Why some developers aren’t buying into the incentives gambit

Ben Shaoul, Joe McMillan riff on switching brokers and Tribeca’s aspirational prices

TRD New York /
May.May 04, 2017 04:30 PM

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)


Related Articles

arrow_forward_ios
40 East 72nd Street and Spiros and Antonia Milonas  (Getty; Google Maps)

Under water: Shipping magnate’s troubled UES condo is bankrupt

Under water: Shipping magnate’s troubled UES condo is bankrupt
U.S. home prices rose with Phoenix, Seattle and San Diego logging the biggest gains (iStock)

US home prices jump 5.2% in August

US home prices jump 5.2% in August
An estimated 12.8 million Americans would owe an average of $5,400 from missed payments (iStock)

Rent debt could reach $70B by year’s end: Moody’s

Rent debt could reach $70B by year’s end: Moody’s
19 Strong Place and 161 Warren Street (Google Maps, iStock)

Brooklyn’s luxury market has best week since before the pandemic

Brooklyn’s luxury market has best week since before the pandemic
14 East 11th Street and 21 East 61st Street (StreetEasy)

“Bidding war”: $28M townhouse tops luxury deals in Manhattan

“Bidding war”: $28M townhouse tops luxury deals in Manhattan
(iStock)

New home sale prices rise but buyers are hanging back

New home sale prices rise but buyers are hanging back
Abandoned malls are being turned into senior housing, giving planners a chance to rethink retirement communities (iStock)

Abandoned malls get new life as senior housing

Abandoned malls get new life as senior housing
Beneath wall to wall carpeting, brokers find herringbone flooring, behind a coat of paint may be a marble mantle, or hidden away could be antique mirror doors. (iStock)

Hidden treasures: Old homes offer up surprises when readied for sale

Hidden treasures: Old homes offer up surprises when readied for sale
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...