Condos With a Name: 'Available'
The Architect May Be A-List,
But the Location Often Isn't;
Meier, Libeskind Languish
By TROY MCMULLEN
March 31, 2006; Page W1
It sounds like the ultimate home: A stylish urban condo with huge windows, sleek surfaces and the imprimatur of the star architect who designed it all.
Yet some high-end developers are discovering that it takes more than a name to move the merchandise.
At Charles Gwathmey's Astor Place in Manhattan, one apartment has sold since September.
Daniel Libeskind, famed for his plan to rebuild Ground Zero, designed an angular, 56-unit building in downtown Denver, yet the project hasn't recorded a sale in seven months, leaving 15 apartments unsold. Architect Robert A.M. Stern's name tops the marketing brochures for a high-rise in Stamford, Conn., but half of the 91 apartments remain available 18 months after sales began. And after two years of high-profile promotion, the newest Manhattan tower by Richard Meier, architect of Los Angeles's Getty Museum, has sold just 15 of its 31 units (not counting five bought by its developers).
Backers of these projects had hoped the cachet of a famous architect would inoculate them from a real-estate downturn. They have been charging a premium for their properties, and most aren't lowering prices. Yet these developers often ignored the first rule of real estate -- location -- and built in marginal neighborhoods far from other luxury homes and upscale stores. Some buyers, meantime, may simply have grown weary of all the name-dropping about these "starchitects."
The slowdown appears to have prompted some developers to exaggerate their sales figures. Marketers for Mr. Meier's 165 Charles Street, along Manhattan's Hudson River waterfront, had widely distributed information to potential buyers and the media stating that 24 of the building's 31 units had sold. But a look at deeds filed with the city showed a much lower number.
Izak Senbahar, co-developer of the project, says 15 apartments have been bought by outside buyers. He and his business partner bought five units, and deals for four more are in progress, he says. Mr. Senbahar defends the initial sales figures his group distributed, saying they never attempted to mislead buyers by purchasing the five units and lumping them into the sales totals. Moreover, he says, the number of unsold units "is not a factor for sophisticated buyers. If they like what they see they'll buy it." He adds that he and his partner are unsure what they ultimately will do with four of their units -- the fifth will be used by the building's superintendent -- but they may eventually put them back on the market.
A co-developer of Mr. Libeskind's Museum Residences in Denver, Corporex Colorado, reported a year ago that the project had sold two-thirds of its units. Reached last week, Glen Sibley, a vice president at the company, recited the same figure. "Perhaps the earlier number was a bit high," Mr. Sibley says.
"Developers try hard to create buzz for a project," says Las Vegas developer Laurence Hallier. "Telling buyers or the media that a project is nearly sold out or is going fast is all part of the game."
Charles Auster, a 54-year-old investment banker, says he considered buying in one of the half-dozen architect-branded buildings in lower Manhattan, but he choked on their prices and was wary of their out-of-the-way locations. "I'm not sure there's value there," Mr. Auster says, adding he feared the condos may not do well in the resale market. Instead, Mr. Auster spent about $2.4 million for a 1,450-square-foot apartment in Midtown with a fireplace, den and views of Central Park. "You can't get that [view] in those buildings," he says.
One building Mr. Auster had considered is Mr. Meier's waterfront tower in Manhattan. The white-metal-and-glass structure, standing next to two similar ones also designed by the architect, is priced at about $2,500 a square foot -- well above the $1,610-a-square-foot average for other luxury buildings in Manhattan in the fourth quarter of 2005, according to appraiser firm Miller Samuel. Yet instead of Mr. Auster's Central Park views, the project abuts a noisy highway with unobstructed views of New Jersey. No sales contracts have been executed in the building since December, says co-developer Mr. Senbahar.
No Bidders
But at least that tower got built. Two years ago, developer Frank J. Sciame hired Pritzker Prize-winning Spanish architect Santiago Calatrava to create one of the most highly stylized apartment houses ever envisioned for New York. The building in lower Manhattan would consist of 10 cube-like apartment units, each 45 feet high, cantilevered one atop each other around a central axis. Yet none of the units -- asking $29 million to $45 million each -- has even received a bid, let alone sold, says Mr. Sciame, and construction hasn't started. Other high-profile Manhattan projects have been scrapped outright, including costly condos that were to be designed by architects Frank Gehry and Zaha Hadid.
