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January 2009

Corcoran closes Harlem office



2224 Frederick Douglass Boulevard

The Corcoran Group has joined the ranks of New York City residential real estate companies which are shutting offices to cut costs in the midst of the economic downturn.

The company is closing its Harlem office, a storefront location at 2224 Frederick Douglass Boulevard at 120th Street,

which opened in 2005

. According to an e-mail issued yesterday by company President and CEO Pamela Liebman, the "plan [is] to merge our Harlem office into our other West Side offices."

Tresa Hall, Corcoran executive vice president and director of sales, broke the news in person to the agents in the Harlem office the day before, agents in the office said.

The office is slated for closure in about a month, when the lease expires, the sources said, with the majority of roughly 20 Harlem agents working out of vacant space in the 888 Seventh Avenue office between 56th and 57th streets.

However, Liebman's statement said, "Harlem remains a very important market for us and we fully intend to provide the same degree of coverage that exists there today." Liebman would not respond to questions about the move, besides confirming the Harlem office's closure.

Corcoran has nine Manhattan offices besides the Harlem one, including its headquarters at 660 Madison Avenue between 60th and 61st streets, plus offices in Brooklyn, the East End of Long Island and South Florida.

Corcoran has taken other steps to cut costs in recent months. Liebman told

The Real Deal

in December that the company had been "cutting unnecessary expenses," reducing advertising and marketing costs and had eliminated back-office positions through both attrition and layoffs.

Other residential real estate companies have made similar moves to shave off costs, including Citi Habitats, which shares Corcoran's parent company, NRT. The rental giant closed two offices --

one in the Financial District

at 100 John Street between Pearl and William streets, and

the other at 346 West 57th

Street, between Eighth and Ninth avenues.

Bellmarc Realty

closed its corporate headquarters

at 352 Park Avenue South, between 25th and 26th streets, moving workers stationed there to the company's Flatiron office.

Last month, Warburg Realty announced it will

shutter its office

at 65 West 13th Street and a smaller brokerage,

Homestead, closed its shop

before the New Year.

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Townhouses get condo amenities



33 Charlton Street


Aberdeen Properties is adding amenities usually found in condos, like concierges and climate-controlled package rooms, to townhouses around the city. The properties include 52 West 76th Street, on the market at $15.9 million; 24 West 11th Street, listed at $14.95 million; 33 Charlton Street, listed at $10.95 million; and two separate units at 41 West 74th Street, on the market for $7.65 million and $7.5 million. The renovated townhouses are ready for move-in, and Prudential Douglas Elliman's Dolly Lenz, Leonard Steinberg and Raphael De Niro have the exclusive listings.

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Home Sales Better Than Expected in December

WASHINGTON — Sales of existing homes posted an unexpected increase last month, closing out the worst year for the real estate market in more than a decade.


The National Association of Realtors said Monday that sales of existing homes rose 6.5 percent to an annual rate of 4.74 million in December, from a downwardly revised pace of 4.45 million in November.

The results were better than expected. December’s sales had been forecasted to fall to a pace of 4.4 million units, according to Thomson Reuters.

Buyers were taking advantage of dramatically lower prices, especially in distressed markets like California, Florida and Nevada, where foreclosures have swamped the market.

The nationwide median sales price plunged to $175,400, down 15.3 percent from $207,000 a year ago. That was the lowest price since May 2003 and the biggest year-over-year drop on records going back to 1968.

“The economy just simply cannot recover as long as home prices continue to decline,” said Lawrence Yun, the trade group’s chief economist, who called on lawmakers to include tax credits for home buyers in the economic recovery package being considered by Congress.

For all of 2008, there were 4.9 million existing home sales, down more than 13 percent from a year earlier, and the lowest total since 1997.

And another encouraging sign — the number of unsold homes on the market in last month fell nearly 12 percent to 3.7 million. At the current sales pace, it would take 9.3 months to sell all the properties, down from 11.2 months in November.

In another economic report, a private research group says its monthly forecast of economic activity rose unexpectedly in December, mostly because the flood of federal bailouts increased the money supply.

The Conference Board’s monthly forecast of economic activity increased 0.3 percent in December. Economists surveyed by Thomson Reuters had expected a 0.3 percent decline.

The group’s index of leading economic indicators had fallen 0.4 percent in November and a revised 1.0 percent in October.

The index is designed to forecast economic activity in the next three to six months based on 10 economic components, including stock prices, building permits, average weekly manufacturing hours and initial claims for unemployment benefits.

With most components falling steeply, the Conference Board said unemployment could rise to 9 percent from 7.2 percent as the country remains in an intense recession through spring.

The Conference Board’s leading economic index is about 5.0 percent lower than its most recent peak in July 2007. In the last six months, a separate Conference Board index has seen its largest decline since 1980.

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J Condo offers free rent



J Condominium


The J Condominium at 100 Jay Street, between York and Front streets, is offering one month of free rent to anyone who signs up for a $2,400 per month studio, according to a listing on Craigslist.com. The listing for the Dumbo building also offers no broker's fee and no application fee. The Corcoran Group is the sales and marketing agent for the 267-unit building.

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Renewal commissions grow in tenant's market



Sierra Realty's Peter Braus


Office building owners struggling to retain their tenants in the weak economy are more likely to pay a full broker's commission on a renewal lease compared to a year ago, landlords said.

Peter Braus, executive vice president and principal at property owner and manager Sierra Realty, said tenant brokers have more leverage in the commercial leasing market today as vacancy rates rise and new tenants are hard to find.

A tenant's broker is "going to be holding a lot of cards with the landlord," he said. "The landlord is at a disadvantage. If he doesn't agree to pay a full commission, he is looking at the possibility of the broker taking the tenant elsewhere purely to receive a full commission."

In a more traditional leasing environments, landlords rarely paid full commissions on renewal leases, brokers and landlords said. Full commissions of about 5 percent for the first year, scaling down over the lease terms, were generally paid only on new leases. In general, landlords either paid half a commission or no commission for a renewal lease, although some landlords always pay full commissions on renewal leases.

But as availability rates have soared, from 7.9 percent in December 2007 to 11.3 percent in December 2008, according to CB Richard Ellis, tenant brokers have more leverage to threaten to take a tenant to another building.

