Stefanos Chen

Both the volume of sales and the price of co-ops and condos in Manhattan fell sharply in the third quarter, thanks in large part to higher transfer-tax rates for luxury apartments that went into effect in July, according to several new market reports.

But the decline was not limited to high-end sales, reaffirming that the balance of power has shifted to buyers.

There were 2,562 sales in the third quarter, down 14.2% compared with the same period last year, and the median sales price fell 8.2% to $1,025,000, according to a Douglas Elliman report.

Compass, another real estate brokerage, said that properties in the third quarter spent an average of 152 days on the market, the longest period since 2012.

While much of the slowdown has occurred at the top of the market, especially in new development, the pullback has been widespread. Resale apartments sold for an average of $1,359,654, the lowest in nearly five years, according to the brokerage Halstead.

“The report is finally showing what the market is,” said Diane Ramirez, the company’s chief executive. “I think we’re at the bottom, or at least very close to it.”

One of the biggest reasons for poor sales in the third quarter was that many buyers rushed to close in the spring, before changes to the so-called “mansion tax” took effect, said Jonathan Miller, the president of Miller Samuel Real Estate Appraisers &amp; Consultants, and author of the Elliman report.

In July, a flat 1% tax on sales above $1 million was changed to a staggered rate starting at 1.25% for $2 million sales, and up to 3.9% above $25 million.

Compared to the same period last year, sales were down in every price tier except for apartments below $500,000, which rose 4.8% to 352, according to the Elliman report. There were 757 sales between $1 million and $2 million, a decline of 4.7% over the same period last year, while the percent of sales at all higher prices was down by double digits.

The revised mansion tax was the latest in a string of obstacles for the flagging luxury market. Last year, limits were placed on local, state and property tax deductions that disproportionately affect high-cost markets like New York. And a steady stream of international investment from countries like China has declined in recent years, in part because of closer scrutiny of anonymous shell-company buyers, but also the strengthening dollar.

The cooling investor market, both domestic and international, was apparent in other ways: 42.8% of sales were all-cash deals in the third quarter, down from an average of about 50% and the lowest share since 2014.

“This is one of those moments where we’re starting to see the market pivot,” said Miller, adding that the decline in sales could have been worse, if not for very low mortgage rates attracting both those who need financing, and more affluent buyers taking advantage of cheap lending.

There is, of course, no shortage of people seeking to buy in Manhattan, and deals continue to close, when sellers are realistic — though some are more willing than others to lower their prices.

“This market is a bloodbath for some,” said Frances Katzen, an agent with Douglas Elliman, who said that buyers who bought at peak prices a few years ago are unwilling to lower their prices further, because they would lose money on the deal. But with a glut of new inventory clogging the market, she said more clients are coming around.

“It’s a horrible market to be a seller,” she said. “It’s absolutely fantastic to be a buyer.”

This article originally appeared in

It's Now a Buyers' Market in Manhattan Real Estate

NEW YORK — Brokers saw it coming, but that did not soften the blow.

Two-thirds of the city’s planet-warming pollution is produced by buildings, primarily residential ones, according to a 2017 inventory. Despite recent efforts, impeded in part by years of intense building, the city reduced greenhouse gas emissions by only 14.8% from 2005 to 2015.

But the aggressive new plans passed at city and state levels could mean a fundamental reimagining of one of the world’s most recognizable high-rise cities. The changes touch every corner of the housing market, from affordable to luxury development and prewar walk-ups to glassy new towers.

“I look out the window of my New York office, and I get a little panic attack,” said Lois Arena, a director at Steven Winter Associates, a design consultancy, about the scale of the new green mandates. “Oh, my God, all of those buildings?”

In June, state lawmakers passed the Climate Leadership and Community Protection Act, which requires the state to reduce its greenhouse-gas emissions to 85% below 1990 levels by 2050 and possibly offset the remaining pollution with carbon dioxide-removing strategies, like planting trees.

Similarly, a raft of New York City bills passed in April, known as the Climate Mobilization Act, offers a road map to net-zero emissions, including stringent pollution guidelines for about 50,000 buildings that are 25,000 square feet or larger, with high fees for noncompliance; a loan program for renewable energy upgrades; requirements for some buildings to have “green roofs” covered in plants and solar panels; and new rules that could make rooftop wind turbines a common sight on the skyline.

The changes could affect not just what gets built in the city but also how it is built, and for whom.

Affordable housing will likely be at the vanguard, because of government incentives and the cost-saving benefits of sustainable features. Luxury developers, too, will be compelled, by conscience or fines, to devise greener versions of high-rise towers. And thousands of older buildings will be required to make pollution-reducing upgrades.

Affordable Housing Leads the Way

In Queens, on the shoreline ravaged by Hurricane Sandy in 2012, stands a new seven-story building on the front line of climate change in New York.

The first phase of the project, called Beach Green Dunes, is a 100-unit affordable rental building designed with the latest in green engineering, with rentals ranging from $653 a month for a studio to $1,597 a month for a three-bedroom. The median asking rent in the borough was $3,000 a month in May, according to a Douglas Elliman report.

