In an era of mega-brokerages and international alliances, can the boutique or stand-alone real estate company survive, let alone thrive?
Christopher Korey, founder and owner of Christopher Korey Private Realty, says yes—and then some. Korey, who grew up in New York (part of that time at the landmark San Remo) and who has been in business for two decades, says the “best listings aren’t listed”—one needs to learn about them through word of mouth. In what must be a first for a brokerage owner, Korey, a stylish man- about-town, also co-runs a fashion consulting firm, koreyfrancois.com. (He says that while the fields may seen widely different, there’s plenty of client cross-pollination between the two businesses.)
Here Korey joins colleagues Lisa Natt, an interior designer and founder of Sola Showroom, and attorney Daniel Seidenstein to talk about the pri- vate sell, Midtown’s new buzz, and whether the market is topping out.
Why wouldn’t somebody want their listing publicized?
CK: There are high-net-worth individuals who don’t want their apartments publicized on the Internet because you get a lot of what we call lookie-loos, who just want to peek into a celebrity or rich person’s apartment.
So your business must be primarily by word of mouth.
CK: My business is based on referral. All my clients have been my clients for roughly 20 years.
What age groups do you most often deal with?
CK: New York is so global now that the influx of buyers and sellers runs the gamut. Young international wealth is extensive and driving a large part [of the business], especially in new construction and new developments.
Daniel Seidenstein: Also with this new generation, a lot of parents are getting involved. Within the market, that’s creating cash-only offers and a younger clientele. This generation wants to live in the city, not the suburbs.
Do they buy the schools or do they buy the apartment and worry about schools later?
CK: They usually buy the school, because that’s always the priority, which explains the boom in Tribeca. Also, people go crazy for anything near PS 6.
Are there any deals left in Manhattan?
CK: There is no such thing as a bargain or a steal or anything like that in Manhattan. Undervalued means that you have to go way further out in Brooklyn or some other borough and become a pioneer and wait for the neighborhood to come to you.
What about the Sutton area, which I hear is better-priced than other prime neighborhoods?
CK: It used to be, right up until they opened Whole Foods on 57th. Three years ago, you could find a two-bedroom for under a million dollars in the Sutton area. The maintenances were a little higher, but you were able to eat that because of the quality of the buildings and the neighborhood. But there was a stigma attached to it—it was too sleepy, too far, there was nothing there, you couldn’t walk to the train. Whole Foods opens up on 57th Street and everyone is asking me why I’m not taking them to Sutton Place. Now that $900,000 two- bedroom is $1.4 million to $1.5 million.
In addition to your brokerage, you have a styling consultancy. Does that help with real estate sales or is it a separate business entirely?
CK: My clients were always asking me [about how I dress] and where I shopped, and I would say, “Well, you can do it, too; we just have to find the right thing for you,” and it started from there.
Do you just monetize the real estate?
CK: No, we monetize both.
With people in the fashion business, where and what do they want to buy?
CK: Downtown. Literally, it has to be south of 34th Street; otherwise it’s Canada.
Any pockets of Downtown that are surprisingly hot right now?
CK: The outskirts of Tribeca. Same is true if you go east. The cutoff used to be Avenue A, but that has stretched over to Avenue D. Even if you look at the Lower East Side, like Stanton Street or Orchard Street, people are much more willing to go there.
Where would you put your money for the next hot neighborhood?
CK: Long Island City, for the simple reason that you can get into Midtown twice as fast as you can go across town. It’s about 12 minutes away. Plus, there are a lot of underdeveloped old factory buildings with high ceilings, big windows, and views of the city that are screaming to be developed. In Manhattan, there’s the strip along Broadway where the Ace and NoMad Hotels are, with cast-iron buildings [that could] be converted to condos.
“Starchitects” like Norman Foster and Jean Nouvel are now building in Midtown. How do you see this area changing in the next five to 10 years?
CK: Midtown will become more international because these new developments tend to be bought by foreigners, who use them as pieds-à-terre or investment properties. They like to feel as if they’re in the center of things; they aren’t really concerned with proximity to the train or the day-to-day.
Lisa, there’s been a huge boom in contempoary art that’s impacted the way interiors are styled and designed, and a modern aesthetic predominates in condo architecture. Do you see the pendulum ever swinging beyond modern?
Lisa Natt: Yes. I think the drive to modern also came from a desire for less-cluttered environments. But what got lost was the creation of spaces that felt unique to the people living in them. A pitfall with über- modern spaces is that they have no real character.
Concurrent with a predominant taste for modern is what seems to be a never-ending push for newer iterations of luxury. Where does that end?
LN: I think luxury in general tends to constantly find new levels for itself. An $800 shawl would normally be considered luxury, but if you can sell that, why not a $1,500 shawl? Everything is about being elevated. There was so much consumerism, but now there’s a shift where people think that it may not be so pretty to constantly be looking for the next best thing. I see people paring down and investing rather than purchasing. They want to feel what they’re buying is more timeless and understated.
Is the Manhattan real estate market topping out?
CK: I won’t call it the top, but I will say we’re over- heated. Prices have gone wildly off the charts. We’re on a trajectory where New York is becoming a city of the wealthy, which is unsustainable long-term.
Where do you do most of your deals, in what price range?
DS: You get a glut at $999,999 because of the mansion tax. And then, between $1.5 million and $5 million.
What percentage of your closings are all-cash deals?
DS: It’s less than it used to be. I would say two years ago you couldn’t get a deal if it wasn’t all cash. Now I’m finding more mortgage contingencies. It’s not the feeding frenzy that it was.
Predictions for 2016? Where are we all headed?
DS: The market rise going on since 2012 isn’t sustainable. It felt overpriced in 2014, and it’s still continuing to rise. At some point there’s going to be a market correction.
CK: It’s hard to argue with that. We may correct or not, but if you’re going to be here for a long time, you’ll be fine. I believe all asset classes will correct at some point in the next 12 months. Do I think it will be something catastrophic? No, I don’t, because there’s a bid under every level of this market, three to four levels down.