Dan Shedrick, a gregarious, deeply suntanned 55-year-old entrepreneur, is standing in the middle of perhaps the last great plot of open buildable land in the Hamptons, a quick Mercedes jaunt from power restaurant Nick & Toni’s. It is a remarkable oceanside patch: 54 sun-drenched, salt-kissed acres of fallow potato fields on East Hampton’s swanky Further Lane. Nestled around this precious, leafy acreage are the houses of Billy Joel, Citicorp’s Jack Rivkin, and financier Bruce Wasserstein, not to mention the renters of the summer, Meg Ryan and Dennis Quaid.
Shedrick, who made his money producing Score baseball cards – is well aware that owning this parcel (in Hamptons-real-estate terms) is like sitting on a pile of Internet stock options a week before the IPO. Which is why it sounds all the more shocking when he utters the most heartbreaking sentence imaginable to the area’s desperate house-hunters: “I want to return it to its original status – farmland.” In just a couple of weeks, Shedrick will seed the property with buckwheat and ryegrass. “To me, the Hamptons are really about open space, about the golden light over the fields in the late afternoon,” says Shedrick, who has a house in Bridgehampton and grew up in Sagaponack.
Ryegrass! In this market? It’s like telling a Met curator that you plan to buy Van Gogh’s Irises and hang it in your daughter’s bedroom. But Shedrick’s noble gesture stands out precisely because it is such a rebuke to the current frenzied auction-house atmosphere.
In the most prime locations – which means south of the highway in Southampton, Sagaponack, and East Hampton – there is little open land for sale that people can build on. Never before in the Hamptons has so much money chased so little available property. This scarcity is leading to intense pressure on buyers, sellers, and even brokers. In a year of overnight cyber-fortunes and spectacular Wall Street bonuses, people want to announce their arrival in vaguely Pharaoh-ish fashion, by building – or buying – a monument to their own financial acumen.
This summer, seemingly every plot of buildable land has been striped with a dirt road leading to a bare-timber frame. Speculative building is rampant; indeed, “spec” houses – dwellings built by people who plan to profit off their immediate sale – are cropping up from Montauk to Southampton. Entirely new streets are being unfurled: Casey Lane in Bridgehampton is a cul-de-sac whose entrance is across the street from the Channing Daughters vineyard. Sagg Pond Court is another overnight cul-de-sac with a dozen houses that has taken root off Sagg Main Street in Sagaponack.
On Holden Court, a spur off Erica’s Lane in Bridgehampton, spec-house builders have created a Levittown for the overclass. The two streets are an enclave featuring nearly a dozen hulking houses cheek by jowl, some of which are on the market for close to $2 million. “There ought to be crime-scene tape strung across the entrance to Erica’s Lane,” sniffs sassy Sag Harbor broker Tara Newman.
Jeff Salaway, the owner of Nick & Toni’s, who’s been tastefully renovating the Atlantic, an aging down-market Shinnecock hotel, decries the suburbanization creeping toward his house in Wainscott. “You’ve got acres and acres of farmland around there that now have houses on them,” Salaway says. “It’s futile to wish they weren’t there. But I do wish they’d spend a little more time thinking about what they look like. Architects seem to think the more peaks on the roof, the better. Everyone is trying to out-gable the next guy. So there are these somewhat modest homes with, like, 27 rooflines. I don’t get the point of having a house in the country, and then twenty feet away, there’s somebody else’s goofy-looking house.”
But making a statement in the plutocratic Hong Kong Hamptons has become increasingly difficult; all the money in the world can’t add one measly square foot to the very finite quantity of land available. It’s a situation that leads to no shortage of extreme behavior, from bidding less-than-spectacular properties into the stratosphere to bulldozing modest shingles and wedging gigantic pleasure domes into their places. Says Tom Raffo, a broker in Sotheby’s Southampton office and a developer who builds spec houses himself, “This summer, we saw the last wave of building on any open land in the Hamptons.”