“We’re looking at trying to make a building that is as cost-effective as possible, for everyone,” said Eric Bluestone, a partner at the Bluestone Organization, one of the developers.

The site is on a stretch of formerly city-owned land that had been abandoned for decades, in a high-risk flood zone. So the builder devised several resiliency features, including putting the first occupied floor 7 feet above the sidewalk and creating an elevated patio that doubles as a rescue boat dock, in case of severe flooding.

Energy-saving features are also crucial to the development. The project was funded in part through government subsidies and loans that prioritize or require green design. And utility costs, which can make up a third of an owner’s monthly expenses, can be drastically reduced with renewable energy and better-insulated design.

The project is built with passive house principles, a German standard that maintains a steady interior climate thanks to a nearly airtight building envelope and a system that exchanges indoor and outdoor air.

Passive designs vary but tend to have more opaque surfaces and less glass than some new towers. These buildings also use about 60% to 80% less energy than conventional ones, which in Bluestone’s case translates to about $25,000 a year in electrical savings.

“During the summer months, our meters are basically running backward,” said Bluestone, who supplements his energy needs with a combination of solar panels and a cogeneration system that makes use of otherwise wasted thermal energy to help heat the building’s water.

A second phase of the project, from L+M Development Partners and Triangle Equities, is expected to be completed in the fall. It will have 127 affordable units built to the passive standard, as well as a geothermal cooling-and-heating system drilled 450 feet below the parking lot.

There are 119 passive house buildings in New York City that have been completed or are underway, and the majority are residential, said Andreas Benzing, an architect and the president of New York Passive House, a nonprofit group that promotes the standard. While passive buildings are still a small fraction of the housing stock, Benzing said interest was growing, in part because the additional upfront costs — 2% to 5% more than standard building — are quickly recouped in energy savings. Others say passive house construction can cost close to 10% more than conventional techniques, depending on the project.

“There has been a passive house explosion in New York City,” said Jennifer Leone, the sustainability officer for the city’s Department of Housing Preservation and Development, adding that there were around 20 to 25 new multifamily projects, affordable and market rate, aiming for the standard.

A new 709-unit affordable apartment complex underway in East Harlem could be the largest passive house complex in the country. The project, on East 111th Street and 112th Street, called Sendero Verde, was the first in which the city agency required passive house design. The initial phase will include two buildings rising nine and 14 stories, developed by Jonathan Rose Cos., L+M Development Partners and Acacia Network, that could be completed in 2022. The designer is Handel Architects, which also designed the 26-story passive-design student housing tower on the Roosevelt Island Cornell Tech campus developed by the Hudson Cos., one of the tallest passive buildings in the world.

The first tower’s heating-and-cooling system will be electric, with about 20% of the building’s common-area energy needs met by solar arrays. There will also be a school, a community services space and public gardens.

“Affordable housing has the largest penetration of greenness of any building sector,” said Jonathan Rose, in large part because developers are looking for ways to keep operating costs down, as they can’t substantially raise rents to cover those costs. All of the 360 units in the first phase will be reserved for residents making less than 90% of the area’s median income, or $86,000 a year for a family of three. Almost a third of the units will go to extremely low-income renters, meaning a family of three making less than $29,000 a year, with a share reserved for the formerly homeless.

Luxury Leaders and Laggards

The priorities of luxury developers often don’t align with climate concerns.

Floor-to-ceiling windows, the hallmark of many luxury apartment buildings, are far less effective at insulating buildings than solid surfaces and require more energy to heat and cool. Extra-tall ceilings, cavernous amenity spaces and a tendency to pamper residents (at least those who actually live in the buildings) don’t help luxury developers’ situation.

“It’s like saying a 12-cylinder Ferrari is more efficient than it was yesterday — they still use a lot of gas,” said Stephen DeSimone, the chief executive of DeSimone Consulting Engineers, who has worked on several supertall and high-end buildings. Luxury and sustainability, he said, are “sort of at odds with one another.”

But the city’s new emissions standards for buildings over 25,000 square feet could change that. In April, the City Council passed rules that require some 50,000 large buildings to reduce carbon emissions in aggregate by 40% by 2030 and another 40% by 2050; noncompliance could result in millions of dollars of annual fines. (Rent-regulated buildings will have to meet less stringent criteria.)

But the penalties should act as a deterrent, not a revenue source, said Costa Constantinides, a Queens councilman and chair of the committee on environmental protection.

“I don’t want anyone’s money; I want their carbon,” he said, adding that the regulations, with the goal of becoming carbon neutral by 2050, are achievable.

Some have already embraced the idea of green design in high-end buildings. The 500-foot, 42-story mixed-use condominium now rising at 77 Greenwich in the financial district will be about 30% more energy efficient than the current code requires, said Dan Kaplan, a senior partner at FXCollaborative, the designer.

“Our going premise wasn’t ‘Let’s make it all glass,’” which has become de rigueur in the luxury market, he said. (One-bedrooms in the building start at $1.78 million.) Instead, the project used glass “more judiciously,” with the largest expanses overlooking the Hudson River. Elsewhere, more traditional windows are set in a stone facade. The building also has a heating-and-cooling system known as variant refrigerant flow, which is quieter, less conspicuous on the facade and twice as efficient as more common through-the-wall systems. The upgrade could cost about 20% to 25% more than conventional systems, Kaplan said.