One Manhattan landlord, who asked not to be identified, said his company paid a full commission on a renewal lease signed in December for a space in a 200,000-square-foot building a block from Penn Station.

The landlord, who would normally pay a half-commission on a renewal, paid a full commission out of "fear the tenant would be moved to another building," the landlord said.

Abraham Hidary, president of property owner Hidrock Real Estate, said he would be more open to paying a tenant-broker fee on a renewal.

"A year ago I would have thought twice. For myself, certainly a year ago we might not have. We feel in this market it makes sense to work with the tenant's broker," he said.

But some property owners don't think commission changes are in response to current economic conditions.

David Berley, chairman of the board and managing partner at property manager Walter & Samuels, said over the past several years more tenant brokers were seeking commissions, but he did not believe that growth was related to the recent economic decline. He said he pays tenant brokers only on a case-by-case basis.

"It is not what I am used to, but if it is an important tenant and I want to keep him, I am happy" to pay the commission, he said.

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Plaza, penthouse buyer reach agreement


Andrei Vavilov, the Russian financier, has settled his dispute with the Plaza over two penthouse units he purchased.

Those Plaza fans who closely track the comings and goings of luminaries who stay and live at the renovated hotel and condo should take note. The building has reached a resolution with one of its disgruntled penthouse buyers.

The buyer, Andrei Vavilov, a Russian financier and a former Russian deputy finance minister, reached a settlement with the building’s developer, El-Ad Properties, about his purchase of two penthouse units for $53.5 million.

His lawyer, Y. David Scharf, did not provide more details about the resolution — which was reached on Tuesday — but stressed that it was favorable. Records tracked by StreetEasy.com show that no buyers closed on these units.

“We are very pleased with the outcome,” Mr. Scharf said.

Last September, Mr. Vavilov drew some notice when he sued El-Ad over fraud and breach of contract claims.

According to court records, the two penthouses he had bought and planned to combine did not offer the ceiling heights and views he expected when he bought the units site unseen. In fact, he was so disappointed that the lawsuit compares the penthouses to “glorified attic space.”

But El-Ad fired back with a countersuit claiming the buyer had made “defamatory and untrue” statements about the developer and called the lawsuit a “sham,” court records show.

In fact, court records say that Mr. Vavilov did not complain about the units until his wife — the Russian actress Maryana Tsaregradskaya — saw them.

On June 26, 2008, the records say, Mr. Vavilov had walked through the apartments with two El-Ad employees and made no complaints about the units. When he took Ms. Tsaregradskaya through the apartments, she said “they were simply not large enough for her tastes.” She told El-Ad employees she wanted to have “the biggest apartment at the Plaza” and asked whether she could purchase another penthouse that was under contract. Through the summer, the couple called several times to see about buying more penthouse units.

El-Ad declined to offer more details about the settlement terms. But Lloyd Kaplan, a spokesman representing El-Ad, called the resolution amicable and “on terms acceptable to both parties.” He added, “We believe it is a positive resolution and we are very pleased with the terms.”

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Elliman canned from Manhattan House



Manhattan House



O'Connor Capital Partners has ousted Prudential Douglas Elliman as the exclusive broker at Manhattan House, the landmark Upper East Side condominium conversion that has struggled under a debilitating credit crisis,

The Real Deal

has learned.

Elliman Vice Chairman Dolly Lenz, who supervised the Manhattan House sales team, was officially notified of the decision late Monday, following weeks of negotiations involving frustrated apartment buyers, existing tenants and HSH Nordbank, the senior lender, according to sources.

Corcoran Sunshine Marketing Group and O'Connor Capital Partners issued a joint statement confirming that Anne Young, senior managing director of Corcoran Sunshine, will lead on-site sales at Manhattan House, at 200 East 66th Street at Third Avenue.

"We are thrilled to be working together to provide Manhattan House tenants with not only elegant, spacious homes, but also the ultimate lifestyle amenities and service at this historic development," the statement read.

Elliman has been in charge of Manhattan House sales since October 2007, when developer Jeremiah O'Connor, founder of O'Connor Capital Partners, settled a year-long legal dispute with former partner Richard Kalikow. The two acquired Manhattan House for a record $623 million in 2005, and O'Connor has struggled mightily to convert the building into luxury condominiums.

Sources say that only about 25 percent of the building's 583 apartments have been sold and only about one-third of those sales have closed, as many buyers have walked away from their deposits amid concerns about the pace of construction at the building, and commercial banks have tightened financing rules on new condo sales.

Analysts say that Elliman was not entirely to blame for the poor sales effort, but that the building was priced well above its market value.

"The overall problem is that you have an environment where towards the tail end of the housing boom people acquired developments at a premium price, and to justify the higher prices they paid you have to sell at a premium price," said a market analyst, who asked not to be identified.

Streeteasy.com shows that 46 apartment sales have closed at Manhattan House and 33 units are listed at an average $1,607 per square foot.

This is not the only building where Corcoran Sunshine has replaced Elliman.

Corcoran Sunshine took over marketing and sales at Miraval Living

at 515 East 72nd Street, as well as at Georgica, at 305 East 85th Street.

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Economist predicts gloomy 2009

A year ago, economists predicted 2008 would be a challenging year for the struggling real estate industry. The property market had just come off what seemed then like its worst year ever and signs of a recovery were faint. A year later, after watching property values plummet further, foreclosure rates soar higher, and home sales shrink lower, real estate professionals from Florida to California are now predicting far worse for an industry in ruins.

“The very future of how real estate is bought, sold, and financed is under tremendous pressure,” says veteran Florida real estate economist Lewis Goodkin. “There’s no question that the years ahead will be sharply different from years past.”

One of the biggest questions swirling in property circles these days is how a reeling real estate industry will reshape and redefine itself for the future. Few signs of a quick reversal of fortune exist, but a closer look at the future of the industry reveals important trends and, surprisingly, reasons for optimism.

Falling sales means a dwindling number of brokers. That, experts say, will be good for business. Like mortgage brokers, shrinking rolls of agents will eventually mean brokers are brought in only to do specific parts of a transaction for far less money.

