Clelia Warburg Peters is the president of New York-based Warburg Realty, a brokerage firm founded in 1896. In addition to its bread-and-butter brokerage business, Warburg just published its first Global Property Handbook, a partnership with European brokerage Barnes and Wealth-X, a wealth information and insight business, which analyzes the luxury housing market around the world.
Ms. Peters, who was born and raised in New York City, but lived in London for much of her adult life, recently relocated from Tribeca to the Upper East Side. She spoke to Mansion Global about which international locations are ripe for luxury, how the world has misunderstood high-end buyers and more.
Mansion Global: Describe your dream property.
Clelia Warburg Peters: This is almost the most difficult one for me to answer, because I just love real estate. But the attributes of a dream property for me are something with a view. A beautiful open view of the park, or the harbor are ideal. Even though I grew up in an apartment, I love vertical living—a house or a duplex. I love prewar features, like a working fireplace or casement windows. My in-laws live in a spectacular apartment and it’s almost like a little house built on top of a building with a wrap-around terrace, and they have working fireplaces. I love that little touch of country in the city.
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MG: Do you have a real estate property that got away?
CWP: After college, I moved to Cobble Hill, Brooklyn, and loved the neighborhood. I had a few different opportunities to buy there, and my cousin and I considered buying a brownstone and splitting it. Prices seemed outrageous to us at the time, but in terms of appreciation of property value, that would have been a really, really great move.
MG: What does luxury mean to you?
CWP: In the environment we’re in today, luxury means personal—any experience that’s tailored to you. The way you want to live reflected to you.
MG: What area do you think is the next hub for luxury properties?
CWP: One of the most interesting places is Havana, with the opening up of Cuba, and the charm of Havana, I think there’s going to be a lot of real estate investment there in the next five-to-10 years. Also, Lisbon. Portugal, is trying to draw non-EU citizens with its Golden Visa program. It’s vibrant and dynamic. Also, Berlin is like Europe’s Williamsburg. It’s a hub of creative activity. I have several artist and writer friends who have lived there. The costs are low and quality of life is high.
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MG: What’s the biggest surprise in the luxury real estate market now?
CWP: One big surprise is that there was a global over assumption about luxury real estate. A lot of people thought the very high-end market had a depth it simply doesn’t. People who have $100 million don’t put $50 million in real estate, whereas someone with $10 million would easily buy a $5 million property. Though we’re seeing more people who can afford it, we don’t see people buying real estate at that super high-end level.
For me, the other thing, in light of our report, were some surprises on which cities trend up in terms of being the most popular locations for high net worth individuals. It wasn’t surprising that London and New York were the top 1 and 2 (in that order), but I was interested to see that Sydney was no. 4. Equally interesting: there was a tie at 6 for Chicago and San Francisco, and Osaka. Japan, overall, is no. 2 in terms of ultra high net population after the U.S.
MG: Where are the best luxury homes in the world and why?
CWP: London is the top choice, so it will be interesting to see what happens because of Brexit. It is the financial hub of Europe, and sits at an intersection of east and west. Plus it’s appealing for Middle East and Indian buyers. There’s an enormous variety of homes in the city center, too. If luxury is about personalization, London offers a lot of opportunities to find your perfect and unique situation.
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MG: What’s your favorite part of your home?
CWP: I just moved to a pre-war co-op on Fifth Avenue. I grew up in a pre-war apartment on the park on the West Side, but I’d forgotten about the quality of the light and what a gift the park is to the city.
MG: What’s the most the valuable thing in your home?
CWP: It sounds trite, but the most valuable thing is my new baby. Also, having an apartment that can adapt to our needs.
MG:What’s the most valuable amenity to have in a home right now?
CWP: Not sure if there’s a cookie-cutter answer, because it depends a lot on the priorities of the buyer. There are always some evergreen things—a beautiful kitchen or comfortable, elegant bathrooms—but one of the things we see in the market is that there’s increasing diversity in terms of what people want for luxury. Some people like the anonymity of a loft building in Tribeca, with no staff. But there may be someone who wants a fully serviced building, so that every desire can be attended to rapidly. Both of those are equally luxurious, so the most valuable amenity is choice.
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MG: What’s your best piece of real estate advice?
CWP: If you are someone who can, either yourself or with the assistance of a visually oriented partner, see past the surface, there’s real value. There’s a lot that a coat of paint, some new tiles, and an updated kitchen can do to change the feel of the apartment.
If you’re buying for your own home, or even an investment, you need to buy what you love and what feels like home. Our home is a central part of our identity and how we feel secure in the world. Even if you’re an investor, you need a property you can feel confident someone else will feel that way about.
MG: What’s going on in the news that will have the biggest impact on the luxury real estate market?
CWP: This year is going to be fascinating, in terms of the global financial markets, which the luxury real estate market is very closely tied to. I don’t know of a period that’s had such a high level of uncertainty and ambiguity. Usually that would translate into a market that’s holding back, but it’s truly unclear whether that’ll be the case.
London properties will likely decline in value, but the timeline for that is not clear. China’s currency will have an effect, but how we’re not sure. I think the answer is "we’ll see."
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MG:What is the best area now for investing in luxury properties?
CWP: As far as the global answer, like I said earlier, I’m seeing Cuba, Lisbon and Berlin. In New York, we’re seeing $10 million homes in Brooklyn Heights, and we’ll see that spread out into other parts of brownstone Brooklyn. There’s a whole generation of people for whom the fantasy of life in Brooklyn is more appealing than Manhattan. That said, the "gold coast" on the Upper East Side [which spans from Park to Fifth Avenue] is always going to be a great luxury destination.
MG: If you had a choice of living in a new development or a prime resale property, which would you choose and why?
CWP: We bought in an Upper East Side co-op as a value play, because we were able to get 20%-30% more for our money than in Tribeca. I love classical proportions and the quality of older construction, but I think there are some really spectacular buildings that have gone up and are going up. I can’t wait to see the Zaha Hadid property [on the Far West Side]. If I had to pick a "forever" apartment, I’d probably pick a pre-war co-op, but I’d love to spend a period living in one of these spectacular new buildings.
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MG: What area currently has the best resale value?
CWP: From a global perspective, London is the leader. Whether that will continue remains to be seen. In New York, we’re looking at Brooklyn and Queens. What’s happening in Queens right now probably doesn’t qualify as luxury for now, but it will over time. At a certain level of wealth, if luxury is truly about getting what you want above all, we’re lucky that large swaths of New York are a pretty sure bet in terms of a resale perspective. I love [Douglas Elliman president] Dottie Herman’s quote: "There’s no wrong time to buy, there’s only a wrong time to sell."