Tuesday, May 31, 2011

What does it cost to live on Madison Square Park, and what do you get for the money?

The Grand Madison, 225 Fifth Avenue

The building:

225 Fifth, a 12 story landmarked Renaissance Revival-style building at the northwest corner of the park, was built in 1906.  Not quite a century later, in 2005, it was converted to condominiums.  193 of them.

Currently there are five active sales listings plus four in contract and one available for rent.  According to PropertyShark, 153 of the 193 units are owner-occupied.

The building is still on its way to a permanent certificate of occupancy, but it has been diligent about renewing its temporary certificates of occupancy (the current one expires August 25, 2011).

What it costs to live there:

Average sale price per square foot for the last 12 months has been $1,451.  A 2 bedroom, 2 bath apartment of 1290 s.f. without a park view would have set you back about $1,700,000, or $1318 per square foot. 

Average monthlies, including real estate tax, are $1.64 per square foot..  There is no tax abatement.  While tax rates, and thus taxes, will no doubt increase, there won't be a sudden lurch upward when an abatement expires.

The highest sale price in the building to date, according to Streeteasy, was $5,294,900 for Penthouse N, which closed on April 6 of this year.  It’s a 1756 square foot 2 bedroom, 2 bathroom apartment with a 573 s.f. terrace.

Rents in the past year have averaged $5.50/s.f. per month.  For a 2 bedroom, 2 bath apartment of 1290 s.f., that's $6,450 per month.

What you get:

A large staff  of doormen and porters, a concierge, resident manager, valet service, impressive fitness center and landscaped interior courtyard. 

An unusually spacious apartment with very high ceilings by today’s standards.  The average size of a two bedroom is almost 1500 s.f.  One bedrooms are about 945 s.f.  

Ceilings are approximately 10’, which is almost two feet higher than those in buildings built in the 80s and more than a foot higher than those in most prewar apartments.  (A disadvantage is that there are as many as 11 apartments on a floor, a relic of the building’s early days as the Hotel Brunswick.)

Maybe a park view.  Five of the 22 “Penthouses” (not all have outdoor space) and the J, K, L and M lines have park views.  Some apartments face into the landscaped courtyard, which means they are extremely quiet but on the lower floors do not get much light.  The north exposure faces a tall building, and the apartments on that side don't get much light either.

And of course, the park itself, with its children's playground, wonderful dog run, Art in the Park, the Shake Shack, stunning landscaping, overarching trees, and on and on and on.   People come from the farthest reaches of Chelsea, Murray Hill, Gramercy and the Flatiron district to enjoy the park.  People who live in The Grand Madison cross the street.
More buildings will be profiled soon.


Saturday, May 21, 2011

What, exactly, is a "cond-op"? And what are the risks in buying one?

A true cond-op is a condominium with several units, all but one of which are commercial.  The one non-commercial unit is a co-op consisting of a number of residential units. 

London Terrace, the huge complex between 23rd and 24th Streets and between 9th and 10th Avenues, is a good example.  The condominium comprises the commercial units which house the stores on the ground floor plus one unit that is the co-op.  All 711 co-op apartments are part of this one condominium unit.

But the term is also used by marketers to mean what they call "a co-op with condo rules."

In what is called a "co-op with condo rules," you will most likely enjoy unlimited subletting, no board approval, and other attributes of many (though not all) condos*.  And the co-op can borrow money when it needs to, using the building as security.

But the red flag here is, if the developer wants to offer the relative flexibility of usage offered by most condos, why didn't they just build a condo? 

This kind of "cond-op" usually does not own but leases the ground it sits on. 

Condos can't be built on leased ground (the only exception to this is in Battery Park City, where the city owns the land and leases it to the condos).

So if the developer wants to build an apartment building on a piece of land he leases, he is restricted to the co-op form of ownership.  Buy in one of these buildings and no matter what they call it, what you're buying is shares of stock in a corporation, not real property.  And that's a co-op. 

But condos are very popular right now, and the developer wants to offer as many of the perceived attributes of a condo as possible.  Hence the misnomer, "cond-op."

If you really love the property and want to live there, go ahead.  But make sure you and your attorney both read the land lease carefully before you buy. 

How soon does the lease end?  What happens then--does ownership revert to the landlord?  What are the controls on increases in the rent?  When is the next increase?

And of course, as you must when you buy a condo, you need to know how many units are still owned by the sponsor, how many are owned by any other single entity, and how many are rented.  Not much point in spending a lot of money to live in what is essentially a rental building.  Also, if the proportion of rented units is too large, it may be hard to get financing.

A land lease is not necessarily a deal breaker.  But it's never a plus.

And it may be a hindrance when it's time to sell.  For one thing, the building will be that much closer to the end of the lease.

So when somebody wants to sell you what they're calling a "cond-op," the first question to ask is, "Is there a land lease?"

*Condo rules vary.  Towers on the Park, at the northwest corner of Central Park, does not allow owners to rent their apartments.  This condo also does not allow dogs.  The condo I live in does not allow rentals of less than a year.


