Most Markets Will Enjoy
A Modest Improvement
The future is looking somewhat brighter for some hard-hit real-estate markets, according to a new study.
San Francisco and Boston -- both hammered by the technology-stock bust and economic recession -- stand out in a survey of which of 31 markets will fare better in the next 18 months.
The survey, by Cushman & Wakefield, a commercial real-estate services firm based in New York, takes into account leasing, employment, construction and sublease space to predict which markets will perform best.
The financial-services and technology industries are beginning to take more space, and that's particularly benefiting San Francisco and Boston, says Maria Sicola, the firm's research director.
Florida, another area hit hard -- by hurricanes -- is seeing strong investor interest, despite the damage in the state. Fort Lauderdale, Miami, Tampa and Orlando make up half of the cities in the top quadrant, which includes markets that are currently performing above average and are expected to continue to do so for the next 18 months.
"Every market is showing slow but steady leasing activity and a slow decrease in vacancies," Ms. Sicola says.
But office space is still cheap. "Only a few are starting to see rents go up," she says.
In Manhattan, there are a "significant number" of large leases (over 100,000 square feet) that are pending and may close in the next three months, Ms. Sicola says.
No Donald
A few months ago, New York-based Hudson Waterfront Associates L.P. hired a company to produce a virtual tour of the latest condominium development it is building in Manhattan in partnership with Donald Trump.
Hudson Waterfront secured Montreal-based Alpha Vision Inc. to produce a video that would give prospective buyers a sense of what the 279-unit condo development at 120 Riverside Blvd. will look like when it's completed.
The 120 Riverside development is one of what will eventually be 17 luxury residential towers built at Trump Place.
For the virtual video tour, Alpha Vision shot nearly 10 hours of footage, including an aerial view of the area from a helicopter, says Kevin Small, Alpha Vision's director of branding and creative marketing. The video tour also included footage of two doormen in action at another Trump Place building -- but it didn't have any shots of Mr. Trump.
Mr. Small says Hudson Waterfront executives didn't want to include Mr. Trump in the video.
"We felt that seeing what the building would look like was more important than seeing the developers in this presentation," says Frank Haftel, the Hudson Waterfront executive who is overseeing the 120 Riverside development.
But, he adds, "Mr. Trump is prominently referred to throughout our presentation center," where visitors can view the video and get more information about the condominium complex.
Doing It Yourself
Two years ago, Gary Juster put down a $60,000 deposit for a condominium unit at a property in the ski resort town of Stratton, Vt., that the owner was planning to convert from a hotel to a condo complex.
Now, Mr. Juster is a few weeks away from completing a $5 million renovation and conversion of the 90-room hotel, formerly known as the Village Lodge, into a 34-unit condo complex and is looking to sell the remaining 15 units that haven't yet been spoken for.
Mr. Juster, owner of Tarrytown, N.Y.-based Juster Development Co., which owns and manages 18 shopping centers, acquired the hotel last year and decided to handle the conversion himself after his deposit on the condo was returned. The previous owner had decided to abandon its condo-conversion plan -- for the second time -- after failing to presell about half of the units before starting construction.
At most, the previous owner received deposits for eight units, or only about 20% of the project, says Richard Montague, president of Vermont Country Properties, Manchester, Vt., who marketed the units for the previous owner. Mr. Montague is now marketing Mr. Juster's units at the complex, called Landmark at Stratton, for $325,000 to $925,000, or about $425 to $525 a square foot.
"The previous owner didn't want to commit the money to convert the property" until it met its preconversion sales target, says Mr. Montague. "Unless you have a tremendous track record [of following through], it's difficult for the public to take a leap of faith and buy."
Moreover, the previous owner would have taken nearly two years to convert the hotel, which was a stumbling block for prospective buyers, "who don't want to wait that long," he says.
That's why a few months after Mr. Juster purchased the hotel, he closed it and began the renovation work. "It was a run-down, beat-up hotel," says Mr. Juster. "Many people didn't have the vision to see what this building would look like" as a condo complex.
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