Property Grunt

Sunday, July 29, 2007

It can be done

We did it and so can you.

No, you can't always get what you want
You can't always get what you want
You can't always get what you want
And if you try sometime you find
You get what you need

- The Rolling Stones

New York City, particularly Manhattan is notorious for being the most expensive place on the planet. We all have heard stories of people who come in with what they think is a lot of money and see it disappear into the ether once they step foot onto the island.

In the area of real estate, the media has carpet bombed the public with stories of exorbitant prices for apartments and the chosen few who can live in New York City due to their hefty salaries or enormous bonuses. Unfortunately, these stories reflect a prevailing reality that only those who live in a certain tax bracket can survive in New York City.

Which is why I am really glad that Christine Haughney has done a story on the people who are not armed with the salary or bonuses nor do have the family resources to purchase a home. In affect, they pulled their own bootstraps.

July 29, 2007
Every Penny Counts

WHEN Janey Lee and Pablo Agüero were struggling freelance Web designers, buying an apartment in Manhattan seemed like a dream, one clouded by credit-card debt, student loans that had to be repaid and the bills for their wedding.
But now, five years later, they are about to move into a $445,000 two-bedroom condo in Hamilton Heights, in Upper Manhattan, with their 5-month-old daughter, Matilda. Their combined salaries of just over $100,000 qualified them for a mortgage, but it took a lot more for them to come up with the down payment.
In a city synonymous with luxury and spending, Ms. Lee, 30, and Mr. Agüero, 35, decided to do without.
They gave up smoking to cut costs, they stopped meeting friends after work for beers, they didn’t buy new clothes, and they stashed away tax refunds and as much of their earnings as possible. Whenever they wanted to buy drinks, gadgets or cookware, they asked each other: “Do I want an iPod or a house? Do I want a latte or a house?”

It is a war between wants and needs and deciding which dominates the other. It is classic B.F Skinner with the use of negative and positive reinforcement.

“It would be absurd for me to buy things when I wanted a place rather than a frying pan,” Ms. Lee said as she fed Matilda a post-nap bottle.

More impressive, perhaps, than their willpower was that they were able to save $90,000.

Still, Ms. Lee and Mr. Agüero are part of the shrinking pool of New Yorkers who have been able to buy apartments for less than $450,000, and the even smaller group who have done so without help from their parents or a Wall Street bonus.
“Most people that I’m working with are getting some kind of familial assistance,” said Tracie Hamersley, the Citi Habitats broker who helped Ms. Lee and Mr. Agüero find their apartment. “They were unusual in that they were doing this on their own.”
Mr. Agüero described it as “a mind-set,” adding, “If you want to own a place, you have to do everything to own a place and everything else comes second.”

This is why this couple was able to save $90,000. They kept their eyes on the prize. I strongly also believe another motivator was their child. Home ownership plays a key role in family finances because of the tax benefits. Also in my opinion, that once children enter the picture it is best to own a home for their development.

Today, $450,000 is nearly the average price of a Manhattan studio, according to the Miller Samuel appraisal company. The number of Manhattan apartments that sold for less than that has shrunk drastically in the last five years, to 13 percent of total sales in the second quarter of 2007, down from 44 percent in the second quarter of 2002.

About 15 percent of the Manhattan apartments currently listed by the Corcoran Group and Citi Habitats, and about 30 percent of those in Brooklyn, are less than $450,000. In the Bronx, 38 percent of the listings are under $450,000, according to the Bronx-Manhattan North Association of Realtors; on Staten Island, the figure is 43 percent, according to the local Board of Realtors; and in Queens, 17 percent, according to the Multiple Listing Service of Long Island.

Janey Lee and Pablo Agüero
Mr. Agüero and Ms. Lee say that losing their jobs in the dot-com collapse of 2001 gave them the motivation to save. Ms. Lee quickly found a new job but then was laid off again. Mr. Agüero said he spent a full year freelancing and living on $1,000 a month.

He survived each day on a $2.95 chicken special from a local restaurant; a 99-cent Coke; and a pack of cigarettes, before he finally just gave them up.
They both wanted a safety net.

“That was the initial thing that motivated us,” Ms. Lee said. “There is no job security.”
After they opened their own Web design business, they tried not to return to their old spending habits. The couple found that they spent the most money when going out in a group for drinks. So they would suggest meeting their friends for brunch or heading to Chinatown, where they could buy meals for less than $15 each. They also found that they could save by cooking at home for their friends even when their Fresh Direct deliveries cost $100 a week.

They slowly built up a nest egg. In 2002, they saved their $3,000 tax return and another $5,000 between them. They said that it was hardest not to spend in the beginning: in one case they missed shopping so much that Mr. Agüero splurged on a pair of $300 Prada shoes. After wearing them a few times, he realized they didn’t really fit, so he sent them to his brother in Spain.

Those shoes became a symbol of the perils of impulse shopping. Over the next two years, they each saved $15,000.

By 2005, they thought about using their accumulated $38,000 in savings for a down payment. When they realized that they couldn’t afford anything, Mr. Agüero got a job at a bank and saved his entire annual take-home income of about $40,000. They lived off Ms. Lee’s salary. That drove their savings up to $78,000.

