Roubini (now optimist): Buy don't rent

Politics and real estate are all local, or rather personal decisions. A guy like Roubini has the financial flexibility and know-how to make such housing decisions rationally, knowing the costs and consequences. For the average American, or the average middle class New Yorker, I hardly think you can extrapolate this action to them.

Nada... Amazing complete and convincing for just a table napkin analysis.

I'm actually a beta tester for Apple's soon-to-be-released iNapkin. Think iPad, but it folds into your pocket, and you can blow your nose with it too.

I'd be very interested in knowing what he was thinking with the purchase financial vs. social. Since you took a class with him, jason10006, why don't you ask him to put up a post with his rationale for us?

Having looked a lot for nice rentals in the past 3 months, there is no question in my mind that that apartment rents in the 20-30k range. It does probably take a while to rent, just like it takes a long time to sell. The TIme Warner Center comps being argued about are just crazy in the sense that they are not nearly as big nor as nice places to live.

Nada: It is a personal/career hedge. If the economy tanks, he's in the money professionally. If the economy soars, he's in the money personally.

Why do some of you act surprise by his purchase?
Majority of the bears here did the same thing. They would kick and scream about how housing is going to continue to collapse but yet went out of their way and purchase a place recently.

Didn't look at the thread too closely to see if it was mentioned before. But has no one factored in the playboy angle? Nuriel Rubini's parties are the "playboy grotto" of the east coast. The guy has tons of young pulchritude and a particularly male-friendly ration at his parties. Anyone with that predilection and plenty of money is also going to look at an apartment with an eye to its effect on tickling a girls "interest".

BTW, the "bears" who bought in the past 2 yrs were not real bears, more like lemmings.

Sorry W67, i can't read your threads.
You're lacking ink.

muhahahah!

Perhaps, the way to look at this is a decision between two choices offered.
Previous owner had an offer price to sell and an offer to rent. One can of course quibble that one or both of these prices was not rationally set, but that's an entirely different discussion and frankly a little surprised at the insistence of some to take the discussion in that direction. Roubini liked the apartment and clearly preferred the buy option. Of course there are factors that go into the buy that transcend pure dollars and sense.

and yet your analysis Riversider is decidedly and purely dollarly and senseily, propsosed. I guess one can mathematically and dollarly make an argument to blow up Israel, glossing over the fact it is a sovereign nation with little children living in it.

And, yet that is what you have done. IT DOESN'T MAKE sense for anyone to buy that apartment when a like kind unit is for rent at $15K. So IT makes SENSE if you are Roubini, who pays up for sex with 21yos by over-paying for an apartment and/or your ONE economic call makes you gobs of money, ala Gabelli (who is a faced stretched tool).

So to all the lemmings who would feel icky buying a Penthouse if it "only" cost $2MM or you've just made multiples of your income whether a janitor, off kilter stewardess, hamburger flipper or nanny => KNOW HOW TO COMP, or buy away cause you CAN. Do you have any grey poupon?

Skinny & w67, excellent speculation as to the mind of Roubini.

Renter88, first of all congrats on your change in circumstances that has led you from your $6400 UWS rental building apt to a market segment where you have views on pricing of $20-30K apartments. What range have you been looking at in the past 3 months, and what areas? Maybe we can help you out.

I beg to differ on your opinion that a place like this takes a while to rent. Properly priced, a $25K place goes just as quickly as a $5K place. Just look at the TWC place's timeline, which indicates an offer after a month of listing. The Roubini place sat for 3-4 months.

On your opinion that the TWC places being worse, there are a large number of apartment buyers that disagree: count the number of park-view TWC places closing for $4000-ish a square foot while the Roubini place sat for 4 years. The last sale in the line that just rented for $15.5K was $8.5M in July 2008. Knock 20% off that price for coming off the top of the bubble, we're still looking at $6.8M. Maybe the $8.5M was crazy, but I just don't see you going below $5.5M for that place. Hell, there's someone asking $8.8M for the same line as we speak.

