3-Bedrooms Soar as New York Nests 

Sep 26, 2004

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IT was as frenzied as a Manolo Blahnik sample sale. Michele Kleier, a broker at Gumley Haft Kleier, put the prewar, three-bedroom apartment on the market two weeks ago, then stood back and watched the hordes that descended for her first and only open house. "We must have had 100 people in two hours," she said. The seven-room co-op at 88th Street and Madison Avenue went into contract above the $3.45 million asking price in a four-way bidding war.

These days the most prized apartment may be the one that offers three bedrooms. Buyers, typically families needing space for children or couples seeking space for offices, are finding that there is very little available.

The extra bedroom doesn't just add a bit to the price. To get a prewar three-bedroom, buyers have to spend an additional $700,000 to $1 million above the cost of a two-bedroom.

Three-bedroom apartments are the fastest growing share of the market, according to a study by the residential brokerage firm Brown Harris Stevens. Of 5,489 sales during the first eight months of this year, 638 were three-bedrooms, increasing the market percentage of three-bedroom sales to 12 percent from 9 percent for the same period last year.

On the East Side, the median price of a three-bedroom apartment rose to $2 million from $1.3 million. (If the price tags on Manolos increased by that much there would be riots by wage-earning fashionistas.) On the West Side the median price grew to $1.75 million from $1.59 million, while the median price downtown grew to $1.55 million from $1.47 million.

Gregory J. Heym, the chief economist at Brown Harris Stevens, who conducted the study, suggested that the surge is driven by families opting to raise children in the city and young people looking to trade up.

Not all three-bedrooms are created equal. "When you get into larger apartments, there is a lot of difference in size and design," Mr. Heym said, with square footage ranging from 900 to many thousands. Prices range from $299,000 in Harlem to $12 million and beyond on the Upper East Side. But no matter where they are, he said, "the demand is strong and they tend to hold their value."

Classic seven-room prewar apartments average $2 million to $4 million; a three-bedroom with two maid's rooms, another typical configuration, is at least $4 million to $6 million, according to Deanna Kory, a senior vice president at the Corcoran Group who specializes in large apartments on the Upper East and West Sides. Ms. Kory said that, in general, the larger the room count, the larger the rooms. "If you look at a six-, seven- and eight-room apartment, the seven and eight are going to have larger-scaled rooms," she said. "And the price goes up exponentially."

Demand for affordable three-bedroom apartments is at least as intense. Next week, the Developers Group will market a new building in Washington Heights, the Bennett Condominium at 736 West 187th Street, of which 27 of the 56 apartments will be three-bedroom units starting in the mid-$500,000 range.

"We are already getting an enormous amount of phone calls about them," said Highlyann Krasnow, the executive vice president of sales for the Developers Group.

Many good values can be found in Washington Heights and neighboring Inwood. "I think that's where the growth market is, in that area," said Hall F. Willkie, president of Brown Harris Stevens. "It is more affordable for young families whose means might be more limited. There are direct subway lines and buses. Amenities are catching up. If you're priced out of one area, you just keep going until you can afford it."

Some couples who look for apartments before starting a family, so they won't have to move continually, find the prices rise faster than they can make decisions.

Patricia A. Zapf, an associate professor at John Jay College of Criminal Justice, and her husband, Robert Parfitt, a business consultant, now rent a three-bedroom on the Upper West Side.

Ms. Zapf said that they started looking at two-bedroom apartments last year and that most of the units were going for $660,000 or more. "I can't even think about paying that much," she said. But in a year, she said, "they went up to $880,000." That made them realize they had to act fast.

They have been actively looking for and bidding on three-bedrooms for the past six months. But they have had to branch out to other neighborhoods, and they're now looking in Harlem.

Currently there is only one three-bedroom apartment on the market in their price range of $450,000 to $500,000 in Harlem, according to Ms. Zapf. But the apartment, with a $475,000 asking price, is in an income-controlled building in which buyers cannot make more than $160,000 a year. (The couple exceeds that limit by $5,000).

For some intrepid buyers, the do-it-yourself three-bedroom is the most effective way to get a spacious apartment. Steve Goldschmidt, an associate broker with Warburg Realty, sold five units in a co-op conversion building in Morningside Heights at 535 West 110th Street in a matter of months. Several of them were going in pairs at $650 to $800 a square foot for raw space to buyers who planned to combine them. For one of the larger combinations that would have 2,300 square feet, the price tag was about $1.5 million, before renovations.

