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
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.”
