Manhattan Rent Prices to Climb Back to Pre-Pandemic Levels

Per the Daily Mail, Manhattan rent prices are on track to climb back to pre-pandemic levels as renters are flocking back to the city, causing the number of available units to drop by 38% in a month. Many New Yorkers who fled to work from home across the country are coming back in a rush to take advantage of the decrease in rent prices, causing apartments to fill up at a drastic rate. In turn, the steady increase in demand will eventually bring the rental market back to where it was in the beginning of 2020. Does this news ring a bell? Maybe because it was our July newsletter headline. If you haven’t already subscribed to our newsletter and want to keep up on the state of the market please do so now!

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. 

Outdoor Dining Spotlight: Lafayette

Chef Andrew Carmellini’s restaurant Lafayette in NoHo has completely transformed their outdoor dining space into the most charming “Le Village de Lafayette,” filled with 12 adorable private dining “chalets.” Each lovely chalet seats two to seven people, and is decked out with cozy handwoven carpets, hanging icicles and snowflakes…plus special fireplace heaters to keep you nice & toasty during the chilly weather! Check it out 😉

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.

Outdoor Dining Spotlight: Osteria 57

Since private cabins are apparently our ‘thing’ we’re going to recommend another great outdoor dining option! Located in the heart of the West Village, Osteria 57 offers a delicious, pescatarian, Italian leaning menu. But let’s get to those cabins... wonderfully warm and private, we TOOK OUR COATS OFF. Need we say more?

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.

The 5 Things You Need to Know to Adapt Your Real Estate Strategy to The New Normal

I hope you and your loved ones are staying safe and healthy during this time.

It’s been a long 6 months of contemplation and observation while adjusting to the new normal.

The reason why I took a break from sending updates since my joining Douglas Elliman and forming The Lanyard Team in January is that I wanted to take time in assessing this new reality to present my thoughts with conviction and supporting data in the midst of all the speculation. I purposefully withheld sharing my analysis until the market reopened in early July, which allowed for the restart of in-person showings in a safe and responsible manner.

As we head into the Fall market and the fourth quarter of 2020, I am here to deliver the facts, dispel myths and present opportunities for moving forward. This message is a reflection of the very ethos of the Lanyard team—to create value and profits for our clients. 

1. THE MARKET IS NOT IN DIRE STRAITS
FOR THE SELLERS.

NYC real estate has experienced depreciation all over, but prime Manhattan and prime Brooklyn are holding up stronger than outliers. As the summer comes to end, and COVID-19 cases remain low, we expect to see many people return to NYC and bring a pickup in the market. I urge you to connect with us for a detailed explanation of your particular property/area.

2. FOREIGN BUYERS ARE STILL IN THE GAME…

if you have the right connections, data, and tools. Investors, both new and repeat clients, are leveraging our marketing tools for successful remote purchases, and my phone hasn't stopped ringing with requests from from India, China and Russia. Since our marketing tools have always included property videos, 3D tours, and real-time video showings, we continue to empower our clients to fully envision themselves in the properties we market.

3. THE SUBURBAN FLIGHT IS REAL, BUT SMART BUYERS STILL (AND WILL ALWAYS) COVET NEW YORK.

If you ask my colleagues in Westchester and Fairfield counties, they are seeing significant spikes in activity from Manhattanites seeking a refuge from the pandemic. But, this does not mean that the migration is one-way. In fact, I am seeing a commensurate shift in buyers returning to prime areas of Manhattan from Brooklyn, Queens, and the tri-state suburbs.

4. THERE IS AN INDISPUTABLE LACK OF CONSUMER CONFIDENCE IN THE CURRENT NEW YORK LANDSCAPE, BUT LET ME DECONSTRUCT WHY:

• Buyers are exploring options outside of prime locations (ex. Park and Madison Avenues) due to residents sheltering in place at their vacation homes;

• The concept of “Location. Location. Location” is taking the back seat while buyers are considering “smart investment” strategies in other areas.

5. THERE IS NO PLACE LIKE NEW YORK.

Bankers have a saying “you make your money on the buy” and so those buyers who are in the long game in New York will be most rewarded. Transactions were down 60% for Q2 and we are seeing discounts as high as 20% from pre-COVID pricing. Once normalcy is restored due to a vaccine (among other factors), the spirit and desire to be a part of something greater will contribute to the revival of one of the greatest cities on earth.  So the window for ‘COVID discount’ will not be open for too much longer.

The savvy buyer always knows not to wait until that moment to transact

This is the guiding philosophy of the Lanyard Team: we are long on New York real estate and a good part of our success has been  finding our clients deals during market dips. 

My mantra has always been: If you wait until the news outlets tell you we’ve hit bottom and it’s time to buy, then it’s already too late.

Additionally, many of our clients who purchased from 2010 to 2015, are now listing their properties for sale at a profit margin that is still substantial enough to warrant an upgrade to a higher price point. That is why we are on track to exceed our record far beyond $100M in profits

That is why we are on track to exceed our record far beyond $100M in profits