Q1 & Q2 2022 Report

HAMPTONS MANHATTAN SOUTH FLORIDA

Q1 AND Q2 2022 REPORT

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TABLE OF CONTENTS

2 INTRODUCTION

6 VISION

8 WHAT SETS US APART

12 THE HAMPTONS $10M + MARKET

26 MANHATTAN $10M + MARKET

40 SOUTH FLORIDA $10M + MARKET

54 INVITATION

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EXECUTIVE SUMMARY

HAMPTONS | MANHATTAN | SOUTH FLORIDA

Despite coming off of two record-breaking years in a row, the luxury real estate industry in the alpha markets of New York, South Florida, and the Hamptons are outperforming their historic averages. While both South Florida and the Hamptons saw dips in the first half of 2022 compared to the same time in 2021, they came out ahead of 2020 and above average sales quantity and volume for the years between 2015 and 2020

In New York, the script is different. 2020 was tough for primary urban markets across the country, and particularly New York. But this year has seen record-breaking transaction volume and quantity.

As the pandemic lifestyle is nearly all but over, we are comparing the first half of this year to pre-pandemic levels, and for the first time in our market reports, using them to predict the rest of this year.

So far all three markets are on pace to meet or exceed their pre-pandemic rates. In the Hamptons for example, consider that the first half of 2022 saw 46 $10 million+ sales, compared to 58 in the entire year of 2019, and an average of about 61 sales between 2015-2019. Similarly, though South Florida is coming off a very hot market, it still had 189 trades in the first half of this year, compared to 82 trades it had in the entirety of 2019. New York City is back as well, on pace to exceed 2019’s 261 sales, having made 158 sales so far this year.

Join us as we dive into the data of the $10 million+ alpha markets.

HOPE YOU ENJOY.

Cody Vichinsky

FOUNDING PARTNER & PRESIDENT, BESPOKE

Total $10M+ Trades in Q1 & Q2 YoY

The first half of 2022 had 46 trades totaling nearly $927 million in the Hamptons, exceeding Q1 & Q2 trade quantity averages since 2015.

The data shown below includes the 9 locations surveyed within the Hamptons $10M+ real estate market for Q1 & Q2 year over year.

$3B+

Between 2015-2021, there was an average $1.4 billion in sales volume. Only halfway into 2022, the Hamptons is a handful of $10M+ trades behind that.

$10M + TOTAL HAMPTONS SALES BY PRICE POINT

The data shown illustrates the total sales quantity and volume within the ultra-luxury real estate market surveyed within the Hamptons for Q1 & Q2 year over year.

2020 TRADES 2021 TRADES 2022 TRADES

95

$10M - $20M

$362M 2020 VOLUME

$497M 2021 VOLUME

$439M 2022 VOLUME

18

$20M - $30M

$115M 2020 VOLUME

$216M 2021 VOLUME

$90M 2022 VOLUME

9

$30M - $40M

$68M 2020 VOLUME

$109M 2021 VOLUME

$134M 2022 VOLUME

16

$40M +

$325M 2020 VOLUME

$300M 2021 VOLUME

$264M 2022 VOLUME

In the Hamptons, we saw a slight decrease in sales volume and quantity (16% and 17%, respectively) between the first half of 2021 and 2022. With renewed interest in New York City, we do project a slight cool down of the Hamptons market throughout the rest of the year, to about 75 sales; 46 have been made already.

However, it is important to keep this cooloff in perspective. Remember that in 2015, which was considered a highly prosperous market at the time, there were 74 trades. Between 2016 and 2019, the number of trades hovered consistently between 54

and 59, until a massive surge in 2020 had 92 trades, the result of which were a migration from the city on account of the pandemic. The Hamptons’ popularity continued in 2021, having outpaced that by 35 trades, with 127 and a sales volume topping $2 billion.

Continued growth at pandemic-level rates would be unsustainable. So while the chart comparing the first half of 2022 to 2021 is flattening, the market is still on pace to meet or even exceed what was considered in “normal” times, like in 2015, a prosperous market.

At this rate, the Hamptons is predicted to see 30 to 40 more trades for the rest of 2022, exceeding the average sales between 2015-2021.

For further perspective, though the Hamptons decreased in sales volume and quantity between 2021 and 2022, they had a 49% quantity and 29% volume increase over 2020, which itself was a record-breaking year. To contextualize the continued strong market, the average sales volume for the first half of 2020, 2021, and 2022 are about $973 million, or about 45 sales.