That said, maybe park views on the UWS just isn't your thing. Maybe you really think being on the Bowery facing the Avalon rental buildings is a nicer place to live. OK, I get it, you want to be downtown. You want a penthouse with outdoor space. You want to live the life.

Here's a new/fancy triplex with a terrace overlooking Union Square, 30% smaller than the Roubini triplex. I know, a view of Union Square just isn't the same as the Avalon rental building, and Union Square just isn't as pleasant as the Bowery to some, but it'll have to do. Asking rent was $12K, has been empty since Nov 1, finally went last week. Could have been yours for $11K.

http://streeteasy.com/nyc/rental/695514-condo-863-broadway-flatiron-new-york

Mind you the rent vs. buy discount gets better the higher you go. I just don't see how you'd quote something like $30K for the Roubini place given options like this.

Need a more direct comp not so far away? How about this one on Ludlow in the LES that is 3379 sq feet, lots of outdoor space, went with a last ask of $12K in July:

http://streeteasy.com/nyc/rental/651931-condo-75-ludlow-street-lower-east-side-new-york

Perhaps somewhat less desireable (didn't sell with an ask of $5M), but 2x difference with the Roubini place as $25K would imply? I think not.

There are at work many factors unseen.
The value to Roubini may be location and the fact that it does have a vanity effect. It is clearly a show off pad and who knows...Moving a collection of sex toys that large gets precarious as your public profile raises to the status of that of Roubini.
One day your the most respected economist in America, the next day your on the cover of the Post when Moishe's Movers accidentally spill a refrigerator size box of your dildos onto the city streets.
Now when he says supply side economics my ass...you know what he means.

Perhaps that one is too far away to be a proper comp for some. OK, OK, fine.

How about this one, located 700 feet away. A short stroll down the Bowery, penthouse duplex, same size (3700 sq ft), large outdoor space, higher ceilings, arguably fancier architecture/design. It sat on the market unrented at $19K for 7 months.

http://streeteasy.com/nyc/rental/458312-condo-259-bowery-street-lower-east-side-new-york

It didn't rent with that ask, so they raised it to $25K as of 3 weeks ago. Presumably, Roubini's purchase created a power vacuum for $25K unrentable listings on the Bowery that needed filling.

Since I fought nada tooth and nail on our last high-end rental discussion: Let me point out that he's right on this one. That place doesn't rent for $25K, it rents for $15K. Maybe. Still problematic that you have to move all the food up a floor from the kitchen to the terraces. For parties the caterers will do that, but on an everyday basis it will get old.

@Skinny, I think you called the psychology perfectly.

and @renter, if you need an agent, I get high-end rentals, and I'm here.

ali r.
DG Neary Realty

Occam's Razor my friends. He did it for the poon.

I don't mean to be snarky. But you have to know how the type thinks. Women are very important to Nouriel Rubini. And he is good at getting them. And this apartment will make him better. So long as he has access to lots of $ in the future, and right now it looks like he does and will (this could change), he will make choices based on what he wants in life. And to do that you have to deal with prices as they exist in the market. That someone owns the big fancy penthouse apartment will tickle her interest much more than if it is rented.

If you want to go on a vacation somewhere and stay at the Four Seasons, you don't think "In the next 2-3 years there will be a global crisis and I will be able to pay 50% of the going rate", you just go and enjoy it even if you know one day it might be cheaper.

Crap, FP. I can't believe we're coming down on the same side of a "what does this high-end place rent for" argument. Cosmic forces must be in disarray given the combination of a winter solstice and lunar eclipse ;).

Merry Xmas my friend!

ali

Merry Xmas / Festivus to you too!

You know I was just thinking. A view of Central Park may be prettier than a view of Avalon Bowery, but I had it all the wrong way around. The point is that the pretty young things that fill Avalon Bowery will have a view of you and will think, "now wouldn't that be a cool place to hang?"