NYT: Manhattan Apartment Sales Surge to Three-Decade High

One benefit to reading The Lanyard Team’s newsletter each month is the ‘heard it here first’ factor. In this case, the NYT echoes the sentiment of our most recent newsletter. More apartments were sold in Manhattan in the third quarter than at any other time in the last 32 years, in the latest sign that New York City real estate is set for a faster-than-expected recovery, according to new market reports.

There were 4,523 closed sales of co-ops and condos in Manhattan in the third quarter, exceeding the record set in the middle of 2007, when 3,939 sales were recorded. The quarter ended with more than three times as many sales as in the same period in 2020, when the market was largely locked down because of the coronavirus, and with 76.5 percent more sales than the same time in 2019, before the pandemic. This is largely a result of pent up demand.

Market Update - October 2021

CONDO SALES SURGE

COOP SALES CONTINUE TO THRIVE

CONDO SIGNED CONTRACT

1-2M up 120% YOY (from Sept 20)
2-4M up 183% YOY
4-5M up 600% YOY
5-10M up 242% YOY

COOP SIGNED CONTRACTS

1-2M up 36% (from Sept 2020)
2-4M up 19%
4-5M up 250%
5-10M up 400%

NEW LISTINGS

Coops down 48% YOY
Condos down 37% YOY
Coops down 35% MOM (from Aug 2021)
Condos down 11% MOM

We stand by our projections and the fall market is indeed proving to be both healthy and tightening. Signed contracts in the condo sphere are up an average of 285% from Sept of last year. In the 2-4M condo range alone that translated to a total of 139 signed contracts—-that is a significant number. The coop market continues to thrive, with consistent increases in the 1-4M pricepoints but a whopping 250% jump in the 4-5M range—400% in the 5-10M Range.

Furthermore, an interesting metric to consider is that the amount of contracts signed for EVERY CATEGORY ABOVE was at least the same number of contracts (or slightly higher) than the prior month of August. This shows that the market is not just healthy, it is GATHERING SPEED. The fall market is indeed bringing with it higher pricing, faster absorption, and lesser discounts. We have witnessed this firsthand having experienced no fewer than 6 bidding wars over the last few weeks.

Lastly, inventory is shrinking. Both coop and condo inventory are down YOY, and even moreso both inventories are even down from just the prior month of August. Less Inventory + More Demand means sellers are gaining leverage as the Covid discounts dissipate.

Spotlight On: Long Island City

Long Island City is showing serious signs of life after the COVID-19 pandemic froze the nation’s fastest growing neighborhood over a year ago. LIC has seen one of the most dramatic growth spurts over the last decade, with condominium properties appreciating by over 60% since some of the first condos launched back in 2006. This is especially compelling since as recently as 20 years ago the area was very much a ghost town.

With beautiful views of the city, LIC’s Gantry Plaza State Park is home to the famous Pepsi-Cola sign. In 1940, the sign was placed on top of a massive PepsiCo bottling plant that sat where the park is today. Along the way, take a moment to admire the rugged beauty of the park's centerpieces - restored gantries. These industrial monuments were once used to load and unload rail car floats and barges; today they are striking reminders of the waterfront's past. With the city skyline as a backdrop and the gantries as a stage, the park's plaza is a wonderful place to enjoy a spring or summer concert. Recreational facilities include basketball courts, playgrounds, handball courts, and a fishing pier with its own cleaning table. Continuing down the waterfront you have Hunter's Point South Park. This waterfront park was until recently an abandoned post-industrial area in Long Island City. Transformed into a space that offers fun and relaxation for everyone in the area, the new park includes a central green, playgrounds, adult fitness equipment a dog run, a bikeway, a waterside promenade, picnic terraces a basketball court, a 30-foot-tall cantilevered platform for viewing the skyline and waterfront.

