele Kleier,

president of Gumley Haft Kleier. “They are great apartments and they’re still

on my Web site, so I assume if there was somebody out there, I would be getting

calls.”

In some cases, real-estate

watchers say, the market isn’t the problem. “The reason these apartments aren’t

all selling is that, for the most part, they are all way overpriced,” said

Clark Halstead, chairman and founder of Halstead Property, which is owned by

Terra Holdings, the company that also owns Brown Harris Stevens. “Whereas the

broader market has recovered with unbelievable vigor, this part of the market

is still facing value-conscious reality decisions. It will eventually recover,

because some of the people who are selling these things will decide they need

to sell and adjust their prices.”

Added another broker: “I think at one point there was no such

thing as overpriced; now it has re-entered the vocabulary.”

Most real-estate analysts attribute the turnaround in the market

for one variety of trophy property-the Manhattan townhouse-to prices being

dropped. After a dim 2001, in which, according to the “Year End 2001 Corcoran

Report,” there were two-thirds fewer sales than in 2000, this year has started

off well, including Mr. Knobel’s sale.

According to Jonathan Miller, president of Miller Samuel Inc., a

real-estate appraisal firm, market normalcy is slowly trickling upward. “What

happened is that the recovery has been starting at the entry level and then

working its way up,” he said. “You really had the market start over in the

fall.”

“The high-end market was the last to go down and will be the last

to recover,” said Hall Willkie, president of the 152-broker realtor Brown

Harris Stevens. “Starting in January, properties priced up to $3 million came

back gangbusters. There was a lot of pent-up demand. In January, all the sales

were under $5 million, in February it got up to $7 million, in March there were

a handful of sales for over $10 million.”

“Showing activity on these kinds of properties has increased

recently,” said Mr. Henckels, referring to the number of prospective buyers

making appointments to tour high-end properties. “We haven’t seen a lot of

bidding yet, but I expect it will increase soon.”

For that, brokers thank Alan Greenspan. Mr. Henckels said

something clicked in mid-January after the Federal Reserve Bank chairman

announced that the economy seemed to be improving. “The confidence just seemed

to float up,” he said. The question is, ‘just how high will that confidence

float?’

 

 

WASHINGTON HEIGHTS

 

790 Riverside Drive

Two-bed, two-bath, 1,500-square-foot co-op.

Asking: $490,000. Selling: $490,000.

Charges: $810; 45 percent tax-deductible.

Time on the market: one day.

WHICH COMES FIRST: THE CO-OP OR THE RING?

A year ago, a 34-year-old lawyer and real-estate junkie who had been living in

a basement apartment in the West Village started thinking about marrying his

30-year-old girlfriend. So he started looking for rings and apartments. The

girlfriend, a former punk rocker who now works for a children’s television

show, made it clear that moving to Brooklyn was not an option. “According to

her, crossing a bridge was never going to be part of the equation,” said the

lawyer. Their first choice was the Village-East or West-“but I think it quickly

became apparent that we weren’t going to find what we wanted in either

neighborhood absent another half-million dollars,” said the lawyer. So they

totally changed tracks and ended up touring an apartment near West 157th

Street. It was too dark, but they resolved on checking out other apartments in

the building. Two months later, one came on the market for $445,000, and they

came close to making an offer-but the lawyer’s girlfriend wanted the ring

first. She still didn’t have anything on her finger when yet another apartment

in the building came and went. Finally, over the summer, he popped the

question-but, of course, there were no available apartments in the building

then. They had to wait a few months more before they could make an offer of

$445,000 on this apartment-but with interest in the building rising, they ended

up paying $45,000 more than that.

 

 

UPPER WEST SIDE

 

80 Central Park West

One-bed, one-and-a-half-bath,

875-square-foot co-op.

Asking: $699,000. Selling: $660,000.

Charges: $898; 50 percent tax-deductible.

Time on the market: two months.

GETTING A LARGER PAD THE HARD WAY It

wasn’t only because Amy Arpadi is a broker at the Corcoran Group that she was

forced to play the real-estate market immediately after Sept. 11. A week

earlier, after an elderlyneighbor passed away, she had bought a second, larger

apartment in this building near West 68th Street, where she’s lived for the

last 12 years. “I just had an opportunity, and I had to grab it,” Ms. Arpadi

said. “But my timing was unfortunate.” She couldn’t afford to hold onto her old

place, so she put it on the market for $750,000-a price an appraiser had

recommended prior to Sept. 11. Ms. Arpadi held open houses, but nobody came.

