The High-end Real Estate Market

GREED AT A GLANCE

Does outrageously high pay turn otherwise reasonable bankers into reckless cutthroats? Or does outrageous pay attract reckless cutthroats into banking? The author of a just-published review of business ethics at Barclays, the scandal-ridden British banking giant, can’t seem to make up his mind. Anthony Salz, a banker himself, conducted 600 interviews before releasing his 244-page report last week. Excessive pay, he found, “contributed significantly to a sense among a few that they were somehow unaffected by the rules.” But “elevated pay levels,” he also notes, “inevitably distort culture, tending to attract people who measure their personal success principally on compensation.” Between 2002 and 2009, 60 bankers at Barclays annually carved up over $258 million in bonuses . . . The financier Martin Zweig loved to live large — and high. Back in 1999, Zweig paid a record $21.5 million for a 16-room spread at the top of the classic Pierre hotel tower just off Central Park in Manhattan. The maintenance fee for his new pad: $30,000 a month. Five years after moving in, Zweig tried to sell his posh digs. He asked $70 million, couldn't get it, and then pulled the apartment off the market. Zweig passed away this past February, at age 70. Now his widow, amid a Manhattan luxury boom, has placed the apartment back on the market — for $125 million. A sale at that price would set a new New York record for a luxury residence, more than $30 million over the current high mark . . . The soaring market for Manhattan high-end property, a new Christie’s International Real Estate study reports, reflects an even broader global surge. Residential real estate, Christie’s CEO Bonnie Stone Sellers notes, has become “a tale of two markets — luxury and everything else.” Among the global hot spots: Miami, where South American buyers are collecting $5 million-and-up properties at a furious rate. The wealthy South Americans, says Christie’s, are worrying about “their own local economic conditions.” Their latest worry: Lawmakers in Argentina have just adopted legislation that limits the standard workweek for domestic workers in private residential service to 48 hours, mandates overtime pay, and sets a minimum age of 16 for domestic work

From Toomuch online by the Institute for Policy Studies.