Some of those efforts are lost on buyers. “Not everybody understands what we’re doing,” said Michael Namer, a founder and principal of Alfa Development, which is working on its fifth apartment building to seek at least silver certification through LEED, the widely recognized green-building standard.

The U.S. Green Building Council, a nonprofit group, established the LEED standard in the late 1990s. Certification is based on a point system that rewards various categories of green and healthy design, including building materials, energy efficiency, access to mass transit and indoor environmental quality.

Namer’s latest building, at 200 E. 21st St., a 20-story, 67-unit condo in Manhattan, will have solar arrays that help heat potable water; a rainwater-collection system that irrigates several landscaped “green roof” areas; LED lighting with motion sensors in common areas; and double-paned glazed windows that reduce heat transfer. There is also an agreement to source any additional electrical needs from an off-site wind farm.

These and other features added about 5% to the construction costs, Namer said, but could ultimately reduce utility bills by 20% to 50%. The building is about 60% sold, he said.

“You don’t see it, because it’s all inside the building,” he said of the features, which may explain why the flashy luxury market has not adopted many of them. “But the aha moment is when they get the Con Edison bill.”

One of the most high-profile luxury projects to tout its green bona fides is Hudson Yards, the sprawling mixed-use development on the far west side of Manhattan. Mayor Bill de Blasio in April called for “a ban” on steel and glass skyscrapers that contribute significant greenhouse pollution and cited the mega project as “the wrong way to do things.” (His office has since walked back the term “ban.”)

The developer, Related Cos., countered that all of the buildings on the eventual 28-acre site will reach LEED gold standard or better. Geoff Hurst, a Related vice president working on sustainability, said the project’s green measures include a stormwater collection system; computer programs to provide air where it is most needed; and on-site power-generating plants that save about 24,000 metric tons of carbon a year, or the equivalent of taking about 5,100 cars off the road.

Even so, the towers at 15 and 35 Hudson Yards are each about 50% glass, whereas more affordable towers might be only 25% to 30%. High-performance glass can help reduce heat transfer, but opaque surfaces are still three to four times more energy efficient.

Moreover, critics argue that too many luxury apartments remain empty or underused, because of the slowing sales market and the use of many units as pieds-à-terre. In midtown, on a strip known as Billionaires’ Row for its new multimillion-dollar apartment towers, about 40% of units remained unsold in April, said Jonathan Miller, the president of the real estate appraisal firm Miller Samuel.

While developers consider how to build a way out of the climate crisis, the bulk of carbon emissions come from the city’s existing building stock.

This year, the owner of Stuyvesant Town-Peter Cooper Village in Manhattan completed the installation of the country’s largest array of solar panels on an apartment complex. But even with efforts like that, New York still lags behind solar leaders like Los Angeles. And among proponents of solar, some question its potential in a city like New York, where there is sometimes limited rooftop area and shadows are cast by tall buildings.

Mark Chambers, the director of the Mayor’s Office of Sustainability, estimated that retrofitting the city’s existing buildings to meet the new standards would cost owners upward of $4 billion.

“Quite honestly, a lot of people are less focused on green energy and more focused on putting food in their mouths,” said Scott Alter, a founder of Standard Cos., which is renovating a 151-unit affordable rental building in Manhattan. He commended the city’s goals but is concerned that green updates, like new boilers and windows, can snowball into costlier projects because of the age of some buildings.

Other recent legislative changes could play a role. Some developers argue that the major rent reforms passed in June reduced incentives for landlords to make capital improvements to their buildings and will hamstring energy-saving goals.

“It will take them longer to do basic upgrades, much less transform into climate responsive buildings,” said Rose, the developer.

And it could be years before the market catches up to some of the most progressive designs and their energy-saving potential.

“The banks are not quite ready to underwrite 75% savings,” said Spencer Orkus, the managing director of affordable housing at L+M Development Partners, about the potential utility cost savings at passive house projects like Sendero Verde. “So the goal is to take a few of these projects and see how they perform.”

The path to net-zero emissions by 2050 may be unclear, but there is a growing consensus: Time is of the essence.

“Everybody says 30 years is too long,” said Peter Iwanowicz, the executive director of Environmental Advocates of New York, a group that lobbied for the new legislation. “But 30 years is a snap of the finger.”

This article originally appeared in <a href="https://www.nytimes.com/2019/07/12/realestate/counting-down-to-a-green-new-york.html" link="null" target="_blank">The New York Times</a>.

(Sustainability): NEW YORK — The city’s ambitious plan to fight climate change by virtually eliminating greenhouse-gas emissions by 2050 is underway — and the battle begins at home.

Counting down to a green New York

The 16,750-square-foot, 40-foot-tall chamber, with seven kinds of marble flooring, a vaulted-tile dome and Corinthian columns, closed in 2016, a victim of automated tellers and digital payments. Its last full-time tenant, Chase Bank, moved into a squat storefront across the street, about one-tenth the size.

