Halstead Property

Diane M. Ramirez
President
dramirez@halstead.com
(212) 381-3203

Susan Ruttner
Exec. Vice President
Westside Office
Tel: (212) 381-2231
sruttner@halstead.com

Once Again New Yorkers Barter For A Place To Call Home

Pictured: Justin G. Schiller, who sells rare children's books, wants to trade a watercolor drawing by Maurice Sendak for a studio or small one-bedroom apartment below 100th Street in Manhattan.

By STEPHANIE ROSENBLOOM

JUSTIN G. SCHILLER, who collects and sells art and old and rare books, is shopping for a Manhattan apartment. But he has no intention of plunking down a single penny for one. Rather, he plans to do something fittingly old-fashioned: barter.

In a time when half a million dollars barely buys a studio in New York, Mr. Schiller is hoping to trade a watercolor drawing by his longtime friend Maurice Sendak, perhaps best known for his children's book "Where the Wild Things Are," for an apartment.

Mr. Schiller's approach is unusual, but in a time of continuing high prices, it could become more common. There are a number of enterprising apartment hunters for whom cash is not necessarily king. Brokers in Manhattan say they are encountering people who will swap a variety of goods and services in their quest to buy or rent, offering up everything from artwork to acupuncture.

The Sendak illustration — of children bedecking one of the artist's wide-eyed "Wild Things" monsters with tinsel and ornaments as if it were a Christmas tree — appeared on the cover of Rolling Stone magazine in 1976.

It was appraised by Christie's in 1998 for about $350,000, said Mr. Schiller, who specializes in collectible children's books. He estimates its current value at $650,000, though, of course, the value of art is always somewhat subjective.

This is the first time in its 20-plus years that Halstead Property, which is representing Mr. Schiller, has taken on such "a unique exchange," Diane Ramirez, the company's president, said in an e-mail message.

In Manhattan, where the average price per square foot for apartments exceeds $1,000, the notion of bartering is particularly enticing. Mr. Schiller, who already owns an apartment on the Upper East Side, wants to buy a studio or small one-bedroom for a colleague, Oliver Lei Han, who emigrated from Changchun, China, in 2003 and who has been assisting Mr. Schiller with vintage Chinese propaganda art from the Mao Zedong period.

"Although we have some money," Mr. Schiller said, "if I used our money to buy a small apartment in New York, we would use up our cushion."

"There's no reason," he said later in the interview, "why art can't be a monetary commodity."

And why stop at art? Not all barterers have pricey illustrations to trade. Many simply rely on their professional skills and a pinch of bravado.

Zahra Joudi, a sales associate at the Corcoran Group, is currently working with a plastic surgeon who is offering nips and tucks in exchange for a deal on a mixed-use building that would house his practice.

But making such an offer to a seller has obvious pitfalls. "It is touchy because you don't know how they will take it," Ms. Joudi said. So far she has approached one seller's broker who agreed to take the deal to his client. "It's going to be very interesting," Ms. Joudi said. "We don't know. We haven't heard yet."

The barter idea was hatched when the surgeon mentioned to Ms. Joudi that the seller could use a bit of work.

"I said, 'Why don't you offer to do it for her?' " Ms. Joudi said.

"There are different ways to add value or pay the value they are asking for," she said. "Our job is to bring deals together. That's the way it is right now. You have to be creative; you have to find different ways to make deals happen."

As Susan Ruttner, the Halstead broker who is working with Mr. Schiller, put it: "We know back in the day artists traded artwork for food or lodging. It's just another permutation of a similar activity."

Mitzie Lau, a senior associate at Corcoran, knows of several successful bartering agreements between landlords and tenants, mainly those in the beauty and bodywork fields. A friend of hers, a colon hydrotherapist, once gave a landlord two colonics a month in exchange for a $200-a-month discount on a $1,650 apartment, a one-bedroom in the West 50's.

Still, negotiating such unconventional agreements can be time-consuming and complicated. "Two hundred a month plus a massage a week — that doesn't go down very well on a deal sheet," Ms. Lau said.

Brokers are also rarely keen on giving up commissions for reflexology. Mr. Schiller has offered Halstead art instead of a commission, but a spokeswoman for the company said it is declining the offer.

Lewis Friedman, an associate broker at Bellmarc Realty, was showing a one-bedroom apartment for rent on the West Side a few years ago when he said a couple showed up looking "a little grungy."

"They were like 'How can we afford this?' " he said.

But the couple, a chef and a yoga instructor, fell in love with the apartment and turned in a two-page proposal offering their professional services in exchange for free rent, according to Tami Robinson, who owns the apartment with her mother and father.

"My parents laughed hysterically at the offer," Ms. Robinson said. But she was intrigued. "I loved the idea," she said. "Who wouldn't want a chef?"

The apartment, however, rents for more than $4,000 a month. "It's $50,000 to $60,000 a year that we'd be throwing away," Ms. Robinson said. "The guy would have to cook every night for me to have it make sense."

A Japanese bank is now renting the apartment. But Ms. Robinson still likes the notion of bartering. "It's a beautiful thing," she said, adding that if she had unlimited funds, she would have seriously considered the deal. "The service has to be so ridiculously valuable," she said. "But it's New York. Anything's possible."

Or almost anything.

An even exchange is not illegal, said Steven R. Wagner of Wagner Davis, a Manhattan law firm that handles co-op and condominium matters. "There's no reason why it can't be done," he said. "The question is what will the purchase price be for purposes of going to a co-op board for approval or a condo board for right of first refusal."

Some people who barter may think they can avoid paying taxes, but that's not legal, Mr. Wagner said. Barterers should assign fair market value to whatever they are offering in exchange, he said, and gave this example: if you put up a painting worth $100,000 and take out a $100,000 loan to buy an apartment worth $200,000, the purchase price is still considered $200,000, and you should pay tax on that amount.

Mr. Schiller, an only child who founded the International Wizard of Oz Club at age 12 and who in the 1950's shelved books at Biblo & Tannen on Fourth Avenue in Manhattan in exchange for volumes he couldn't afford, chose not to sell the Sendak illustration and then use the cash to buy an apartment because, as he put it, "I would rather not sell it if I can't find an apartment."

He would like a place somewhere below 100th Street and is willing to offer other works of art if a seller would prefer something else.

Trading face-lifts and yoga lessons is one thing, but a work of art is often an object of love. Mr. Schiller bought the Sendak more than a decade ago and has had it hanging in his house in Kingston, N.Y. "When one enjoys a piece of art it becomes part of you," he said. "Even if I let go of the piece, it will still be inside of me."

Pictured: Justin G. Schiller wants to exchange this Maurice Sendak drawing for an apartment for his colleague Oliver Lei Han, a specialist in propaganda art.

Sunday, June 11, 2006