A league of their own

What do millions really buy in New York City?

TRD New York /
May.May 06, 2014 07:00 AM

New York City is no stranger to multimillion-dollar home listings. A townhouse at 12 East 69th Street asking $114 million — currently the city’s most expensive listing, according to StreetEasy — nabbed a number of headlines when it hit the market late last year. Next up is a $100 million penthouse at 150 West 56th Street listed by its owner. These are big, big prices — but what exactly does the cash buy? Does it buy privacy, better amenities, greater space, or simply bragging rights?

Like art and fine wine, Manhattan real estate seems to have no upper limit when it comes to price tags. We turned to a panel of experts to see what more money can really nab in the city.

The answer, it turns out, isn’t an easy one. “Pricing is always a tricky thing to discuss,” said Ryan Serhant of Nest Seekers International and TV show “Million Dollar Listing New York.” “As objective as people want to make it, it’s always a subjective thing.”

“Fashion has a lot to do with pricing,” said Leonard Steinberg, who heads Douglas Elliman’s LuxuryLoft Team. By “fashion,” Steinberg means the more boutique attributes of a home — in the $36 million penthouse he’s marketing at 250 West Street in Tribeca, fashion takes the form of a nearly 5,000-square-foot irrigated terrace, Calacatta Gold marble countertops and protected Hudson River views. These aren’t fundamental features; they’re the cherries on top.

Of course, the basics, too, factor into the price. Fundamentals such as square footage, the number and positioning of rooms and ceiling height are all a part of the equation. As these features improve, the price increases.

And it’s not just the apartment that matters. Appraiser Jonathan Miller notes a transition in the last decade — previously, the word “luxury” applied to a particular unit in a building; now, however, the designation applies to entire buildings. Features that make an entire property top-of-the-line range from the design of the exterior — increasingly, that means the special touch of a starchitect — to standout building-wide amenities (residents at 200 11th Avenue have hi-tech condo-side personal garages) to services, like access to Barneys New York stylists (in the case of the Carlton House on East 61st Street).

“You’re buying yourself into a lifestyle,” said Serhant’s “MDLNY” co-star Fredrik Eklund.

So what happens every time you double the amount you’re able to spend on a spread in the city? Do you really get twice the bang for your buck? Read on for our price breakdown.

$2.5 million

For $2.5 million, you could buy a nearly 5,000-square-foot home on an ocean block in Manhattan Beach, Brooklyn or a nearly 5,000-square-foot townhouse in Tarrytown — but in Manhattan, it won’t go far. In fact, it’s below the entry-level point of the luxury market, which is defined as the top 10 percent of co-op and condo sales. According to a recent report from Douglas Elliman, in the first quarter of this year an apartment had to close for at least $3.7 million to be considered luxury — that’s up from $2.9 million from the first quarter of 2013.

It’s a particularly paltry sum if you’re hoping to nab newly built digs, according to Serhant. “It’s like wanting $19 at the ATM,” he said.

And why is that? New development today generally gives way to luxury projects, according to Miller. “The site acquisition and costs of construction have never been higher,” he said. “There are limited sites available, and what is available is expensive.”

Of course, it also depends upon the age of the building and its location. At 15 Broad Street, a conversion in the Financial District, there’s a 2,210-square-foot apartment available for $2.9 million. The unit has three bedrooms, three bathrooms and new flooring; building-wide amenities include a fitness center, swimming pool and housekeeping services.

“The minute you say Tribeca, it evokes a different feeling,” said Lawrence Rich of Douglas Elliman, who has sold units at 15 Broad Street. Indeed, prime neighborhoods, like boutique Tribeca, command their own premiums due to their cachet. At 101 Warren Street in Tribeca, a new-construction building where Rich has also handled sales, a $2.9 million unit here has one bedroom, 1.5 bathrooms and just 1,288 square feet.

In general, $2.5 million can nab the Manhattan buyer an attractive home in such neighborhoods as the Upper East Side, Midtown or Murray Hill, StreetEasy shows. Units closer to the ground are generally larger in bedroom, bathroom count and square footage than those located higher up.