Eventually she dropped the price to $699,000, and two of her neighbors got into

a bidding war. But even with their competitive bidding, the place sold for

$40,000 less than the reduced asking price.

 

 

UPPER EAST SIDE

 

879 Fifth Avenue

Two-bed, two-bath, 1,400-square-foot co-op.

Asking: $1.295 million. Selling: $1.250 million.

Charges: $1,625; 50 percent tax-deductible.

Time on the market: six weeks.

THERE

ARE TWO MORE DOCTORS IN THE HOUSE When a couple in their early 60’s, both

doctors, decided to purchase a second home in New York City, they clearly did

their homework. How else could they have ended up with a Fifth Avenue address

for under $1.5 million on the corner of 68th Street, smack in the middle of the

city’s Gold Coast? This white-glove building has lots of services, including a

roof deck overlooking Fifth Avenue, an exercise room and a tailor valet who

will come to your apartment and pin your clothing. The only catch is that the

apartment was in “estate condition,” with an antiquated kitchen and bathrooms.

“It needs to be completely redone,” said Dianne Van Laer, a broker with

Bellmarc Realty. And although the apartment does sport leafy views, they’re of

the sycamore trees in the interior garden rather than Central Park across the

street.

 

 

WEST VILLAGE

 

299 West 12th Street

Two-bed, two-bath, 1,400-square-foot condo.

Asking: $1.39 million. Selling: $1.2 million.

Charges: $915. Taxes: $289.

Time on the market: six months.

A

WALL-TO-WALL DEAL Demand for apartments in this prewar doorman building on 12th

Street and Hudson Street, one of five Bing and Bing condos in Greenwich

Village, is usually very high, and it’s out of character for an apartment here

to sit on the market. But according to Lew Lydiard of Charles H. Greenthal

& Co., this place was a difficult sell because the retired lawyer selling

it (who had once worked on the Pentagon Papers lawsuit) had knocked down a wall

and taken out the second bedroom. Although the second bedroom could easily have

been re-created, Mr. Lydiard said that many perspective buyers had trouble

envisioning it. Eventually, a woman who was returning to the Village after a

few years in Washington, D.C., and had always pictured herself living in this

1931 building made a deal. Mr. Lydiard said she is in the process of putting up

a wall.

 

 

SOUTHAMPTON

 

So Long, Linden: East

End Estate Split for $18 Million

None of the 16.4 acres of Linden, an estate located on

Ox Pasture Road near Halsey Neck Lane in Southampton, touch the water. Not one

of the seven bedrooms of the house overlooks the Atlantic. In fact, the place

is a good 20-minute walk away. But two buyers paid a combined $18 million for

the place over the last few months, partly, according to local broker John

Golden of Sotheby’s International Realty, because “it’s absolutely beautiful.”

For just under $9 million, one buyer grabbed nine acres

of the estate, including the main house, the 60-foot pool and the carriage barn

with a two-bedroom apartment on its second floor. The other buyer paid slightly

more for the Victorian guest house and a total of 7.25 acres.

“It surprises me a little that one person didn’t buy

it” whole, said Peter Turino of Dunemere Associates Real Estate, who put the

estate on the market two years ago for $25 million, but subsequently carved it

into three parcels after failing to find a buyer. “But maintenance and upkeep

on that estate is overwhelming-even for very rich people. This isn’t the kind

of place that needs just one full-time caretaker to maintain. It needs at least

four.”

Not to mention that the main house-a three-story,

17,000-square-foot affair with an entrance foyer with powder room and

gentleman’s half-bath, lavish living rooms with fireplaces for entertaining, a

solarium, seven bedrooms (some with fireplaces and balconies and all with their

own bathrooms) and a staff wing-needs a lot of renovation. “It is a very big

job,” said Mr. Turino. “And it will cost millions of dollars.”

Still, there’s a sense that with the dual sales, the

East End is losing one of its finest properties. Linden, as built by Grosvenor

Atterbury and landscaped by Frederick Law Olmsted in 1915, will be no more. It

went up for sale just a few months after the death of its last owner, Lloyd H.

Smith, a conservative Houston oilman and a

founding director of The National Review ,

who bought the property in 1953 from the original owner, Rufus

Patterson, a Cincinnati manufacturer. Patterson commissioned Atterbury, who

designed the Parish Art Museum and the American wing of the Metropolitan Museum

of Art,andOlmsted, wholandscaped Central Park. The property included several

manicured lawns, cuttinggardens, fruit orchards and allées . Ms. Smith called the estate Lenoir after his wife, but Mr.

Smith changed the name to Linden, after the tall trees that dotted the

property.

Now the place is in two pieces: “big” and “bigger.”