A Sugar Hill Townhouse Shell For $78/Sq. Ft.

Posted on August 8, 2011 by BeatingUpwind

I think someone just got a pretty good deal on a Harlem townhouse shell… 535 West 152nd Street just sold for $490K. While the number may seem like it’s inline with other shell prices, apparently the place has 6,290 sq. ft. despite the fact that it’s just 16 2/3 feet wide and just 4 stories. That’s almost double the square footage of many Harlem townhouses. The place has an extension that stretches back 90 feet. So given the +/- 5 foot set back in the front – that’s nearly 100% lot coverage (though I’m sure there’s some sort of side yard).

At 6,290 sq. ft. the buyer bought the place at $78/sq. ft. – which is an incredible price. I’m not sure exactly what the condition was inside. The issue is that 6,290 is 566 sq. ft. over the max allowed square footage of 5,728. If it’s in really bad shape it’s possible that DOB might not allow the new owner to build back to restore the building to the original 6,290 sq. ft. Still, even at 5,728 sq. ft. they paid $86/sq. ft. – which is still very low.

The reason why this place went for such a reasonable price was because the seller was realistic about the place’s value. The seller was the same developer we purchased our townhouse from – TPE Townhouses Harlem (TPE is part of Tahl Propp – a big Harlem landlord). This was possibly the last of about a dozen townhouse shells they were selling. They weren’t giving away the townhouses, but they knew to sell a dozen shells you gotta take the best offer – even if it seems low.

Just to put this building in perspective… It’s outside the landmark district, and not all that close to subways – it’s a 6 minute walk to the 1 train at 157, 7 minutes to the C train at 155, and 8 minutes to the A/B/C/D trains at 145. The block it’s on is also mostly apartment buildings – not the charming tree-lined brownstone blocks you find elsewhere in Harlem. So it’s sorta lacking on location.

So there are great deals out there still. Now that I’ve got my real estate license and have access to all the listing databases it’s interesting to see what’s on the market. There are some interesting opportunities out there – but as always price continues to be an issue, as is matching the building to the particular needs of the buyer…

I’m Now Officially A Real Estate Agent w/ Level Group

Posted on August 4, 2011 by BeatingUpwind

Well, it’s now official… I’m now a fully licensed real estate agent. I passed all my tests a couple weeks ago and then I interviewed at a few firms and in the end chose Level Group.

New Business Model

Level Group is a part of a new breed of real estate companies that are challenging the traditional business model for real estate companies. These new companies are based on a virtual office business model where the agents are more independent and essentially run their own businesses. The agents find their own clients, pay for their own advertising, and pay their broker a monthly fee that gives them access to listing services, etc. In return the agents get to “keep their entire commission” – though if the monthly fee is low there are transaction fees, but those fees are far lower than the 40 to 60% that’s typically taken out of an agent’s commission by a traditional broker.

The independent, virtual business model was a good fit for me. I like running my own business – I’ve been doing it for the last 10 years now. There are two big players in NYC with this new business model and Level Group is one of them. In fact Level Group (under it’s old name Pari Passu) was the first New York brokerage to go with the new business model.

Level Group’s Advantages

In the end I picked Level Group for a couple reasons. First, they understand that a virtual office business model doesn’t work very well if you don’t have good technology behind it. The other firm didn’t seem to really understand the importance of technology. Second, Level Group’s principal broker and founder (a real estate lawyer) are both personally focused on commercial real estate. While some may see that as a negative I saw it as a positive since commercial real estate is largely rational and numbers oriented. While I had really great interaction with the other company, rational & numbers oriented management just seemed to be a better fit for me.

A Catch 22 That Almost Ended Everything

There was actually a little drama right after I signed up. The first thing I needed from the broker was clarification on how I should handle blog posts. They came back with an observation that nearly ended the entire real estate pursuit for me… Agents can’t advertise other agents’ listings without permission and blog posts about properties (even if negative) are seen as advertising. Websites like Curbed and Real Deal get away with it because they’re not licensed agents.

The Catch 22 was that as soon as I became a licensed agent I was essentially barred from doing frank and honest blog posts about other agents’ listings. The problem is that honest/frank blogging is my marketing strategy to get customers. So if I’m an agent I can’t blog, and without blogging I have no customers – which makes it pointless to be an agent.

Luckily we came up with a solution… When I blog about active listings I’ll be obscure and won’t identify the property. It will actually be a good thing since being obscure will encourage buyers to contact me to find out details.

The second part of the solution is that I’m going to be really conservative and require all the buyers I work with to sign what’s called a buyer’s agency agreement. By default all agents work for the seller, not the buyer – even when they’re working with the buyer looking at multiple properties. (They’re legally subagents of the seller’s broker.) A buyer’s agency agreement changes that – it means the agent works for the buyer. If all the buyers I work with sign buyer’s agency agreements then I’ll never have a fiduciary obligation to the sellers (except when I have listings).

