http://cityroom.blogs.nytimes.com/2011/03/04/big-deal-luxury-market-shows-signs-of-improvement/
Big Deal | Luxury Market Shows Signs of Improvement
By SARAH KERSHAW
March 4, 2011
Quote:
For months, New York City brokers have been saying that sales in luxury real estate, the last segment of the market to back away from the edge of a cliff, were rebounding. But one week sales were up, one week they were down. One month they were down, one quarter they were up.
...Now the least Pollyanna-ish real estate watchers are looking at a February surge in contracts signed on properties listed for more than $4 million as quite something. That is because 70 of the listings went into contract last month, the highest number of any month going back to January 2007, well before the housing crisis crushed the high-end market.
A Tower Reinvented for Lovers of Fun and Dogs
So you’re a developer and you decide to undertake the construction of an $800 million 63-story glass tower in the middle of Manhattan. It’s 2007, the financing is secured and real estate is hot.
But then the sky falls on the housing market and you’ve poured the concrete for the foundation of this towering tower near Times Square, and because you’re a developer of new construction, you decide to put the project on hold for almost a year.
Time to regroup, dig deep into creative marketing and gather intelligence on who might rent and buy in this building at a time when prospective renters, and particularly buyers, are going to be skittish, to say the least.
The Related Companies did that before unveiling its latest and highly anticipated development, a mixed-use rental and condo building on 42nd Street between Ninth and 10th Avenues, known as MiMA, for the middle of Manhattan.
There was one obvious thing to do with the new project: Witnessing the increased strength of the rental market over the last year, the developer carved up the space to add 40 more rentals to the 623 it was going to market. It kept the same number of condos — 151 units, on the highest floors.
Besides MiMA, the company has developed 13 other condominium projects in the city, including the Time Warner Center, its last endeavor of this scale, and Superior Ink, the West Village condominium designed by Robert A.M. Stern; it also owns 17 luxury rental buildings in the city.
Related routinely survey residents moving in and out of its buildings — roughly 5,000 so far — to strategize on each of its new projects.
But in this instance, while the MiMA project was on hold, the company conducted an intense demographic survey of 1,300 renters and owners living mostly in Manhattan that went beyond the usual questions about age, income, ethnicity and family composition. The research looked at hobbies, values, self-perceptions and behavioral characteristics, and found that people who might live in MiMA perceived themselves as “confident, straightforward, fun, loving, aspiring and caring.”
Likely residents were “social and love to play the role of host,” the survey found. Also, they strongly identified as dog owners and spent a lot of money on their pets. They liked working out, playing sports, “living in a happening neighborhood,” attending the theater and playing games. They also considered home “a reflection of self and success.”
“We took a bet, but we really believed in the project,” said Jeff T. Blau, the president of the Related Companies.
And after the housing crisis, “We said, ‘Hold on a sec, let’s figure out a redesign, let’s expand the health club and add more amenities.’ ”
These findings from the survey were useful in determining that the project would not merely offer a “pet spa,” like some of Related’s other buildings, but something called “Dog City.” In Dog City, there are play spaces (indoor and outdoor), grooming services, a veterinarian on site, and a coordinator of dog play dates.
The building contains a private Equinox fitness center (Related owns Equinox, but this is the first of its buildings to include an Equinox gym open only to residents), a game room with billiard and poker tables, a basketball court, a film screening room with a popcorn machine and an outdoor screening area on a third-floor terrace.
It remains to be seen whether all the research and amenities will pay off, as rentals go on the market now for occupancy in late April and sales begin in May for occupancy in the summer.
For rentals, studios will start at $2,895 a month; one-bedrooms at $3,495; and two- bedrooms at $5,995. For condos, studios will start at $695,000; one-bedrooms at $950,000; two-bedrooms at $1.75 million. Prices for penthouses and three-bedrooms have not been released.
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