“Fordune,” Henry Ford II’s old southampton estate, which boasts 44 oceanfront acres and a 16,000-square-foot, French-country-style main house, is the current K2 among Hamptons asking prices – on the market for a staggering $35 million. It is, in price, what Ira Rennert’s 29-bedroom dormitory under the stars in Sagaponack will be in size. But even a few rungs down, the prices are simply astonishing.
“Bidding wars are constantly flaring up,” says Peter Hallock, president of Allan M. Schneider Associates, a premier Hamptons real-estate company. “Just today, one of my brokers was dealing with a property where two people kept topping each other’s previous price. People get frustrated and angry, and as a broker, you don’t want to lose both clients. So we decided to go to a sealed bid, which you see more and more often. Both parties write down a price, slip it into an envelope, and whoever names the higher price gets the property – end of deal.”
One Manhattan public-relations executive says he had hammered out an agreement with an investment banker for a house on a nice wooded patch of Amagansett. The house, he says, was in contract; the price, agreed upon. Then one afternoon, right before the closing, the banker called him to say the deal was off – a much higher bid had just swanned in. “But we had a deal – I had your word,” the P.R. executive protested. “And I’m sure in business, your word means everything.”
“Yes, but this isn’t business,” the banker countered. “This is real estate.”
Frank Newbold, senior vice-president of Sotheby’s International Realty in East Hampton, says he’s never seen the market at this temperature. “This is the year of the eight-digit deal,” he says. Newbold doesn’t view the market as hypertrophied in the least. “It’s funny – or scary – to say, but up until now, the Hamptons have actually been sort of undervalued, in a way,” he says. “If you go to places like Malibu and Aspen and the major resorts of the United States, prices were always ahead of us. And this year, the Hamptons have caught up with a vengeance.”
Indeed, expensive is being continually redefined on Long Island’s East End.
“For years,” Newbold says, “the most expensive house was Calvin Klein’s house on West End Road, which had sold for $5.8 million. Then, when Larry Gagosian bought his house, Toad Hall on Further Lane in East Hampton, a few years ago, it jumped up to $8 million,” Newbold says.
Among the moon-shot sales figures of this season are Wasserstein, Perella president Fred Seegal’s old house on Tyson Lane in East Hampton, which sold this summer for $15.5 million. Sotheby’s has gone to contract on the house on Southampton’s Fowler Lane owned by the Blackstone Group’s Pete Peterson for close to the asking price of $15 million. But then, they’d already installed him in his new $12.5 million place, formerly owned by Austrian financier Robert Osterrieth. The sale set a new record for Rose Hill Road in Water Mill’s estate section, shattering the $8 million record that the sale of Adrienne Vittadini’s house set a few years ago – until last week, anyway, when Wall Street financier Jerry Unterberg bought a French-country chateau on eight acres alongside Mecox Bay for above the asking price of $15 million.
“Prices in the last two or three years for the most prime stuff – and waterfront is the gold standard – have doubled,” Newbold says.
Here’s what’s left: Richard Avedon’s Montauk shingle, a sunny but unspectacular four-bedroom squatting on a windswept bluff, is on the market for $12.5 million. David Silver, who operates Jerry and David’s Red Horse Market with Jerry Della Femina, is offering up his waterfront, French-country “barn” – as he has described it – just up the road on Georgica Cove from Kelly Klein for $8.75 million. On Sagaponack Pond, Richard Ekstract’s glassy, ultra-minimalist riff on a country house is an eight-acre whimsy available for $9.5 million.
“Last year, we thought prices weren’t going to go up much further, but this year they’re already up over 20 to 25 percent,” says Myles Reilly, a well-connected broker at Cook Pony Farm in Bridgehampton. “I’m wishing I still had all last year’s inventory. Especially the mid-range – $850,000 to $2 million – and especially in Bridgehampton. There are a lot of buyers in that market and very few sellers.”
