Where the Wall Street Crowd Stays
by c. j. hughes
For years, if you were the type with a Series 7 license and an expense account at Harry’s Cafe & Steak, the choice of where to buy in the Hamptons was a no-brainer. Wall Streeters typically headed to one of two places to cool off: There was Sagaponack, around Bridge Lane, where executives from Goldman Sachs famously gathered, and there was Southampton, along Meadow Lane, where bigwigs from hedge funds and private equity firms kicked back.
But recently, facing job insecurity and intensified scrutiny over their spending habits, many financiers began rejecting those tight-knit circles—and their often stratospherically priced properties—for different addresses. Indeed, in an atomization of the established pecking order, Wall Streeters today are more likely to be dispersed across the breadth of the East End, from Westhampton to Montauk, according to real-estate brokers, community leaders, and residents.
Much of this diaspora is being driven by the younger buyers, who seem particularly keen on the “between the bridges” area of Westhampton Beach, on Dune Road, from Jessup to Beach Lanes, says Enzo Morabito, a broker with Prudential Douglas Elliman Real Estate who has sold homes on the East End for 30 years. Along this sandy stretch, Bank of America, Goldman Sachs, Morgan Stanley, and other bank employees (who make up 70 percent of Morabito’s clients) live in waterfront properties that recently traded for a relatively affordable $2 million to $4 million.
These homes, which nestle among low pines, can be just an hour-and-a-quarter away from Midtown Manhattan by car, which is important for those who are expected to put in long hours at the office and are not yet members of the private helicopter set. “These guys haven’t gone up the corporate ladder too much,” says Morabito, “and everybody is afraid to not report for work.” Plus, homes that trade for 25 percent of their equivalents in Southampton or other east of the Shinnecock canal locations are enticing for buyers who supposedly know a thing or two about value, he says, adding, “No one can count on that bonus anymore.”
Agreed, says Patrick Galway, who once worked as a real estate appraiser in Manhattan before his current stint as director of the Westhampton office for Town & Country Real Estate. He likens the trend to what he saw happen in Manhattan over the decades. In the 1980s, when he arrived, many bankers wanted to live on the Upper East Side, though now they are just as likely to be found in SoHo or Tribeca. And that breaking-with-the-herd mentality is poised to put upward pressure on prices. “Just like in Manhattan, people are stretching out,” he says.
Not all sections of Westhampton that lure bankers are created equally, however. Dune Road in the hamlet of Quogue, for instance, is pricier, largely because lots there are bigger than those in Westhampton Beach. Homes are generally older and more traditional-looking, too. There, “people will pay $7 million for dirt” or a teardown, Galway says. Otherwise, bankers are also betting on homes with privet hedges in inland Quogue Village, like along Quaquanantuck Lane, where properties can list around $5 million, he added. They are joining Sallie Krawcheck, a former Citigroup and Bank of America executive who has a spread facing Shinnecock Bay there.
“It’s a sleepy little town,” says Galway, who grew up in East Quogue, of the retail offerings, “but major money is everywhere.”
Despite shielding landscaping, Hamptons bankers at all levels still want top-notch security—like metal gates and closed circuit security cameras— to prevent neighbors from gawking, says Gary DePersia, a senior vice president with The Corcoran Group, who has sold East End homes since 1995. If those devices make Morgan Stanley employees seem like Beverly Hills celebrities, so be it, he explains. “You’ve got to understand, our movie stars are Wall Street stars,” he says. “They want privacy and anonymity.”
But, tall gates won’t deter all interloping, especially with beachfront homes, according to other brokers. Consider the protesters who took to the streets in July near billionaire David Koch’s house on Meadow Lane in Southampton during a fundraiser for presidential candidate Mitt Romney.
A quest for privacy partly fueled the mini-boom among Goldman execs in the 1990s in Sagaponack, which up to that point was a pass-through agricultural community. Among its fields, honchos like Lloyd Blankfein, now the bank’s CEO, put down roots; his house still stands on Parsonage Lane. Also in the neighborhood is Gary Cohn, Goldman’s current COO, though former vice chairman Robert Hurst has put his 11,700-square-foot manse, on 33 acres on Sagaponack Pond, up for sale as he decamped for Aspen. The home, with eight bedrooms and eight-and-a-half baths, and stretch-to-the-horizon views, is currently listed at $65 million with Corcoran’s Debbie Loeffler.
In fact, the pond became encircled by so many Goldman-ites—about a half-dozen, Loeffler says—that the area quickly earned the nickname “Goldman Sachs-oponack,” she jokes.
And the fortification feel doesn’t end there. In order to have more clout with the local zoning board, the so-called second-home residents are said to have helped Sagaponack break away from East Hampton in 2005 to incorporate as its own village, which ratcheted up its exclusivity, residents and brokers say.
Otherwise, the past-generation Wall Street honchos congregated in Southampton on Meadow Lane, Dune Road, and Gin Lane. Leon Black, founder of the private equity firm Apollo Global Management, is on Meadow; close by is the getaway of David Ganek, of the Level Global hedge fund, which closed in 2010; Henry Kravis, founder of investment giant Kohlberg Kravis Roberts & Co., is also a neighbor.
While Wall Streeters are less tied to these long-favored areas, some are branching out with baby steps. Some buyers believe hobnobbing with the industry elite on weekends is good for business and so remain near Sagaponack, even though they’re willing to live on the outskirts in next door Water Mill. DePersia sees bankers buying from Mecox Road in Water Mill to Town Line Road in Wainscott. “They are spreading out, but they still like to be in the middle, where it’s sort of an equal drive to East Hampton and Southampton,” he adds.
To be fair, other super-quants have branched out of the traditional locales before, but these were men who ran their own shows. Peter Peterson, cofounder of the Blackstone Group, surveys Mecox Bay from a perch in Water Mill, for instance, and the late Bruce Wasserstein, of the Wasserstein & Co. private equity powerhouse, relaxed on a Further Lane oceanfront in East Hampton, where he was a bit of an outlier among brand-name actors and directors (though his ownership of celebrity-friendly New York magazine may have won him plum party invites).
Sometimes, age plays a role in the where-to-summer decision. Lured by an increasingly bustling nightlife, finance types younger than 35 are flocking to Montauk, figuring the three-hour-plus commute by car is worth it to enjoy Zum Schneider, the popular East Village German beer hall that opened a local outpost earlier this summer. “And, they tend to tell their friends to come here, too,” says broker Barbara Feldman, who matches buyers with specialized brokers and so has been contacted by many who work on the Street. When they buy, which takes places after renting for a few seasons, they prefer Old Montauk Highway and the “presidential” streets off it, like Washington and Grant Drive, she explains, where starter homes cost about $1 million and where salaries go much further than in other Hamptons villages
Yes, Feldman said, even Masters-of-the-Universe-in-training like a deal in this new post-recession reality. Still, most agree that a second home in the Hamptons to beat the city heat is as much of a must-have accessory for the banker crowd as a Bloomberg terminal.
photography by ©2011 StefenTurner.com as per my Assignment T&&C with Sotheby’s (1370 Meadow lane); imagenation (208 Dune road)