The bank’s second act is more surprising: It will become part of Brooklyn’s tallest skyscraper, 9 DeKalb, a 1,066-foot luxury apartment building with retail at its base. The landmark beaux-arts interior will be transformed into a flagship store, and the roof will become an outdoor lounge with a pool that wraps around an ornate Guastavino dome. The marble and pink granite facade will be fusedon one side to a slender glass-and-steel tower designed by SHoP Architects, which will have about 425 rentals and 150 condo apartments.

Across the city, a number of old banks are similarly gaining new currency, as developers search for prime sites at a time of near-record land prices. In the past, the scale of these conversions was often smaller — perhaps a handful of apartments above a bank hall, or a drugstore with incongruously ornate chandeliers. Now, thanks in part to residential demand in quickly gentrifying areas, the projects are becoming more ambitious.

“The market continues to be hungry for development opportunities, and these represent niche plays,” said Jonathan Miller, a New York real estate appraiser, who added that he noticed a similar trend near the peak of the 2007 housing bubble. There is the same glut of supply now, and developers are hoping the prestige of these buildings will pay dividends.

Historic banks in New York are rare. There are roughly 81 landmark banks in the city, said Sarah Carroll, chairwoman of the Landmarks Preservation Commission. That designation requires developers who want to alter the facades — and in the case of 13 banks, the landmark interiors — to receive permission.

While the commission does not track the current use of these buildings, most of those designated as landmarks are in Manhattan and Brooklyn. Many other historic bank buildings don’t have protected status, and their original reason for being no longer exists.

“The issue is really analogous to churches — opulent spaces that were built for what was then a very widespread need,” said William Higgins, a principal at Higgins Quasebarth &amp; Partners, a preservation firm that has consulted on a number of bank conversions. “That need recedes, and what’s left on the shore are these spectacular buildings that have lost their purpose.”

In Manhattan’s Chelsea neighborhood, the 1897 New York Savings Bank became a carpet store in the late 1980s and a gourmet grocer in the mid-2000s and is now a very stately CVS pharmacy. The 1906 Williamsburg Trust Co. bank, an imposing temple to commerce at the foot of the Williamsburg Bridge in Brooklyn, became a Ukrainian Orthodox Church in the 1960s. Until last year, the former Corn Exchange Bank on 42nd Street housed Show World Center, an adult-entertainment relic from the old Times Square. Now it is becoming offices.

But there is value beyond a bank’s bricks and mortar: the air space above it. Most of the grand bank halls in the city were built before changes to zoning that allowed for greater height and density. By buying the unused development rights, or air rights, above a bank, a developer may build bigger, taller or both on an adjacent lot. That the banks are often in commuter-friendly business hubs also makes them appealing for redevelopment.

In South Williamsburg, Brooklyn, a 23-story tower is rising beside the landmark 1908 Dime Savings Bank. The developers, Tavros Development and Charney Construction &amp; Development, bought the adjacent lot as well as the bank’s air rights for $80 million, in 2016. The purchase allowed the developers to add 20,000 square feet of floor space to the new tower, making it one of the tallest in the neighborhood. There will be retail and office space on the lower floors, topped by 177 rental apartments, 30% rented below market rate. The tower, called the Dime, is expected to open in late 2019.

In 2017, the developers convinced the branch owner to sell the neoclassical bank hall outright for $12.3 million, allowing them to incorporate the building into their design. The 40-foot-tall interior space, with mullioned windows and decorative columns, will either become an office or retail space, a beer garden or restaurant. (Only the facade has landmark protection.) The roof will become part of an outdoor amenity for residents and office workers, with views of the Williamsburg Bridge. Amenities in the adjoining tower will include an indoor basketball court, yoga room and outdoor “misting stations” to cool down sunbathers.

“When you’re viewed as the big, bad developer, how do you get the authenticity that people moving into neighborhoods like this crave?” asked Sam Charney, the principal of Charney Construction &amp; Development. Monumental architecture isn’t a bad start. Being a block from the JMZ subway lines also helps.

Those perks will be vital to the marketing pitch. About 80% of the units will be studios or one-bedrooms, with the average one-bedroom measuring about 560 square feet, said Nicholas Silvers, a partner at Tavros. The average size of one-bedroom rentals in the borough was 727 square feet in March, said Miller, the real estate appraiser.

Prices haven’t been announced, but the developers’ strategy is to market units for less than those of nearby competitors, like 325 Kent, part of the redesigned Domino Sugar Refinery site, where the luxury rentals list for an average of $3,436 a month for one-bedroom apartments, according to StreetEasy.

“We think this will be leased up in three to five months, at the most,” Charney said.

A few blocks away, Cornell Realty Management is building a 26-story hotel and condo tower adjacent to the former Williamsburg Savings Bank. The domed bank hall had already been converted to an event space when the developer bought the air rights and adjacent lot.

The tower, a 277-foot concrete base topped with a glass cube, will have 235 hotel rooms and 21 condos. Completion is expected in 2021. Paul Taylor, the president of Stonehill Taylor and the lead architect, said the project might not have made sense a few years ago, when most housing demand in the area was in the northern, more expensive part of Williamsburg.

