The inside word at midseason
According to conventional wisdom, rentals were a disaster. By the more pessimistic estimates, as many as a third of the houses available did not find tenants, in spite of a June surge. Landlord wannabes who were counting on the income are scrambling to fill in with part season rentals. Don’t let your heart bleed for the real estate brokers however. Paradoxically, many agencies did as well as or better than last year. It turns out that the number of listings had increased way beyond demand, skewing the ratio of what was available and what rented. Brokers may be working twice as hard to make the deal, but sales are still hot, prices holding up, and the commissions are rolling in. Some of the notable hits and misses as we go into the homestretch of summer:
An über-wealthy Wall Streeter paid $100,000 for a week’s rental in Southampton. The owner of the oceanfront house, not hurting for money, was not particularly interested in renting until the price was ratcheted up to temptation levels.
Burnt Point, the $50 million Campbell estate on Georgica Pond, had a contract out to a European but it was never signed and the deal fell through. Even the weaker dollar and stronger euro could not save the deal.
The Worhol/Morrissey property in Montauk, also $50 million, has not been the hot ticket people expected. Maybe that much money still means something.
Every agency was scrambling for the McCulloch listing on Lily Pond Lane—4.8 acres with a major oceanfront house plus two building lots in back, up for grabs at $35 million. Dunemere won the listing and every other broker want s to know how. The answer is Chuck Bullock, one of the real pros in East End real estate, with solid Maidstone Club connections.
Talk about turnover. The Marty Raynes property in Southampton sold in 2001 for $12 million. The new owner got $500,000 for the 2001 summer rental and then sold it in 2002 for $13,000,000.
Astonishing real estate prices remain one of the eminent hot topics on the Hamptons party and dinner circuit. (If you’re in the chattering class and need some safe repartee with a stranger, this is practically scripture.) But the real insiders story is about the devolution of power in the real estate brokerage community in recent years, the continuing consolidation into fewer, larger, richer, multi-location agencies. No longer as specialized, they hustle in all price ranges and all locations. We spoke to some of the key players in this high-pitched, high stakes game.
Prudential Long Island Realty
Players: Dotty Herman, owner of 47 Prudential offices on Long Island, a hands-on wunderkind, who keeps generating new ideas and new offices.
Stats: Seven offices in East Hampton, Southampton, Bridgehampton, Sag Harbor, Westhampton Beach, Hampton Bays and Southold, with about 100 salespeople.
Quick profile: It used to be a given that “big brand name” agencies could not find a place in the Hamptons. In just five years, Dotty Herman, defying conventional wisdom, has turned that theory on its head, proving that it’s never business as usual.
Volume: Annual for 2001 not available. Projected for 2002: $400 million
Big sales: Wainscott oceanfront house on 2 acres: $6,250,000. North Haven bayfront: $6,500,000.
Star brokers: Paul Brennan, Nick Pizzo, Susan Rudick, Faye Weisberg
Bold face clients: Calvin Klein, Katie Couric, Richard Gere
Secret strength: A leader who thinks big—very big. There is always a new horizon. They have taken broker education to new levels, they follow consumer trends and demographics, they study their markets, and they explore every inch of every aspect of the business.
Sotheby’s International Realty
Players: Frank Newbold, media smart, a talking head and sound bite specialist, runs the East Hampton office; Philip Fenwick is in Southampton and Cia Comnas in Bridgehampton.
Stats: East Hampton, Bridgehampton, Southampton offices, with about 75 salespeople. Headquarters in New York; local offices run by managers receiving a salary plus percentage.
Quick profile: On the one hand: hierarchical and structured, as you would expect a division of a large international corporation to be. On the other: the Hamptons offices operate fairly autonomously and have not been tarred with the scandal of the parent corporation.
Volume: We estimate the three offices have over $400 million in sales.
Big sales: Marden, 11-acre estate on Further Lane, $23,100,000. Selling broker on former Ford estate house. Selling broker on Chevy Chase: $10 million.
Star brokers: Kelly Nelson, John Golden, Harald Grant, Cinny Gay. Ed Petrie.
Bold face clients: Alec Baldwin, Mercedes Ruhle, Arethra Franklin, Peter Morton.
Secret strength: Discretion. Sellers who don’t want their expensive homes splashed around in magazines rely on the global reach and snob appeal of Sotheby’s to put together quiet deals.
Dunemere Associates
Players: Peter Turino, Andrea Ackerman and Joe Kazickas, equal partners. They earn commissions plus profits.