By 2006, they had saved another $20,000, which pushed their savings up to $98,000. They started to search in their neighborhood, Washington Heights. They found the apartment in Hamilton Heights in November and put down $90,000. They hope to move in by the end of the year.

They are happy to be the first people they know to have reached their goal of buying an apartment. “We actually don’t have friends who own,” Ms. Lee said. “We’re really kind of taking that leap, which is different from everybody else that we know.”

They had no job security, so they created their own security; not only by creating their own business but also by becoming frugal and reducing their spending to the necessities.

Amy Wegenaar

Amy Wegenaar, 31, wanted her own place. But she found it hard to save because the rent on her Lower East Side apartment had crept up to $1,550 a month.
Ms. Wegenaar is an art director for the Publicis Groupe and her main client is Garnier beauty products. She worried that on her annual salary of about $85,000, she couldn’t buy anything for more than $250,000. She also wanted an apartment large enough to fit her lunchbox collection, her Spiderman collection and her collection of Jack Skellington dolls in coffins from “The Nightmare Before Christmas.”
She felt discouraged as her married friends bought apartments for more than double what she could afford, and as a single friend bought with help from her parents.
“I would look,” Ms. Wegenaar said. “I would print out the info, and then I would start to cry. I would say, ‘This is never going to happen as a single person.’ ”
In 2004, she started to save $400 a month from her paychecks, adding to that amount with raises and bonuses. By late 2005, she had saved nearly $10,000 and found a $160,000 apartment in Ditmas Park, Brooklyn. She had discovered Ditmas Park by searching listings in her price range on Craigslist. When she visited the area with her parents, she found out that her father had grown up nearby, and that made the area more appealing. But she still didn’t have enough money.

So she went into savings overdrive: she went grocery shopping only with a list and cut out luxuries like expensive juices. When she went out with friends, she ordered the happy-hour drink specials and often chose Mexican food so they could munch on free chips and split a cheap entree. She shopped the sales racks at Urban Outfitters and sewed dresses from discounted fabric she bought on the Lower East Side.

I am quite impressed with Ms. Wegenaar because in her particular field being part of the bar and club scene is a perquisite. The fact that is able to navigate the social with these obstacles shows how determined she was to make this happen.

By October 2006, she had saved $17,000. When she found a $220,000 one-bedroom co-op in Ditmas Park that required only a 10 percent deposit, she wrote a $6,500 credit-card check to cover the shortfall for the down payment and closing costs.
“I can’t let $6,000 stand in the way between me and a home,” she said. Her mother, sister and married friends who owned their apartments encouraged her to take the leap. Makeba Lloyd, a broker at the Developers Group in Brooklyn, sold her on the deal. Ms. Lloyd had moved into the same building in Ditmas Park several months before and talked about how happy she had been moving from Manhattan.
“She actually showed me her apartment, and she showed me what you could do with it,” Ms. Wegenaar said. “It felt so right.”

I think Mr.Onyejekwe's experience reflects what the consequences are to one's social life when they embark on this journey.

Obi Onyejekwe
It can be harder to find what feels right for buyers who don’t want to stray far from Manhattan’s most central neighborhoods. When Obi Onyejekwe moved from Atlanta in 2003 to work as an art director, producing commercials for SpikeTV, he thought he would quickly be able to buy an apartment with the $50,000 he had saved.
Mr. Onyejekwe (pronounced on-yeh-JECK-weh) had been saving and investing in a 401(k) since his first $7 an hour job at J. C. Penney. After college, he saved more than half of his salary from his early jobs by living at his mother’s home in Atlanta.
So when he arrived in Manhattan, he was determined to save and buy even while making less than $100,000 a year. He rented an $800-a-month apartment in Harlem and limited nights out to once a week. He spent less than $6 a day for lunch in SpikeTV’s cafeteria. While he never entirely stopped dating — an expense he calculated could cost him $400 a month — he said that he kept his eye on the larger goal of homeownership.
“It’s great to date, go out and have fun,” said Mr. Onyejekwe, 30. “But you have to be established first.”

That is a great attitude to have.

He soon found it was harder to save in Manhattan than in Atlanta, especially as he made friends. In 2004, he moved to a $1,350-a-month one-bedroom apartment in Hell’s Kitchen to be closer to his friends. He also found himself going out three or four nights a week. He considered moving to Brooklyn, where he could afford to buy, but he wanted to hold out for something centrally located in Manhattan. Karen Fornash, his sales agent at the Corcoran Group, helped him narrow his search.

He finally saved enough by making friends with people at work who shared his obsession of buying their own apartments. They chose to eat out at places with entrees that never cost more than $15 and went to events like the Warm Up dance parties at P.S. 1, where the only thing they bought was beer. They also became regulars at a bar near Times Square where they could get five drinks for the price of four.

In February, Mr. Onyejekwe closed on a one-bedroom on East 24th Street in Gramercy Park for $420,000. He put down $84,000, and he showed the co-op that he had an additional $84,000 in investments. His eight co-workers also bought apartments in Manhattan and Brooklyn that cost $320,000 to $550,000.