“Available properties that are in the core of Williamsburg have been picked over,” Taylor said of the shift south.

This is not the first time his firm has reimagined a bank. In 2017, Stonehill Taylor redesigned the interiors of the First National Bank Building in Jersey City, New Jersey, which was converted into a 258-unit hotel.

In the financial district of Manhattan, the symbolic heart of commerce, conversions of grand bank buildings are old hat. Metro Loft, a development company that has completed 14 similar conversions, many of them in the area, is wrapping up a new rental project at 20 Broad St. The 29-story tower, formerly offices for the New York Stock Exchange next door, opened in September, with 533 luxury apartments. Built in 1956 and once connected directly to the Stock Exchange building, the tower has a mix of apartments, from studios to two-bedrooms, starting at $2,685 a month.

The connection to banking is still tangible. Below street level, two vaults, once filled with stocks and bearer bonds, are being repurposed: one to store mechanical equipment, the other as a lounge for residents, said Nathan Berman, the founder of Metro Loft.

The developer’s gain is clear in these projects, but what do the historic buildings get out of it? In the case of 9 DeKalb, where the Dime Savings Bank will merge with the borough’s first super-tall skyscraper, the bank will be restored, inside and out.

The developer, JDS, bought the bank and its air rights for $95 million in 2016. That gave the tower an additional 385,000 square feet of development rights, adding about 30 more floors.In exchange, the developer will repair damage to broken capitals and weathered friezes and preserve much of the landmark interior, restoring the hand-painted wallpaper in the upstairs ladies’ lounge, among other things.

The restoration has also uncovered some bank lore. In the subbasement, insulated by thick concrete, security guards used to shoot their weapons against a far wall for target practice, said Marci Clark, an architectural historian who is a director with JDS.

On a recent morning, light poured into a subterranean vault that had not seen the sun since the early 20th century. The developer had torn down an accessory building on the lot to make way for the tower. One of the bank’s walls had been temporarily pinned, held up like a theater scrim, so the new building can be integrated behind it.

The new tower, which is expected to be completed in 2022, will be deferential to the landmark but not derivative, said Gregg Pasquarelli, a principal at SHoP Architects, the designer. The hexagonal geometry of the building, seen in its ornate tile and coffered ceilings, will be echoed in the shape of the new structure.

Not every bank conversion results in towering new construction. Some recent projects have created livable space in the original buildings. At the Brooklyn Trust Company Building in Brooklyn Heights, the Stahl Organization converted the upper floors of the building, which had been used as offices, into 12 condo units, while the grand bank hall below remained open. Sales began in 2015 and prices ranged from about $3.4 million to $4.4 million, said Vanessa Connelly, who led sales with Brown Harris Stevens.

“There’s definitely an incentive to repurpose these buildings,” said Barry Rice, the architect whose firm designed the conversion. As vacant lots have become harder to find in desirable neighborhoods, he noted, these sorts of conversions have become more popular.

“It’s a beautiful, historical-looking building, and that’s what initially attracted us to it,” said Nadine Kim, who bought a three-bedroom apartment in the building in 2016. Kim, who works in investment management, said the combination of good bones, high ceilings and modern finishes sealed the deal.

But there are challenges that come with bank conversions. Some of the top-floor apartments in the Brooklyn Heights building have no windows, because the Italian palazzo-style facade is a landmark, and changes were not permitted. So some of those duplex apartments make do with skylights instead.

Another quirk is in an apartment that shares a common wall with the still-functioning bank. It is the only place in the building where the controls of one of the bank lobby clocks can be reached. A hidden panel was built into the back of the master bedroom to access the clock, so a building manager can manually change the time twice a year, said Roger Fortune, a vice president with Stahl. While that unit has been rented, it hasn’t yet sold.

Laura Bohn, an interior designer, converted a 1907 beaux-arts bank in the West Village into 11 condo units in 2000, with her husband, Richard Fiore, a developer. At the time, she recalled, “Nobody thought it was a good idea — nobody.”

The couple moved into the one unit they couldn’t sell, a 2,700-square-foot apartment with 15-foot ceilings but poor internal light.

After major renovations, including the creation of two outdoor spaces to bring in more light, the couple listed the apartment for $4.5 million in 2016. It lingered on the market but is now under contract “for a lot less than it should have been,” Bohn said.

But she is pleased with their decision to convert the building. All of the apartments have finally sold, and their new ground-floor tenant, the whimsical Museum of Illusions, is a fitting use for the dramatic space.

Next on Bohn’s agenda is moving to France, maybe the Loire Valley, where she envisions another conversion: a 15th-century chateau.

This article originally appeared in <a href="https://www.nytimes.com/2019/04/19/realestate/historic-bank-buildings-get-a-second-act.html" id="a49c71e8-ed57-3903-a960-d0b0942da82d">The New York Times</a>.

NEW YORK — The fate of the soaring, palatial and utterly impractical Dime Savings Bank in Downtown Brooklyn was inevitable.

Historic Bank Buildings Get a Second Act

<h1>NEW YORK — A hedge fund billionaire has purchased a Central Park penthouse apartment for $238 million — the most anyone has ever paid for a home in the United States.</h1>

The sale, which closed Wednesday, was confirmed by a spokesman for the buyer, Kenneth Griffin.

