Q: What is your view of the real estate market this spring?
A: The market right now is frenzied, due to a lack of supply and a huge demand for inventory. Most markets are driven by consumer confidence, which in Manhattan is very strong. There is a lot of wealth in the city, and there just is not that much supply. What we see, traditionally, is that upward trends always start in Manhattan then spread virally to the outskirts. When buyers get priced out of the city, they go further out—to Williamsburg, Long Island City, Jersey City, places like that. Then it spreads from there. Those neighborhoods grow and change. For instance, Williamsburg is a very different place and market today than it was three years ago.
Q: How is the market on the Upper East Side?
A: The Upper East Side is divided into segments. Fifth Avenue is still the single most powerful address on the globe. Park Avenue is the second most. It has always been all residential, architecturally beautiful homes, with very established residential addresses. Going further east are addresses with less architectural significance. These are newer buildings, less accessible to transportation, and the neighborhoods were not originally built to be residential. But with the shortage of housing, new neighborhoods get discovered. The Second Avenue subway will have a positive effect on property values. There are some newer high-end buildings further east, like The Lucida [151 East 85th Street], 74th and Second, The Brompton [205 East 85th Street], the Georgica [305 East 85th Street] and The Laurel [400 East 67th Street]—all newer, more high-end buildings. The developers created luxury product with great amenities. Those buildings are helping the neighborhoods. Restaurants and more shopping are following.
Q: Is 96th Street still the cut-off point for many buyers?
A: Not really. We are selling a project at 1 Museum Mile at 109th and Fifth. It has extensive amenities, including private parking, a rooftop pool, park views and a doorman. It is designed by Robert A.M. Stern, and it has become a destination building.
To add value, you have everything you need, which gives buyers a reason to go a little out of their way. You may travel another 10 blocks, but it’s worth it when you get there. It’s kind of a microcosm of the suburbs.
Q: Do you think this trend of the “destination building” will continue?
A: Yes, because Manhattan is the epicenter of the world, and it has also become the best and safest big city in the world, and it is an island, so the amount of real estate is limited. Developers are continually looking to create more product to feed the demand. The stabilizing factor is that land prices keep going up. That prevents a glut. The market is almost self-leveling in that way.