Last Saturday, the Corcoran Group’s Harlem office, at the intersection of Frederick Douglass Boulevard and 120th Street, was closed for the day. Listings for million-dollar townhouses and hundred-thousand-dollar apartments papered the office’s windows, concealing a barren and blacked-out room filled with desks and computer monitors.
Corcoran announced in late January it would shutter the office, which it opened at the height of the housing boom in 2005, within a month, citing the dwindling number of deals seeping from the surrounding area.
“The L’Occitane-scented waters of the gentrification wave are already rolling back,” the snark blog Gawker declared upon hearing the news of the shuttering.
Sometimes, though, an office closing is just an office closing.
“It doesn’t make a lot of sense to have a small office in a sales market that is challenged,” said Pam Liebman, the president and CEO of Corcoran. “We’ll follow our business closely, and, where we can be successful without bricks and mortar, we will do that.”
Simply put, the shuttering had less to do with all the to-do about the supposed rollback in gentrification—and its none-too-subtle racial subtext—than with simple market realities. Citywide, apartment sales have dwindled steadily for 12 months now, under the weight of stricter lending and a sputtering local economy.
Citi Habitats shuttered its Financial District office just after the new year; Bellmarc Realty closed its headquarters on Park Avenue South; and Warburg Realty said it would close its West Village office. (Funnily enough, rhapsodies about a gentrification rollback did not accompany Warburg’s West Village shuttering as much as they did Corcoran’s Harlem one. Hmmm …)
Citi Habitats president Gary Malin laid out the bare facts of the bottom-line value of a storefront, however wealthy the surrounding neighborhood: As much as 8 in 10 deals originate on the Internet. Walk-ins at sales offices and other venues, like newspaper ads and cocktail babble, generate the other two.
“Yes, people still like to walk by and see window dressings, but I don’t see what practical good it does in terms of business,” Jorden Tepper, executive sales director at Century 21 NY Metro, said. “I see ground-floor retail space being less and less of a necessary business model.”
Others may disagree, though in the end, they acknowledge that the storefronts are more carnival barker than rainmaker. “It’s not just a gallery,” said Diane Ramirez, president of Halstead Property. “Our offices are marketing tools and provide a place for our agents to work from.”
As for storefronts’ deeper meaning for a city clearly in transition, there’s just not much to it. Harlem—and, for that matter, the only recently regnant Financial District—will endure as a popular spot for buyers and investors. A storefront, however marquee the brokerage moniker, does not the neighborhood make.
In fact, it’s the other way around. Halstead, Corcoran, Warburg and Prudential Douglas Elliman all opened Harlem storefronts within a roughly 12-month period four years ago, as the uptown neighborhood joined, for better or for worse, the luxury condo rush.
That same rush may soon necessitate another marketing push by brokerages—but for entirely different reasons: Stagnant demand, coupled with steady unsold inventory, means lower asking prices. Indeed, according to fourth-quarter 2008 market reports by many of these same brokerages, condo prices have started to dwindle toward decade-long lows.
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