The unit, a nearly 24,000-square-foot combination of two apartments, is at the top of 220 Central Park South, an under-construction tower developed by Vornado Trust Realty and designed by the firm of Robert A.M. Stern.

The sale dwarfs the previous record-holder in New York City, a $100.5 million duplex sold in 2014 at One57, a nearby high-rise that helped rechristen a sleepy strip of Midtown across 57th Street as “billionaires’ row.”

The previous United States record-holder was a $137 million East Hampton home that sold in 2014.

The Wall Street Journal first reported the closing.

Griffin, founder of the investment firm Citadel, is not new to stratospheric real estate sales. He has spent hundreds of millions on apartments in New York, Chicago, Miami and London. He holds the record for buying the most expensive apartment in Miami, a $60 million sale in 2015 at the Faena House in Miami Beach. Last year he spent $58.75 million on a Chicago penthouse, a record for the city, he Chicago Tribune reported.

The nearly 1,000-foot Central Park South tower has proved to be an outlier in an otherwise softening luxury market. In October, Steven Roth, the chief executive of Vornado Trust Realty, said the building was about 85 percent sold.

In November, Tong Tong Zhao, a founder of a hotel management company based in Shanghai, bought a 27th-floor, 2,394-square-foot two-bedroom in the tower for $13.49 million. British musician Sting and his wife Trudie Styler, who recently sold a unit at 15 Central Park West, another Robert A.M. Stern tower, are buying a unit in the building.

The record sale says more about the peak of the last housing cycle than it does about the current high-end sales slump, said Jonathan J. Miller, president of the real estate appraisal firm Miller Samuel.

“It’s been on my list for four years,” said Miller, who said the unit, first listed for $250 million, went into contract in the fall of 2015. Sales of this magnitude can take years to close, because the purchase was made while the building was beginning construction, and the buyer probably had significant input on the final layout, he said.

At just under $10,000 per square foot, the sale is certainly in rare company, but less pricey than the $88 million sale of an apartment at 15 Central Park West, which went into contract in 2012 for an eye-watering $13,049 per square foot, Miller said.

It sold to a trust linked to the eldest daughter of Dmitry Rybolovlev, a Russian billionaire who made his fortune in potash fertilizer.

Overall, the New York luxury market is in the middle of a price correction. Homes seeking $4 million or more took an average of 447 days to go into contract in 2018, according to Olshan Realty. Near the peak of the market, in 2013, similar homes spent only 172 days on the market. And at the current rate of sales, it would take more than six years to sell all the new development in Manhattan, which recently totaled almost 8,000 units, Miller said.

Rumors of the record-breaking sale have circulated in real estate circles for years. Now that the apartment is nearly finished, how will it size up?

“That would be the hardest appraisal we’d ever done,” Miller said — because there’s nothing to compare it to.

This article originally appeared in <a id="c34802bb-c4e3-4653-9b6c-0bd2c3a9d1de" href="https://www.nytimes.com/2019/01/23/nyregion/238-million-penthouse-sale.html">The New York Times</a>.

At $238 Million, It's the Highest-Priced Home in the Country

The sale, which closed Wednesday, was confirmed by a spokesman for the buyer, Kenneth Griffin.

At $238 million, it's the highest-priced home in the country

The affordable ones, of course, will attract thousands of applicants, but the bulk of the new units — in gleaming towers, many of them conceived at the height of the last housing boom — will enter a saturated market, where buyers and renters have ample choice and little incentive to rush.

At the current rate of sales, it will take more than six years to sell all the new development in Manhattan alone, which totals almost 8,000 units, said Jonathan J. Miller, president of Miller Samuel Real Estate Appraisers and Consultants.

The pace of sales has already slowed coming into the new year, with homes seeking $4 million or more taking an average of 447 days to go into contract in 2018, according to Olshan Realty. In the halcyon days of 2013, similar homes spent only 172 days on the market.

Suffice it to say that newcomers will have much to prove in 2019. In Manhattan, where developers bet big on Far West Side and downtown sites, in areas unaccustomed to hulking towers, proof of concept will rest on the pace of sales — and most everyone is being tight-lipped about numbers. In Brooklyn, the impending partial L train closure could damage recent momentum in the rental market. And in Queens, awash with ambitious towers even before the announcement of Amazon’s campus, the new year will begin to untangle hype from reality.

That’s good news for buyers and renters who can afford the expensive new offerings, and if the market slumps further, perhaps a boon for those seeking lower prices still.

The Times asked Localize.city, a data company that focuses on New York housing, to search city building records for residential projects that have been under construction for more than two years. Some may drag into 2020, but the majority are expecting move-ins this year, and many of the condos have been quietly selling units based on floor plans for months or even years.

Out of 28,513 anticipated units, roughly 20,000 will be ready by the end of the year, said Israel Schwartz, a data analyst with the company. That’s about the same as last year, and down from the peak of 25,000 units in 2017, but still higher than in the bullish years of 2012 to 2015, when demand outpaced supply and 14,000 units on average were completed every year.

