The Real Deal

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Downsizing model apartments

Showmanship or sleight of hand? Add model apartments to the list of woes developers are dealing with as new construction grinds to a halt. Though sales offices will remain essential, tactics will change, said real estate marketing professionals.

"You're not going to see a lot of sensational presentations, like the holograph at the sales office for the Tempo 300 on East 23rd Street," said Shaun Osher, CEO at Core Group Marketing. "The goal is to create [an image] of what it will be like to live at a certain property. A hologram has nothing to do with that."

Beth Fisher, senior managing director at Corcoran Sunshine, said developers will be relegated to wooing customers in the down market with budget-style model apartments.

"Consumers are less comfortable buying pre-development because … they're afraid that buildings won't get done," she said. While developers have a greater need to dazzle buyers, they will likely cut costs by renting furniture rather than buying, and installing less expensive fixtures, she added.

Developers are also opening sales offices later in the building process than they have in recent years to save on leasing and design costs, said Osher.

"They used to open the moment an offering plan got approved, but now we'll likely see offices open closer to the date of completion of a building," he said.

The wait allows developers to construct a selling floor in the building itself and then stage representative model apartments as the need arises, rather than design a sales office at another location and construct an apartment from scratch. "Condo buyers are very sophisticated, so you have to wow them without giving a false impression," said Sarah Burke, senior vice president at the Developers Group.

The downsizing of model apartments may be a good thing: Though sales offices and model apartments are designed to seduce, sometimes they don't match the delivered product. When the romance ends, real estate lawyers typically field calls from remorseful buyers complaining that the model apartment they saw misrepresented the final product.

One potential buyer, who declined to be identified, said that on a visit to the W Downtown's sales office, the model apartment's ceilings were about 11 feet. Noting the height, the visitor asked if the dimensions would be replicated in the completed building. Answer: No, the ceilings would be about a foot and a half lower. And while developers do have leeway legally, that doesn't stop buyers from complaining.

"I've gotten calls from people complaining that the wood is different from the showroom or that the marble is a different color, all the while not understanding that no two marble tops are the same and they may have hit a bright or dark vein at the quarry and there's nothing they can do about it, except replace it at their own expense," said real estate attorney Luigi Rosabianca.

"I know it's a cliché, but you have to read the fine print of the offering plan," he said.