Gift cards, broker fees and other incentives have become commonplace in the city’s oversaturated condo market. Desperate to unload product, some developers have banked on the premise that inducements will boost traffic and result in more closed deals.
Or will they?
“At the end of the day, you may get more traffic. But make no mistake about it, it’s purely about price,” said Alchemy Properties’ Joel Breitkopf, speaking on a panel Thursday alongside developers Ben Shaoul of Magnum Real Estate Group, Witkoff Group’s Brett Mufson and DDG’s’ Joe McMillan. The Real Deal’s Amir Korangy moderated the discussion about Tribeca’s evolving residential landscape.
“Good brokers don’t rush to the extra [commission] point or the car of the iPad or things like that,” said Shaoul. “That’s pretty sleazy.”
At Magnum’s 100 Barclay, Shaoul said he upped brokers’ commission late last year. But by March, when business picked up, he increased prices. “It’s a function of the product” and the market, he said. “In some cases, we’re giving zero concessions.”
In addition to concessions, the panelists also riffed on a wide-range of topics including condo pricing in Tribeca, hiring brokers and swapping out new development marketing teams. “Sometimes, a broker’s team just gets tired. You may want fresh blood,” said McMillan.
That’s especially true for larger projects like 100 Barclay, where Magnum swapped out Douglas Elliman for Corcoran Sunshine last year. “People immediately say, ‘what’s wrong with the project?’” Shaoul said.
Nothing’s wrong with the project, he said, and between January and March he claims to have sold $100 million worth of apartments in 100 days. He’s also getting ready to put 100 Barclay’s penthouse — which he intentionally held back — on the market with an asking price of $75 million. “It’s the best penthouse, best apartment I’ve seen in my life,” he said.
Overall, sales at 100 Barclay are blending at $2,200 to $2,300 per square foot, he said. At Alchemy’s Woolworth Residences, condos are selling for $3,000 per foot and between $3,500 and $4,000 per foot for “premium” units, according to Breitkopf. By comparison, Witkoff’s 111 Murray has a blended average of $3,200 per foot, according to Mufson.
When it comes to selecting brokers, Mufson said Witkoff investor Howard Lorber, who is chairman of Douglas Elliman, has taken a “hands on” approach that’s been “uniquely a benefit.”
(To read more about 100 Barclay, click here)