Manhattan

Half-Empty Haven: The Elite’s Luxury Tower in New York Struggles to Fill Up (Wall Street Journal)

By Columbus International,17 July 20239 November 2024

Hudson Yards has always been an ambitious real estate project, spanning approximately 28 acres, located on the west side of Manhattan and developed by the Related Companies. The goal was to transform a windswept railyard into a new luxury destination for the global elite, creating a new residential area with skyscrapers, luxury stores, restaurants, and exclusive services. However, almost a decade after its inception, the project has faced difficulties in achieving this goal. At 35 Hudson Yards, one of the residential towers in the project, approximately 50% of the units remained unsold by the end of June, more than four years after sales began – according to the WSJ.

To stimulate sales, Related has had to reduce prices and offer incentives such as covering taxes and closing costs for buyers. Recorded sales at 35 Hudson Yards show an average price decrease of 30% compared to the initial listed prices. Some units have been sold at discounts of over 40%. Additionally, the project has faced competition from a wide range of luxury condominiums in Manhattan, with greater discounts offered compared to other areas of the city. In contrast, another residential tower in the project, 15 Hudson Yards, initially fared better and is nearly sold out after almost seven years of marketing. Despite efforts to promote the new neighborhood, reception to Hudson Yards has been mixed. While some appreciate the luxury stores, restaurants, and tourist attractions, others describe it as a place lacking authentic personality, characterized by soulless glass skyscrapers.

Furthermore, the proposal to introduce a casino at Hudson Yards has raised concerns among potential buyers, who worry about attracting large crowds and tarnishing the area’s upscale image. Related has responded by stating that if they are fortunate enough to obtain a gaming license, they will create a tasteful world-class resort that enhances the offerings at Hudson Yards. Currently, Related still has over a billion dollars worth of condos to sell at Hudson Yards. Despite the challenges, the company remains optimistic about future sales and has been sending out contracts for many units at 35 Hudson Yards. However, luxury property prices in Manhattan are experiencing a decline in sales, and many buyers are seeking to resell their units at prices lower than their initial purchase, preparing for potential financial losses.

Luxury Real Estate Market in Manhattan Heats Up: Here’s Why, According to Wall Street Journal Analysis

By Columbus International,13 July 2023

Luxury real estate market in New York City is experiencing a resurgence, defying earlier uncertainties and signaling a potential shift in the US real estate landscape. The Wall Street Journal reports that high-end properties in Manhattan had their second-best June for signed contracts since 2006. Contrary to expectations, which predicted that rising interest rates and a declining economy would deter affluent buyers throughout 2023, the market has been invigorated by a rebounding stock market and diminishing recession fears. Donna Olshan, president of Olshan Realty, a prominent brokerage firm monitoring luxury sales in Manhattan, remarks on the positive trend: “People are actively investing in exceptional homes, defying any concerns about the market’s current climate.” While transaction speeds may not match the peak years of 2021 and 2022, luxury deals during the first half of 2023 have exceeded pre-pandemic levels.

Notably, a recent off-market transaction in Soho involving a remarkable penthouse set a new record as one of the most expensive real estate deals ever completed in downtown Manhattan. Formerly owned by Peter Jennings, the esteemed former anchor of “ABC World News Tonight,” the apartment boasts breathtaking Central Park views. Within a mere two weeks of listing, it garnered four offers surpassing the asking price of $10.45 million, demonstrating the eagerness of discerning buyers to secure premier properties. Lisa Chajet, the real estate agent overseeing the transaction, notes the enthusiasm: “High-net-worth individuals are recognizing the value and seizing the opportunity before prices surge again.” Although the luxury market in New York remains robust, the national scenario presents a different landscape, as luxury sales nationwide continue to lag behind the past two years and even pre-pandemic levels. Taylor Marr, chief economist at Redfin, explains that affluent buyers are still cautious due to high interest rates and are postponing discretionary purchases, including secondary residences.

In April, for the first time in 11 years, home prices experienced a year-on-year decline. However, this trend is primarily observed in the western regions of the country, whereas the housing market on the East Coast and in the Midwest has demonstrated resilience. In particular, affluent suburbs near major cities like New York and Washington, D.C., have witnessed strong demand, as buyers prioritize properties within excellent school districts. Reluctance among homeowners to sell has further intensified the scarcity of available properties, which, in turn, has contributed to stable or even rising prices in many areas. Despite concerns about bonus reductions on Wall Street, where average payouts fell by 26% compared to the previous year, the real estate market in New York has remained buoyant. The recovery of the stock market, with the S&P 500 gaining 14% by the end of June and the Nasdaq posting its best first-half performance since 1983, has played a vital role in supporting luxury sales. Furthermore, developers have introduced incentives such as covering closing costs and waiving common charges for up to two years, facilitating more than half of the luxury home sales this year.

Zeckendorf Development, a prominent real estate firm, has responded to market conditions by offering discounts of 5 to 10% to attract buyers at their new condominium building located at 1289 Lexington Ave on the Upper East Side. The strategic pricing adjustment has generated positive results, with over a third of the units already sold since the sales campaign commenced a year ago. While the luxury market in New York continues to thrive, potential risks lie ahead. A slowdown in the economy or an increase in interest rates could have a significant impact on the market’s stability. Experts advise keeping a close eye on future developments to gauge the sustainability of the luxury real estate surge in the city.

Reconstruction of Penn Station in New York City is moving forward, with an Italian company leading the proposals

By Columbus International,13 July 2023

The reconstruction of the heavily criticized entrance of Penn Station is set to proceed despite the presence of controversial new skyscrapers. With a project value totaling $7 billion, Governor Kathy Hochul announced that the construction of the skyscrapers may be delayed for several years. As per the New York Post, state authorities have already allocated $1.3 billion towards the project, but additional substantial federal funding is needed to bridge the remaining gap, particularly due to the economic threat posed by remote work in the wake of the Covid-19 pandemic. Governor Kathy Hochul expressed her determination to see the project through, stating, “My focus right now is on completing this project.” Hochul and MTA officials have also revealed plans to accept proposals from architects and external firms to develop a more detailed vision for enhancing the main level of Penn Station. The vision includes merging two levels of the station into a unified entrance level, with a goal of doubling or even increasing the ceiling heights throughout the station, which have long been a subject of complaints.

Additionally, an eye-catching new railway atrium is set to be constructed between 7th and 8th Avenue, where the currently unused Madison Square Garden runway is located. This design aims to allow sunlight to reach the new entrance level, a feat not achieved since the original complex was demolished. The MTA’s vision also entails building two new main entrances at the corners of 8th Avenue. The owners of Madison Square Garden have strongly opposed the railways’ current proposal, expressing concerns over potential interference with their operations and sporting events. Meanwhile, an Italian company, with former MTA President Pat Foye serving as a high-level executive, has put forth its own plan, which involves demolishing the Hulu Theater—an auxiliary structure of Madison Square Garden—to create a new railway atrium on 8th Avenue within the complex.