Brooklyn will have the most openings overall, with 13,272 apartments across 421 buildings, many of them concentrated in Williamsburg. Manhattan will come in second, with 6,342 units in 79 buildings, followed by Queens, with 6,302 units in 154 buildings. The Bronx, in the early stages of a building boom, and Staten Island will lag behind, with 2,471 and 126 units respectively.

These projects will have to compete with historically high inventory already crowding the market, said Grant Long, senior economist for the real estate website StreetEasy. As of November, there were 9,425 homes for sale in Manhattan, up 18 percent from a year earlier; Brooklyn had 5,365 units, up 21 percent; and Queens had 3,267 units, a 35 percent jump.

There are outliers, like 220 Central Park South, which began closings last quarter and is hoping to sell a record-breaking $250 million four-level penthouse, but its success doesn’t have much bearing on the rest of the market.

Weakness in the sales market has helped shore up rental demand in recent months, but landlords’ reliance on concessions has continued to grow in all three boroughs, suggesting tight competition and overzealous pricing, according to a recent Douglas Elliman report.

The following projects, a sampling of the largest in the city, will lead the way or darken the path ahead for the next wave of builders.

Betting Big on the Margins

If Billionaires’ Row in Manhattan, a canyon of uber-luxury condos in the heart of the borough, represents the last building boom, the next cycle may be defined by projects that hug the fringes of the island.

Four of the top five new Manhattan projects with the most units are near the waterfront, in areas long ignored by luxury developers.

One Manhattan Square, an 800-foot tower with 815 units, looms over the small neighborhood of Two Bridges, south of Chinatown. Developed by Extell, a company that helped set off the luxury buying frenzy in the last cycle, this project could spur a similar push on the Lower East Side.

Prices at the tower start at $1.2 million for one-bedrooms and just over $3.5 million for three-bedrooms. The unit mix leans toward one- and two-bedrooms — a safer bet than the behemoth apartments that characterized the last cycle, many of which are struggling to find buyers.

There will be more than 100,000 square feet of perks, including a two-lane bowling alley, a hammam-style spa, an adult tree house and an outdoor tea pavilion. The priciest unit currently listed, a $13.18 million duplex penthouse, is under contract, said Raizy Haas, a senior vice president at Extell. Beyond some marquee sales, however, the developer is quiet on progress.

“We’re not doing updates,” said Gary Barnett, president and founder of the company, but added that he was pleased with sales. Marketing for the tower began in 2015, and according to a 2017 filing with the Tel Aviv Stock Exchange, 100 of the 815 units had sold at the time.

To drum up interest, Extell offered to cover three to five years of common charges in its new buildings, which could amount to tens of thousands of dollars a year on larger units. The promotion was set to end in 2018, but Barnett said the company may extend the deal. Extell is also paying buyers’ brokers half their commissions at contract signing, sometimes a year or more before closing — a rare and somewhat risky incentive, as early buyers could seek to back out of their purchases.

Perhaps the project’s biggest perk is a version of tax abatement, no longer available to builders, that covers most of a buyer’s property taxes for 20 years. (In exchange, the developer built about 200 below-market-rate rentals in a building adjacent to the tower, for applicants who make roughly between $34,000 and $57,000.)

The building’s success could influence three luxury rental projects planned nearby. In December, the City Council filed a lawsuit to force a public review of the proposed towers, which range from about 700 feet to more than 1,000 feet, to reconsider the height and unit mix of the towers. (Extell’s project was exempt because it was built as-of-right.)

The developers have promised infrastructure upgrades, including funding for a nearby public housing complex and neighborhood parks, local subway improvements and about 700 new units to be leased below market rate.

But the towers could also bring about 2,100 luxury rentals to the largely lower-income neighborhood, and that would hasten the displacement of longtime residents, said Chris Walters, a rezoning specialist with the nonprofit Association for Neighborhood and Housing Development. And the range of “affordable” units will stretch the meaning of the word, he said, with some reserved for families making more than $100,000 a year.

How the Extell project performs will determine whether other developers take a risk on the neighborhood, said Long, the StreetEasy economist: “It will seal the fate of what happens with the rest of those buildings.”

West Side Changes

The 15 Hudson Yards building, in a part of the Far West Side of midtown that has been in the spotlight since its 2005 rezoning, will open its 392 units to the first residents this quarter.

“Hudson Yards seems to be an anomaly, because our traffic is still good,” said Sherry Tobak, a senior vice president of Related Cos., one of the developers. But she declined to offer sales figures. Units in the tower, which has 285 luxury condos and 107 below-market rentals, now range in price from less than $4 million for two-bedrooms to $32 million for the choicest penthouse.

Tobak admitted to “some degree of concession,” including coverage of the mansion tax, which amounts to 1 percent of the sale price of anything above $1 million. The first listings were offered in 2016, based on plans and renderings.

“I still haven’t seen it,” Ann Cutbill Lenane, an agent with Douglas Elliman, said of the two-bedroom she bought for herself after closing on a similar unit for a client. Lenane, who went into contract about 18 months ago, said she was impressed by the amenities, including a resident dining room where she will be able to entertain up to 65 people. The project also has a 20-year tax abatement for buyers.