“A lot of pressure to spend and splurge wasn’t around because everybody was saving to buy real estate,” he said.

Recently a very controversial report was issued how obesity can be socially contagious. I have to concur with the report, let’s face it if your friends have a tendency to gorge themselves on pizza, beer and tacos, you are very likely to indulge in the same type of behavior. Mind you, I am not saying it is the only thing that causes obesity, but it plays a key role.

That concept can also be applied to real estate and in finances because there is a social aspect in buying your first home. As Mr. Onyejekwe has stated, he was going out 3 to 4 nights a week. One day he looked at his bank account and realized there was no way in hell he was going to buy at that rate. So he began to cut down on his spending.

What is most telling was this quote.

“A lot of pressure to spend and splurge wasn’t around because everybody was saving to buy real estate,” he said.

What I suspect what happened was that he realize there was no way he could keep up with his current circle of friends who had no concept or desire to save for the future. I also suspect that there was some tension between the group and his lifestyle. In fact I would fact I wouldn’t be surprised if his friends accused him of being cheap and were probably jealous of his goal.

It reminds me of an episode of King of Queens titled Home Cheapo

Carrie is upset when she learns that Deacon and Kelly were able to afford buying a second home. She is convinced that the reason they can afford it and she and Doug can't is because she and Doug pay for everything when they do things as a group. Meanwhile, Arthur helps Spence get to apply for a new job.

I don’t mean to spoil the ending but it turns out that Doug and Carrie are completely wrong. Deacon and Kelly had scrimped and saved for their second home and although this is just a tv show, people do get strange when it comes to money. Especially if someone close to them has more than they do.

What did Mr. Onyejekwe do about his social life? He got new friends who had same the goals and needs. These friends were understanding of his efforts because they were doing the exact same thing.

Carina Katigbak and Michael Lenton
Sometimes, buying an apartment for less than $450,000 is simply a dream deferred, like Carina Katigbak and Michael Lenton’s plans for an expensive wedding with 130 guests. When the newly engaged couple moved into Ms. Katigbak’s 400-square-foot basement studio in Gramercy Park last December, they quickly realized they both needed more space.

Their rent, $1,600 a month, was rising rapidly, and they were battling leaks and mice. Ms. Katigbak, 27, still held out the hope that they could put the $45,000 they had in savings toward their wedding. But she realized that if they didn’t use it to buy an apartment, they would spend their newlywed years in a shoebox. Mr. Lenton, a 33-year-old nurse, needed to sleep after shifts, and Ms. Katigbak needed room to study for her Ph.D.

“We talked about ‘Do you want to have a fancy wedding, or do you want a place to live in,’ ” she said.

They put their wedding plans on hold. They budgeted for a $300,000 apartment on their combined annual income of about $100,000. They saved money by walking instead of taking the subway, by eating dinner at home and attending free events like Shakespeare in the Park. They also tried to talk each other out of anything over $50.
“We wanted a bedroom with a door and sunlight,” Mr. Lenton said. “We were willing to compromise on everything else.”

They quickly learned that $300,000 apartments sold fast after they lost three of them to other bidders. Their broker, Maggie Leigh of the Corcoran Group, suggested that they keep their standards simple. They considered sixth-floor walk-ups, not doorman buildings. In June, they found a $365,000 one-bedroom condo on St. Johns Place in Prospect Heights, Brooklyn. They plan to move in September.

They would still like a scaled-back version of their dream wedding. They’re saving for a reception in the Toronto suburbs, near where their families live, with a much smaller guest list. But they have become more flexible about purchases they once obsessed over.

“They’re passing fancies that you need at the moment,” Ms. Katigbak said. “Then you find something else to fulfill what you want.”

This reminds me of two very funny stories about weddings.

When it comes to weddings, the bride often goes insane and dominates the entire wedding process while the groom stays in the background so he doesn’t get his head ripped off. In the process they blow more money than Lindsay and Brittany do on rehab.

I knew of this one couple that had gotten engaged and were in the process of figuring out their wedding plans. This particular bride wanted to have a house, but she realized the wedding would make that very difficult to achieve. So they eloped.

A dear friend of mine had what I thought was one of the most frugal weddings I had ever been to in my life, yet it was quite tastefully done and everyone, including myself, had a great time. The two things that allowed her to pull that off was she had the wedding in a city that had a lower cost of living than New York City and that her husband was lock step in her objectives.

Now mind you, these two had the resources to have a Celine Dion class wedding but instead they chose to restrain themselves and save their money for a new home.
As the cliché goes, when there is a will there is a way. If you are willing to scale back on your spending and make an effort to save, you can achieve what these people have done.

I am not saying it is easy. In fact it sucks. You are going to need to subjugate your spending to the point of night sweats and that is particularly difficult in a country where consumerism and consumption are laws of the land. However, take comfort in these words.

“They’re passing fancies that you need at the moment,” Ms. Katigbak said. “Then you find something else to fulfill what you want.”

You will probably lose some of or all of your friends in your quest. That’s okay. It sounds harsh but that is life. You need to make a decision to live for yourself or other people.