"This is not buying mint condition," Mr. Goldschmidt said. "These are people who are independent business people who don't show the traditional co-op package. Here they can take two whole apartments and make it their own."

Downtown, Mr. Goldschmidt said, three-bedroom apartments in residential areas like TriBeCa are swallowed whole as soon as they hit the market.

Some buyers prefer TriBeCa because they don't like the prewar style. "You know the apartment in 'Mr. Blandings Builds His Dream House'?" asked Julie Spigelman, referring to the 1948 movie starring Cary Grant. "That's what uptown apartments look like to me. They are so boxy."

Mrs. Spigelman and her husband, Sam, a urologist, who are from Los Angeles, recently bought a three-bedroom apartment in TriBeCa. They had planned to sell their house in Los Angeles, buy a smaller one nearby and get an apartment in downtown New York at some point in the next two years. But they moved faster when they discovered how quickly apartments were going and how much prices were rising.

Their daughters, 17 and 20, are in musical theater and were planning to move to the city. The Spigelmans wanted to have space for their children to stay and something they could use as a second home in retirement. They thought a one- or two-bedroom might work. While Mrs. Spigelman and her older daughter were in New York to see some plays last March, Mr. Spigelman called from California to suggest they check out a one-bedroom he had found online.

"I loved the building, I loved the area," Mrs. Spigelman said of the condo building on Nassau Street overlooking City Hall Park. She called her husband from the apartment and he asked her if she could see them living there in 20 years. "I said not even if we were newlyweds."

"I'd forgotten how small an apartment in New York can be," she said. "I'm here in my house 3,000 miles away looking at them online. One bedroom, two bedroom seems pretty doable. But when you stand in it and say 'I'm going to cram everything I own in this place, my husband, and have space for children?' "

The listing agent, Lisa Wong of Douglas Elliman, suggested Mrs. Spigelman look at another apartment in the building, a three-bedroom on a higher floor.

"I walked in and looked out at the Empire State Building, called him from the doorway and said, 'Put the house on the market, we can live here.' "

In the time it took to get the check sent overnight from California for the apartment, the only other three-bedroom unit in the building went into contract, which made Mrs. Spigelman very nervous. But this summer, they closed on the apartment.

New developments like the Time Warner Center and the Trump buildings are adding three-bedroom apartments that are less family oriented, and are attracting buyers without children who simply want the space.

Michael Shvo, an agent with Douglas Elliman who also works as a consultant to developers, said some buyers in the Time Warner building have converted 2,400-square-foot apartments into one-bedroom units. "They want the space, but not all those rooms," he said.

So why not just build them as one-bedrooms in the first place?

"As a developer," he said, "it doesn't matter how many square feet, if you can put in three bedrooms you're always going to get more money for it than if there is only two. As conscious as people are about price per square foot, they are also conscious of price per bedroom."

His current developments, including a building at West Broadway and Franklin Street that will have 2,600-square-foot three-bedroom units starting at $4 million, are being designed with modular floor plans. "If people want to knock a wall down, they can," he said. "If they want to combine it with the apartment next door, they can."

Three-bedroom apartments in new developments in Brooklyn are also selling quickly, in certain neighborhoods. Two units from the Developers Group in Park Slope at 103 St. Marks Place — each with three bedrooms, three and a half baths and more than 2,400 square feet — were priced at $890,000 and $980,000 and sold in two weeks.

But it's a different story in Williamsburg. At another building handled by the firm, the 226 South Second Street Condos, the three-bedroom triplexes priced at $900,000 and $940,000 took longer to sell.

"In Williamsburg our best seller is a two-bedroom, not a three-bedroom," Ms. Krasnow said. "A lot of younger people are going there to get more bang for their buck. Once the size gets big, then the purchase price gets too high."

With prices rising so quickly, those who want larger apartments feel increasing pressure to move before prices rise further.

"Things that we were looking at that were $700,000 are now $1 million, $1.2 million," said Lucy Appert, a teacher at New York University, who with her husband, Edward, has been flirting with buying a three-bedroom apartment on the Upper East Side for the last five years. "We could never tell anyone in North Carolina, where we're from, that we're looking at million-dollar apartments."

With both of their families in the furniture business in North Carolina, the couple had so much furniture crowding their two-bedroom Upper East Side apartment that they had to rent storage spaces.