Looking at the breakdown by towns, East Hampton greatly stood out in sales. While Southampton typically leads in both sales volume and quantity simply because it is the largest $10M+ market, East Hampton surpassed it in volume so far this year, having traded $258 million compared to Southampton’s $159 million, and trailed it by only one trade. This indicates a surge in sales of Southampton homes at the lower end of the $10 million+ range, while

East Hampton led at the higher range, with an average price of $28.75 million, about $8 million higher than the average for the Hamptons as a whole, at $20.2 million. Still, Sagaponack led in the most expensive trades, with an average sales price of $48.25 million across only two trades, including an off-market trade facilitated by Bespoke with a closing price of $50 million in the first quarter.

Demand for waterfront properties is continuing to grow, consistent with our previous predictions in our end of year 2021 market report. So far this year, there have been 16 waterfront properties traded, making up 35% of overall trades, compared to 25% in 2021 and 14% in 2020, as waterfront is taking up a larger and larger share compared to other settings.

Mill Creek Cottage, Water Mill, NY

Rare Double Lot Compound on Mecox Bay

382’ of Frontage | 3.4 Acres+/- | 10,176 SF+/-

7 Beds | 9 Full and 4 Half Baths

Bespoke Exclusive. $29,500,000

Hamptons Quarterly Transaction Quantity

Hamptons Quarterly Transaction Volume

Hamptons Yearly Transaction Quantity

With a slight slowdown expected in the year’s second half, 2022 is still projected to exceed pre-pandemic levels set in 2019.

Comparing 2022 to any other ordinary year, the markets are at peak performance levels. We are looking forward to the end of the year, which we believe will set the pace for the new normal.”

JOSEPH DE SANE | MANAGING DIRECTOR, BESPOKE

MANHATTAN $10M+ MARKET

359

95 TRADES

106 TRADES

158 TRADES

The first half of 2022 had 158 trades totaling over $2.5 billion, far exceeding levels set in 2020 and 2021.

The data shown below includes the 6 locations surveyed within the Manhattan $10M+ real estate market for Q1 & Q2 year over year. DOWNTOWN

10

9

9

MIDTOWN

19

10

13

27

41

46

UPPER

19

22

57

MIDTOWN

9

9

6

UPPER

11

15

27

$6B+

In 2019, Manhattan sold just over $5 billion worth of $10M+ homes.

Halfway into 2022, it sold $2.5 billion, on pace to meet 2019 levels.

$10M + TOTAL MANHATTAN SALES BY PRICE POINT

The data shown illustrates the total sales quantity and volume within the ultra-luxury real estate market surveyed within Manhattan for Q1 & Q2 year over year.

$10M - $20M

13

$30M - $40M $145M 2020 VOLUME

2021 VOLUME

2022 VOLUME

$20M - $30M

$40M +

2020 VOLUME

2021 VOLUME

2022 VOLUME 13

Considering the windfall New York City faced between 2020 and 2021, the market has seen strong performance so far this year, not only making a comeback but on pace to exceed 2019 levels. In 2019, there were 261 sales, and so far this year there have been 158. There’s also been a 49% increase in sales quantity and 33% increase in volume compared to the first half of

2021, which saw modest growth. As with 2020 and 2021, it is notable that the sales in Manhattan and the Hamptons have an inverse relationship.

We predict this year will end in about 240 to 260 trades, a strong market for the city in any “normal” year. That said, it is still hard to assume what the “normal” will be,

as the commercial real estate markets have not made a comeback as strong as residential. With commercial markets being a typically strong barometer of economic activity, we believe we will start to see a shakeout and return to stability at the end of this year and into early 2023

The Dakota

1 W 72nd Street, #82-84, New York, NY

Historic Central Park West Residence

6,000 SF+/- | 5 Beds | 9 Full Baths Co-Exclusive. $20,000,000

Most of this year’s sales were concentrated in the $10-$20 million range, with 136 trades. In 2021, there were 88 and in 2020, 73 in this price range. There are two reasons for this. In part, economic and public market conditions pushed homes at the $7-$10 million price point over into the $10 million+ range, and into our analysis. But the primary reason is simpler: the city, after its 2020 windfall which lingered into early 2021, is exciting to $10 million+ buyers again, and is seen—and proving itself to be—a good investment, contributing to a significantly higher transaction quantity this year, and of course high quantity favors lower price ranges. Additionally, this demand brought prices back up from the

deep discounting common in 2020 and early 2021, which greatly contributed to the increase in sales volume, from $1.8 billion in 2021 to $2.4 billion.