If you decide to live for yourself and your friends are not with the program, they will be cast aside. Just remember, there will be others to take their place.

Wednesday, July 25, 2007

Oh Maria, full of Grace

Get it together Hunt Honey.

Dear Maria,

This morning on the Today show you were interviewed about the huge housing crisis that is now impacting Wall Street. When Matt Lauer inquired about what buyers are sellers should do, you rattled off the following response.

Well the first thing is that you have to make sure you can afford a home. When in fact when you want to buy a home. But y’know Matt I always come out on the side that you don’t want to time this market when you buy a home, sure if you find a home and you love a home and, and, and, you find your dream house you want to be doing that, you want to make sure you can afford it and not look at this unrealistically, if it looks unrealistic no money down, no interest for several months, it probably is but you don’t want to time this market, when buying or selling a home, this is an investment you make for a long time, if you find something you love you want to be buying it at this point. Don’t time the housing market.

When I first heard you say these words, my initial reaction was “What the hell has she been smoking?” and then my next thought was “Whatever it is she better stop soon.”

I want to get something very clear. I think very highly of you. Not only because of your beauty but the fact that you fought your way through the mean streets of Brooklyn to get where you are. No matter how many Jimmy Choo shoes you collect and no matter how many Prada suits you acquire, you will always be considered a girl from the neighborhood. So whether you believe it or not. I am going to be restraining myself.

That being said, I believe that a refresher course in real estate is in order. That closing statement of yours reeked of ignorance and was just about as convincing as Lindsay Lohan’s being sober in Vegas.

I noticed two main themes in your response to Matt Lauer. The first is timing. You repeated constantly like a rabid hyena going through withdrawal that the public should not time this market.

Timing plays a key role not only in real estate but also in finance in general. For example, remember those dot com millionaires? They managed to get stock options and when their dot coms went public, everybody became rich. The smart ones cashed out at the height of the market realizing the timing was right and there was no place to go but down. If they took your advice and not time the market, they would be surviving on bologna from a 99 cents store and fighting for a share in a rent stabilized one bedroom in Rego Park.

Like all markets, the real estate market is cyclical and it is broken down into the following phases consisting of Recovery, Expansion, Balance and Decline.

We are now in the declining phase, which is the worst time or best time to buy real estate depending on who you are. If you are looking for a first home with your spouse it might be best to wait it out for the market to stabilize in order to find a good deal. If you are a real estate investor or a real estate developer, you might be throwing wads of cash at distressed markets and take advantage of the situation before your competitors jump in. Or you may wait it out until it bottoms out in order to get the best value for their money. But for both parties, it is critical to be aware of the state of the market.

The second theme that I noticed in your statement was love. You encouraged the viewers that if they were in love with a home that they should buy it, albeit you warned them not to be unrealistic with their financing. However, you still rallied them to let their emotions guide them rather than their financial statements.

Do the words Irrational Exuberance mean anything to you? This is the type of emotional hijacking that got us into this mess in the first place. People weren’t doing the numbers and they did not or did not want to understand the downside of their actions. And now they are suffering the consequences. And yet here you are still pontificating this irrational exuberance to the masses.

Maria, I empathize that you are doing your job. As a news producer you have to either stir things up or tone them down. I respect that. But I can’t let what said on the Today Show pass.

I know that you, like your financial brethren, are scared. You just got out of a recession and things were starting to get better. The stock market was becoming sexy again and now you are back to the days of the dot com meltdown where people treated the stock market as a pariah. It is as if the economy turned into a Britney Spears photo shoot for OK magazine.

Now is not the time to put our heads in the sand. What we need to do is take stock in what we have and what we have lost. We have to figure out a new game plan to get ourselves out of this mess. Simply following our hearts will not help. It will require spreadsheets, P&L statements and jettisoning of anything that is a financial drain on our lives.

Maria, please stop preaching the party line. Everyone knows how this movie ends and making contradicting statements and batting your eyelashes won’t change a thing. You need to alert the masses of what how dire the situation is, you need to get them ready for the storm that is consuming this market. You need to get people off the beach before the Tsunami hits.


Tuesday, July 24, 2007

Apartment Ratings gets their game on.

We aren't going anywhere.

I recently emailed Jeremy Bencken of Apartment Ratings about forums for movers when he responded with some very excellent news.

Here is the press release.


Site offers unbiased reviews of tens of thousands of apartments nationwide

LOS ANGELES (July 9, 2007) -Internet Brands, Inc., a leading operator of media and e-commerce websites, today announced its acquisition of, the largest and most popular community of apartment renters on the Internet.

"We've brought transparency and savings to home buyers and sellers on, and to the mortgage lending process with our Ethical Lender Rate Directory on," said Michael Dodge, general manager of the home and real estate division at Internet Brands. "The acquisition of builds on this momentum by enabling us to educate and inform consumers in the rental market as well."

Launched in 2000 by Jeremy and Katie Bencken, features more than 500,000 reviews and ratings of about 60,000 apartments nationwide. The site offers renters valuable resources including rent trend data, safety information and detailed maps. Renters can also interact with one another and get advice from the site's apartment living blog.