After a property is sold I will be able to identify properties and talk frankly about them as comps – I just can’t do it for properties that are for sale.

Need An Agent?

If you or someone you know are looking for an uptown townhouse and want an agent who’s been through the process and will be frank and honest with you – call me or e-mail me and I’ll be happy to help you in your search – 917-447-2572 / jay@beatingupwind.com

Harlem Rents Going Up

Posted on August 1, 2011 by BeatingUpwind

If you’re a townhouse owner with a rental apartment or two you’ll be glad to hear that rents in Harlem are going up. The latest report from MNS Real Estate shows that over the past year rents in doorman buildings are going way up…

Studios – Up 27%
1 BR – Up 19%
2 BR – Up 34%

The doorman buildings tend to be newer and are far more likely to be market rate apartments. I’m sure some of that is new, high-end buildings coming onto the market for the first time, still – 30% is a BIG rent hike.

Non-doorman buildings haven’t done as well…

Studios – Up 5.5%
1 BR – Up 5.25%
2 BR – Down 2.4%

The non-doorman buildings are generally the older apartment buildings that make up the bulk of Harlem apartments. They tend to be somewhat run-down and have minimal maintenance. There’s a reason why the rents in them are far lower. Many of the studios and 1 bedrooms are probably largely rent stabilized, which would explain their low increases. It’s interesting that the rents for 2 bedrooms actually went down slightly.

I’ve always wondered what the market rate for our rental apartment will be. The MNS report doesn’t exactly answer the question. Technically we’ll be a non-doorman one bedroom which is currently $1,723, BUT it’ll be new construction and it’s got more space than many two bedrooms (about 1,050 sq. ft.) with in-unit private laundry room, tons of storage, a bright room in the cellar that can be used for a home office or a media room, plus use of a garden. All in all I think market rate is probably a bit less than for a doorman 2 bedroom ($3,147). But $3,000 is a long way from $1,723.

When we were looking in 2009 we saw one townhouse on 130th Street that had been renovated very nicely. It was 18 feet wide – so just wide enough for two small bedrooms side-by-side. Even with little bedrooms they were getting #2,800/mo for one of the floor-thrus, and $3,000/mo for the other one. So you can get good money for Harlem apartments if they’re good apartments.

Either way, the increase in rental prices is good for townhouse owners who have an income unit. It means more of your mortgage expenses can be supported by rental income. In rough terms you can get another $200,000 in mortgage for every $1,000 additional you pay per month in mortgage payments. That drops to about $160,000 when you add in things like insurance and taxes (which you’d pay anyway), and you need to allot for months when you don’t collect rent, and if you share any utilities with your tenant you have to subtract that as well. Still, your garden apartment may have gone from $2,000 to $2,600 over the past year. The extra $600 could support nearly $100,000 more of your mortgage. Not bad – though bumping up an existing tenant’s rent by $600 isn’t wise. Still, the trend is up, so next time you change tenants you’ll see a nice bump in rental income.

Our Newly Framed Art: Warhol, Nordström & Kerlin

Posted on July 31, 2011 by BeatingUpwind

Dan likes to buy art. In all truthfulness I like to buy art as well, but lately we’ve been trying to save our pennies to have money for the house. But we did just get some art framed…

Andy Warhol – Pasadena Art Museum Poster 1970

The most recognizable name amongst our newly framed art is Andy Warhol. As Warhols go this is a rather inexpensive piece… It’s the “Brillo” poster from his museum show in 1970 at the Pasadena Museum of Art. Like a lot of Warhol’s work, it’s a screen print. Apparently it was made at Warhol’s “Factory” and it’s signed, so it’s not “just a poster”.

Dan and his friend John Serdula found the frame down in South Jersey in this barn filled with old frames. We need to get John to do a bit more restoration on the frame – it’s a bit too rough for my liking. We like the contrast of new and old though. If we had put the poster in a contemporary frame it would have just looked like a poster. In an old 19th century French frame it has more character.

We’ve actually had the poster and the frame for a while now. It’s just we finally finished the job and had it all put together.

Jockum Nordström – “House And Bugs” 2008

The next piece of art is one that Dan got me to cave in on and we bought it in the past year – it’s by Jockum Nordström – “House And Bugs”. David Zwirner Gallery had loaned it to a show John organized at Heskin Contemporary. This piece looks a lot better in person – the picture doesn’t do it justice (probably the lighting)…

It is a print (edition of 50), but it’s a really well done print. Apparently Nordström went off to learn print making and he made these prints himself. He’s put out another round of prints since then that were “professionally” printed and apparently they’re not nearly as nice.

