Posted by Jonathan J. Miller -Monday, March 12, 2012, 11:15 AM Comments Off
Source: Wikipedia
I’ve written magazine articles and blog posts about the Startchitect phenomenon [sorry for the broken links] over the years – the subject was visited in this week’s New York Times real estate cover story with a title I love: “Boldface Buildings in the Cold Light of Now” versus the less intense web version: “Starchitect Buildings Test the Value of a Name.” The article explores the buildings that faired well and those that didn’t, suggesting that the branding of a building doesn’t assure success.
I’m surprised the term hasn’t found its way into the dictionary yet, although Wikipedia has a comprehensive write up. I saw the Richard Meier designed buildings at 173-176 Perry Street (and later the sister building 165 Charles Street) in Manhattan as the first luxury development that fit my definition of the Starchitect phenomenon. It came online and sold quickly to west coast types who were awash in the aura of Meier’s phenomenal Getty museum achievement.
My take on the Starchitect phenomenon:
“The city is better for the starchitect phenomenon,” said Jonathan J. Miller, the president of the appraisal firm Miller Samuel, “because it enhanced the mystique of New York’s residential housing market. But during the frenzy, those buildings were marketed as if they had inherent greater value, and the jury is still out on that.”
I saw the evolution of events during the boom as going something like this:
Prices began to rise rapidly
New development surged
Land assemblage costs spiked
Developers looked for ways to differentiate (think pet spas)
High costs drove development skew to high end
Starchitects introduced to “create” value in emerging more affordable locations
Starchitect branding became the baseline for all new development
Branding morphed into designers and decorators
Housing market corrected
Starchitect buildings generally struggled as much as non-Starchitect developments
Being an appraiser, and thinking about values, I always looked at the Starchitect phenomenon as a way to artificially increase the net present value of the development – make it more front end loaded – i.e. create more buzz during the compressed marketing period pulling future upside to the developer rather than the buyer. Over time it all comes out in the wash and the branding power fades.
I see these projects as commanding higher prices than non-Starchitect developments built around the same period, but am skeptical they have a stronger staying power or more future upside.
Of course the Starchitect phenomenon moved on to commercial and global stages. I’d have to say that it was terrific for the NYC housing stock [Thank You Amanda Burden!] and will always have its place in the new development space. However the new development phenomenon that required nearly every building to have Starchitect branding was a one-off. It was over-emphasized and over-relied on, fed by an era of easy credit.
Its A Good Time To Be A Famous Architect, Even If You Are Not That Famous [Matrix]
Posted by Jonathan J. Miller -Tuesday, March 6, 2012, 10:23 AM 2 Comments
I was asked by Leigh Kamping-Carder, reporter at The Real Deal who was writing a story about the sale of the Rothschild Mansion to define what a “Mansion” actually was and could “townhouses” be considered mansions (like their suburban stand-alone counterparts)?
In Europe, a mansion included a “ballroom” and many bedrooms. In the UK and Asia, “mansion block”, “mansion” may refer to a block of apartments.
‘Manor’ comes from the same root — territorial holdings granted to a lord who would remain there — hence it can be seen how the word ‘Mansion’ came to have its meaning.
Definition (Big and Wide)
When I think about the “Mansion” moniker, I think about other housing terminology like “terraces“, “penthouses” and “luxury” that have loose definitions but it comes down to…
You’ll know it when you see it.
Here are some general guidelines I’ve gathered over the years to consider whether to consider a Manhattan property worthy of a “Mansion” designation. I think I’ll expand this to the suburbs, McMansions, in a later post.
Manhattan townhouses that have one or more of the following:
25′ wide or greater.
Limestone or partial limestone facade.
A7 tax classification (mansion types of townhouses).
10,000± square feet or larger.
5 stories or more.
…could be considered a mansion, but these are only loose guidelines. A 9,000 square foot, 23′ wide limestone townhouse could be considered a mansion.
No particular architectural style
There is no particular architectural style associated with Manhattan mansions. Some of my faces are neo-Georgian, Beaux-Arts and Neoclassical.
No additional premium
There is no actual premium for the “mansion” designation other than the characteristics that comprise the definition. Those amenities already provide a premium over more generic townhouses (generic is a relative term). So I suppose you could say mansions sell for a premium, but not because of the given name, but rather for their combination of amenities that are already considered.
No double counting people!
Just think big and wide, and not this kind of “double-wide“.
Suggestions to refine my loose (big and wide) “mansion” definition are welcome!
Posted by Jonathan J. Miller -Monday, February 27, 2012, 9:45 AM Comments Off
[Interview starts at about the 31:30 mark.]
Had a nice interview about new and existing US home sales with Michelle Makori in the NASDAQ Marketsites studio on the street level at Times Square. She’s the anchor of the Friday evening broadcast of Biz Asia America, a show on the English-language channel of China Central Television (CCTV), China’s largest national broadcasting network. It is a 24-hour international news channel, which can currently be viewed in more than 120 countries and regions. They are making a big push in the US expanding operations in DC and NYC.
Have you recently sat down in front of the TV and tried to find national and international news? Aside from the inconvenient timing of network news, its nearly impossible and frustrating. Remember CNN Headline News? Now its HLN/Nancy Grace. CNN International is basically the same content as the US version. Bloomberg TV is one of the only US (real) news channels out there today other than when Anderson Cooper is on the scene at a disaster.