$5 million

If you double your money to $5 million, you shouldn’t necessarily double your expectations. “Five million doesn’t get you what it used to anymore,” Serhant said. “You’ve gotta have a considerable amount of money.”

At this price point, Serhant said, you could buy a second-floor home in a new, shiny building, even though the same amount could buy a penthouse in an older building.

Roberta Golubock of Sotheby’s International Realty said that, for $5 million, a buyer can indeed buy a “nice” apartment inside of a luxury development, though it will be smaller or perhaps on a different floor. Increase the budget and you increase the luxury factor: think higher ceilings, open views and a collection of high-quality amenities.

Still, buyers in this price range shouldn’t be discouraged, Steinberg advises. While those wishing to spend $5 million can’t expect expect to nab a 10,000-square-foot, five-bedroom space perched on a high floor, they can still find something beautiful, he said. “The problem is as the expectation for quality … rises with every new building, your eye gets trained to the next most fabulous,” he said.

In terms of necessities, there are some parallels between what $5 million can get and what $20 million delivers, Steinberg said. Buyers can get high ceilings, a number of bedrooms that suit their needs and even some outdoor space. But the key difference, especially in luxury builds, is that the proportions will be scaled down.

$10 million

If your budget reaches eight figures, now — finally! — you’re in the market for a truly envy-inducing pad.

In the $10 million range, expectations can increase. For those looking for a home on a higher floor, a larger amount of indoor and outdoor space, high-quality finishes and even a tony neighborhood, these factors come within reach. “Molding on top of molding on top of molding,” Serhant said of buyers at this price point. “They want marble that was hand-carved by baby Jesus.”

Buyers pay a premium for these homes because they come in short supply around the city, Serhant said.

In some instances, spending $10 million can garner an outstanding pad, even if it isn’t located in a tony, big-name development like Walker Tower or 740 Park Avenue. “Luxury has different meanings to different buyers,” Golubock said. “If you take the marriage of location, scale, outside space, square footage and views, that can bump up something that might not be in a more architecturally distinguished property.”

Breaking the $10 million threshold also buys residents into a brand: Think 15 Central Park West and 56 Leonard. “That’s why people pay that kind of money to be in very branded buildings,” Serhant said. It’s the cachet associated with these addresses — which comes with some serious bragging rights — not to mention the services that these buildings offer.

$20 million

The $20 million mark builds upon the $10 million one. In the same high-profile buildings, buyers can move up the ladder in terms of size, finishes and, most significant of all, views.

“Whether you’re adjacent to the water, parks or to some recognized building that is historically interesting and important, that’s where the numbers really jump,” said interior architect Stephen Alton, who’s currently working on the Touraine condominium at 132 East 65th Street.

And if the views are protected, that adds to the price, too, said Golubock. (Think an apartment overlooking Central Park.)

But when house hunters buy into the branded buildings that produce these mega listings, what all do they get inside the development as a whole? Well, the Touraine, for example, features a wine cellar room. There’s a 75-foot lap pool at 56 Leonard and 18 Gramercy Park residents get keys to the gilded gates of Gramercy Park.

“It’s not the quantity of amenities, it’s the unique choice of amenities,” Alton said. “It’s a kind of cachet that is not going to be had somewhere else.”

$40 million

So, what more can buyers get with an extra $20 million and above? Take all the amenities discussed earlier and amp them up: sprawling floorplans, large penthouses, sweeping views, high ceilings, massive terraces — the list goes on. The penthouse at 11 North Moore Street in Tribeca, listed for $40 million, has a private elevator entrance, 3,168 square feet of outdoor space (with a private rooftop pool) and an entire master floor. One of the Walker Tower’s full-floor penthouses, which is on the market for $47.5 million, has coffered ceilings and radiant heat flooring throughout, among other posh touches.

But in the Manhattan market, there is something else that spending $40 million or more can buy: “A premium single-family townhome,” said Serhant. “That’s privacy.”

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