October 5, 2015--Four Month's Work

Kenneth Griffin, 46, CEO of the investment firm Citadel, is worth a neat $7.0 billion.

His divorcing wife claims that last year he earned an average of $100 million a month, or $68.5 million for the year after taxes. Mr. Griffin is not denying that. And so, after just 11 years of marriage, it is going to be an expensive divorce.

Nonetheless, he has been on a real estate shopping spree.

Here's what four months of work, or $400 million in income, bought him--

According to the New York Times, in Chicago, where Citadel is based, he bought two whole floors of the Waldorf Astoria hotel. He bought the 37th floor for $13.0 million and paid $16 million for the 46th floor.

In New York this year, Griffin is purchasing three floors, totally 18,000 square, at 220 Central Park West. Still under construction, he shelled out $200 million for the triplex, a record for Manhattan. (He could have had our place on 9th Street for a lot less.)

Then in Miami Beach, he closed a deal recently for the 12,500 square-foot penthouse of Faena House (faena--"a series of final passes leading to the kill by the matador in a bullfight") for a Miami record $60 million. The condo has a media room, "great room," a 70-foot-long "infinity pool," and I assume a host  of bed and bathrooms.

Actually, the three purchases total "only" $390 million, which means he had to work even less than four months to earn enough to buy all of them for cash.

I almost forgot--Griffin also owns houses in Aspen and Hawaii.

Kenneth and Anne Dias Griffin In Happier Times 

October 1, 2103--Dog Wars

"Did you see what they got for the apartment across the hall?" Rona was reading her favorite section of the Sunday Times--Real Estate.

"Not yet. I'm still reading about Iran."

"It's not as nice as ours and it went for . . ."

"Don't tell me. I have a weak heart. But I do know that prices for any apartment Downtown have gone through the roof and anything for sale is rarely on the market for more than a few days."

"I really don't get it," Rona said. "In truth there's nothing special about our building except maybe one thing."

"What's that?"

"Location. For some reason everyone in Manhattan seems to want to live Downtown and there are relatively few places; and, also, because of zoning they aren't building any more apartment houses."

"Location, location, location. A place like ours in Cleveland would probably go for $200,000."

"If that. But one more thing."

"What's that?"

"We're a pet-friendly building."

"Good point. More and more places in the city don't allow pets."

"And we do allow them. So those who have dogs and don't want to live in the suburbs are willing to pay a premium for buildings that allow pets. Like our building."

"So I should like the fact that those two guys down the hall, living in a small one-bedroom, had three hunting dogs who howled at the moon in the middle of the night?"

"Thankfully they finally moved out. But, yes, from an economic point of view we should be happy we're friendly to dogs."

"I hate having so many in the building, but I guess you're right," I sighed. "Lucky us."

"But listen to what else is going on," Rona had continued to thumb through the Real Estate section.

"Fire away."

"In a lot of fancy Manhattan buildings that don't allow pets people are claiming they need so-called 'service' and 'companion' dogs."

"No surprise. I knew this was about to become a big issue. Finding alleged medical reasons to get around house bylaws."

"Including St. Bernards."

"St. Bernards as companion dogs? I love it. And probably in a 700-square-foot apartment where the dog requires at least 200-square-feet for himself."

"Be serious," Rona said, "There are lots of situations where having a dog is good for one's health and safety. Seeing-eye dogs, for example."

"Without doubt, but I'm sure if you read the entire article we're not talking just about dogs for blind people."

"You're right," Rona said, "There are examples cited in the article where apartment owners say that having a dog helps get them out of the house--they have to be walked two or three times a day--and that having to walk one's dog provides them with the opportunity to exercise. Which in turn is good for their health."

"And, I assume, they use this reasoning to seek approval from their co-op boards to get a waiver to allow them to have a dog."

"Yes. Though listen to this--someone claimed that he had a version of Parkinson's that made him unstable on his feet. The board asked for a letter from his doctor to verify this. And based on it granted a waiver. But then a couple of weeks later they saw the person with 'Parkinson's' running in Central Park without his dog."

"I love it. So what did they do?"

"The rescinded the waiver."

"It's really complicated. There's evidence that older people who live alone live longer and are healthier if they have a pet than those who don't."

"Any kind of pet?" Rona asked.

"I don't remember."

"So maybe people should start off with goldfish to see how they do."

"You're bad."

September 10, 2013--The $289,500 Hot Dog

One of my favorite big city guilty pleasures is slipping out once in awhile for a hot dog and Coke. A Sabrett's dog from a street-corner vendor. They come piping hot on a roll smothered in ballpark mustard and sauerkraut. Though they may not have any nutritional value, and are likely take years off one's life, once or twice a year it doesn't get any better than to sit out on a park bench and munch away on two or three.

And you can't beat the price. Depending on the where, Sabrett's cost about $2.00 each with the soda just a buck. In a neighborhood luncheonette, by contrast, a tuna on whole wheat and a fountain Coke is at least $12.00.

Down in my neighborhood--the West Village, at carts surrounding Washington Square Park--they go for a bargain dollar-fify each while up at Central Park they cost $2.00 or more.

Now I know why there is this price difference.

According to the New York Times, city authorities charge vendors an annual fee to set up in a specific location because about 10 years ago they needed to step in to regulate the situation as vendors were at war with each other. Literally.

Pushing their carts, they would show up before daybreak to stake out a favored loaction and then squat there, fending off others who had been set up there the day or week before. There was much pushing, shoving, and cursing; occasional serious fisticuffs; sometimes stabbings and even gunshots. No surprise, there were also allegations that the Mafia was involved.

Now, every five years, the best spots are auctioned off. There are 20 locations around Central Park and licenses there go for anything from $125,170 a year at the Harlem end of the park to a staggering $289,500 by the entrance to the zoo.

That means, to break even, with dogs at $2.00 each, a vendor who paid this fortune to be set up near the sea lions and monkey house has to sell nearly 150,000 to just break even. If one adds the costs of ingredients, that number is much higher.

With this annual cost of doing business how can any of these guys turn a profit? Some vendors report that they can gross $2,000 on a summer Sunday but take in virtually nothing when it rains or during the winter.  Maybe all the profit comes from selling bottled water at $2.00 a pop

Somehow it must pay.

Or is this yet another example of Big Apple real estate, where everything is inflated beyond normal reality? Where apartments that sold 10 years ago for $400,000 are now worth $2.0 million. Or more.

Location, location, location is the name of the game in Manhattan real estate and it must also be true when it comes to Sabrett's carts. A lot of people after all do come to the Central Park zoo to see the polar bears.