Nordström’s work, while contemporary, is rather folky. It goes really well with the old frame we put it in. The frame actually has a history of it’s own. It used to be the frame for Gifford Beal’s “The Albany Boat” (1915) which is owned by the Met. Here’s a picture of that piece…

We had to cut down the frame slightly, but it still has tags on the back from the Met and from the LA County Museum of Art (from when it was on loan there).

We got the frame from Hudson City Antiques. John is good friends with the owners and he spotted the frame when they brought into their shop and said it would be perfect for the Nordström piece. John then did some restoration on it so now it looks pretty incredible (at least in person).

Sherry Kerlin – “The Bride of Christ” 2007

The last piece also has a John Serdula connection (as does much of our art)… The artist, Sherry Kerlin, is someone we met through John. She needed a website, so Dan designed and built a website for her and in exchange we got to pick out one of her pieces of art.

The image is of a little girl with a rosary on her first day of communion. We love it – the button eyes on it are a bit spooky (given the general innocence of the piece) – but it’s what you expect of one of Sherry’s pieces – she has a slightly sardonic view of the world around her.

And like the Nordström piece, we got the frame at Hudson City Antiques. If you’re looking for old, historic frames you definitely should check them out. Not only that, but they’re far more flexible than a regular framer. For example, we really wanted UV plexiglass for the Warhol and the Nordström, but the price his supplier was charging him was a bit crazy. So he let Dan find UV plexi cheaper online and have it shipped to his store – something most framers would never agree to. That saved us hundreds of dollars and will save the artwork from damage down the road (a lot of similar Warhol posters are pretty faded).

Wrap Up

So our theme at the moment seems to be contemporary art in old frames, but Dan was just remarking that he wants to mix it up and go back to new/contemporary frames when we next do framing.

Now we just need to finish the house so we have space to hang all the art… Our current rental is looking a bit over-crowded with art at the moment.

40 Story Buildings In Washington Heights?

Posted on July 31, 2011 by BeatingUpwind

Our contractor took the week off this week (long story), so I figure I’d do a blog post I’ve been meaning to do for a while now… Whether really tall buildings are appropriate uptown.

Back in early May Quadriad proposed a set of 40(ish) story buildings for our old neighborhood – around 190 and Broadway. They’d literally tower over all the buildings around them. Here’s what they were proposing… Phase 1 would be three towers built on top of the 191 Street IRT station (the 1 line)…

Phase 2 would knock down a funeral home across the street and put up a 4th building that’s shorter…

We got into a bit of a discussion with a friend of ours who lives quite near where these buildings will be built. She thinks they’re a horrible idea, but Dan and I sorta like them. Our friend’s argument is that they’re inappropriate for the neighborhood. Nothing in Washington Heights is 40 stories. I think the highest is 20-some stories. She prefers the “as-of-right” option the developers have proposed, which looks like this…

To which Dan and I say “eh…” It’s just boring architecture.

Our friend’s other argument is that luxury condos (or luxury rentals) are a bad idea – that Washington Heights should remain largely affordable housing. The irony is that she’s one of those rare Manhattan Republicans. How a Republican can be opposed to the interests of developers beyond me – I thought that was one of the defining characteristics of Republicans in New York. The other thing is that the capitalist (Republican?) argument should be that more supply => demand is accommodated => lower prices. In other words, if you want Manhattan to still have affordable housing you need more units on the market to meet the demand since the more there is of something, the lower its price will be. Clearly there’s not much vacant land in Manhattan – that means you need to build up.

Plus, all major development projects these days include affordable housing units. The bigger the project, the more affordable housing units you’ll get. So if you want affordable housing in Manhattan you should be in favor of projects like this one.

I’ve also heard people say tall buildings uptown will overburden the transportation infrastructure. But the Quadriad site is literally on top of a subway stop and less than a 5 minute walk to another subway stop. We’ve got pretty good subway access uptown that’s no where close to capacity. They could easily double the number of trains if they needed to, or extend the C train to 207. Transportation isn’t really an issue.

So what this boils down to is aesthetics and zoning and perhaps historic preservation. I had an architectural design professor in college who said “if you break the rules you need to do something really special”. Yes, the 40 story towers break zoning rules, but Dan and I think they’re good enough to warrant the rules being broken.

That isn’t always the case. For example Graceline Court (the silver and pink building in the picture below) stands out on the Harlem skyline, but it’s just incredibly boring…

Harlem is generally zoned lower than Washington Heights, so this is potentially a bigger issue in Harlem than it is in Washington Heights. I’m actually very much in favor of tall buildings going up in Harlem – but I want them to be interesting to look at, and I don’t want (too many) historically interesting buildings torn down in the process. Graceline Court is just dull – I want something better than that. I’d love it if they build a 40+ story building on the empty lot at 125 & Lenox where the rumor mill says a Hyatt (?) may be built.

So I say Go Tall Uptown (and make it interesting)… What does everyone else thing?