“Did I buy it a little high? Maybe,” she said. But given how many attractions have been built around the tower, including The Shed, a futuristic cultural center, and the nearby High Line, she is confident of its value.

Due north, near the water’s edge of the Upper West Side, three vitreous towers collectively known as Waterline Square are also expecting residents this year. In total, they will add 263 condos and 868 rental units to the site of former rail yards, largely ignored for decades. Developed by GID Development Group, each tower was designed by a different architect, with condos beginning around the 20th floor. Prices range from $1.925 million for one-bedrooms to $17.25 million for penthouses, but the bulk of the units are two-bedrooms starting at around $3 million. Here, too, buyers will receive lengthy tax abatements.

“It’s been difficult to get deals done this year,” said Melissa Ziweslin, a senior managing director at Corcoran Sunshine Marketing Group, which is marketing the towers. Starting last spring, agents who brought buyers were given a 4 percent commission, higher than the standard 3 percent, she said, as an added incentive.

Even with the slowdown in 2018, Ziweslin said, the units were selling at an average of $2,549 a square foot, or about 25 percent higher than those in nearby buildings.

A Test for Williamsburg

The luxury rental project at 420 Kent, part of an 857-unit complex on the South Williamsburg waterfront, will be the largest to open in Brooklyn this year. About half the completed units are spoken for, said David J. Maundrell, who is leading the marketing with Citi Habitats New Developments, but he would not say how many units that represents. Prices range from $2,350 a month for studios to more than $10,000 a month for the largest apartments.

The blocky three-tower complex, developed by a company owned by Eliot Spitzer, the former governor of New York, will have two rooftop swimming pools, a landscaped garden and a waterfront park on the East River. A subsidized ferry service to Wall Street and midtown departs nearby.

“We had people wanting to give us sight-unseen deposits,” Maundrell said, adding that weakness in the sales market has attracted some would-be buyers who could have decided to rent instead.

But in April, the L train, a major artery for the fast-gentrifying neighborhoods along its route, will partly shut down for 15 months of repairs. That could hurt a number of projects opening in 2019, including 420 Kent, which relies on the only viable alternative for many Williamsburg commuters, the JMZ subway lines.

“All of those lines will be a lot more congested,” said Miller, the real estate appraiser. With the added headaches, he said, “people may just look elsewhere,” as renters have a wealth of new options hitting the market.

In November, 46.5 percent of rentals offered concessions in the form of free rent or discounted broker fees, up from 18.6 percent a year earlier, Miller said. And of the new units that were leased in November, nearly 80 percent offered sweeteners. The median rent, after concessions, was $2,736 a month, down 0.7 percent from the previous year.

A Shot in the Arm for Queens

The impending arrival of Amazon’s campus in the Long Island City neighborhood of Queens has agents and developers hoping the buzz will translate to deals. But even before the announcement, the area was primed to have the most new units of any market in the city: almost 2,220, across 23 buildings, to open by year’s end.

After 2019, Long Island City will continue to lead residential building citywide, with 5,125 more units expected in the years to come; the only market to approach that number is Williamsburg, with 3,437 units.

“It’s like Williamsburg was five or six years ago,” said Jerry Wolkoff, the developer behind 5Pointz, the beloved street-art haven being converted to luxury rentals. (A group of artists won a $6.7 million judgment last year after Wolkoff whitewashed their murals without notice in 2013; Wolkoff, who had allowed the artists to paint there for years, is appealing the decision.)

The rental tower, which will retain the 5Pointz name, will have about 1,115 units, with 500 to 700 ready for occupancy this summer, he said. Pricing hasn’t been established, but 20 percent of the units will be below market rate.

Is Wolkoff worried about overbuilding or some residents’ distaste for how the tower was erected? “It will rent itself, because of the amenities and what I’ve done with the building,” he said, adding that new commissioned graffiti will be displayed throughout the project.

The building frenzy has also spilled over into neighboring areas of western Queens, like Astoria, where the Durst Organization is building a seven-tower complex, near the banks of the East River, called Halletts Point. The first tower, a 22-story, 404-unit brick building, in which 20 percent of units will be below market rate, will open around March.

The building, with unobstructed views on all four sides, will have mostly studio and one-bedroom apartments, with a smattering of two- and-three bedrooms, said Jordan Barowitz, the company’s vice president of public affairs.

The Amazon news “is definitely a shot in the arm for Halletts,” he said, but added that the company isn’t counting on that in the short term, as only several hundred Amazon employees will report to Long Island City in 2019.

Still, the move is a tantalizing, if mainly symbolic, prospect for builders coming to market this year.

“It’s a quick commute to Astoria from Anable Basin,” he said, referring to Amazon’s proposed base in Long Island City, still years away.

This article originally appeared in <a href="https://www.nytimes.com/2019/01/04/realestate/whats-coming-in-new-york-real-estate-in-2019.html" id="43fa231d-c8c7-3573-a03e-21958f982e85">The New York Times</a>.

NEW YORK — More than 20,000 new apartments in New York, both for sale and for rent, will open their doors this year — and likely just a fraction will find residents by year end.

Stefanos Chen

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