The Real Deal New York

Luxe developers packing more into less

"Efficiency" the buzzword as land prices, construction costs keep rising

November 14, 2014 02:50PM
By E.B. Solomont

A rendering of 15 Leonard Street in Tribeca

A rendering of 15 Leonard Street in Tribeca

Forget studio apartments. A new batch of efficiency units can be found in luxury buildings, as developers seek ways to add value for high-end buyers while keeping a lid on their owns costs.

Unlike the sprawling trophy apartments that have hit the market in the past few years, tighter-cut units at buildings like 15 Leonard Street, the Charles at 1355 First Avenue, the Rudin family’s Greenwich Lane and others offer more value per square foot for buyers, brokers said.

“You could have a 4,000-square-foot three-bedroom or you could have a 2,000-square-foot three-bedroom and with the right layout, really have every square inch be usable square footage,” said Wendy Maitland, director of sales at Town Residential.

Town recently put four full-floor condos under contract at 15 Leonard Street, a project being developed by Steve and Sherri Schnall’s Tribeca Development Partners and Gold Development. The building’s four-bedroom condos measure 2,621 square feet — and are under contract for prices ranging from $6.4 million to $7.5 million, or $2,441 per square foot to $2,861 per square foot.

In comparison, the average sale price in the luxury market in the third quarter of the year was $7.25 million, and the median sale price was $5 million, according to real estate appraisal firm Miller Samuel. The average price per square foot was $2,617 during the quarter, up from $2,055 per square foot a year earlier.

“The average price per square foot is getting high, so in order to assuage that, given the fact that land is so expensive and the cost of construction is expensive, we’re advising our clients to make more efficient apartments,” said Stephen Kliegerman, president of Halstead Property Development Marketing.

He noted that the move toward efficiency is gaining the most traction in the middle of the market and in the $1 million to $5 million segment. “There’s a lack of inventory in those price points,” Kliegerman said. “You want to build those units more economically to meet those price points.”

At developer Christopher Okada’s 432 West 52nd Street, a 918-square-foot two-bedroom unit recently went into contract for $1.325 million, or $1,443 per square foot.

But Maitland said even at the higher price points, the luxury market is changing.

Town is marketing a four-bed, four-bath condo at the Charles that measures 3,451 square feet. The 20th floor unit, which has a dining room, living room and library, has an asking price of $8.87 million, or $2,750 per square foot.

“The ultra high end of the market – which would have been maybe slightly under $10 million and up – used to be trophy buyers,” Maitland said. “Now it’s people who are actually living and working in New York City.”

MENU