By Keith Loria
Born and raised in Israel, Yair Tavivian served in the Israel Defense Force as part of an elite Air Force intelligence unit before making his way to the U.S., and finding himself in the real estate biz.
Tavivian now leads one of the Douglas Elliman’s top groups, with his team concentrating on the New York City region. Prior to 2018, the Tavivian Team was largely focused on the re-sale market, where it saw great success over the past decade, but recently shifted its focus to new development in Manhattan with price points below $1.5 million and in Brooklyn with average price points of $500,000 to $600,000.
Tavivian’s extensive knowledge of the new development and re-sale co-op and condominium market is the driving force behind The Tavivian Team’s impressive sales record of more than $950 million of closed real estate in NYC, as his team easily averages more than 100 completed transactions per year.
What are your predictions for 2018 about multifamily investment opportunities in New York?
Tavivian: In 2018, investors in New York will continue to be attracted to the condo market in Manhattan and Brooklyn at price points below $3 million. The strongest areas in Brooklyn will be Bushwick and Gowanus, and East Harlem and Midtown East in Manhattan. These neighborhoods are seeing an influx of condos coming to market at attainable price points, and are in high demand for both renters and buyers, which makes for a safe and attractive investment.
What do you see as the trends to keep an eye on in the year ahead? What’s on your radar and why?
Tavivian: The trends we are seeing is a shift towards smaller, more efficient units and layouts with low price points. These homes are selling at lightning speed because people are finally able to enter the market at a reasonable price. The past five years showed huge demand for large units and pricing that was simply too high to sustain in the current market conditions. With these smaller units, we’re seeing more and more of the millennial buyer, as well as older first-time homebuyers who were priced out of the market prior to this shift.
What was the biggest surprise about 2017?
Tavivian: The biggest surprise was the return of the ultra-luxury market, which had seemed to cool, but bounced back in a big way at the end of the year. The sale of the penthouses at 520 Park, and 152 Elizabeth, achieving price points in the $35 million – $70 million range were indicative of the market rebound. We also saw several super-luxury buildings announced, like Central Park Tower and The Crown building—with residences asking staggering prices above $100 million. Whether it’s sustainable or not will play out in 2018, and we’ll all be watching closely.
What are the up-and-coming locales/neighborhoods that you think will be big during the next year?
Tavivian: In Brooklyn, we see Bushwick and Gowanus continuing to trend as popular for both renters and buyers, as these areas feature more affordable places to live, and a thriving culinary and cultural scene. In Manhattan, we see the east side as a prime growth area, especially along the Second Avenue Subway, which has proven to be very beneficial in attracting new residents to the neighborhood. My prediction is that Midtown East and East Harlem will see the most change. East Harlem recently went through a rezoning for more residential development, and we’re seeing lots of developers snapping up sites there, along with the telltale coffee shops and upscale grocery store openings, which are always indicative of an up-and-coming neighborhood.
What do you feel is the most important thing that investors need to be aware of in today’s multifamily environment?
Tavivian: It’s important for investors to focus on developments and projects that are priced right. We are seeing first hand that residences that are priced to sell are moving very quickly. There is an untapped market of buyers that have largely been ignored during the ultra-luxury craze of the past several years. By focusing on upcoming areas with lower price points, it’s easier to find ways to maximize returns on rent and sales. There are far more buyers looking to enter this segment of the market than ever before.