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Tribeca tightens

03/01/2011, By Melissa Dehncke-McGill

Tribeca tightens

Neighborhood's dearth of inventory helps desirably priced apartments fly fast March 01, 2011 07:00AM


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From left: Danny Davis, Naomi Muramatsu, Sofia Song, Sean Turner and Karen Gastiaburo

If there's one thing driving the Tribeca residential market right now, it may very well be the lack of a market. Indeed, brokers and market analysts say the neighborhood's inventory, which is roughly 30 percent lower than it was at the peak, is influencing how almost all properties are being perceived and how quickly transactions are taking place.

While even slightly overpriced apartments are still sitting on the market, when a property is priced right, particularly if it's a two-bedroom or larger, it's getting snapped up fast.

One broker said, "Two-bedrooms up to $1.9 million are [typically] trading in under two weeks with multiple offers.

"Open houses for [those] two-bedrooms … are packed," he said, adding that he recently had nearly 30 potential buyers at a third open house.

Of course, part of the reason there is so little inventory is because, unlike a few years ago, there are virtually no large new developments on the market in Tribeca today. That's because many of the planned projects in the pipeline stalled or failed when the economy soured, and because it's extremely difficult to get funding for new projects.

Meanwhile, while families are still flocking to Tribeca (look no further than the fact that noon to 3 p.m., aka naptime, is the hardest window to show properties), some say singles are becoming more interested in the area as it has become more populated with hot destinations like the new bar Weather Up and Sean Avery's 77 Warren.

Still, prices have remained relatively flat in the last year and a half, and some sellers are stubbornly resisting price reductions. For more on which apartments are selling best and worst, which parts of the neighborhood have the most celebrity buzz (it's no longer just Northern Tribeca) and what the current development pipeline looks like, we turn to our panel of experts.

Danny Davis
senior vice president, Citi Habitats

What are you seeing in terms of sales prices in Tribeca compared to three months ago, six months ago and a year ago?

The area has seen a remarkable turnaround since the financial crisis that occurred during the close of 2008. … We are back to the days of multiple bids and over-ask offers. The crux of the situation is lack of inventory. There are buildings like Tribeca Summit at 415 Greenwich Street, which a year ago still had a significant amount of property to unload … [but] now it appears to me that all these developments that weren't moving have caught up to the market.

What kinds of apartments are selling best in Tribeca today?

The two-bed market has picked up in the last few months. The high end of the market is also back with a vengeance. Apartments in trophy buildings -- whether it's the Ice House, the Hubert, the Atalanta or the Deitz Lantern Building -- will sell well.

What kinds of apartments are struggling most to sell in Tribeca these days?

Like any neighborhood, a very expensive, large one-bedroom is going to be a harder sale than a similarly priced two- or three-bedroom. And also what isn't selling are overpriced apartments. There are still some people who think we are living in 2006, and until there is a price correction the apartment will sit.

What are the most surprising trends you're seeing in Tribeca these days?

The most surprising trend is the size of families. I remember when my wife Lisa and I were pregnant with [our third] and someone from the neighborhood said, "Did you know that three is the new two?" I laughed at that. But sure enough, there are babies everywhere. It appears that four is actually the new three. ... I am working with people who are looking for a minimum of 6,000 to 8,000 square feet.

What's the biggest challenge of selling in the Tribeca market?

Access to apartments between 12 and 3, while the baby naps. Also, pre-construction.

Martha Stewart's daughter, Alexis, has discounted the price on her Tribeca penthouse in the Ice House multiple times in the last few months. What are you seeing with decreases in asking prices in the neighborhood?

That is an isolated incident and a perfect example of an overpriced apartment. An apartment like the one you mentioned at the Ice House has a very specific renovation which does not necessarily cater to the masses.

When 34 Leonard in Tribeca changed hands this fall, it went from condo to rental. Are you seeing that elsewhere in Tribeca? If so, where?

That was a very unusual situation. Most developers would purchase a building and resubmit an offering plan to the Attorney General and then sell them as condos. I had two letters of intent [from buyers] when the building was about to go condo again. Most developers could not pull off what new owners [Steven and Michael] Elghanayan did. They took an abandoned, quality condo and created a luxury rental building -- with high prices. [It was] great timing. [But] I'm not seeing any other buildings going rental.

Other than families, what kinds of buyers are you seeing in Tribeca and how is that a change from the past?

I am also seeing couples without children and even singles. Tribeca in many areas is becoming a destination for partygoers. With restaurants like Locanda Verde and Terroir, and new bars like [Weather Up] and Sean Avery's Warren 77, Tribeca is also catering to a younger crowd.


Naomi Muramatsu
director of residential sales and director of commercial leasing and sales, Bond NY

What kinds of apartments are struggling most to sell in Tribeca these days?

Not many, but if I had to choose I would say mostly the larger properties like 33 Vestry or 60 Warren -- huge, probably over-$10 million properties. The prices are higher than the market so it's taking a little longer to sell.

What are you seeing with decreases in asking prices in the neighborhood?

I only see decreases in those trophy properties, very few of them. Most of the [properties] coming on the market -- if they are priced right -- don't see any price reduction. Rather, they are going for very close to ask or over the ask. Is it hard to convince those who aren't pricing right to lower the price? I think they have had their properties on the market for a while, maybe a year or two, and they're still hoping that the market is going to go up. They are basically chasing the market. That's a little tough.

Are you seeing many buildings go from condo to rental in Tribeca?

There are a few of them. There are probably five or six buildings that are not becoming 100 percent rental, but where there are some units in the buildings that they couldn't sell so the developer is renting them.

Which areas or buildings in Tribeca have the most celebrity buzz right now?

It used to be that celebrities chose Northern Tribeca -- a development like Sky Lofts or a similar building -- but it seems like some of them are coming to the southern part of Tribeca and choosing a smaller building with a penthouse and a terrace, or something like that.

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