"Since we launched the site, our ultimate goal has always been to help renters make informed renting decisions," said Jeremy Bencken, founder of "We're proud that unlike most other online apartment hunting services, we don't accept advertising from apartment owners or managers, allowing us to provide completely unbiased reviews and resources on the site."

About Internet Brands

Los Angeles-based Internet Brands ( is a leading operator of media and e-commerce sites for large ticket consumer purchases, such as cars, real estate, mortgages and travel. The company empowers consumers to make better product choices and save money. Internet Brands' sites deliver superior content and consumer insight and have received dozens of "best-in-class" awards.

Internet Brands' automotive division includes,,, and Autodata Solutions. The company's home division includes,, and Internet Brands' travel division includes,,,,,,, and

Internet Brands was founded in 1998 as CarsDirect and added the new parent company name of Internet Brands in June 2005.

I congratulate Katie and Jeremy on their success. They deserve it, considering how much work they have put into Apartment Ratings.

Now if you think Katie and Jeremy are going to take the money and run, you are quite wrong. They are not only sticking around to further strengthen the brand but they also struck a deal that allowed them to keep their development team and office. I look forward to see more of their work.

Sunday, July 22, 2007

Top 10 List on why you should see Ali Rogers

This is straight from Ali Rogers.

1) To hang out at McNally Robinson, the coolest bookstore in New York, located in SoHo at 52 Prince Street;

2) Because you're real estate press and hanging out with other real estate press is mysteriously your idea of a good time;

3) You are sick of getting e-mails telling you to buy Diary of a Real Estate Rookie and think this will make them stop;

4) You are a past or current client and want to say hi;

5) My husband and his team at Supportive Spouse International are twisting your arm;

6) You haven't been to Tom and Jerry's in a while, and intrigued by the possibility of drinks there afterwards (Note: not author-paid; author is cheap);

7) You work for The Wall Street Journal and want more scoopola on this Rupert Murdoch person;

8) You are a writer friend and made me come to yours;

9) You have general real estate questions and would like to ask them in public;

10) Free condo*

*($2 million shipping and handling charges)

That's it: come to the reading on Monday, it's where the cool kids will be. 7 pm at McNally Robinson NYC, 52 Prince Street. The book is a paperback, was called "witty" in Newsweek, and makes a great gift. As noted above, there will be a quick Q&A after the reading, and then a group head-over to Tom and Jerry's for a quick libation.

I'll see you all there.

I'll see you all there.

Thursday, July 19, 2007

The Youtube Revolution

Kelly emailed me her latest youtube link.

Below is the first youtube clip she emailed me.

What a difference.

As everyone knows, Inman news has been running full steam with online video and podcast real estate movement for quite sometime. And now the New York Times has finally discovered this trend in their recent article Podcasting Real Estate in Europe and Asia.

Within the year, I predict more brokers will either hire Kelly or do their own youtube presentations. In the June and July entries that due to these developments they predict that newspapers are going to be taking a bigger hit in the next couple of years.

No. I am not oblivious. I am aware of what happened in midtown Manhattan yesterday. I am still gathering my thoughts since I was actually in the area when it occurred. More on that later.

Tuesday, July 17, 2007

Roll Call

It has been a long day and I am too tired to blog so here are some press releases to chew on.

It looks like foreclosure season is in full swing. If you want the full Propertyshark report go to Kelly Kreth Communications.

Foreclosure Auctions soar in Los Angeles in THE FIRST quarter of 2007
Miami and New York City reach near-term highs, while Seattle recovers

New York City, July 17, 2007 –, the premier real estate data site, today released its quarterly report covering first-time residential foreclosures in New York City, Miami, Seattle and Los Angeles for the April-June 2007 time period.

Four-City Findings (Request report for details):
· Foreclosure Auctions: recorded 3793 first-time trustee sales in Los Angeles, 643 foreclosure auctions in New York City, 1282 in Miami-Dade County, and 334 in Seattle for April-June 2007.
· Major Increases: The number of foreclosures increased significantly in Los Angeles, New York City, and Miami. (See below for numbers)
· Foreclosures per Household: Miami had 136% more properties scheduled for foreclosure per household than Los Angeles, and a 775% higher rate per household than New York City.

Los Angeles County
Trustee Sales: Los Angeles had 3793 trustee sales during the period, an increase of 54.63% from the first quarter of 2007, and a 202% increase compared to the first quarter of 2006. The top 5 zip codes in Los Angeles County for trustee sales were in Lancaster and Palmdale.

Miami-Dade County
· Foreclosure Auctions: There were 1282 new residential foreclosures in Miami-Dade for the quarter, a 29.89% increase from Q1 2007 and a 146% increase from Q1 2006. For a list of the top 20 Miami zip codes for foreclosure auctions, request the report.

New York City:
· New Foreclosure Auctions: There were 643 new residential foreclosures in New York City (5 boroughs), a 16.06% increase from the first quarter of 2007 (554 foreclosures), and a 19.52% increase from the second quarter of 2006.
· Foreclosures by Borough: All New York City boroughs had a quarterly increase in the number of new residential foreclosure auctions, with large percentage increases in the Bronx (76.60%) and Staten Island (58.82%) since last quarter. However, 73% of New York City foreclosures were Queens and Brooklyn properties.

