On Wednesday, March 22, 2000 the New York Association of Realty Managers (NYARM) held its regular monthly membership dinner meeting at Frank's. The special guest speaker was Stacey Corso, editor of Residential Business New York, a monthly Real Estate Media publication. Ms. Corso was also attended by the Vice Chairman and President/CEO of Real Estate Media, Gerald Schein and Jonathan Schein, respectively.

"As a resident of New York City and an editor covering the multifamily marketplace, I must admit that I am obsessed with space," Ms. Corso began. "In daily conversations with members of the industry, friends and even people I have just met, we always seem to talk about our living quarters. From how much we pay for them, to swapping stories about how some lucky 79-year-old Italian woman has lived in the same two-bedroom rent controlled apartment in Chelsea for the past 40 years and pays $150 a month for it. Our lives seem to revolve around the issue."

LACK OF SPACE

With vacancies in Manhattan currently hovering in the 3% to 4% range it is incredibly difficult to find a reasonably-priced apartment. Even in the outer boroughs, vacancies are under 5%. It was reported in the March issue of Residential Business New York (Res Biz) that Edward Lee Cave sold a 20,000 square foot penthouse at 740 Park Avenue for an unbelievable $37 million. The Corcoran Group claims that this is the highest price ever paid for a co-op in the world! Barbara Corcoran told reporters that she planned on calling the Guinness Book of World Records to announce the sale.

Even the sale price for 1,000 square foot co-ops and condos has gone through the roof, so to speak. Res Biz estimates that the median price for pre-war condos exceeded $392 per square foot at the end of 1999, while post-war units hit $440 per square foot.

When Stacey interviewed Neil Binder, Bellmarc Brokerage for the January issue he estimated that a "classic seven" on the West Side would have cost about $500,000 four years ago. Today, that same property would go for $1.4 million. In that same interview, Binder claimed that Washington Heights is the only place in Manhattan where you can find a one-bedroom apartment for under $100,000. Meanwhile, rents for units in new buildings have approached the $50 a square foot range and the average luxury two-bedroom apartment uptown is fetching upwards of $4,000 a month.

The tremendous demand for New York apartments is driving sales prices and rental rates up, thus leaving an extremely limited supply of product. The lack of properties for rent and for sale has not impacted the wealthy as much as it has impacted the middle-class buyer and low-income renter. According to the 1999 New York City Housing Vacancy Survey released by HPD and the US Census Bureau, the vacancy rate for units with asking rents of less than $400 plummeted to 1.26% last year, down from 3.21% in 1996. Furthermore, availability of units with rents between $600 and $699 decreased considerably from 4.58% in 1996 to 3.44% in 1999.

LACK OF NEW AFFORDABLE HOUSING

According to Ms. Corso, there is a scarce supply of affordable housing projects currently being developed in New York City. While there are a few 80/20 projects going up in Hell's Kitchen and on the Lower East Side, there are virtually no low-income housing projects being developed in Manhattan.

Most real estate experts agree that prices and rents will continue to rise and vacancies will decrease until the stock market experiences a major correction. Given our region's booming economy, low unemployment rates and incredible job growth, all indicators suggest that a minor recession isn't even on the map.

REAL ESTATE TECHNOLOGY

According to Ms. Corso, when people in the industry tire of discussing the prices they pay to live in these difficult to find, overpriced New York spaces, they turn to another rapidly growing obsession - technology and its impact on the industry. It has already had a major impact on local brokerage houses and may very well have a profound impact on the property management sector. The use of the Internet or computer networking systems, can make managers more accessible to their residents. The Internet allows residents to maintain constant lines of communication with management.

Roseland Property Management utilizes e-valet, a service which permits residents to e-mail requests and work orders to its management staff while providing a host of community and residential services available in the surrounding area.

USING THE INTERNET

Insignia Financial Group has created its own Internet portal at a cost of $10 million. As reported in an interview with Andrew Farkas, chairman and CEO of Insignia Financial Group some 60,000 higher-end apartment units managed by Insignia are tied into a building-specific Internet portal that allows management to more effectively communicate with residents. Residents can submit work orders to their supers on-line, almost immediately contact their managing agents using e-mail and access building-specific documents 24 hours a day/seven days a week.

Ronni Lynn Arougheti, who was profiled in Res Biz' March cover story along with a host of other powerful female players, claims that many of her co-op and condo boards no longer meet once a month in person, but communicate via e-mail. In short, the Internet will allow managing agents to serve their residents and property owners faster and in a much more efficient manner.

Executives at Charles H. Greenthal & Co. agree that advanced computers and software are critical to the performance of the property manager, given the numerous daily tasks and regular reporting that managers must perform as city, state and federal regulations increase. Many times, new regulations are added on top of existing ones, thus increasing the amount of cumbersome paperwork.

Technology, however, has revolutionized the way a manager functions, making them more efficient when filing reports and maintaining building records. "As the Internet changes the way we do business, other technology advancements are also having a profound impact on the residential market," claims Ms. Corso. "For instance, in our April issue, I am writing a feature on the new wave of submetering. We will be talking to the leading manufacturers and marketers of electronic meters to find out exactly how buildings can save money by using this relatively new type of technology. Aside from electronic metering, high-tech advancements have also been made regarding every aspect of a residential building, from lighting and windows, plumbing and water systems, to telecommunications infrastructure."