Friday, May 20, 2011

We are now officially so chic and expensive it's just painful.

From the June issue of Allure:  "Bond No. 9 New York Madison Square Park Eau de Parfum.  Notes of huckleberry, grape hyacinth and red leaf rose pack a sweet punch, while prairie dropseed grass gives this fragrance an earthy edge.  $240 for 3.4 oz.; bondno9.com."

Madison Square Park Eau de Parfum? 

Bond No. 9 New York thinks the world is ready to pay $240 just to smell like us?

I am in transports of bliss.

On the other hand, what the hell is prairie dropseed grass and what's it doing in our parfum?


Friday, May 13, 2011

Penthouse 2009 at The Plaza: You and I can't live there. It's okay.

Well, you can live there if you have $37,500,000 but if you've got that kind of money you're not reading this.

I just came from a cocktail party* given there for brokers.  And yes, it's a nice place. 


You share the hall outside with several other apartments.

There's no entry foyer.  You walk right into the living room.

The only terrace is not off the living room, it's off the master bedroom.  At 229 square feet it's not very big, and it's not very private either.  On the other side of the fence at one end there's somebody else's terrace.

The 6,319 square feet are spread out over three and a half levels.  There is a private interior elevator, but still, that's a lot of up and down.

On the plus side, there are huge windows that give you fantastic views of that other park (the big sloppy one just above 59th Street that doesn't have a Shake Shack), and everything north up to about Montreal. 

But that's the same view you get from any north facing apartment on a reasonably high floor (the Plaza penthouse is on the 20th) on Central Park South.

I wasn't crazy about the wall paper, either.

Oh, well.  Back to my little aerie on the 36th floor of the Stanford--sixteen floors higher than that penthouse.  And I can see Chicago.

*Lovely Prosecco and wonderful hors d'oeuvres--salmon and sour cream and caviar on blinis, little tiny devilled eggs (plovers'?), salmon salad on toast rounds, and more.  And they were all big enough (except maybe the plovers' eggs) to be visible without a microscope.  Stribling knows how to throw a party.


Wednesday, May 11, 2011

Is it better to buy or to rent? Here's what the New York Times says.

Follow this link to the most comprehensive analysis of the difference in costs between buying and renting that I have seen.  The numbers they use are a little naive, but you can fill in your own.  Bottom line, if you're staying put longer than six years (and who can stand a move more often than that?) it's less expensive to buy.    http://www.nytimes.com/interactive/business/buy-rent-calculator.html?nl=todaysheadlines&emc=thab1

Sunday, May 8, 2011

Don't jump into the pool without a lifeguard: Why buyers need their own brokers.

The broker hosting an open house works for the seller.

It's his or her job to get the highest possible price for the property. (Note: from here on it'll be he, his or him in order to simplify things and to make my third grade English teacher happy.)

The seller's broker is NOT the person to help you negotiate the best price.

It's legal for one broker to represent both buyer and seller, but in that case the broker's responsibility to each is limited. And the broker is prohibited from disclosing all the information from either side to the other.

Many buyers think they can cut a better deal if there's only one broker involved.

But any possible savings (and there's no guarantee you'll get them) will be cancelled out by the loss of time and the lack of a professional negotiator.

There's a lot of important information that isn't on the web.

Your broker will be familiar with a building's location. A good broker will tell you what to expect before you walk in the door and find yourself staring out the window at a brick wall, or smelling the cooking fumes from the restaurant downstairs.

If it's a condo, he will know how many of the apartments are owner occupied and how many are rented.

If it's a loft, he will know if it has certificate of occupancy, artist certification or other Department of Buildings issues.

In most cases, he can tell you what it sold for the last time it was on the market and whether or not the sellers have done any work since then.

Your broker can explore the financial situation of a given building. He can look at its financial statement and give you an idea of whether it's a disaster or in good shape before you pay a lawyer or an accountant to examine the statement more carefully.

Because he works for you, not the seller, he has no reason to paint the rosiest picture of the property.

He won't waste his time or yours looking at properties that just aren't right, no matter how great they look on the web and no matter how wonderful the seller's broker makes them sound.

The seller's broker is obligated to try to get you in to see his property whether it's right for you or not.

Your broker doesn't have to pretend the apartment is properly priced when it isn't.

The seller's broker's job is to make every effort to get the seller his price, whatever it is.

Your broker does a lot more than just help you find the right property.

If you get involved in a bidding war, he's already been through many and knows how to win them. He can advise you when you're about to bid more than the property's really worth, or over your head (he'll know what a co-op board will expect to see liquid after closing).

He can also recommend a few good lawyers who have represented buyers of similar properties and guide you to the best mortgage brokers, architects, interior designers and other suppliers.

Ask your friends whom they've worked with and liked.

