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February 25, 2007




The Sizzling Luxury Market




THE unseasonably warm January real estate market was particularly heated among the wealthiest, who, brokers say, lavished their hard-earned and inherited money on ever more expensive co-ops, condominiums and town houses.

“It’s not just the Wall Street bonuses — there is just so much liquidity in the market,” said Kirk Henckels, the director of Stribling Private Brokerage, who has just released a report on the luxury residential market.


Mr. Henckels’s report looks back to 2006, but he and other market observers say that the high-end market has been setting a pace for the rest of the market in the new year and that the trends have continued into February.

Although some analysts worry about high inventories of unsold apartments, especially new condos, Mr. Henckels says the high-end deals have produced some spot shortages, in prewar co-ops, for example.


The Stribling report points to 2006 as a record-setting year in co-ops, especially those costing more than $5 million — the price range where if you have to ask, you probably can’t afford it. For the first time, the total prices of Manhattan co-ops selling for $5 million or more passed the $1 billion benchmark, with buyers spending nearly $1.4 billion, up from the $980 million tallied in 2005. There were 11 co-op sales at more than $20 million last year, up from four in 2005, the report said.

And the steady stream of closings in January already filed with the New York City Department of Finance shows the luxury market has remained strong. Although some sales are not reported for many weeks or even months, the records show that 38 January sales of co-ops, condos and town houses for at least $5 million were reported as of mid-February, with a total value of $382 million. In January 2006, only 16 such sales, worth a total of $124 million, were reported by mid-February.

The sales so far this year include the $27 million purchase by Frederick R. Adler, an investor, of a three-bedroom condo at the Ritz-Carlton New York at 50 Central Park South, as well as the three separate apartments bought by Franck Ruimy, an investment fund manager, in the tower designed by Richard Meier at 165 Charles Street, for a total of $17.7 million.

The list excludes the $18.5 million sale by Elizabeth Ross Johnson, an heir to the Johnson & Johnson fortune, at 1 Central Park West, the Trump International Hotel and Tower — because it was resold the same day for $21.25 million, a transaction that was included.


Figures compiled by Gregory J. Heym, an economist at Brown Harris Stevens, show that the positive momentum continued into February. He found that in the first 20 days of February, the number of contracts signed for apartments that cost more than $2 million nearly doubled, to 153 contracts from 80 the year before. He put the total value of these contracts at more than $566 million, up from $307 million the year before, an 84 percent increase.

Mr. Henckels said that there were still many large apartments available in new and newly converted buildings, but that the supply of older co-ops on the market had been all but depleted, at least until the spring, when many new listings typically appear on the market. “The store is empty,” he said.


Related Deals at Related Companies


WHEN it comes to buying and selling real estate, executives at the Related Companies — the builders of the Time Warner Center and scores of other projects across the country — seem to like to keep their transactions in the family.

In December, Stephen M. Ross, the chairman of Related and the new chairman of the Real Estate Board of New York, took title to the 8,900-square-foot, full-floor penthouse atop one of the swankiest addresses in New York: 25 Columbus Circle, the south tower of the Time Warner Center, according to city records.

No price was listed on the transaction, apparently because Mr. Ross was both the buyer and a principal of the company that sold the condominiums.


The next month, Mr. Ross sold his co-op at 965 Fifth Avenue for $10 million, but not to just any buyer, and without listing it for sale through the system set up by the real estate board, according to a real estate professional who searched for the listing. The buyer was Bruce A. Beal Jr., one of Mr. Ross’s top lieutenants. Mr. Beal, an executive vice president at Related, oversees acquisitions and development for the company in New York and across the metropolitan area.

Mr. Ross is not the only Related executive to buy into the company’s projects.

In 2004, Robert Puddicombe, a company executive, bought an apartment on the 70th floor of the Park Imperial at 230 West 56th Street, then a new mixed office and condominium building built by Related. He paid $329,950 for what was listed as a 1,107-square-foot, one-bedroom penthouse, with terraces and one bath. According to the offering plan, it was one of the smallest apartments in the building.


But in the almost three years since that purchase, the description of the unit has changed. Two weeks ago, Mr. Puddicombe sold the apartment on West 56th Street for $6.425 million, a nifty return of nearly 20 times what he paid for it. But from the listing, it was no longer the same modest one-bedroom.


Last November, shortly before he sold his 56th Street apartment, Mr. Puddicombe bought another apartment for $940,900 on East 96th Street, in One Carnegie Hill, another project developed by the Related Companies.


A Condo Big Enough for a Freshman Class


MIKHAIL KURNEV has built 2,000 college dormitory rooms across Lower Manhattan, but when it came to his own home, he opted for a place uptown, with a little more space. Mr. Kurnev this month bought a loft-style, full-floor condominium in Loft 67, at 219 East 67th Street, the former offices of the Christie’s East auction house, according to city records.

Mr. Kurnev is president of Coalco New York, a division of Coalco International, a diversified development company based in Russia, with extensive aluminum holdings and real estate investments around the world. Coalco New York’s portfolio includes more than 30 percent of New York University student housing, as well a number of luxury residential developments.


The condo in Loft 67 has 4,655 square feet of space, a 50-foot terrace and floor-to-ceiling windows, according to Loy Carlos, a broker for the Corcoran Group who represented the developer. It was sold as “raw space,” not a daunting challenge, perhaps, to an experienced real estate developer.

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