Manhattan's movers and shakers

In Manhattan, you are where you live. Little wonder, then, that the battle for pole position in the city's turbocharged real-estate market has become a gripping celebrity soap opera. David Usborne takes a stroll down Park Avenue

Those are the days when we Gothamites indulge in the kind of gossip that interests us most. In the Observer, the column is called "Manhattan Transfers", while the equivalent in the Times is the "Big Deal". Here, and in equivalent dispatches in other papers and magazines, we find recent intelligence, reliable or otherwise, on - wait for it - local residential property deals.

Stifle that yawn. Remember that in New York, surely more than in any other spot on the planet, who you are is where you live. Set aside that myth about classlessness in America for a moment and understand that your status in this city is determined first by the statistics of your lodgings: the square feet you occupy, the rent you pay for them and, most important, the five numbers that make up your zip code. Last year the average price of a Manhattan apartment, in all zip codes, exceeded $1m for the first time. In December Rupert Murdoch paid $44m for a three-level pad on Fifth Avenue. And he paid for it in cash.

All of this is well understood by Steven Gaines, an associate editor with New York Magazine, who has just come out with a new book, The Sky's the Limit: Passion and Property in Manhattan. Gaines offers us glimpses not just of how much money is sloshing around in Manhattan property deals nowadays but also how easily the deals can go wrong.

To explain the importance of the zip-code, Gaines returns to observations made by Tom Wolfe in Esquire magazine 20 years ago. Wolfe said the cream of Gotham society were "desperate to live in what are known as the Good Buildings". Identifying the Good Buildings - which turn out mostly to be co-operative addresses on a stretch of Fifth Avenue between 59th Street and 95th Street - "may have nothing to do with space, construction, or grandeur," Wolfe went on, but more to do with the types of people already living in them.

So it is not just that the buildings in this part of town are stately in their looks, some almost regal. The posh people - or those who think they are posh - stick with their tribe. If aliens were to capture the slim rectangle of real estate to the east of Central Park, including Fifth and Madison Avenues and also Park Avenue (although Gaines tells us that the west side of Park is more prestigious than the east) they would find in their net the likes of Woody Allen, Paul Newman, Bette Midler, Kevin Kline, Michael J Fox and Ralph Lauren. And the roster of shops along Madison would be equally impressive. Cartier, Rolex, Bvlgari are there as is DKNY, Giorgio Armani, Nicole Miller, Moschino, Kenzo, Yves Saint Laurent, Givenchy, Sonia Rykiel, Calvin Klein, Roberto Cavalli, Barneys, Chloe, Joseph and even Alfred Dunhill.

But neither money nor fame guarantees a berth in this promised land. Here is where we learn very quickly of the tyranny of the co-op boards. Most of the buildings here are co-operatives. You do not buy bricks and mortar here but rather shares in the co-operative. How many shares will depend on the size of the space you will occupy. Before you can buy them - and start picking paint colours - the co-op board must decide first if they like you. To get in, therefore, you must be PLU - People Like Us.

Ironically, it is the celebrities, who are most likely to be stopped at the gates. You think a stretch-Hummer is cool? Turn left and head to Los Angeles. "If you're a pop star, don't even think about it," explains Gaines. "If you're the type of celebrity that has paparazzi stalking you, it's very, very difficult, and you'll never get into a building on Fifth Avenue. Britney Spears is definitely out." Just broken up from your spouse? That's tricky. "It's very important to people who they see in the elevator," writes Gaines. The boards "don't want divorcées because they don't know who they're going to marry."

"Even the loftiest plutocrats have been repelled," Gaines reports, among them Ronald Perelman, chief of Revlon cosmetics. He also tells of how the former CEO of IGC Communications, Shelby Bryan, tripped up while trying to get into super-exclusive Sutton Place complex, where UN Secretary General Kofi Annan and British Ambassador Emyr Jones Parry both reside. When a co-op board member warned Bryan that political fund-raisers disguised as regular parties were not allowed, he asked how anyone would be able to tell the difference. He was summarily rejected for being "fresh". Six years ago, Mariah Carey and Barbra Streisand, fell foul of a co-op board. Carey was ready to pay £4,660,000 for Streisand's 16-room penthouse apartment in the prestigious Ardsley building - until the board rejected her application. Her money alone wasn't enough and the residents feared they would have to run the gauntlet from limo to door in a blaze of camera flashes.