Check the web pages. Talk to several. When you find one who seems compatible and who seems to understand exactly what you're looking for, ask him to send you information about properties that might work for you. Have him take you on a tour of them. See how it goes.

If you see something you like, ask your broker every question you can think of, and if you can't think of any, ask him what questions you should be asking. A good broker will either know the answers or get back to you with them in less than 24 hours.

A good broker returns phone calls and e-mails within the hour. A good broker will constantly send you new properties that might be of interest, or will let you know that there's nothing new on the market that day.

Be loyal to the broker you choose.

If you go to open houses without him, be sure to put his name and firm down on the sign-in sheet. Make sure that any other brokers understand that you are already represented.

Why? Well, for one thing, none of us can afford to invest time and effort in a buyer who may wind up buying through somebody else. And there's no reason for you to work with more than one broker. We all have access to the same properties.

But, if in the course of your search you find that this broker isn't working out as well as you'd hoped, tell him so and tell him what's wrong. If he gets huffy, or can't fix the problem, then find a different one.

Good luck!


Saturday, May 7, 2011

Stunning new art in the park.

Jaume Plensa's "Echo," a sculpture of an elongated, rather mystical girl's head, has just been installed in Madison Square Park. It's a fascinating work of art, and if you're in the neighborhood, you should definitely take a look. (At 44' it's hard to miss.) Here's the link to an article in today's Times about it: http://www.nytimes.com/2011/05/08/arts/design/jaume-plensa-and-monumental-figurative-sculptures.html?_r=1&scp=2&sq=madison+square+park&st=nyt

And by the way, see the skinny little sliver building with the balconies just to the right of the sculpture? Well, count five windows down from the top and that's where I live.

I can now say my apartment has appeared in the New York Times. Sort of.

Thursday, May 5, 2011

Madison Square Park Condos: Finally a seller's market?

Right now there are 68 condos available between 18th and 28th streets, between Fifth and Lexington avenues.

The average number sold per month over the last six months was 16. So, in theory, it should take less than seven months to sell what's currently on the market.

That's still in balanced market territory (six to nine months of inventory is a market in equilibrium; more than nine months is a buyers' market; less than six months is a sellers' market) but that balance is tipping.

The Average Price Per Square Foot for sold properties over the past six months is $1,317. The APPSF for those in contract is $1,370.

The $1,370 figure is based on the last asking price for the properties. We won't know the actual sale prices until they close. But we do know that the last asking price was the right number, because it resulted in a sale. It appears that the average negotiability off the asking price is about 4%.

The APPSF for the properties currently on the market is a different story. It's $1,625. That's significantly higher than it should be if these are serious sellers. These properties could be sitting on the market for a while if their prices don't drop.

Buyers today are very well educated, and even if they don't have time to consult Streeteasy and other websites for current market information, their brokers do. Nobody's about to pay more for anything than the market says it's worth.

But a correctly priced condo should go quickly and for close to the asking price.

Want to know what yours could sell for? Give me a call (917-991-9549) or shoot me an e-mail (cstimpson@stribling.com). I'll be happy to give you a market valuation, no charge, no obligation. I do this kind of thing for fun.

Wednesday, May 4, 2011

One Madison Park: The only good news is that it's not falling over.

In case you didn't know, the very tall tower that looks like a stack of glass blocks at the foot of Madison Square Park is a condominium of some 69 units.

Twelve are inhabited by people who come and go--and have been coming and going for quite some time--through a makeshift entrance for construction workers on 23rd Street. The construction workers, however, are absent. The rest of the units are empty.

The project, with smallish apartments (most are less than 2000 square feet, although they were also offered as combinations) was intended to house the creme de la creme of downtown celebrity, along with anyone else who could afford the prices, which averaged out at more than $2,500 per square foot.

Los Angeles's Creative Artists Agency, the firm representing John Cleese, Holly Hunter and Donald Trump among many other boldface types, was an early partner. A screening room was planned for the use of the occupants, who would presumably watch themselves and each other in it.

That didn't happen. Instead, the project was slammed hard by the September 2008 crash plus a storm of litigation, foreclosure, receivership, and now bankruptcy.

A few months ago, on behalf of a customer, I spoke to Cary Tamarkin, the architect who has been charged with completing the project. I asked him when the apartments were likely to come back on the market.

"Not any time soon," was his reply.

therealdeal.com, a trade publication, reported a week ago that HFZ Group principal Ziel Feldman has presented a final rescue plan.

"Feldman, who has been working for months behind the scenes to help move the project through bankruptcy, submitted a winning bid that would pay about $165 million to get the project out of bankruptcy court and would need at least $40 million to complete constructioon of the luxury tower, located at 23 East 22nd Street in the Flatiron area, according to sources familiar with the discussions," therealdeal said.

"Lawyers representing various parties in the case are awaiting formal submission of the plan, which would have to satisfy both the interests of the secured lenders that hold debt secured by the condominium and unsecured creditors that are owed millions in unpaid loans, contracts and other expenses."

To be continued. And continued. And continued.