55 Wall Street Cirpriani and others

55 Wall is an interesting property. While it is a condominium, it is really not suited for full time tenants, or at least not for the studios and 1BRs. Having rented some apartments there while simultaneously having some exclusives for sale, I can tell you that it was overpriced from day one, remained overpriced and continues to be overpriced. I recently did some comps for the owner I represent who owns several units there and I don't think $700/sqft is too far from the mark. However, you have to realize that everyone that bought down there paid considerably more. So while it may be worth one price, most owners might not be wiling to sell it for that.

While I have not been to 20 Pine, I think it is set up to be more like a traditional apartment. So that would be a better choice. The apartments at 55 Wall have HUGE bathrooms which can account for nearly 40% of the residence. While this is certainly luxurious, it isn't all that practical (unless you entertain in your bathroom).

(Matthew Russell - Brown Harris Stevens)

Agreed. It's quite clear that there is a disconnect with what many people think 55 wall is worth and what certain people select people have paid for their condos.

MRussel, what are your thoughts on 3 Hanover? The building looks like a solid one and I think the location is in a decent place. But do you think that place still ends up off people's radar (buyers and/or renters)? What are the pros and cons? What price/sq ft for a smaller size apartment would make it interseting?

I have not done deals in 55 Wall but have in 3 Hanover (the former Cotton Exchange) which I love. The building's downsides are:

1) rare co-op down there, so tough to appraise (made more difficult by the fact that the layouts are definitely not cookie-cutter;

2) fewer amenities than the new rental buildings/condos -- i.e. no common roof/lounge space like 2 Gold (although the valet service is great to have);

and 3) a lot of the units have dropped ceilings that need to be raised.

I love it though, and I may have a studio for sale later this year.

ali r.
DG Neary Realty

Unfortunately I am not very familiar with 3 Hanover, so you will have to take Ali R's advice on it.

My main issue is more with the whole Wall Street area. While it is "cheap", I don't really expect it to appreciate in value on the same level as the main part of the island. Even in an excellent market a lot of the buildings down there will be dark, with little to no views in an area that is a borderline ghost town at night. True, with time the area could change, but the apartments won't. The argument that a lot of sales offices made during the boom was that all the investment bankers would want to buy apartments in the area. But if you are making boat loads of money, would you really want to live right next to your office? I never understood that logic.

(Matthew Russell - Brown Harris Stevens)

I saw some apartments there some time ago and one thing I couldn't figure out was how much it was going to cost to remove the drop ceiling. Ideally, you could have some tear down the sheet rock w/minimal effort. But then again, is working on the ceiling the same as doing the walls? Also, it seems like some units have wiring running between the drop ceiling and full ceiling, which would either mean 1)since there is a few feet of space you can raise the drop ceiling to barely allow the wires to clear, or 2) rerun the wires elsewhere (which to me = EXPENSIVE, correct me if I'm wrong).

Why do you love it? What do you see as the pros? Pros for buying at as a owner's residence vs. buying to mostly rent out?

Mrussell, yea I have to say I can't imagine most wanting to work right next to their job. But, the reality is that I don't think argument is fully true for other reasons. Most bankers don't even work physically on wall street. Most of the bankers with big money who work on "wall street" work in a builings on park or elsewhere in midtown (Morgan Stanley, Citi, Barclays, etc)

> "Does anyone really think that all of what 55 Wall has to offer would make it a place renters would look to go to? Possibly corporate renters/long term temps?"

yes saiyar1. In my experience, 55 Wall has proven to be very popular for renters. Most if not all of the units are rented fully furnished and the amenity package is very unique. There is also a liberal sublet policy in place, allowing the owners to rent out for short periods of time (1 month minimum) which is nice for the pied-a-terre owners who want their unit rented while they are not using it. Many of the owners I work for at 55 Wall do just that; they stay in the unit for a few months out of the year and rent it out for the remainder. My clients feel it's nice to have that kind of freedom of ownership, which is pretty rare.

For renters it is great. But you are looking at a very very small percentage of the rental population that is interested in this type of product (short term, furnished, on Wall Street, no view). Which is to say that while it is good for renters, it doesn't really help the owners.

> "But you are looking at a very very small percentage of the rental population that is interested in this type of product "

I couldn't disagree with you more Matthew, but we all have our opinions/experiences... I work for many owners in the building and I have found the exact opposite. There is a very large pool of renters who want short term, high-quality, furnished housing. It's not your tradtional rental market and not your typical renter. Compare units at 55 Wall to other furnished units thru Churchill or Furnished Quarters and you'll see what I mean... I have also found there is a very specific type of owner who wants the same high quality apartment, who will only use it a few months out of the year, would like to rent out the unit without restriction while they are not using it, and do not care for a time share or fractional type ownership. There is a short supply of apartments and buildings that will allow this type of operation, making it very helpful to the owners who take advantage. Also, I will add that out of my last 10 rental transactions at 55 Wall, 7 of which have been a 6 month term or longer, making the prospects of a unit at 55 Wall St as a pure investment property much, much better.

front_porch:

Can you elaborate on why you love the building (3 Hanover)? What do you see as the pros?

I imagine some of the views on the side facing the east river are nice. What sort of premium per sq ft would those apt command vs. the ones that face north/other buildings?

What purchase price/sq ft is attractive for a studio?

@ E_Fleming: The number of people looking for short term rentals are in fact a very small population. It sounds like you have had great success with this small group, but I wouldn't be surprised if this pool of renters represented less than 5% of all of the people out there looking for apartments. Typically, even when you see year plus rentals being offered furnished, the questions of, "do I need to keep this furniture" tends to pop up.

55 Wall is undoubtedly one of the few properties where you can rent your unit for as little as a month. No doubt about that. However, since there tend to be several apartments on the market at a time (for rent), the prices for rentals keep getting driven down. And then if someone rents for only one month, you have to fill that apartment all over again. For most investors, this sounds like a tedious proposition when the other option would be to purchase in a condo with slightly less relaxed rules, but shoot for tenants looking for one or more years.