In Miami, a tower designed by Mr. Meier also hasn't broken ground. Real-estate brokers with knowledge of the development say the 101-unit structure, Beach House, may soon be canceled because of a lack of preconstruction sales. The developers, Lynx Strategic Development, didn't return calls seeking comment.
Daniel Libeskind's Museum Residences in Denver.
In Denver, the Museum Residences saw an initial rush of sales after Mr. Libeskind's design hit the market in 2004. But there hasn't been a sale since September, says the developer. The apartments start at $500 a square foot, a record for the Colorado capital. But the project's location isn't as high-end: It's near the city's courthouses, and bail bonds are sold in converted Victorian homes nearby. Yet a few blocks away, a 15-story luxury condo called the Beauvallon has sold out. Though it wasn't designed by a famous architect, it's closer to a more desirable residential neighborhood and its units were priced at $140 a square foot.
Hope Engsberg-Rauzi was looking to downsize when she put her six-acre, Denver-area property on the market last year. The 46-year-old anesthesiologist says she'd heard a lot about the Libeskind-designed apartments but suffered sticker shock when she walked into the sales office. "The cheapest thing in my range was over a million dollars," she says. Instead, Ms. Engsberg-Rauzi paid $810,000 for a three-bedroom, 2,400-square-foot condo at a complex under development west of downtown. "I got more bang for the buck," she says.
At Mr. Stern's Stamford high-rise, called Highgrove, the cheapest two-bedroom unit starts at $1.35 million -- well above similar-sized apartments in the coastal Connecticut city. While the Stern project sits half empty, Mill River House, a recently completed project a few blocks away, sold all 92 of its condos since they went on sale 16 months ago, says co-developer Seth Weinstein. Prices ranged from $350,000 to $550,000.
Yet developers of architect-promoted buildings maintain they aren't concerned by the slowdown. "This is a premier property, designed with the best of everything," says David Wine, vice chairman of Related Cos., developer of a New York building called Astor Place. He says apartments at the undulating glass tower, designed by architect Charles Gwathmey, are worth their prices. But just one condo has sold since September, leaving 15 of the 39 units empty.
The 115-story Fordham Spire, by Santiago Calatrava, hasn't yet broken ground in Chicago.
Real-estate-market analyst Lewis Goodkin, of Goodkin Consulting in Miami, says these developers seem to think it's still 2004 and that the allure of the architects' names will attract wealthy buyers. "The market has adjusted since then, but they haven't," he says.
Some developers of the star-architect buildings have reacted to the slump by stepping up their marketing -- hiring pop stars to host sales events, handing out freebies such as iPods to potential buyers and even offering free memberships in a vintage-car club. Astor Place turned over an empty apartment to Esquire magazine last November for 20 days. The unit, listed at $12.5 million, got a lavish, full-page photo spread in the monthly. It's still on the market.
Not all celebrity-architect buildings have been slow to sell. Mr. Stern's prewar-style apartment house on Manhattan's Central Park West is more than 50% sold after just two months on the market. Elsewhere in New York, apartments at a building that's a collaboration between the French architect Jean Nouvel and hotelier Andre Balazs went on sale two months ago and buyers already have signed contracts on 31 of its 40 units, its developers say.
Despite the languid market, more architect-linked apartments are in the works. Astor Place developer Related Cos. has begun working with Mr. Gehry on a 50-story condo complex across from the architect's Disney Concert Hall in Los Angeles. Phillip Johnson and the Swiss firm Herzog & de Meuron, which designed London's Tate Modern museum, have been hired for condo buildings in Manhattan. Mr. Libeskind has signed on to design condos in Covington, Ky., and Sacramento, Calif. And Mr. Stern's firm has apartment projects under way in Dallas, Atlanta, and Los Angeles.
Mr. Stern, who is dean of architecture at Yale University, says architects take on some risks to their reputation when a project with their name on it doesn't sell strongly. But, he says, a noted designer will ultimately be judged on the quality of his work, not on sales figures, which he says are linked to the overall real-estate market. "The product is the product," says Mr. Stern. "If a building's design is well-perceived, but unfortunately doesn't do well, it should have no effect on the architect."
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