In addition to its aesthetic value, Queens is known for being the most ethnically diverse urban area not only in NYC but the world, offering an array of amazing foods. From food carts, to food trucks to Michelin rated cuisines you can find any cuisine you are craving. Some of our personal favorites are Casa Enrique, Adda, M. Wells Steakhouse, Mu Ramen, King Souvlaki (food truck). Also there are some breweries as well LIC Beer Project, Fifth Hammer Brewing, Rockaway Brewing Company.

NEW DEVELOPMENTS

GALERIE LIC

• Galerie (22-18 Jackson Ave.) is an 11 story condominium with 182 units

• Architecture by ODA, interiors by Paris Forino

• Adam America Real Estate (AARE) and Vanke US are the developers of the site, and it is AARE’s first residential condo project in LIC.

• The building offers a variety of amenities and upscale features, including a full-size indoor pool, a landscaped courtyard, fitness center, a library with books selected from MoMA PS1, and event space. Other amenities include a children’s playroom, pet spa, and a rooftop terrace.

THE ZIPPER

• Former Long Island City zipper factory that was abandoned for 15 years until developer Circle F took it over, retaining its exposed brick walls and timber wood ceilings

• one of the last remaining warehouse conversions (like Arris lofts) likely in LIC

• 41 condo units, ranging from $871,000 for a 1BR to $1.945 million for a 3BR apt

RENTALS

TF CORNERSTONE

52-41 CENTER BOULEVARD

1. Leasing has launched for market-rate rentals at 52-41 Center Boulevard, TF Cornerstone’s latest high-rise addition to the Long Island City. Located along the East River waterfront, the 46-story tower is one of several residential properties within the Hunter’s Point South mega-development and introduces 394 rental apartments.

2. The two towers will eventually yield 1,194 apartments. This includes a mix of studios and one- and two-bedroom apartments.

SVEN

QUEENS PARK PLAZA

• Sven, aka Queens Plaza Park, a 762-foot-tall skyscraper at 29-37 41st Avenue in Long Island City. Designed by Handel Architects for The Durst Organization, the 67-story project currently holds the title as the second-tallest structure in Queens and will yield a total of 978,000 square feet.

• The entire complex will provide 958 rental units, 300 of which will be set aside as affordable housing, according to the Durst Organization. Residential amenities include an outdoor swimming pool, a 20,000-square-foot fitness center, a library, co-working areas, a children’s playroom, and a demonstration kitchen. The nearest transit options to the site are the E, M, and R trains at the Queens Plaza station and the 7, N, and W trains at the elevated Queensboro Plaza station.
  

THE DESTINATIONS THAT STARTED IT ALL

MOMA PS1

Long Island City’s transition has been a long time coming. In 1976, when Queens officials let curator Alanna Heiss take over an abandoned schoolhouse — “The roof was partially gone,” she remembers — to found the contemporary-art space PS1, “it never occurred to me that in a few years people would not be flocking to that place,” she says. Others saw a similar potential: The Noguchi Museum opened in 1985, and artist Mark di Suvero created the Socrates Sculpture Park a year later in an abandoned illegal dump on the waterfront. Recognized as a defining force in the alternative space movement, MoMA PS1 stands out from other major arts institutions through its distinctive approach to exhibitions and direct involvement of artists within a scholarly framework. Functioning as a living, active meeting place for the general public, MoMA PS1 is a catalyst for ideas, discourses, and new trends in contemporary art.

THE CLIFFS AT LIC

Featuring bouldering, toprope climbing, and lead climbing the Cliffs at LIC is one of the largest rock climbing gyms in the country, and the largest in NYC. It can accommodate over 700 climbers at once (pre-covid) and has 16’ top-out bouldering, mega 60' leads with up to 35' of overhang. Also includes a full fitness gym with cardio equipment and free weights. They aim to give you the best indoor climbing experience whether you are an adult or child. 

The Great Florida Migration: Fact of Fiction?

What does the great Florida migration mean for me, a New York condo/coop owner?

Jean Denoyer, the owner of La Goulue, the clubby Upper East Side Madison Avenue mainstay, vocally declared “I have escaped New York!” when he proudly opened an outpost in Palm Beach. Any quick scan of recent headlines would reveal that scores of New Yorkers have fled to Miami and Palm Beach with little interest in returning. However, with vaccinations rolling out arguably ahead of schedule, this is likely to be more fluid.