After several years of escalating home prices, construction costs are falling. Lower construction costs will make it easier for developers to adapt to the current market by offering more affordable apartments and condos, rather than aiming for the high end.

The internet will, of course, continue to be a critical and growing part of real estate, as brokers and firms pour more resources into building smarter, more accessible websites. More listings online means more access for consumers. Eighty-four percent of buyers use the internet to search for a new home, and that number is expected grow, according to the 2007 National Association of Realtors Profile of Home Buyers and Sellers.

Homebuilders, meanwhile, are predicting the continued movement toward smaller homes, with more buyers opting for less square footage as a means of saving more. This is likely to result in cheaper homes on the market in many places.

Finally, tighter credit means some will no longer be able to line up easy financing to buy a home. That will lead more prospective buyers to rent rather than own, thus possibly sparing the industry another quick boom-bust scenario anytime soon.

To be sure, the real estate industry will have to dig itself out of a deep hole. Existing home sales fell last year to levels not seen in years, and the median price of a single-family home was off 13.2 percent in November, to $181,300. That’s the lowest price since February 2004, the biggest year-over-year drop on record going back to 1968 and most likely the biggest drop since the Great Depression, according to the National Association of Realtors. Foreclosures also ballooned, with one in 10 American households with mortgages now overdue on payments or in foreclosure, according to the Mortgage Bankers Association. The trade group predicts more foreclosed, vacant homes will be added to already bulging inventories this year, sending home prices spiraling down and putting more mortgage borrowers deeper under water.

The widening credit crisis is sure to have the greatest impact on real estate’s future. Big developers will be particularly effected, as banks pull back from a fast-deteriorating market. In New York, where a forest of glossy, new condominiums are in various stages of construction, nearly $5 billion in development projects has already been scrapped or delayed because of the banking crisis, according to the Urban Land Institute. A lack of construction financing forced British developer CPC Group to default on a $365 million loan for prime land it bought in Beverly Hills as part of a plan to build luxury condominiums. In Las Vegas, the $3.9 billion Cosmopolitan Resort went into foreclosure late last year and was taken over by Deutsche Bank.

"Massive projects are in real peril,” says Laurence Hallier, chairman of Hallier Properties in Las Vegas. The firm has built several condos, including Panorama Towers, where Leonardo DiCaprio owns a home. “Banks will no longer lend as freely and that will certainly force big changes on developers and ultimately reshape the way business is done.”

There is no quick fix to the credit problems, say experts. Until frozen markets thaw, banks will simply not be able to fund as many projects. But that, too, can be good, say industry veterans. “A slowdown is creating more time to plan and tempered expectations,” says Richard Green, a professor of real estate at the University of Southern California. He predicts that developers will be forced to downsize the scope of many projects. “Projects that do get funding will be sound, which will ultimately be good for an ailing industry.”

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Elliman recruiting up to 75 agents for new rentals-only office



205 East 42nd Street


For the first time since the early 1990s, Prudential Douglas Elliman is opening a new office specifically for rentals, according to Stephen Kotler, an executive vice president and director of sales and rentals at the brokerage.

To fill out the new department, the company is recruiting 50 to 75 new agents who will specialize in rentals, Kotler said, and has leased 15,000 square feet of space to house the rental operation.

The space is located at 205 East 42nd Street between Second and Third avenues, where the company currently has an office that handles rentals and sales, with sales comprising the majority of the business. The new rental department will be located in an area of the building that the company had previously subleased to another company, Kotler said.

The new rental space is slated to be up and running in the next 90 days, Kotler said. The opening will be timed to coincide with the launch of a new Web site specifically designed for rentals, with listings in Manhattan, Brooklyn, and Long Island including the Hamptons, as well as Elliman's new rental market report. The report will be prepared by numbers guru Jonathan Miller, president of real estate appraisal firm Miller Samuel, and a regular preparer of the company's sales reports.

The last time the company had an office specifically dedicated to rentals was in 1991, Kotler said, but that office was merged with a sales office two years later "to meet customer needs," he said in an e-mail.

But, now the company has noticed a slight up tick in rental transactions accompanying the economic downturn of the past few months. Each month since July 2008, the number of rental transactions the company has done has been roughly 15 percent higher than the same month in 2007, he said.

"Based on market conditions, more [potential buyers] are moving towards rentals before deciding what to buy," he said. "For us, it was a no-brainer to do more rentals."

Elliman, one of Manhattan's largest real estate firms, is primarily known for its sales business.

"We don't publicize rentals very much," Kotler said. "We have such a big client base, and we need to let our clients know that we're in the rental business."

The expansion comes at a time when real estate firms all over the city, including

Citi Habitats


Bellmarc Realty

, are closing and consolidating offices, while

others are closing altogether

. To make up for lower profits, many sales agents are

doing more rental transactions


Elliman will come out of the gate with 800 new rental listings at Columbus Village, an Upper West Side mixed-use multi-building project currently under construction, Kotler said. Five new residential towers are slated to open  at the mega-development in the next year, and Prudential Douglas Elliman is the exclusive marketing and leasing agent for all of them. A leasing office for the first of the buildings to open, 808 Columbus Avenue, is slated to open in March, he said, though the

project has faced its share of neighborhood protests, scuffles with the city Department of Buildings and legal troubles


Daniel Segal, an executive vice president, and director of sales and the current manager of the 42nd Street office, will manage the new recruits, Kotler said.

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And the Blog Goes On

KNOWING what your neighbor paid for his apartment is a juicy morsel of gossip, and in New York, gossiping about real estate is an obsession. It is so captivating that an entire niche of blogs was created to cover it.

In the past four years, sites like Curbed.com, Brownstoner.com, UrbanDigs.com, TrueGotham.com and The Matrix have been scrutinizing the housing boom with pithy observation and, in some cases, snide commentary.

For readers, it was fun to pillory the design flaws of new offerings and to read about how one broker had trashed another in an overheard conversation in an elevator.

But with the recession in full swing and the housing market waning, what will these blogs write about now? It’s not entertaining to skewer a market where property values are falling and scores of people are losing their homes to foreclosure.