“New York City, Miami, and Los Angeles foreclosures are at all time highs since began tracking foreclosures” stated Ryan Slack, chief executive officer, “Typically the second quarter foreclosure numbers are lower than the first quarter due to the ‘holiday effect,’ but this year the numbers keep climbing”.
Seattle (King County)
· Trustee Sales: King County had 334 new residential trustee sales in the first quarter of 2007, a 13.02% decrease from the first quarter of 2007. The top zip codes were in Federal Way and Columbia.

Real estate investors can browse current foreclosure listings for the following areas:

Los Angeles Foreclosures:
Miami Foreclosures:
New Jersey Foreclosures:
NYC Foreclosures:
Philadelphia Foreclosures:
San Francisco Foreclosures:
Seattle Foreclosures:

I know Curbed has already done an entry on this but I also got the press release.


NEW YORK, NY – Swanke Hayden Connell Architects (SHCA) is designing a
600,000 square foot, 21-story office tower at 125th Street and Park Avenue in New York City. Developed by Vornado Realty Trust, the project will be the first major office tower built in Harlem in more than 30 years.

Called Harlem Park, the development is adjacent to the first Manhattan stop on the MetroNorth commuter rail line. It will include approximately 82,000 square feet of retail space fronting both Park Avenue and 125th Street, the main retail thoroughfare in Harlem. The building will achieve a Silver level of LEED certification.

Set on an 85-foot podium, the 18-story main shaft of the tower features a unitized aluminum and glass curtainwall system with integrated vertical terra cotta color fins that create a unique enclosure echoing the predominant masonry construction of surrounding buildings.

According to Roger Klein, design principal for SHCA, the new tower, while taller than the surrounding neighborhood, is designed to complement the aesthetics and scale of the neighborhood. “The design is intended to enhance the transparency of the building, and harmonize with the surrounding masonry neighborhood,” he pointed out. “Typically, the design of a tower would express its verticality. In this case, we countered the verticality with a composition of smaller-scale ‘stacked boxes’, which grounds the building in the scale of the neighborhood.

“There is great visibility from the Metro North Station, as one travels over the Triborough Bridge onto the 125th Street, and from Central Park,” he added. “As a result, Harlem Park will be a true icon for Harlem and the city. In particular, the top box in the stack of compositional boxes – designed to be illuminated at night – is defined as a distinct cubic form.”

Swanke Hayden Connell Architects is the continuation of an architectural practice founded in 1906. Staffed with more than 300 professionals located in eight offices worldwide, the firm provides services in five core areas of practice: architecture, interior design, master planning, strategic facilities planning, and historic preservation, working with a variety of corporate and institutional clients.

Sunday, July 15, 2007

It's All About The Benjamins

It's all about the Benjamins baby
Now, what y'all wanna do?
It's all about the Benjamins baby
Wanna be ballers, shot-callers
It's all about the Benjamins baby
Brawlers -- who be dippin in the Benz wit the spoilers
It's all about the Benjamins baby
On the low from the Jake in the Taurus

"It's All About The Benjamins"
Puff Daddy

I would like to take this moment to talk about money. I mean real money. Not that broker's who think they are rich because they have a bunch of listings that are unsold. I am talking the type of fortunes that changes the lives for generations. I am talking 740 Park Ave money. There is a ton of this money being thrown around left and right in this market, particularly in commercial real estate in New York City. One example of this money being utilized is this article from the Real Deal.

Queens portfolio fetching $300M

One of Haros' properties in Corona Vantage Properties is in contract to purchase 47 residential buildings in Queens for approximately $300 million, sources close to the deal said today. The deal, which went into contract on Friday, is one of the largest residential real estate transactions ever in Queens. The transaction underscores that institutional investors are increasingly interested in older buildings in a borough with low vacancy rates and a growing population.

Vantage, a real estate investment firm created in 2005, will nearly double its stake in Queens by purchasing around 1,900 units owned by Nicholas Haros. Apollo Real Estate Advisors, which has provided financing to Vantage in the past, is expected to partner with the firm again on this deal, according to sources.

A spokesman for Vantage said the company would not comment on a transaction that has not been completed.

At around $300 million, or $160,000 a unit, the deal is likely to be one of the priciest portfolio sales in Queens history, according to brokers.

"I don't think it is a record per unit, but the number $300 million--I haven't seen that in Queens," said Massey Knakal Realty Services director of sales Rubin Isakharov. "That is an impressive number."

You know what is really impressive? The fact that this company didn't even use a broker for this transaction. They are that powerful that they did not need a broker.

The price eclipses what the LeFrak Organization is seeking for a portfolio it recently put on the market that includes a large number of Queens rental properties. LeFrak is looking to get $250 million for its 2,000-unit Kings and Queens portfolio, or $125,000 per unit.