"We are looking for some mental space and then public space — a living room, a dining room, then room for a family in the future," said Mr. Appert, a senior manager at Deloitte Touche Tohma.

They calculate compromises (should they look at two bedrooms, move out of the Upper East Side, jettison furniture?) even as they are conscious of the clock ticking on current prices.

"We have that eternal optimism," Mr. Appert said, "and hope that someday we can get a bigger space."

The Town House Morphs 

Aug 28, 2003

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WHEN Alan Wilzig and Karin Koenig move to a new town house in TriBeCa next year, Mr. Wilzig, a kinetic 38-year-old bank chief executive, might not even give Ms. Koenig a key to the front door.

''He wants me to go in through the main lobby for security,'' Ms. Koenig, a 33-year-old artist, said as she perched serenely on a lime-and-cream-colored footstool in the couple's rented loft this week. ''The unique thing about it is that it's a town house with all the amenities of a regular building, which is what every Manhattanite is addicted to -- the doorman.''

The couple, who are to be married next month on the Greek island of Mykonos, recently bought a $4.45 million town house at the Hubert, a new 33-unit condominium development at Hubert and Collister Streets that features two town houses attached to a larger loft building complete with lobby and 24-hour concierge service.

In addition to using the fitness center in the cellar and directing package deliveries to the doorman, owners of the new town houses will be able to enter their homes through the lobby, which connects to their own basements through a corridor. Mr. Wilzig, in a rare moment that found him seated, said he would mount a buzzer in his office at the Trust Company of New Jersey to alert him if anyone triggered an alarm on the front entryway to the town house.

In a bid to sell newly built luxury town houses, the developers of the Hubert, along with those building Morton Square in the West Village, are pitching a hybrid: the privacy of single-family homes, along with the comforts of an apartment building, including doormen, superintendents and other co-op-style services.

For wealthy people looking for more space than a traditional apartment, the town house has long been the Manhattan alternative to the suburbs. ''It's almost like 'Gone with the Wind,' '' said Michele Kleier, president of Gumley Haft Kleier, a Manhattan real estate firm. ''It's Tara. You can actually go in the backyard and pick up a piece of your earth, as opposed to a co-op, where you own shares in something that you don't even understand.''

Developers of the new town houses are betting that some buyers will want something more than that piece of dirt. Robert A. Siegel, who is developing the Hubert with a financial partner he declined to name, said he bought and renovated a Gramercy Park brownstone himself in 1998, but wished he had a doorman to receive packages and a superintendent to fix backed-up toilets.

The remaining 6,600-square-foot, three-story Hubert town house is being offered for $6.25 million, with a $2,991 monthly common charge.

''When you think about it, why wouldn't you want a town house with all of the services?'' asked Jules Demchick, president of the J. D. Carlisle Development Corporation, which is putting six town houses into the 147-unit Morton Square project near the Hudson River. The town houses, which are about 4,000 square feet and range from $3.5 million to $4 million, will have private gardens and separate front-door entrances. Owners will be able to park their cars in the 140-car garage and have their garbage collected by a superintendent and groceries delivered by a concierge.

The new town houses may tap into a growing appetite. Ms. Kleier reported a recent increase in inquiries about town houses by young couples with children. ''They figure if they spend $5 million or $6 million, they are going to get a 3,000-square-foot apartment,'' she said, ''or they can get a 7,000-square-foot town house with a backyard.''

According to the Douglas Elliman Manhattan Townhouse Report, prepared by Miller Samuel Inc., a New York real estate appraisal firm, more town houses were sold last year -- 150 -- than in any year since the concern began tracking sales in 1989.

Some real estate agents question whether the new crossbreeds are true town houses. At Morton Square, the town houses are not even completely distinct properties: three levels of lofts are stacked on their roofs.

''In Manhattan, a single-family town house is something other than a condo, other than a co-op, other than part of a planned community,'' said Bruce Ehrmann, a senior vice president at Stribling & Associates who marketed three newly built TriBeCa town houses designed by the late John Petrarca in 2000. The houses, though modern, still fell within the rubric of the traditional fully independent town house.

To many town house buyers, the concept of newly built is anathema. ''My feeling, at the end of the day, is that one buys a new development to do the new exciting urban thing in Manhattan,'' said Leslie Mason, a town house specialist at Prudential Douglas Elliman in New York. ''You buy a town house so you can relive the Edith Wharton experience.''