The guiding lights behind these blogs say that they are evolving, becoming more serious and focusing on the nuts-and-bolts details of the market. True Gotham, for instance, is writing about how long transactions are taking. Others are becoming more general sites for neighborhood news. Curbed’s tip line once passed on information from a reader who said that there was a truck in the neighborhood giving out free meat.

For some blogs, the real estate slowdown has led to a leveling off in readership. But all of the bloggers say they are confident their services are not only in demand, but will be increasingly valuable as the market gets trickier.

The reader community that formed as a result of these blogs is a fundamental part of their success. “These sites are fulfilling the needs of people to connect with each other and stay on top of the ever-changing market,” said Sarah Rotman Epps, a media analyst for Forrester Research. “Real estate is a topic ripe for discussion — it is competitive, emotionally charged and fast changing.”

Nevertheless, the blogs’ founders worry about declines in page views and advertising, and like the owners of other forms of media, they are trying to find strategies to deal with the recession.

Jonathan Butler, the founder and owner of Brownstoner, said he laid off his sole employee in December and had gone back to writing the entire site himself. Profits have not gone down, he said, but he fears that with the economic downturn, they might. “It is somewhat pre-emptive,” he said. “But I’d rather be safe than sorry — I have two kids.”

Curbed, the most popular of the New York City real estate blogs, with two million page views a month, has not had an increase in page views since September.

“Traffic on Curbed has been flat,” said Lockhart Steele, the president of the Curbed.com media company, speaking from a coffee shop in the East Village. “I think we are seeing a little of the ‘401(k) syndrome,’ ” Mr. Steele said, referring to people who are ignoring recent financial statements because they know they will present bad news. “There are probably people who are thinking, ‘I am not going to look at that for a few months.’”

Although not radically so, the blogs are also becoming more tasteful. Curbed has a feature called Price Chopper that before the downturn was illustrated with a bloody ax. Now that some sellers are taking a bath, the ax has been axed.

In the spring of 2004, when Mr. Steele started Curbed.com, many of his posts picked up information about new buildings and commercial real estate from other publications, with links to their articles at the bottom. But as the site grew in popularity, Mr. Steele started to receive news tips from his readers and posted those.

“The thing that happened is the readers took over,” said Mr. Steele, 35. “I think what makes the site vital is the fact that we cannot be everywhere, but readers are everywhere, and people love to participate.”

Mr. Steele said reader involvement had not declined even with the faltering market. He continues to get tips from readers; these are followed up by two full-time editors.

Mr. Butler, who used to work in marketing for a hedge fund, is also optimistic about the future of Brownstoner and other blogs. “I think real estate is the topic in New York,” said Mr. Butler, 39, speaking from an architecture firm in the Dumbo neighborhood of Brooklyn where he rents cubicle space. “You have plenty of people who couldn’t tell you what the S.&P. 500 is, but they can talk about real estate values.”

Brownstoner, which gets 1.2 million page views a month, was started in 2004. Initially, Mr. Butler wrote about brownstone homes on the market in Brooklyn, and linked to resources about renovating them. This was mainly because he was renovating a brownstone that he had bought six months earlier.

The posts were so well received that he started a forum specifically to discuss renovation of historic homes.

These days Brownstoner has around 15 to 20 posts a day, covering community news, market analysis and new developments. But Mr. Butler still links to listings for interesting Brooklyn properties, and sometimes follows the entire selling cycle, from when a home is listed, through price cuts and the contract, to when the deed is transferred, giving the reader a sort of real-time play by play.

Despite a shaky housing market, advertisers say that Curbed and Brownstoner are vital ways to find buyers.

“You will see us moving toward more Web-based, cost-efficient advertising,” said Stephen Kliegerman, the executive director of development marketing for Halstead Property, a Manhattan brokerage firm that advertises on Curbed and Brownstoner.

“Blogs, in particular, have buyers and sellers who are sharing their stories,” he said. “As more people come to their sites to read about the market, we feel like we will reach more potential buyers than ever before.”

Halstead started placing banner advertisements on both sites about nine months ago. “We have backed off on the number of print ads we are doing,” Mr. Kliegerman said, adding that Halstead would continue advertising on blogs at the same level this year.

Although some people go to the blogs only when they are hoping to buy, sell or rent, for others they become a habit.

Louis Rosenfeld, who lives in Park Slope, started visiting Brownstoner last summer when he was looking for an apartment. He closed on a co-op in the fall, but is still reading the site.

“I find it interesting to use as a lens for what’s going on in the borough,” said Mr. Rosenfeld, a book publisher.

He said he liked the site’s broad approach. “I can find out what is happening with the Atlantic Yards and in neighborhoods like Ditmas Park and Flatbush.” He also said it was difficult to find news about these smaller neighborhoods in mainstream media.

Some see the chance to comment as a way to promote their neighborhoods. On Brownstoner, one commenter used the log-in name Crown Heights Proud.

“I would talk about the good things about Crown Heights and Bed-Stuy,” she said. “I liked to talk about the positive aspects of living in the community, the years of middle-class black people who raised their families there and were not afraid to go out on the streets. There is a history.” Crown Heights Proud, who did not give her real name because she wants to protect her privacy, now posts as Montrose Morris.

While Curbed and Brownstoner are run by real estate entrepreneurs who derive income from the blogs, several are put out by people who have day jobs in the real estate business.

They are less interested in gossip and more oriented to exposing the wizard behind the curtain. Jonathan Miller, the president of Miller Samuel, a Manhattan research and appraisal company, said that the blog genre had given the industry a great deal of transparency.

With so much property information available online, “most people do an extensive amount of research before they even call an agent,” he said. “The blogosphere has brought an in-your-face approach to housing, and as a result, the agent’s role has changed from information provider to adviser.”

He writes a blog called The Matrix (matrix.millersamuel.com), which has the tag line “Interpreting the Real Estate Economy.” He said his goal was to filter “a lot of the spin consumers are given.” He may write about what a change in federal policy could mean to housing demand, for instance.

“I learn a tremendous amount by researching topics, which makes me a better appraiser,” he said. “This is purely a selfish endeavor because it’s like doing homework you like to do.”

