Morgan Evans-New York City Real Estate Expert

Prudential Douglas Elliman is opening a new office specifically for rentals. The company is going to be recruiting 50 to 75 new agents whose sole focus will be the rental market.

A website specifically designed for rentals, will be released as this new office opens. Jonathan Miller, president of real estate appraisal firm Miller Samuel, who prepares the company's sales reports, will also be generating a new rental market report. As I have mentioned in a previous posting, the rental market has become more advantageous for the renter in the 2008 market.

When the sales market slowed down this summer, many buyers became renters. There was an opportunity to be made and it looks like Douglas Elliman is going where the business it at.

Over the last year I have seen a shift in the focus of rentals versus sales business. Many agents would refer out their rental customer's to agents who specialized in the rental market. Now as the sales market has shifted I see firsthand many of these bigger agents now working these leads that they once would have happily given to somebody else.

The rental market in Manhattan is a tough business for agents. One of the hardest parts of finding apartments for customers is the access to information. There is not just one database that you can go to and look for a certain set of customer criteria. There are so many different management companies that have their own apartments and they release these apartments at all different times and as an agent or renter you have to know where to look. Finding the perfect apartment demands knowing where to look, who to talk to, and understanding which buildings will work for your customer.

As the market has shifted in New York City, Douglas Elliman has made a conscious effort to go to where the business is at. Providing a complete set of services to an already established customer base is the key to staying on top of the market.

For The Rental Market Year in 2008, Click Here!

For more information, please contact Morgan Evans or call 917-837-8869

Disclaimer: All information in this post is subject to change without notice. Subject matter: is an opinion, is not guaranteed, may be time sensitive, and may be based on information collected from several sources which may or may not be reliable at the time of sourcing.

Renting a New York City apartment in 2008 was a far different experience than in 2007. In 2007 with very little inventory, landlords really set the market. There was no negotiation, no incentives, no mercy. Our customers had to make decisions on the spot, have all of their documentation in place, and be ready to get deposit checks in the matter of a few hours because if they didn't somebody else would take the apartment. Not so much in 2008. The rental market in New York City is very seasonal, depending on the season and the neighborhood the market fluctuates, the power between the landlord and tenant varies.

The Real Estate Group New York just released their year end report for the Manhattan rental market. In 2008 the power shifted to the tenant. There was an across the board drop in all categories of apartments except for non-doorman studios.

There has been a considerable up-tick in rental business in the last six months. As some buyers have decided to stay on the sideline and watch what happens to prices, they have continued to rent, and we are getting a lot of renters who are looking to take advantage of the softening market and rent the same or better apartment at dramatically better prices. As the report outlines prices have adjusted, but where we have really seen a change is in the incentives landlords are willing to pay. Landlords are trying to keep the stated rent on the leases as high as possible, so they are offering to pay the broker commissions, free month's rent, pay for moving costs, a gym membership.

The most aggressive management buildings that I have seen are including 2-3 months free rent and paying the broker commission. These buildings are in the financial district where the Wall Street crisis is at its epicenter. We do a lot of rentals in the Upper West Side and I would say that rents are negotiable in a 5-10% depending on the unit. There are a number of full service, renovated, doorman buildings that are paying the broker fee and willing to negotiate on their units.

The management companies want to keep the stated price on the lease as high as possible even though with all of the incentives the amortized amount could be 10-20% less, because if the market rebounds a year from now they will be at a higher base rent to renegotiate.

For more information, please contact Morgan Evans or call 917-837-8869

Disclaimer: All information in this post is subject to change without notice. Subject matter: is an opinion, is not guaranteed, may be time sensitive, and may be based on information collected from several sources which may or may not be reliable at the time of sourcing.

Hot Dog Real Estate in New York City

They say location is everything when it comes to real estate. Well, in the world of selling New York City hot dogs that saying has been put to the test. A hot dog vendor has agreed to pay the city $81,701 more a year to sell his hot dogs on the north side of the Metropolitan Museum of Art entrance than on the south side 100 feet away. It doesn't stop there.

The New York City Parks Department auctioned off the food-vending rights to the north-side entrance of the Metropolitan Museum of Art for $362, 201 and the south-side entrance for $280,500, both to the same first time vendor, Pasang Sherpa.

Why did Sherpa pay $80,000 more for the rights to the north side location? That [north] side is busier," explained Sherpa. Many museum visitors use the nearby 86th Street/Lexington Avenue subway express stop to the north.