Data from the US Postal Service shows that in 2020, 2,246 people filed permanent address changes from Manhattan to Miami-Dade County, and 1,741 folks changed from Manhattan to Palm Beach, comprising about 10% of all out-of-state moves from the borough. And the pandemic has prompted many big firms to consider leaving Wall Street for the Miami-to-West Palm Beach corridor, with recent announcements from Goldman Sachs and Paul Singer’s Elliot Management leading the charge. Carl Icahn and Ken Griffin’s Citadel followed suit. A year of working from home to avoid Covid-19 has led to many finance and investing companies (to say nothing about over-leased law firms) to conclude that they can cut back on ultra-pricey Manhattan office space without sacrificing revenue.

However, there are a few key pieces here that are important to understand. Florida home prices in both the city centers and the surrounding suburban environs (Boca Raton, Ft. Lauderdale, etc) have seen pricing surge as much as 30%, making the financial appeal of this area lose a bit of lustre each week.

And of course, a croque monsieur at La Goulue in Palm Beach is not accompanied by the theater, museums, restaurants, Lincoln Center, Carnegie Hall, and many other cultural havens whose opening may not be too far around the corner.

I think what this data really shows is how the pandemic expedited globalization. Every company and industry is rethinking structuring around in-office time as well as making permanent certain aspects of working from home—many firms toying with 2-3 days per week in v. 2-3 at home.

Miami has long been an adjunct for wealthy New Yorkers---now it just means there will be more fluidity of movement for those formerly-known-as-snowbirds. Maybe New York is not relocating to Florida, but merely expanding, like having a pied a terre where there’s always good weather and oh, yeah, the office rents are also dirt cheap.

Contracts Signed Report - February 2021

In deconstructing the data from February’s sales activity, I am struck by a few compelling data points which show where the market is most healthy...see below

• 60% of all condo contracts were at or below $3M, proving the luxury condo market is still depressed but the ‘prosaic’ condo market doing well

• 40% of all condo contracts were btwn $1-2M, which is a curiously limited bracket, meaning most condo buyers were buying smaller and older 2BRs OR newer, larger 1BRs

• the avg sales price for condos was $2.929M, up from $2.826M in Feb ‘20

• the avg sales price for coops was $1.452M, up from $1.226M in Feb ‘20

• only 14% of coop sales were at $2M and above, showing that there is still minimal movement within the larger ‘family’ apt demo

• the East side is beating out the West for transactions, comprising 29% of all contracts opposed to 20% for the West side

• the West side seems to be holding pricing more firmly than the East, but transacting less frequently, which is an unexpected shift

• Downtown sales comprised only 33% of contracts, whereas the remaining 67% across uptown/midtown are the bulk of what’s moving

• Brooklyn is thriving, with over twice as many contracts signed Feb ‘21 over prior year (both condo and coop)

• Condos $2M-4M in Brooklyn received 3x as many contracts YOY

• The single-family Townhouse market in Brooklyn is off the hook, with almost 5x as many signed contracts YOY with the sweetspot of $2-4M homes comprising 40% of all signed contracts

Anecdotally, our team is equally busy in both the condo and coop spheres but we notice the coop market moving more efficiently with lesser discounts off of last asking price. The condo deals on the buy side are more aggressive, but not as frequently as one might expect—many condo owners are still leasing their apts out, waiting for better markets. The Brooklyn market is obviously the one to jump into as the BK submarkets are among the few actually appreciating through the pandemic.

On the Ground Market Update - Oct 2020

The average price of apts which received signed contracts in October ‘20 was $1,170M for coops, $2,904M for condos

• YOY, average price of coops went UP from October ‘19 by 4.7%, whereas average price of condos went UP 27.8%

• Average discount in October was 10.3% from original price for coops, 11.9% for condos, both increased by over 30% from October ‘19