He doesn’t think interest in blogs will wane. “I think the influence of real estate blogs will continue to grow in this downturn,” Mr. Miller said. “I think they will become more and more mainstream. If you are a passionate real estate follower, people are craving quality and relevance, and these blogs are very fun to read.”

Mr. Miller’s blog receives around 60,000 page views a month, which is double what it got a year ago, he said. “I have no way of correlating it to the financial crisis,” he said, “but it might be because of a thirst for information.”

Douglas Heddings, a senior vice president of Prudential Douglas Elliman, started his blog, TrueGotham.com, in 2006, to burnish the image of real estate agents.

“I really wanted to fight the used-car-salesman stigma that real estate brokers have,” said Mr. Heddings, who has been a broker since 1992. “I was so sick of going into a relationship with a potential customer and having them be defensive the moment they met me because of the bad reputation of agents.”

He started to write about the day-to-day intricacies of brokers’ jobs and the things they should be doing for the buyers and sellers they represent. Initial posts had titles like “A Broker’s View of Unscrupulous Real Estate Brokers” and “Things You Can Overhear in a Real Estate Office.”

But being forthcoming backfired, he said. “At the beginning I took a self-righteous tone,” he said. “Airing the dirty laundry of an industry that already struggles with its reputation is not the most effective way to change its perception.”

Mr. Heddings said that his blog had replaced more conventional forms of marketing, like sending postcards, and that as a result, most of his clients had found him through reading it.

One of them was Naomi Novik, a fantasy fiction writer. She got the idea to search real estate broker blogs from thesavilerowtailor.co.uk, a blog run by a British tailor. Since she had come to know the tailor through his blog, she thought she could get to know brokers through their blogs, too. That’s how she found Mr. Heddings.

“New York City real estate has a terrible and well-deserved reputation for being a nightmare,” she said, “and Doug’s blog was endlessly valuable because he seemed like someone who was articulate and trustworthy. I live a good portion of my life online, in a way, and have always found people and services that way.”

Noah Rosenblatt, a vice president of Halstead Property, writes UrbanDigs, which started in 2005. From the outset he has tracked macroeconomic indicators like unemployment rates and stock-market strength to gauge the housing market.

On the blog, “people can learn about me and how I view the markets,” said Mr. Rosenblatt, who worked as a trader before becoming a broker in 2004. “I tell it like it is, real time, ahead of the curve, as opposed to lagging quarterly reports that get spun by brokers.”

As a result, he said, he has attracted a readership that over time has come to know him and to trust his opinion of the market. “It takes a lot of time to build something from nothing,” he said. “You can’t just launch a blog and get 5,000 visitors a day.” Now, all of his clients are people who have found him online.

Propertygrunt.blogspot.com, named in part for Grunt, a soldier in the G.I. Joe comic book series, is run anonymously by someone in the real estate industry. In an exchange of e-mail messages, he said he had no plans to change the tune or the tone of his four-year-old blog, which gives his perspective of the real estate market as a whole.

A recent entry, he said, “was about how brokers kept using the word ‘confidence’ after the dismal fourth-quarter market reports.” He lampooned brokers’ use of the word, and wrote seven sizzling paragraphs in boldface capital letters to get his point across.

But whether gung-ho or down at the mouth, New Yorkers, so far, seem to have an insatiable appetite for real estate news.

“It just is, and maybe it always has been, the great New York obsession,” Mr. Steele said. “Maybe it’s because Manhattan is an island, and from Minute 1 there has always been a fixed amount of space.

“Jeez, I don’t know,” he said. “Real estate just makes people crazy.”

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Midtown East Studio Rental Below Market Value Private Balcony

Date: Jan. 20, 2009
Tags: None

Midtown East Studio Rental - East 50th Street - Private Balcony

Contact JAD Realty Group for showing times:

Jeffrey Ditri - 610.781.8417



Midtown East / East 50th Street

Well maintained, walk-up building
Second floor unit
Kitchen including appliances and new cabinetry
Modern bathroom, new fixtures
Large living space featuring a wall of windows
12' high ceilings
Access to a private balcony
Southern exposure view, bright
Four storage closets
New hardwood floors
Original crown moldings and detail
Live-in super
Priced below market value
Excellent Midtown east location; near all transportation, restaurants, Murray Hill, Grand Central Station, the Upper East Side, and Central Park



Name: Jeffrey
Phone: 610.781.8417

Midtown East Studio Rental - East 50th Street - Private Balcony

Contact JAD Realty Group for showing times:

Jeffrey Ditri - 610.781.8417

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Townhouse sells at highest price since summer

Date: Jan. 20, 2009
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Janna Bullock's townhouse at 9 East 67th Street, at Fifth Avenue, spent nearly three years on the market before closing for $14.925 million, the highest price on an Upper East Side townhouse since the summer. Bullock, a developer, put it on the market unrenovated and invited decorators to dress it up. She took it off the market to renovate the interior and worked with a series of brokers. The townhouse finally sold after Bullock got permission from the Landmarks Preservation Commission to recreate the house's old limestone front stoop and entryway. Broker Richard Steinberg of Warburg Realty brought in a buyer in November, right before his exclusive was set to expire.

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Staff studio in 15 CPW sells for $1.55M

Date: Jan. 20, 2009
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15 Central Park West


THE bull market for Manhattan real estate is alive and well, at least for that unusual and hard-to-find accommodation, the lowly maid’s room.

Property records show that a 448-square-foot staff studio, or maid’s room, facing an inner courtyard at 15 Central Park West sold for $1.55 million in December. That is close to the average price paid for a two-bedroom apartment in Manhattan in the fourth quarter of last year, according to figures compiled by Prudential Douglas Elliman.

The sales contract was signed in mid-November, as automakers were seeking a federal bailout and economists were worrying that consumer spending had all but come to a halt.

By then the most expensive listings at 15 Central Park West, the limestone-clad towers designed by Robert A. M. Stern at West 62nd Street, had been pulled from the market, including an $80 million listing for a four-bedroom apartment, at more than $15,000 per square foot.

But the slowdown in spending did not include what the wealthy residents of 15 Central Park West apparently consider essentials, like plainly finished studios with tiny kitchenettes, suitable for a maid, a butler or an occasional guest. The price of the studio, one of 27 staff rooms in the complex, works out to $3,460 a square foot.