Like Al-Jazeera English and France 24, CCTV is filling the English speaking news void created by traditional US cable news outlets like CNN, Fox, MSNBC and others who focus on celebrities, tabloid style news and gossip. Let’s raise the bar people.
Posted by Jonathan J. Miller -Thursday, February 23, 2012, 5:49 PM 1 Comment
In one of the greatest column names ever devised during the illustrious history of the New York Times known as “The Appraisal” [wink], Elizabeth Harris, pens “Amid a Subway Project’s Dust and Noise, No Complaints About the Rent” about the war zone that is Second Avenue on the Upper East Side of Manhattan. I was on vacation when this was published earlier this week and I was forbidden to bring my laptop.
I was approached to try to take a stab at measuring the impact of the Second Avenue subway construction on the local housing market. Listen to the blasting.
Sales transactions move too slowly to capture the neighborhood impact since this is a relatively recent event of the past few years. So I looked at rents since they are smaller and more nimble.
Methodology
I divided a portion of the Upper East Side neighborhood into three zones (East 64th Street to East 96th Street) as follows:
The blocks to the east and west of Second Avenue (Third Avenue to First Avenue)
The blocks to the west of Third Avenue (to Fifth Avenue)
The blocks to the east of First Avenue (to East River)
I analyzed all the properties collected during our production of the The Elliman Report: Manhattan Rentals that actually rented in 2010 and 2011 and compared them. In a rental housing market that is seeing sharp gains in rents in the past year, I thought it would be interesting to see if there was a material difference in direction between the subway “zone” and everywhere else. I was only looking at “face” rents (the rent paid before deducting concessions) because I have more of that data.
And there was a difference.
In fact, the subway zone showed a 1.7% decline in median rent year-over-year, a 3.2% increase to the west and a 2% increase to the east. And the number of rentals in the subway zone increased 9% while the areas to the west and east fell 5.1% and increased 2% respectively over the same period suggesting that increased affordability may be attracting tenants.
Construction was supposed to be completed by 2016, but now it looks like 2018 or longer.
A gigundo transfer station…
[Courtesy: NYT]
…and trucks carrying explosives [Turn your head to left when viewing photo]…
[Courtesy: NYT]
While I was on vacation, I was contacted by Eyewitness News to discuss my numbers on camera but that wasn’t possible – although the online story includes no mention of the source of the results, the video did provide proper credit.
Thoughts
As time moves closer to completion some buyers may benefit from upside given how unpleasant some blocks are right now. The construction will likely provide downward pressure on housing prices in the near term but those along the zone will likely catch-up and perhaps even benefit from the transportation upgrade.
As a general rule, neighborhood property values tend to be higher in the west and lower in the east. It’s also possible that the price midpoint may shift further to the east than it is now once construction is completed.
Location specifics aside, additional subway access to and from the neighborhood should prove to be a tremendous asset to property owners in that area over the long run.
Posted by Jonathan J. Miller -Sunday, February 12, 2012, 10:44 PM 2 Comments
My wife and I were in Home Depot today buying fixtures for a bathroom renovation and I was struck by the crazy marketing approach by American Standard for one of their toilets.
Hook, Slice or Flush?
UPDATE
American Standard commented on the post and graciously shared a video demonstration they put together to showcase the ability of their toilets to flush a bunch of gold balls (not sure if a sentence like this has ever been put together) and a lot of cool other stuff. Great stuff – love their marketing moxie!
…in reference a story about a triple-combination apartment and how all the sellers would likely benefit by allowing a buyer to return the apartment to its origination (or close to it’s) configuration. In combination sales, while the value of the total usually reaps a premium over the sum of the individual values, the resulting layout may turn out to be something less valuable as compared to an apartment similar in size that was originally designed that way.
When there is an opportunity to restore an apartment back to it’s original configuration before it was cut up (commonly during the housing shortage after WWII in Manhattan), the value of the apartment would likely be comparable to similar sized apartments originally designed to be single units.
Like domain parkers, I’m staking my claim to a third phrase:
Posted by Jonathan J. Miller -Monday, November 28, 2011, 2:00 PM Comments Off
Here’s an info graphic making the case for solar energy for central air conditioning. What caught my attention was the lack of disparity between people that ran their CAC with grid and solar power.
Posted by Jonathan J. Miller -Tuesday, November 1, 2011, 10:30 AM 2 Comments
Here’s a very cheesy but entertainingly sarcastic infographic on home renovations. And yes, I once heard voices in the rear of a property I was inspecting during an appraisal.
Posted by Jonathan J. Miller -Monday, June 6, 2011, 3:27 PM Comments Off
[Source: GoComics.com]
I love this cartoon because it suggests so much to me about today’s new development urban housing market in the US
Ok, so the housing boom paid for the Starchitect’s premium for highrise luxury condos built in most of US urban housing markets resulting in one of the coolest periods of architecture since Art Decco.
Had a fun interview with Tom and Sara this morning on the always MUST watch/listen Bloomberg Surveillance. We talked housing, rentals, vacancy and inventory. An added bonus was the addition of Adam Davidson – co-founder and co-host of Planet Money... Read More
