Pre-Emptive Buys All the Rage
While on the topic of quick buys, here’s a trend: There were quick buys at Spring and Broadway, the Times Building at 229 West 43rd Street, the Clock Tower at 5 Madison Avenue and the Lipstick Building. And that’s in the last month alone.
If the buildings had sold in a normal bidding process, they all should have lasted on the market past Memorial Day.
But not anymore. Meet the pre-emptive buy, the latest trend in Manhattan’s commercial real-estate scene. Don’t want to travel the risky and unpredictable road that is the bidding process to buy a building? Then offer that indecent proposal and subvert the whole process.
It’s worked for Lev Leviev, Haim Revah (the proud owner of the Lipstick Building) and now the Israeli owners who control a powerful corner in Soho.
“New York is a little like the Wild West when it comes to bidding,” said Eric Anton, an investment-sales broker for Eastern Consolidated. “Because prices are increasing at such a fast pace these days, people want to make a buy as soon as possible.”
There’s a common thread between all the buyers in the last month: They’re new to the city.
“We have seen buyers pursue properties pre-emptively because they see this as an opportunity to start establishing themselves in the New York market,” said Jon Caplan, a broker at Cushman & Wakefield.
Mr. Leviev used to team up regularly with developer Shaya Boymelgreen, but now that he’s buying on his own, he’s quick to the draw.
Another reason for the pre-emptive buy: They don’t want to lose. Mr. Revah, for instance, was a runner-up in bidding wars for years. Tired of losing, he asked representatives from Tishman Speyer to name their number for the Lipstick Building; they did, and he wrote a check.
But could this be a sign that the market is peaking? An experienced bidder, Douglas Durst, who is pairing with Steven Roth of Vornado to bid on the Metropolitan Transportation Authority’s West Side rail yards, doesn’t think this is any cute trend.
“I think it is an indication that the market is getting to the top,” said Mr. Durst. “It is not a healthy sign.”