As far as neighborhoods, the Upper East Side saw the greatest quantity and volume, with its 57 trades making up 36% of total trading volume. This is a new trend compared to the popularity over the last several years downtown, particularly on the west side in Tribeca, the West Village, Chelsea, and parts of Soho. Unusually, Midtown East had the highest average sales price and the lowest trade quantity, which in the context of the quantity-focus trend across the other neighborhoods rest of the city, we believe makes sense.

Manhattan Quarterly Transaction Quantity

Manhattan Quarterly Transaction Volume

Manhattan Yearly Transaction Quantity

Halfway into 2022, Manhattan is on pace to meet 2019 levels even with a projected slight slowdown in trade quantity in the second half.

Though commercial real estate is lagging, residential is strong compared to pre-pandemic levels, and I am hopeful for the future of the city. ”

KRISTIN LUKIC | SENIOR PORTFOLIO MANAGER, BESPOKE

MANHATTAN $10M+ MARKET

SOUTH FLORIDA $10M+ MARKET

485

Total $10M+ Trades in Q1 & Q2 YoY

61 TRADES

235 TRADES

189 TRADES

The first half of 2022 had 189 trades totaling over $3.2 billion.

The entire state of Florida saw roughly 90 transactions in 2019, so the market is likely to level out over the remainder of the year.

The data shown below includes all locations surveyed within the South Florida $10M+ real estate market for Q1 & Q2 year over year.

$9B+

In 2019, South Florida sold just under $1.4 billion worth of $10M+ homes. Only halfway into 2022, it sold $3.3 billion, nearly triple.

$10M + TOTAL SOUTH FLORIDA SALES BY PRICE POINT

The data shown illustrates the total sales quantity and volume within the ultra-luxury real estate market surveyed within South Florida for Q1 & Q2 year over year.

359

$10M - $20M

$653M 2020 VOLUME $2.4B 2021 VOLUME $1.8B 2022 VOLUME

$20M - $30M $193M 2020 VOLUME $1B 2021 VOLUME

27

$30M - $40M

$67M 2020 VOLUME $435M 2021 VOLUME $441M 2022 VOLUME

$40M + $119M 2020 VOLUME $686M 2021 VOLUME $383M 2022 VOLUME 20 2020 TRADES 2021 TRADES 2022 TRADES

At this rate, 2022 is predicted to have around 100 more trades by the year’s end.

This year, Florida has seen a decrease in both transaction quantity and volume. This was expected, as $10 million+ sales more than tripled between 2020 and 2021, and we did not expect the same growth rates to sustainably carry into 2022. That all said, similar to the other alpha markets, Florida is still a popular market compared to prepandemic levels, as 2022 trades already outpaces the first half of 2020 and the entire year 2019

So far this year, there have been 189 $10 million+ homes traded in South Florida, with about $2.2 billion more traded in volume compared to 2019’s 82 trades, and H1 2020’s 61 trades, which traded at just over $1 billion. Unlike New York City, commercial activity grew and continues to this year. The moves of prominent hedge funds to the region, like Ken Griffin’s Citadel, Carl Icahn’s Icahn Partners, or Paul Singer’s Elliot Management Corporation are the most prominent examples.

In 2019, South Florida sold only 82 $10M+ properties, over 100 less than the first half of 2022.

Interestingly, there’s been a sharp increase in land/teardown sales over turnkey. This is starkly different than the trend we’ve been seeing in the secondary markets over the last two years (though South Florida is no longer really a secondary market). It’s a glaring signal that the sales so far this year are no longer reactive investments, where the buyer was ready to get out of the city and move into a vacation home immediately, hence the predominance of turnkey in 2020 and the better part of early 2021. Rather, this year’s market growth is sustainable, reflecting homebuyers’ willingness to invest in building their own homes, with a longer turnaround time to move in. Between this increase in inventory and a general cooling off of the market, we expect in the shortterm prices to drop further throughout the second half of this year, resulting in about another one hundred trades until the year’s end, pushing the market into its “new normal” by 2023.

South Florida Quarterly Transaction Quantity

South Florida Quarterly Transaction Volume

South Florida Yearly Transaction Quantity

South Florida is projected to close off its 2021 highs but still lock in significantly higher than average trades. The market is expected to level out in 2023, with trade quantities still exceeding averages from prior years.

South Florida is fully becoming a primary market. Not to say it wasn’t an urban center before, but relocations of New York’s major finance firms seals it among the nation’s top ultra-luxury cities. ”

HARLAN GOLDBERG | PRESIDENT, BESPOKE SOUTH FLORIDA

SOUTH FLORIDA $10M+ MARKET

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