Stats: Offices in East Hampton, Southampton, Bridgehampton, Sag Harbor, and Greenport, with about 70 salespeople.
Quick profile: Now 11 years old, winnowed down from five partners to three, the agency has a serious, almost buttoned up approach to brokerage. Besides expanding to new areas, they have expanded their price range to include more of the middle market.
Volume: Well above $200 million annually.
Big sales: Linden, the great Southampton estate: $18 million. Stott property, in Southold: $6 million, a residential record for the North Fork.
Star brokers: Bettie Wysor, Charles Bullock, Mary Ellen McGuire, Aubrey Peterson
Secret strength: Knowing how to play their affiliation with Christie’s Great Estates, providing referral services nationally and globally.
Allan M. Schneider Associates, Inc.
Players: Peter Hallock, president, Tim Davis, Peggy Griffin, Barbara Ritchie, managing directors.
Stats: Ten offices located in Bridgehampton, Southampton, East Hampton, Sag Harbor, Shelter Island, North Sea Harbor, Amagansett, Southold, Cutchogue, Westhampton Beach, with about 160 salespeople. Run by a partnership of managing directors.
Quick profile: Large but closely held corporation. They are proud of being good local brokers—and they also exhibit stability, professionalism, and a lot of clout in the marketplace.
Volume: Sales in excess of $700 million
Big sales: Listing broker on Tratlio, former Ford estate house with 46 acres and a big slice of oceanfront; $21,750,000
Star brokers: Gary DePersia, Marcella O’Callaghan, Susan Breitenbach, Alison Barwick
Bold faced clients: Tommy Mottola, Julie Andrews, Christie Brinkley, Julian Schnabel
Secret strength: Deep roots. The partners have taken a business closely identified with the founder and since his death ten yeas ago, have kept expanding and increasing. They have to ability to retain staff, customers and listings.
Cook Pony Farm Real Estate
Players: Melanie Ross, “the glue” of the partnership, Michael Desario, Judi Desiderio, John Cataletto, and Morry Blutstein.
Stats: Ten offices located in East Hampton Bridgehampton, Southampton, Sag Harbor, Shelter Island, Amagansett, Southold, Cutchogue, Mattituck, Westhampton Beach, with about 120 salespeople.
Quick profile: Started in 1945 by Ed Cook on Newtown Lane in East Hampton, the agency has changed radically in size through acquisitions and opening new offices, as the ownership changed and evolved. Somehow, it still maintains its small town values and ethics.
Volume: Not available officially. Given their high number of deals, and their strength in the middle market, we project between $200 and $300 million.
Big sales: Hargrave winery to the Borghese family, $4,300,000. Gristina Winery, close to the $5,500,000 million asking.
Star brokers: Nail Hausig, Cliffeton Green, Patricia Wadzinski, Linda Haugevik
Bold faced clients: Kim Catrell, Kathleen Turner, Jimmy Buffett
Secret strength: Dedicated to business. They like to think that even the short term rental might turn into a million dollar sale, so every customer, in every price range, gets top quality service. And it happens often enough to motivate the salespeople.
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A word from the wise: Land.
We asked some of the oracles of Hamptons real estate how they would currently invest a million dollars—admittedly not a princely sum in this market, but a decent chunk of change nevertheless. Their answers turned out to be remarkably similar.
Andrew Hart, manager at Cook Pony Farm:
Vacant land. One or more plots—anything I can put together for a million.
Tim Davis, partner at Schneider:
Anything in Southampton Village or any kind of waterfront—land or a small house.
Hope Harris, broker at Sotheby’s:
Land on or near the water. Or something I can fix up in North Haven.
Peggy Griffin, partner at Schneider:
Land. Give me a decent piece of land in that price range.
Laura Mott, marketing manager at Prudential:
I’d first buy an investment property, then take that income and pay off a piece of land.
Mala Sander, sales at Schneider:
Waterfront—a small house to fix up or a good lot to build on.
Bill Williams, sales at Devlin McNiff
Anyplace I could keep horses—a few acres with a stable. No house necessary.
[sidebar]
Maybe he should get a real estate license—or a life. We know Billy Joel did a deal or two with Sotheby’s. And with Schneider. And we have heard his name associated with Cook Pony Farm and Dunemere. And every owner of a big bayfront property claims Billy Joel is interested in buying it. Either he’s a real estate addict or the rumor mill is working overtime.