So Sherpa has both the north and south sides of the museum entrance which is located on 5^th Avenue and 82^nd St covered. So you would think that spending so much money for the rights to these spots would give you exclusive rights, so that nobody else could sell hot dogs for at least a block radius, right? Well that's not the case. Other vendors who were grandfathered into the current system of auctioning off the prime spaces can still sell their hot dogs on the block, but just not in the main area.

Why did he do this? He pays over $540,000/year for just the location rights to sell hot dogs! The Metropolitan Museum of Art gets over 5 million visitors a year and his carts are right in the middle of all this action. There are no restaurants for blocks, making this some of the most lucrative hot dog selling real estate I would estimate in the entire country.

So he probably charges a real premium for his hot dogs, right? That's not the case; under the contracts of the Park's Department a vendor cannot set their own prices. The maximum they can charge is $2/dog!!!

Okay, time for some math. Let's say the average customer buys 1 hot dog, 1 soda, and 1 bag of chips for a grand total of $6.00. He needs to sell to 107, 117 people/year to break even for the rent. That's not counting the costs of his food. But with that being said 107,117 people is just 2.14% of the total number of people visiting the museum every year. I like those odds that he only needs 2 people out of 100 to break even for rent. Even if it costs $1 for the hot dog, soda, and chips the net profit for each transaction is $5.00 that makes the break even point, 128, 540 people and 2.57% of the total number of visitors to the met every year.

So let's say the vendor gets 3% of the gross, or 150,000 transactions at $6.00 or $900,000.00-$542,201(rent)-$150,000(food) = $207,799.

Not a bad take for selling hot dogs!! This is exactly what makes New York City Amazing!

You can contact me directly at morgan.evans@elliman.com

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New York City 4th Quarter Market Report

I was very interested in the 4^th Quarter Market Reports coming out from the major real estate companies here in New York City. Unless you were on a deserted island somewhere or had your head buried in the sand, the last quarter of 2008 showed a lot of distress for New York City real estate.

What does all of this analysis mean to you? Are you looking to buy, sell, invest, or rent? Are you looking to buy a co-op, condominium, loft, or townhouse? Do you want to live Downtown, on the West Side, the East Side , or Uptown? Each type of property in Manhattan is affected differently, and each neighborhood is has it's owns variables that will shape value. We all know that prices have gone down, but depending on your own situation you need to know the facts.

The overall conclusions from all the reports are that the number of transactions occurring has decreased dramatically and that sales prices have declined. The actual drop for median closed prices was small, 3-4%, a reflection of the long lag time between contracts being signed and closing dates. Its been agreed that the last quarter's drastic drop in transactions and downward pressure on contract prices indicate that the 1^st Quarter reports of 2009 will confirm the current declines.

One of the more interesting statistics that I took away was that contract price levels showed an average decline of 20% from August 2008. There were over 9,000 apartments available during the 4^th quarter, up over 39% from the same period last year. The days on market increased 25 days to 159 days from last list date. The Listing Discount from last list price was 7.3% up approximately 5% from the prior quarter.

If you would like a specialized market report for your building or neighborhood focusing on what you are thinking of buying or selling contact me with your criteria.

Prudential Douglas Elliman 4th Quarter Market Report for Manhattan

If I walk into a new development building with a buyer in today's market, we will be treated like royalty. It's pretty much standard practice to be offered refreshments and the occasional bite to eat.

To set their development apart from the rest, the developers at 211 E 51^st St are offering a hosted complimentary, personalized luncheon for small groups of buyers' brokers. The developer is inviting groups of brokers over for a catered lunch in the model apartment at the building. One of the reasons why the developer has chosen this method of promotion rather than just the typical open house set up is that this format requires the buyer's broker to take a little more initiative to RSVP to the event. I'm assuming this effort to RSVP and the actual luncheon will create a lasting memory of the building and will keep it at the top of the buyer's broker's minds when they are speaking to prospective buyers.

The luncheons have been lucrative as they have created more potential leads for the developer.

Buying in a new development has become increasingly tricky in the past six months. Financing guidelines have made it much harder for buyers to qualify for loans. A new development has to do everything they can to set their development apart from the crowd. Luncheons will attract the hungry broker looking to kill two birds with one stone, previewing a new property and also getting something to eat along the way. But buyers are worried about prices right now and if that development is still holding tightly to the peak pricing of 2007 and 2008 it is going to make it very difficult for them to get any buyers in regardless of what they are doing to entice brokers.