Xinyuan Real Estate will move ahead with plans for a condo tower on the Hell’s Kitchen development site it recently closed on, though noting the property will aim for a price point below the high-end luxury condo market.
The Chinese developer has acknowledged signs of a glut in the city’s luxury home market and distanced itself from recent projects aimed at ultra-wealthy investors – with its first Manhattan project instead looking to appeal to dual-income families and upper-middle-class buyers from both the U.S. and China.
“New York’s luxury condo market is now at a very, very dangerous edge of bubbles,” John Liang, Xinyuan’s U.S. managing director, told Bloomberg. “It’s a myth that Chinese buyers all come to the U.S. loaded with cash.”
Xinyuan closed its $57.5 million acquisition of the development site at 615 10th Avenue, between West 44th and West 45th streets, earlier this month. The Beijing-based firm – which operates in the U.S. through its subsidiary XIN Development – entered contract on the property last fall, as The Real Deal reported.
The company expects its apartments there to sell for up to $2,000 per square foot, Liang said – significantly less than the $2,775 per square foot average for new development listings in Manhattan last year, according to research by Halstead Property Development Marketing.
At that $2,000 per square foot price, a two-bedroom condo at the Hell’s Kitchen project would cost roughly $1.5 million – a price “affordable for upper-middle-class New Yorkers,” according to Liang.
Luxury residential markets in both New York and other global core urban markets have seen signs of softening in recent months, leading to increased concerns over the future viability of new, high-end developments at exorbitant price points. [Bloomberg] – Rey Mashayekhi