Property records show that the seller was Guy A. Metcalfe, a Morgan Stanley managing director, who flipped the property soon after closing on it. Mr. Metcalfe paid $880,000 for the studio on Oct. 23, the same day he bought a five-bedroom corner apartment on the second floor with a 75-foot-wide frontage facing Central Park.

The buyer was identified in city records as Alexander Mikhailov, who bought a three-bedroom apartment on the 34th floor last January for $7.85 million. In outbidding his neighbors, Mr. Mikhailov paid more for the staff studio per square foot than he did for his apartment, which has huge windows with views of Central Park to the East and the Hudson River to the West.

Mr. Metcalfe and his wife, Lisa, apparently had a change of heart after buying their apartment in October. Two weeks after paying $9.35 million, they put it back on the market for $16.5 million; they have since cut the price twice. Now the asking price is $12.5 million, or $3,270 per square foot, less than they received, per square foot, for the maid’s room.


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As Economy Stalls, Fewer New Yorkers Moving Out of State

In what may prove a silver lining in the latest economic black cloud, New York lost fewer residents to other states in 2007-8 than during any year in at least a generation.

Between July 1, 2007, and July 1, 2008, New York recorded a net loss of 126,000 residents to other states — meaning 126,000 more people moved out than moved in — according to an analysis by demographers at Queens College.

Some 257,000 people moved away during those 12 months, the analysis showed, about half the peak of 521,000 in the same 12 months spanning 2005-6.It was the first time the number dipped below 300,000 since the Census Bureau began measuring the annual flows in 1982.

The collapse of home values across the country appears to have already profoundly affected the ability of people in many states, including New York, to sell their homes and move, curtailing domestic migration.

More people who normally might move — potential retirees and job-seekers — stayed put, in part because they could not afford to sell their houses and apartments; and fewer moved to traditional retirement and job centers in Sun Belt states.

Florida, which saw a significant drop in its annual influx of New Yorkers, lost more people to other states — nearly 10,000 more — than it gained for the first time in recent history.

New York is the leading domestic source of migrants to Florida. In 2005, about 100,000 New Yorkers moved to Florida and 25,000 Floridians moved to New York. Two years later, those numbers dropped to fewer than 60,000 New Yorkers’ moving to Florida and 32,000 Floridians’ moving to New York.

California also faced an anomaly in the most recent data: for the first time since the early 1990s, more people moved out of California than out of New York. That earlier period coincided with a recession in California caused by defense industry cutbacks.

Holly Reid, a Queens College demographer, said of the trend in New York: “It’s a possible silver lining.” Despite all the grim economic factors that helped cause the drop-off in out-of-state migration, New York could benefit by retaining its residents. If the trend continues through next year, New York would lose only one seat when Congress is reapportioned after the 2010 census, instead of the two or even three that had been projected, according to Election Data Services, a political consulting firm.

Robert B. Ward, deputy director of the Nelson A. Rockefeller Institute of Government at the State University of New York, said the latest data did not take into account the most recent job losses, which are not unique to New York. “One factor may be that New York has outpaced the nation in employment growth for most of the past year or two, which is a reversal of most recent history,” he said. “California and Florida have also been hurting economically, although Florida’s troubles are more recent.”

Michael J. Hicks, director of the Center for Business and Economic Research at Ball State University in Indiana, distinguished this recession from earlier ones in terms of its impact on migration.

“In a typical recession, major job losses occur in a single sector that is concentrated in one part of the country,” he said. “This recession seems to be in full force everywhere. That means if you lose your job in Indiana, New York or California, you cannot easily move somewhere else and find a job.”

“Because of housing markets, and nearly simultaneous job losses around the country,” Mr. Hicks said, “domestic migration will be far less pronounced during this downturn than in previous recessions.”

The Census Bureau last month showed that Michigan and Rhode Island were the only states whose overall populations declined in the past year.

Utah had the highest rate of growth last year, followed by Arizona, Texas, North Carolina and Colorado. For the first time in 24 years, Nevada — which ranked eighth — was not among the top four in terms of growth rate.

Texas gained the most people — nearly 500,000 — followed by California, North Carolina, Georgia and Arizona.

“Most people move within or to the United States for economic reasons,” said Andrew A. Beveridge, a Queens College demographer. “With the economy slowing down, and real estate values dropping, it is not surprising that more and more people have begun holding on to what they have and staying in place, rather than seeking declining opportunities elsewhere.”

Among those most likely to move to New York rather than leave were people between 18 and 34, Asian-Americans and naturalized citizens.

A separate analysis of federal tax returns by Jan Vink, a researcher at Cornell University’s Program in Applied Demographics, found that while the decline in people leaving New York was spread evenly across the state, the number moving in rose mainly in New York City.

More people moved to New York State in 2007-8 from California, Florida, Illinois, Maryland, Nevada, Vermont and Washington, D.C., than the year before.


Florida is still the top state for people leaving New York, and New Jersey is second, even though the numbers dropped there, too. In a 2005 measurement by the Census Bureau, nearly 61,000 New Yorkers moved to New Jersey. In 2007, the number was 48,000.

Vicki Been, director of the Furman Center for Real Estate and Urban Policy at New York University, said several factors may explain the migration figures.

“Our worry is that if people are under water on their mortgages and the mortgage is more than the value of the house, which is increasingly common, if they sold the house they’d be liable for 20 or 40 or 60 or 80 thousand dollars to pay it off,” Professor Been said. “That may very well lock people in.

“A second explanation,” she said, “is they’re just reluctant to sell when they hope prices will go back up.”

As William H. Frey, a demographer at the Brookings Institution, put it: “Many would-be movers were stranded in states previously thought of as unaffordable.”

California and New York each lost a quarter-million migrants to more affordable states in 2004-5, he said, roughly double what they lost last year.

“New York’s migration has also responded to ups and downs in the financial industry and to housing affordability, but California seems to be much more volatile due to the dynamic push-and-pull migration relationship it has with surrounding Western states,” Dr. Frey said. “Still, in the last two years, as the housing market cooled down elsewhere, New York has been more successful than California in reducing the migration hemorrhaging it suffered during the go-go home-buying years earlier in the decade.”