To pass muster, a co-op board will usually insist that you have liquid assets (cash, bonds or stocks) in excess of three times the price you will be paying. You will need letters of recommendation from the best pedigree of friends. And you must agree to abide by all the building's rules in advance. This means things such as using the service entrance if you are returning from a jog in the park in your running garb. The UN Plaza, according to Gaines, used to ban cooking with woks in the apartments.

Gaines also has tales of famous folk who have made it past the fearsome boards only to behave if not badly once inside then at least at little eccentrically. Over in the famed San Remo building, with its twin neo-Gothic spires, the fashion trail-blazer Donna Karan apparently went nuts with her interior decorating. When Karan later sublet the space, they foundshe had converted it into a "Zen landscape" with "fountains on the wall illuminated by dim pools of light". Nearby, Steven Spielberg caused a stir when he offered to pay the building next to his whatever it would take to spruce up its dilapidated roof-top water tower which was spoiling his view.

Tommy Hilfiger falls into the category of someone both wonderfully connected and wonderfully rich who may not find a warm welcome in the good buildings of Fifth Avenue. While "Fifth Avenue residents are in love with fashion and being fashionable, they don't want people who actually work in that business to live next door to them," Gaines writes. So there was general horrorwhen, a few years ago, Hilfiger actually managed to claw his way past the co-op board to take possession of an apartment in number 820. "That really changed things on Fifth Avenue," Gaines writes. "It's amazing he got into this building, because it's the pinnacle. When it happened, we all said Fifth Avenue was over." Hilfiger, it transpired, wangled his coup partly by producing a letter of support from Leonard Lauder of Estée Lauder, who is definitely in favour in co-op circles. Hilfiger soon split with his wife and never moved into the apartment.

Not every critic has been kind about Gaines' book. A New York Times reviewer this week concluded that it resembled a "less a full-fledged, carefully considered book than a hastily assembled collection of magazine-like stories about the Monopoly game of New York real estate".

But you can't fault his timing. The Manhattan residential market, in spite of warnings of a bubble about to burst, continues to shock with its vertical propulsion. A little over 2,000 apartments were bought and sold on this little island in the first three months of this year for a combined price of $2.45bn. That is more than the combined economic output of Belize and Equatorial Guinea.

For as long as the market is that hot - and for as long as the rich and famous push the numbers even higher - we are going to be hungry for titbits of gossip. Meanwhile, we can all continue to dream. My fantasy classified listing: "TOP VUS, TERR, GB and (this is key) NO BRD APRVL." GB, of course, does not denote a nation - it means "Good Building".

Manhattan's most exclusive addresses

The Ardsley Building, Central Park West

Barbra Streisand attempts to offload the apartment in this co-op she'd lived in for 30 years were repeatedly stymied by the board. Among prospective buyers the board rejected: Mariah Carey in 1999.

Dakota, West 72nd Street and Central Park West

The Dakota, with its grand central courtyard, was home to John Lennon until he was shot outside its arched entrance in December 1980. His widow, Yoko Ono, still resides in their oversized apartment, all in white, with views of Central Park.

Time Warner Center, Columbus Circus

Recently completed twin towers of glass and steel may not be a Good Building - buyers did not have to face a co-op board at all - but it is certainly pricey. During construction, buyers had already put down $300m to snag apartments. One 10,000sq ft duplex on the 75th and 76th floors went for $45m. Residents include: Broadway producer Barry Weissler. Rumoured to have apartment there: Ricky Martin.

927 Fifth Avenue

Residents include the actress Mary Tyler Moore and two red-tailed hawks named Pale Male and Lola, that live on a cornice. The board tried to evict them last year, but after a public outcry, it had to reverse its decision. The board famously rejected Barbra Streisand, who then moved to a triplex penthouse on Central Park West.

The Rockerfeller Triplex, 834 Fifth Avenue

Built by the Rockefeller family, the building has immense apartments (at least 7,000sq ft) with views down Fifth Avenue. The disgraced and recently deceased car magnate John DeLorean once lived here and it's newest tenant is Rupert Murdoch who paid $44m for his triplex.