Vantage and Apollo specialize in revitalizing distressed urban properties. The Haros buildings--which are located in central and western Queens neighborhoods such as Flushing, Elmhurst, Jackson Heights, Sunnyside and Woodside--have amassed huge numbers of housing violations. Last June the nearly 2,000 units in the Haros portfolio averaged almost three violations each, according to the Department of Housing Preservation and Development's records. Haros' largest Queens properties include the 90-unit 91-35 Lamont Avenue in Elmhurst, the 97-unit 37-52 89th Street in Jackson Heights and the 91-unit 139-06 34th Road in Flushing.

I would not classify this portfolio as distressed. In my opinion a distressed property is one that is losing money. Haros was not losing money.

Haros, who built up the Queens portfolio over the past two decades, managed the buildings in addition to owning them. He was included on a 2005 list of landlords the advocacy group Housing Here and Now called the 10 worst in the city.

Tenant groups took Haros to court to force repairs at his properties, and the city levied hundreds of thousands of dollars in emergency repair fees on the landlord.

But Haros' crumbling buildings are still a lure given that buildings in Queens--where occupancy rates often hover at around 98 or 99 percent--are seen as safe investments. According to city statistics, Queens' vacancy rate on rentals was only 2.8 percent in 2005.

"People are just going crazy for apartments [in Queens]," said Isakharov. "They are going for a premium."

Isakharov said proximity to Manhattan, relatively low interest rates and high gross rent multiples are among the factors attracting investors to the borough.

Remember, real estate can be illogical. The original owner probably kept his operating costs as low as possible because he wasn't spending money on repairs and maintaining the property. He probably spent a good chunk of change for his legal fees, but after doing the numbers, the seller probably determined that it would be cheaper to go to court.Yes. He was carpet bombed with violations from the city but he kept them at bay with a good lawyer who knew how to stall.

The industry term for this type of building, is a building "with a lot of hair on it." Which means it has its problems however once they are resolved, there will be a tremendous return in value.

300 million sounds like a lot of money for some buildings with a lot of hair, but as this article pointed out there is practically little to no vacancy rate. There is a ton of people out there looking for better value for their money and these buildings appear to have those attributes they seek. Of course, the issue of overpaying will come up especially if you factor in the repairs. However with the currents trends of the market in their favor, I would not be surprised if they triple their investment in the next decade.

Haros, who just a year ago owned and managed as many as 81 buildings in the Bronx and Queens, sold much of his Bronx portfolio to Urban American for $34.5 million last June.

Tenant advocates say residents in Haros' building will be cheered that the landlord no longer owns or manages their buildings.

Robert McCreanor, an attorney with Paul, Weiss, Rifkind, Wharton and Garrison who worked with the Catholic Migration Office to bring lawsuits against Haros in Queens Housing Court over the past two years, said that while tenants will likely see improvements in their apartments, they are also likely to see rent increases.

"Haros was a terrible landlord and lots of families who lived in his buildings will be happy to see new ownership," said McCreanor. "But they may be fearful of what is in store." By Adam Pincus

Robert McCreanor is correct. They should be fearful. But it will only affect certain parties.

Here's what is probably going to happen. Once the deal closes, the new owners will unleash a platoon of property managers, their mission will be to survey the following areas of the portfolio.

1. The property managers will examine with a fine tooth comb all the physical aspects of the portfolio. This includes the boiler room, laundry room, roof, common areas and anything that is under their jurisdiction. They will then unleash a series of fire teams of contractors, plumbers and other repair oriented personnel. These fire teams will also fix and replace anything they are legally obligated in the apartments of their tenants.

2. The property managers will also do a survey of the buildings staff. They will place all personnel on probationary status, it is during this period that the staff will be evaluated. The objective is to determine who stays and who goes and that is based on productivity. For instance, if the supers are productive they stay, if not they get a severance check and f**k you very much.

3. The property managers will also be looking over the books to see if any cooking has been and who has done it. Anyone playing games will be put out to pasture.

4. The last area to address will be the tenants. This is a very complicated area, particularly due to the past history the tenants have had with their past landlord. What most likely will happen is that the property managers will go through the leases to see who they keep and who they evict. The property managers will take the stack of of candidates of eviction and hand it off to the lawyers who will go to court. Lawyers will also have to determine whether lawsuits filed by tenants are meritorious or not. If they are they need to to determine what the best course of action is. This gets a little funky because the lawyers also have determine what the new owners are responsible for and what is unnecessary legal baggage left behind by the previous owner.

Will the new owners raise rents? Yes. Any place where they can squeeze out more cash they will go after. If a tenant leaves. Even better. They can be replaced.

This is how the high rollers play. This is how rich people with real money do it. These are the types of people who run with the Warren Buffett crowd. They do not associate themselves with the Casey Serins of the world or they sure as hell do not read up on the Robert Kiyosaki bulls**t. These people are armed with MBAs, law degrees, tons of experience and lots and lots of cash money.

You want to play on this team? You want to run in these circles? I am telling you that it is not about connections. Trust me. I know this from experience. It is about added value. Can you bring it? Are you that much of a badass to rise up to the challenge when they call you in the middle of the night and you can increase the bottom line?

Thursday, July 12, 2007

Casey at the bat

I just sold my blog and all I had to do was ruin my life.

I was going to do an entry on this unfortunate soul when he mentioned that he was offered money for his blog when I read his latest entry.

