Adam Manson on the deck of The Panoramic View, a hotel property he has developed into luxury apartments. Neighbors include Robert De Niro and Rolling Stone publisher Jann Wenner. (Doug Kuntz)
(Doug Kuntz)
Someone forgot to tell Montauk about the real estate crash.
Young hotshot developers are circling the East End community more than the striped bass this season. Boldfaced names are snapping up property, tearing down cottages and building mega mansions in a market boom with prices that are defying what the rest of the country is witnessing with prices up over 5 percent from last year.
The bullish developers behind a slew of recent deals are jockeying for position as the South Fork’s easternmost enclave transforms itself, luring international buyers and wealthy New Yorkers who previously turned up their noses at Montauk.
Montauk has often been described as the un-Hamptons, but when a few nightclub guys snapped up a rundown roadhouse and launched it as the now wildly successful Surf Lodge, in 2008, the hamlet started getting hotter.
Montauk has a growing number of trendy new restaurants, including Navy Beach and The Crow’s Nest Restaurant and Inn, just taken over by hotelier Sean MacPherson. Gwyneth Paltrow has been raving about Joni’s, the local organic food café where lines are out the door.
One of the first to smell opportunity in Montauk was Adam Manson, a Long Island developer, who bought the historic Panoramic hotel in 2007.
Its 12-acre plot sits next to Robert De Niro’s beach home, and the Bernie Madoff house now owned by real estate mogul Steve Roth. Manson, a former investment banker and managing partner of Distinctive Management, which has been buying properties in the Hamptons since 2004, is eyeing several full-service resorts, including Gurney’s Inn, the resort next door.
Purchasing Gurney’s would give the Panoramic, where Manson has converted the property into full-service, two-to-five-bedroom apartments priced from $1.8 to $6 million, its own restaurant and a spa. “We have all types of buyers, including Europeans, New Yorkers, families from the Midwest and California. In the 1980s the Wall Street bankers were the target market for second homes and now we know that everyone wants luxury and service.”
Manson is not the only one eyeing Gurney’s, which is rumored to have a $50 million price tag. The property is not even officially for sale and has the issue of time-share ownership.
Canyon Ranch, Ritz-Carlton and the Four Seasons have reportedly all looked at the oceanfront property, and would brand the property for a purchaser.
Gurney’s General Manager and CEO Paul Monte said: “Gurney’s is not for sale. It’s been around since 1926, and my family has been involved in management since 1956.” He added, “It’s priceless.”
Monte’s family also used to own Monte’s Venetian Room in Carroll Gardens before it closed in 2008.
A health resort such as Canyon Ranch, which has properties in Miami and Tucson, could beef up the organic food and spa component and cater to a new crowd. Canyon Ranch spokeswoman Sheryl Press said: “While we have in the past looked at several properties in the Eastern End/South Fork of Long Island, we are not actively looking at this time.” Ritz-Carlton had no comment.
Meanwhile, real-estate investor Andrew Farkas, who bought the Montauk Yacht Club, a 35-acre resort and marina, in 2006, has spent millions refurbishing it, but the town council reportedly will not allow him to deepen the harbor to allow mega yachts to come in.
“He’s pissed, and has unofficially put the property on the market,” said one broker. Farkas declined to comment.
Dave Ceva, who owns Sole East, formerly the Shepherd’s Inn, and a beach property, Sole Beach, is looking to buy properties similar to Sole East, which he bought in 2006. “I’m looking into smaller properties where we could add value.”
Investors are dropping big money to replace smaller, dated houses with mansions. Roth bought the Madoff property for $9.4 million in September last year, and has completely gutted the house.
Rolling Stone publisher Jann Wenner bought a house in the same area for $11.9 million, and has torn the whole house down and has contractors working on a new property.
First-time investors be warned. Unless you have the cachet of the Surf Lodge or André Balazs, the numbers don’t work well for some of these sales. “Montauk is notorious for people having grandiose thoughts about what they are worth,” said one broker.
Some of the Montauk properties that have developers looking east of Amagansett.
* The Montauket is on the market for $17.5 million and includes a restaurant, cottages and a caretaker’s house, set on 1.3 acres that is zoned for resort activity, and is attracting developers.
*The East Deck Motel and Resort , on five oceanfront acres in Ditch Plains is also on the market for the first time since it opened in the mid 1950s. The 30-unit motel popular with surfers is listed at $20 million.
* Modern beach house. On the market for $4.5 million; was just rented by a philanthropist who paid close to $100,000 for 45 days.
* The Inlet restaurant at the end of East Lake Drive, a restaurant, fishing dock, 28 boat slips, for $24 million.
* Two chunks of oceanfront land, right next to Robert De Niro’s beach house and Jann Wenner’s property.
Both lots are 1.5 acres each, and overlook sandy beach, lush green vegetation. Sale price about $5 million.