Jerry Seinfeld can certainly vouch for that; he’s spent the past few months burning the soles of his Nikes in what has become an excruciatingly high-profile house hunt. Massapequa’s favorite son made a play for Seegal’s oceanfront East Hampton estate, bidding $14.5 million, and reportedly didn’t even receive a polite refusal from Seegal’s people. Seegal was apparently already in talks with avant fashion designer Helmut Lang, who upped the stakes by $1 million and clinched the deal.
Seinfeld met rejection again when he wrote a check for nearly $20 million to Lee Radziwill Ross for her house on East Hampton’s East Dune Lane. Ross returned the check and decided to keep the place after all. The latest word is that Seinfeld – tired of either the rejection or the publicity – has dispatched his sister Carolyn Liebling to do the scouting for what will reportedly be a summer house for both of them.
“Anytime you bring an offer into a house right now, you’re going to be competing with four or five other offers,” Reilly says. “There’s a two-acre lot I sold on Highland Terrace in Bridgehampton for $640,000 about three years ago. Everybody thought that price was ridiculous. But even though the land isn’t on the market at this moment, this summer, I’ve given him offers for a million dollars. It’s in a good location, but it’s not even on the beach.”
It helps to act quickly. One of the finest properties to screech onto the market this summer was the 6,800-square-foot 1993 contemporary on Quimby Lane in Bridgehampton that belonged to David and Penny McCall. The socially resplendent couple died in a tragic car accident on a relief mission in Kosovo; the house, built on land that was in the McCall family for a century, has water views of both Sagg Pond and the ocean. “It came on the market at $8.5 million, and the agent was booked solid with appointments. The house started being shown on Saturday. And if you didn’t make an appointment by the Wednesday before, you weren’t going to get one.” The house sold at the asking price just before the first ads hit the local paper.
It’s a golden afternoon, and Reilly is creeping down the back roads of Bridgehampton in his aquamarine Land Rover Discovery. The car pulls up beside an empty 40-acre parcel in Bridgehampton owned by an ancient family in these parts, the Toppings. Rows of potato plants stretch out toward the large estates to the south. “They keep their taxes low by putting it in an agricultural reserve temporarily,” Reilly says. “It might be ten or fifteen years before they will sell it.” Which hardly means the discussion is closed.
“Oh, they probably get calls from brokers ten times a week, easily,” Reilly says. “Me included – I send more letters than I can tell you.”
In the classically over-brokered South Fork (there are some twenty real-estate agencies in East Hampton alone), real-estate agents are increasingly spending their seven-day weeks cold-calling strangers who happen to own particularly attractive houses. Reilly estimates that cold-calling accounts for 30 to 40 percent of his business this summer.
“A lot of buyers are very focused – they have to be on a certain street, they have to be on the water. Cold-calling is often the only way to find anything for them,” Peter Hallock says. “Some people might be annoyed, but their first question is always ‘Well, what do you think it’s worth?’ “
Even last year’s pale-faced pachyderms have become this year’s bargain. Just last week, Hallock sold a house off Gin Lane in Southampton for $4 million; the same price fetched no serious interest as recently as last summer. “The house,” Hallock says, “just grew into the price.”
Land scarcity has led to one of the more defining Hamptons-real-estate trends in recent memory – the teardown. “It used to be, if you bought something to tear down, people would say, ‘Oh, you must be from California,’ ” Frank Newbold says. People who can’t find open land to build on are simply buying lots with houses already in place and razing them to build the palaces of their dreams. Deference to scale is rarely a consideration.
The most at-risk houses for this sort of treatment are the gray contemporary-style houses that went up – particularly in Bridgehampton – during the last Wall Street boom in the eighties. “We’re selling all these contemporaries for a million dollars,” says Reilly. “People paint them white, spend the summer there, have their architect design something, and by the next summer, they’ve got something new.” This is how a three-to-four-bedroom house in the 1,800-square-foot range surrenders to a hulking six-bedroom, 5,000-to-6,000-square-foot behemoth. But even Reilly applauds trading in a dreary, dated house for a more interesting postmodernist statement or a more traditional, if hulking, Hamptons shingle with its signature gambrel roof.