A little background on Casey. He is the numbnut who mortgaged not only his future but his wife's future as well when he went on a real estate flipping spree after blowing a wad of cash on real estate guru education bulls**t.

When he first started his site he was labeled as the poster boy of what was wrong with the real estate market. For quite awhile he was also the resident punching bag as millions lefts comments ragging on him on his own stupidity and suggesting on what type of soap to bend over for when he got sent to jail for mortgage fraud. He was also featured on Nightline and other news shows that displayed his complete lack of common sense and overall ignorance.

But here he is with the last laugh now that he has sold of his blog for a pretty penny. There were talks of a book deal, but apparently Casey's wife beat some sense into him and he has decided not to pursue the book deal out of maintaining whatever privacy he has left. My prediction is that his wife will change her mind once someone waves that enormous check in front of her face.

It just goes to show that shame is the new fame.

I don't have any disdain for this guy. Okay. Maybe a little bit. In all honesty, I have become more motivated since reading about his good fortune. Mind you, I am not going to do anything stupid like buy ten different properties all over America, but I have had a project associated with this blog that I had to put on the back burner and was planning to set it up for take off. But planning is over. I am going to do it. More details later.

Sunday, July 08, 2007

Face Value: Cooling off in Queens

Entrepreneurs are simply those who understand that there is little difference between obstacle and opportunity and are able to turn both to their advantage.

Nicolo Machiavelli

Greetings good people, I hope all of you had a most excellent 4th of July week. Seeing that we are all melting right now, I have decided to cool things off with some Face Value photos that I took last winter.

Awhile ago, I visited 66-17 Woodhaven Boulevard in Rego Park. This is a mixed use property that is a Massey Knakal listing. I want to make it clear that I took a tour of the area, I never stepped foot into the property, nor did I ever meet the broker of this exclusive.

Here’s the description.

Great opportunity in the heart of Queens, on Woodhaven Blvd. to get an excellent investment property with solid tenants - ground floor leased to National Nextel Service Center until 4/2012 (plus 5 yr. renewal option); same residential tenants for 10 years. Ground floor and one apartment remodeled in 2002. The subject property is located on Woodhaven Boulevard between 66th Rd. and 66th Avenue in close proximity to major transportation arteries as the Long Island Expressway and Yellowstone Boulevard. Buses #53 and #11 stop in front of the property, which is conveniently located a block away from a World Gym, an Eckerd's store and a small retail strip with a Seven Eleven, a West Coast Video and a restaurant. Close to The Shops at Atlas Park and Metropolitan Avenue. Perfect property for an investor. Approx. 3% annual increases built into the Nextel Store lease. Asking Price: $985,000

Great description right? Except they forget to mention one thing.

IT’S RIGHT ACROSS FROM A FRAKKING CEMETERY! Specifically, the St. John’s Cemetery.


Now before we write this property off, there are actually some positive attributes to the location. Since it is on the doorstep Long Island Expressway and Yellowstone Boulevard it makes it ideal for business that are centered on the automobile industry, like this hotel, car wash and gas station.

So it is an ideal place for a Nextel store because of it is an accessible place for people on the go to fix their phones or to purchase cellular phone related products.

Now I bet a lot of you can’t get the idea of the cemetery across the street from this property out of your head. In fact it seems like a deal breaker. After all who the hell wants to come home in the middle of the night knowing that the dead are laid to rest across the street?

Remember that quote I posted from Machiavelli about utilizing an obstacle as an opportunity? Well, there is one property on that block that is example of an obstacle being turned into an opportunity.

It is the ideal location for a florist since visitors can easily pick up flowers and pay their respects to their loved ones. It even has a bus stop in front of the florist so visitors can easily purchase their flowers.

My guess is that the business owners own the building and it would be highly unlikely that they would sell anytime soon. They pretty much have a built in customer base guaranteeing the cash flow for the business and I suspect that they plan on keeping this property and the business in the family as long as possible.

If the opportunity came up where someone offers an enormous check to purchase both, I would be surprised if they utilized the services of a broker. The property pretty much sells itself.

In real estate investing, it is imperative to be to have that mindset to look at a property in different angles. It is not just about finding a good deal but to be able to recognize a bad deal.

Now is 66-17 Woodhaven Boulevard a good deal? When I saw this listing several months ago the original asking price was $1,150.000 and the cellar was being rented out for $300 a month. Considering the location and what the property offered, I wasn’t to keen on it. Now the asking price has been reduced to $985,000 and there is no tenant in the cellar so it appears the owners are beginning to realize that they need to be more flexible. Will it help? Let’s check in the next couple of months. As for it being a good deal, the price reduction has definitely helped. But this particularly property's profitability is relies heavily on a specific commercial tenant base. If they can pull that off, then they are golden.

Thursday, July 05, 2007

Quick Update

I am taking it easy through the 4th of July week, but I will be back in action by next week. I have lots to blog about.

Sunday, July 01, 2007

Lockhart Steele: The Return

Last Friday was Lockhart Steele's last day at Gawker media. Don't be sad. According to Gawker he is returning to Curbed.

Welcome back Lock.