Florida has never suffered a net loss from one decade to the next, and the 10,000-person deficit in domestic migration last year may also be a first.

Grant I. Thrall, a geography professor at the University of Florida in Gainesville, said: “At the recent peak, 1,000 people per day were moving to Florida. However, 400 people per day were leaving Florida. Now, out-migration has increased and in-migration has declined.”

Dr. Thrall predicted, however, that while Tennessee and the Carolinas were also competing for retirees, migration to Florida would increase again because the number of aging baby boomers is so large and the state remains an appealing destination for them.

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Major retailers seek rent relief in NYC



Borders at 2 Penn Plaza


Beleaguered owners of chain stores in New York City are asking for permanent or temporary rent reductions through deferred payments, lower payments or leases based on a percentage of retail sales, several retail brokers said.

"Virtually every national chain has a rent reduction program that [will] affect metro New York real estate," said Patrick Smith, executive vice president of the northeast region of Staubach Retail. "Performance is down so significantly they are trying to bring their four-wall occupancy costs to an acceptable rate."

Tenants and landlords are negotiating over a wide spectrum of options that include simply not paying rent in a given month -- equaling as much as an 8 percent reduction over the year -- to rent deferments of up to 20 percent. In the deferment cases, the amount saved would be tacked on to future years.

The retailers seeking relief include local sports chain Modell's Sporting Goods, as well as national retailers such as Borders, CVS and Big M Inc., the owner of women's clothing retailer Mandee, according to various brokers who asked not to be identified.

Lon Rubackin, managing partner with GFI Capital Resources Group, explained how a rent deferment plan might be structured.

Property owners, "might say for a period of three to 12 months you can pay a 10 or 20 percent discount, and whatever that savings is, might get tacked on at the end of the lease, or two or three years from now," he said.

Street retailers, or those stores not in malls, are also seeking a leasing option more often seen in malls, in which rents are based on a range between 8 percent and 12 percent of gross rent. The corporate office of Urban Outfitters made such a request in recent weeks, one broker, who asked not to be identified, said.

Modell's, CVS and Borders declined to comment. The other retailers did not immediately respond to a request for comment.

The move to reduce rent payments is part of a national trend by tenants to save money in the weakening economy and to stave off going belly up, said Robin Abrams, executive vice president at Lansco.

Chain store tenants are contacting landlords irrespective of whether the location is a well-performing or poorly-performing store, she said, arguing that times are tough and they want a rent reduction for every site.

Henry Goldfarb, a retail broker and vice chairman with Grubb & Ellis, said he knew of two chains seeking rent reductions in two separate buildings, but declined to identify them.

"Two owners called me for advice," about how to deal with the tenants' requests, he said.

In addition to chain stores, landlords are being badgered for rent reductions from local shops. "Right now it is a small percentage but we feel it is going to grow," Goldfarb said.

He said such requests were unheard of a year ago, but had occurred in the economic downturn in the late 1980s and early 1990s. Today, landlords remain skeptical and at times demand a look at the books to prove the company is in fact in a very weak financial situation and not simply seeking to increase profitability.

In recent months, "a few of the chains are sending out actual form letters ... that say because of the economic situation they are looking for rent reductions of 20 to 25 percent from all owners," he said. He did not identify which retailers were involved.

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Number of Homes Listed For Sale Fell in December

The number of homes listed for sale declined in many metropolitan areas last month, but the drop was smaller than has been typical for the holiday period.

The supply of homes available for sale in 29 major metropolitan areas in December was down 6.4% from a month earlier, according to figures compiled by ZipRealty Inc., a real-estate brokerage firm based in Emeryville, Calif. The ZipRealty data cover all single-family homes, condominiums and town houses listed on local multiple-listing services in metro areas where the firm operates.

On a national basis, inventories typically fall sharply in December from November because fewer people want to show their homes during the holidays. Over the past 25 years, the average decrease in December from the prior month has been 11%, according to Zelman & Associates, a research firm. Compared with a year earlier, the December inventory in the 29 metro areas was down about 9.5%.

Nationwide, about 4.2 million previously occupied homes were listed for sale at the end of November, according to the National Association of Realtors. That is enough to last about 11 months at the current sales rate. The housing market is considered roughly in balance between supply and demand when the inventory is around six months.

These inventory numbers don't capture the entire housing supply. Newly constructed housing and foreclosed homes, a large part of the supply, aren't always included in Realtors' multiple-listing services. In addition, many people have taken their houses off the market, hoping to get a better price later. Those homes will come back on the market eventually.

The ZipRealty data don't cover New York City. Miller Samuel Inc., an appraisal firm there, says there were 9,081 cooperative apartments and condominiums on the market in Manhattan at the end of December. That was down 2.9% from November but up 41% from December 2007.

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Weak office market leads to surge in lease renewals





In another sign of a more conservative office rental market in the city, the amount of space taken by tenants signing lease renewals in Midtown jumped sharply in 2008 to more than a third of the total space leased, according to a fourth quarter report from real estate services firm Grubb & Ellis.

While the total leasing velocity in the Midtown market was down 26 percent to 15.5 million square feet, firms renewing their leases comprised 37 percent of the market, up from 20 percent in 2007, the report said.

Richard Persichetti, research services manager for the New York office of Grubb & Ellis, said he expected the trend to continue in 2009 as firms become even more reluctant to spend money on moving and build-out expenses.

"I think you will see renewals will be more common in today's market because capital is in short supply," Persichetti said.

In Manhattan overall, the report said office leasing declined while vacancy rates rose in 2008.

The amount of square feet leased in Manhattan fell 20 percent to 24.6 million square feet while the amount of space that is vacant or will be vacant over the next 12 months grew to 11.6 percent in the last quarter of 2008 from 7.7 percent in the same period in 2007, the report said.

The report also said investment sales in Manhattan fell dramatically.

For the entire year, investment sales in Manhattan fell by 70 percent to $12 billion in 2008 from $40 billion in 2007, according to the data. In the fourth quarter, just $862 million in investment properties traded hands, a 69 percent decline from the same period a year earlier, while Midtown had its weakest quarter in more than five years, recording sales of just $470 million, the report said.