Minutes later, the Range Rover is back on Montauk Highway. It veers off onto ultra-exclusive Georgica Road and stops at the corner of Jericho Lane.
“This is the teardown of the moment,” says Reilly, pointing at a small, cottage-style ranch house on 1.6 acres that is – or was – the last great opportunity to live on Georgica Road with something less than a champagne budget. The property just sold for $1.29 million. “There’s no land in Georgica right now of this caliber. Great trees. And it’s an acre six: that’s enough land for a big house, pool, and a tennis court – which would make it a $4- or $5 million property right there.”
Reilly laughs. “I actually had one client who wanted to move this house to his property to be his pool house.”
Developer Tom Raffo admits that this year, he just purchased his first teardown house. The land, three acres in Water Mill with an enviable view of Peconic Bay, is currently home to a seventies contemporary. Raffo is planning to yank the house down in the fall and build a 5,000-square-foot shingle English-country-style house.
Teardown fever knows no social or economic bounds. Even on Southampton’s old-money Meadow Lane, CS First Boston’s Andy Stone recently bought an Italianate stucco palazzo with both ocean and bay views for nearly $10 million that he’s already moved up from the ocean and is expanding beyond recognition.
Of course, teardowns are meeting with condescension throughout the Hamptons, even if they’re slowly being accepted as a way of life, says Tina Fredericks, the real-estate agent best known for selling Ron Perelman the Creeks in 1993. On East Hampton’s West End Road – home to Steven Spielberg, Kelly Klein, and Courtney Sale Ross (widow of Time Warner boss Steve Ross) – Alfred Lerner, chairman of the MBNA bank, bought a French Norman house for $6.8 million that he ripped down right after the deal closed. In its place, there is now a huge, baronial seaside estate with a red-tile roof. “The thing looks like it belongs on the Lido in Venice,” says Fredericks. “It betrays a total disinterest in our natural beauty. It’s just too much ego and money working in combination.”
In the midst of this mayhem, fissures in the traditional definition of a Hamptons status property are suddenly visible. It is no longer social suicide to buy north of the Montauk Highway in places such as the Northwest Woods, where Sean “Puffy” Combs bought a modern house last year near Donna Karan’s.
“The whole north-south thing is out the window,” says Newbold. “It’s sort of like those old rules about not drinking red wine with fish.”
Myles Reilly says he’s selling houses in the Northwest Woods for over a million dollars where there weren’t even any houses three years ago: “The land has nearly tripled in price. Even in the Springs, where it’s more of a local area, they’re selling their houses for the threes and fours. And I never thought I’d be saying that.”
The only wide swaths of prime land available are off the well-trampled path. In Montauk, there are 100 acres of prime oceanfront property with a $17.5 million price tag. It’s beautiful, but regrettably, it’s in Montauk. And for the Hamptons powers-that-would-be, Montauk is a scary journey from social hubs like Loaves and Fishes, Sagaponack’s Ron Perelman? priced market.
Until very recently, prices in Noyac – Sag Harbor’s woodsy if down-market neighbor on Noyac Bay – were cooled by a Siberian breeze, relatively speaking. Steve Kroft, of 60 Minutes, and his journalist wife, Jennet Conant, did their best to warm it up for the A-list by buying a house there last year; others will doubtless follow. Sotheby’s is currently offering a lovely wooded 315-acre parcel called Bayberry in Noyac via a sealed-bid auction. “Three weeks before bidding will close, we’ve already got several bids above the $35 million asking price,” Newbold says cheerily.