Sally Susman, a Manhattan public relations executive, recently signed a contract to buy a five-story town house in Gramercy Park. After she and her partner looked at nearly 100 apartments in full-service buildings, they abandoned the dream of a doorman when they fell in love with a 19th-century brownstone. To Ms. Susman, the romantic appeal far outweighed the loss of some luxury services. Besides, she said, ''I'm not a huge fan of new construction.''

The marketers of the Hubert recognized that they had to persuade Manhattan's notoriously status-conscious real estate brokers to embrace the new project. With glass and steel facades, the new town houses have few echoes of their brownstone and brick predecessors.

BEFORE ground was broken in January, the Sunshine Group, a real estate firm that specializes in marketing new luxury residential projects, convened a panel of the city's semantically correct town house brokers to come up with marketing lingo. The developers had originally considered calling three other multistory units built into the main body of the condo building town houses, too. But the brokers at the panel discussion dissuaded them. James Lansill, senior managing director at Sunshine, said that might confuse buyers and drive them away. Those units, he said, sold as ''maisonettes.'' In the town houses, Mr. Lansill said, the brokers ''didn't want us to call anything a patio, but a garden -- they really focused on the nomenclature of the town house buyer.''

Rather than buy the new town houses, some have chosen simply to remodel the old versions. Jon Kully, a 28-year-old architect who is renovating a federal-style brick town house on a leafy block of 20th Street in Chelsea, exhibited all the breezy idealism -- and contradictions -- of a newly minted architecture school graduate as he traipsed through the construction zone this week in cargo shorts, a black T-shirt and flip-flops. A marketing brochure he produced called the project ''the activation of history rather than the preservation of a concealed archive.''

''A developer does something in order to sell it,'' he said. ''It is not something that is done with integrity.'' Mr. Kully said he is wildly overbuilding the town house, which he calls a showpiece. This fall he will move into the upper floors and try to sell a duplex on the ground floor.

The town house blend is not a new idea. In 1963, developers of an apartment complex at 333 East 69th street installed 16 town house units on the ground floor, eight with separate street entrances. At the time, the architect William J. Conklin, the chief designer of the project, said he wanted to reinvigorate the Upper East Side streetscape. This month, one of the town houses, a two-story, three-bedroom unit with three and a half baths and a private garden, sold for $2.6 million, according to real estate sources.

The developers of Morton Square said concern for the streetscape prompted them to mix town houses in with a more traditional 14-story apartment building. ''We wanted to break up the block and give it a residential feel,'' Mr. Demchick said. Walking down Morton Street on a bright summer morning earlier this month, Mr. Demchick said the town houses would fit in on the tree-lined cobblestone street, where they would face a boxy brick rental building with five stories and 112 units.

The Hubert town houses and condo building are sandwiched between one industrial conversion and a row of warehouses, just a block from a traffic circle. ''The location is a loft location, not a town house location,'' said Judith Thorn, a broker with Ashforth Warburg in Manhattan. ''It's not the charm where you're looking at an ivy- or wisteria-covered house across the street that dates back to the 1800's.''

Buyers like Mr. Wilzig and Ms. Koenig are already used to the industrial location. They currently live in a two-bedroom loft in an elegant building around the corner from their new town house. In the cluttered apartment, antique cabinets are stuffed with Murano glass vases and guilloche enamel perfume bottles. Painted motorcycle helmets line the windowsills, and two full-size motorcycles sit by the windows. The couple bought the 6,554-square-foot town house in part to hold their collections. ''There is more space than we will know what to do with at the present time,'' Mr. Wilzig said. ''Until hopefully there are a couple of little Wilzigs to take up some of that space.''

Given their family plans, it was ultimately the security of being attached to a conventional doorman building that attracted them. In a regular town house, he said, ''you can spend whatever you want and have the greatest attention from alarm companies and otherwise, but she's still got to turn it off to walk in -- and if somebody's walking in behind her with something poking her in the back, you're done.''

But he still wanted the autonomy of a town house. Originally, the Hubert's developers wanted to offer part of the roof above his town house as a terrace for a third-floor condo. For Mr. Wilzig, that would have been a deal-breaker. ''I told them up front that I am not buying this at any price with half a roof,'' said Mr. Wilzig, who negotiated the full roof into the contract. Without it, he said, ''you take away the illusion of total independence.''

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