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Gramercy/Union Square Rent Stabilized One Bedroom Rental

Gramercy Park East 17th Street & Irving Place One Bedroom Apartment

Rent Stabilized

For showings, please contact JAD Realty Group:

Jeffrey Ditri: 610.781.8417



Gramercy / Union Square / Irving Place

Well maintained, walk-up building
Third floor unit
Newly renovated kitchen including appliances and new cabinetry
Tiled bathroom, new fixtures
Living room featuring an exposed brick wall
11' X 11' bedroom, can fit a queen size bed and extra furniture
Two storage closets
Wall of windows in bedroom, bright
Southern exposure view
New hardwood floors
Rent stabilized unit, priced below market value
Excellent Gramercy location; near all transportation, restaurants, Irving Place, the East Village, and Union Square



Name: Jeffrey
Phone: 610.781.8417

Gramercy Park East 17th Street & Irving Place One Bedroom Apartment

Rent Stabilized

For showings, please contact JAD Realty Group:

Jeffrey Ditri: 610.781.8417


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New York City neighborhoods with the best real estate bargains


Dreaming of a sunny two-bedroom near Central Park? An East Village townhouse? Or just a simple apartment to call your own?

Who isn't? But for many of us for many years, these dreams have been out of reach. Now the tides may be turning, according to a new real estate study by Streeteasy, a website that tracks real estate trends.

The good news: there are a lot of property owners asking a lot less than they were. 4,300 listings in Manhattan - that's about 33% of available listings - had price cuts this quarter, while only 133 listings had price increases - that's 74% fewer than last quarter.

The downtown and midtown markets as a whole saw the most cuts. Co-ops had 34.1% more price cuts than in the last quarter and condos had 42.3% more.

Here are some of their key findings:

Manhattan neighborhoods with the most price cuts
These neighborhoods have seen the highest percentage of sellers cutting prices from quarter three to quarter four 2008:

  • Beekman - 50.6% of listings cut prices
  • Manhattan Valley - 45.7%
  • East Village - 43.1%
  • Central Park South - 41.9%
  • SoHo - 41.7%

The average price discount in these neighborhoods was between 8 - 10 percent.

"The increase in price cuts are the sellers' reaction to current market conditions; they are finally realizing that they must offer an attractive deal to make things happen," said Sofia Kim, Vice President of Research for Streeteasy. "Motivated sellers know that they must move their pricing in order to have success in today's market. Right now, many incentives are being worked into deals."

Manhattan neighborhoods with the deepest price cuts
These neighborhoods have seen the most significant price cuts from quarter three to quarter four 2008:

  • Clinton - 10.93% average discount
  • Tribeca - 10.83%
  • Flatiron - 10.35%
  • Central Harlem - 8.58%
  • East Harlem 9.98%

John Gasdaska, Vice President of the Corcoran Group, said that great deals abound in this market. He especially likes the deals on the west side - between Central Park West and Riverside Drive - from the 60s up to the 80s.

Case in point: He is listing two properties with prices that have dropped by hundreds of thousands of dollars. A 1200-square-foot one-bedroom property on West 75th Street has dropped from $1,075,000 to $795,000.

No matter the neighborhood, keep an eye on the luxury market for deals
(if you can afford these places, even with the discounts!)

The median sales price of a luxury apartment slipped nearly 4 percent to $4,022,000 between October and December compared with the same period a year ago, according to Prudential Douglas Elliman's quarterly report released Tuesday, as reported by the Associated Press. The report defines the luxury market as the upper 10 percent of sales prices.

"You've got a market where suddenly people don't have the wealth they had before. Those who helped to build Wall Street to the stratosphere don't know what their futures look like now," Rick Goodwin, publisher of Ultimate Homes, told the Associated Press.

Nearly 42 percent of the 259 Manhattan homes currently listed for $10 million or more were dumped on the market since September, according to StreetEasy.com.

Last year, 69 sellers with properties listed for $10 million or more cut their prices — 59 of them were in September or after. There were only 17 price increases last year, according to StreetEasy.com.

One penthouse owner on Central Park West repeatedly slashed the asking price down to $9.9 million from an original $16.5 million — and still no takers.

Flippers at 15 Central Park West, dubbed the "Hedge Fund building," and other new condo buildings like The Plaza and Trump Park Avenue are trying to unload their investments, according to the Associated Press.

Last year, 69 sellers with properties listed for $10 million or more cut their prices — 59 of them were in September or after. There were only 17 price increases last year, according to StreetEasy.com.

"Those who can afford to buy these properties, they're thinking it doesn't feel right to put $20 million into real estate right now," Goodwin said.

And without willing buyers, sellers will have to cut their prices even more.

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Citi Habitats shutters Financial District office



100 John Street

Citi Habitats has shuttered at least one of its numerous Manhattan offices.

The rental brokerage has closed its storefront Financial District branch at 100 John Street between Pearl and William streets, said Pamela Liebman, CEO of the Corcoran Group, which shares a parent company, NRT, with Citi Habitats.

"The lease was up and we didn't need the space," Liebman said, adding that the company may open another office in the area in the future. "If it picks up again in the Financial District, we'll be happy to open another office down there."

She added that the branch was a "tiny" office, with only about six agents. The office, in a 221-unit luxury rental building, closed several weeks ago, according to the leasing manager for the building, who asked to remain anonymous.

Gary Malin, president of Citi Habitats, did not respond to requests for comment.

Citi Habitats has 14 other offices in the city, according to its Web site.

As the New York City real estate market limps along under pressure from the economic downturn and untold job losses, many brokerages are looking to save money by eliminating or consolidating offices. The Real Deal reported Tuesday that

Bellmarc Realty has closed its corporate headquarters

at 352 Park Avenue South, moving workers stationed there to the company's Flatiron office.

As for Corcoran, Liebman said the company  currently has no plans to close any of its offices, but may look at doing so as a way to cut costs in the current economy. Corcoran has 30 offices in the New York City area, including 14 on the East End of Long Island, according to the company Web site.

"We're not closing any offices, but that may change," Liebman said. "We're continuing to monitor the market. If there are opportunities where we see that closing an office or a consolidation would suit our brokers well, we would take advantage of it."

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