Noyac isn’t the only emerging market in the Hamptons. “North Haven is getting more popular now that we have a vaccination for Lyme disease,” says Sag Harbor broker Tara Newman of the style-challenged island north of Sag Harbor. “I think people started to decide that even a Lyme-disease scare would be better than having a neighbor build a 29-bedroom house next door.”
North Haven, many blips off the social radar only five years ago, is suddenly a veritable Georgica Road for the artsier, non-Maidstone set. Celebrity painter Eric Fischl, fashion designer Nicole Miller, and even seafaring zinc-oxided songster Jimmy Buffett live there. Sony Music chief Tommy Mottola has his spread right at the Sag Harbor Bridge, which reportedly attracted Rosie O’Donnell’s attention at $8.95 million but is now said to be off the market because Mottola decided he wanted to summer there.
“I had a show down in West Palm Beach about four years ago and was complaining to Jimmy Buffett’s wife, Jane, that I was getting priced out of the Hamptons,” says gregarious painter Dan Rizzie, who had been looking at Amagansett at the time. ” ‘Well, Rizzie, why don’t you stop your complainin’ and come on down to North Haven,’ Janie said.” They had bought there a year before. Rizzie jumped at a sixties ranch house there and is not sorry he did.
“If you’re worried about not having ‘an Address,’ ” says Rizzie, “just wait a couple of years, and you’ll have one.”
Even Sag Harbor next door – with its gingerbread houses sardined together along picket-fence-lined streets – is experiencing house-price inflation.
“I’ve got a friend in Sag Harbor Village who just paid over $500,000 for one of those little houses that I think was built by Sears and Roebuck back in the twenties, where you just ordered it from the catalogue and they constructed it for you,” Rizzie says.
“Sag Harbor is the new SoHo,” says Hamptons writer Steven Gaines. “They have the best restaurants, the artsy people, the galleries.”
Tara Newman, whose husband, Ted Conklin, owns one of Sag Harbor’s hipper hangouts, the American Hotel, laughs a bit at the comparison. “I would say Sag Harbor is more like the meatpacking district,” Newman says lightly. “Not everyone is confident enough to live in the meatpacking district. We have galleries but not Wally Findlay. We don’t have Cartier, like East Hampton – where I still remember a store on Main Street called Pets Painted With Love. That’s the Ralph Lauren boutique now! In Sag Harbor, up until a few years ago, the IGA supermarket didn’t even sell Woolite and all they had was iceberg lettuce.”
“There’s a whole new class of people moving to Sag Harbor,” Newman says. “All these way-south-of-the-highway people are here: Philip Morris scion Lewis Cullman and his wife, Dorothy, moved here within the last three years; Metropolitan Museum vice-president Ashton Hawkins is here; art dealer Barbara Gladstone bought this incredible historical house and restored it – she did a remarkable job. These are people who could live anywhere in the world.”
The Cullmans bought two small buildings on two adjacent lots once owned by P.R.-crisis guru John Scanlon; a former train station is the guest house. This past year, they added a third lot (and main house) right next door for around $650,000, which is still a healthy price for Sag Harbor; the whole place together cost almost $2 million. “The lesson is very 1999: If you can’t buy an estate, buy two smaller lots together,” says Newman. “It’s like building your own Kennedy compound.”
“There is a new reverse chic taking hold,” Frank Newbold says. “Marshall Cogan just sold his house on Lake Agawam and moved to Sag Harbor. Alec Baldwin and Kim Basinger are living in Amagansett. Pete Peterson just moved from Southampton Village to Water Mill. He moved from the ocean to the bay. This was unthinkable just a few years ago. It’s saying, ‘I’m so secure, I can do what I want.’ “
Of course, the sudden increase in wattage now being observed in formerly second-tier Hamptons quadrants doesn’t make everyone north of the highway feel quite so smug. Says Rizzie, with an audible shudder, “I just dread the day I finally see one of those Hollywood stands by the side of the road selling maps to the stars’ homes.”