The Real Deal New York

Why NYC penthouses are becoming less and less exclusive

Top floors of new buildings are increasingly being used for shared amenities
July 27, 2018 11:30AM

(Credit: iStock)

Exclusive penthouses just aren’t what they used to be.

Although the top floors of high-rise buildings have typically been reserved for their largest and priciest apartments, at several new buildings, the space is instead being used for shared amenities like restaurants, lounges and pools, according to the New York Times.

Developers are betting that the switch will add value for the whole building despite lowering the value of the individual penthouse space. The shared amenities could also spark a new revenue stream through membership fees.

Sales and rental markets have both been in decline recently, which has helped spark the shift. Sales volume in Manhattan dropped to the lowest level since 2009 during the second quarter, with the median sales price falling to $1.1 million, a 7.5 percent decrease year over year.

Developments opting for the shared space strategy include JDS Development Group‘s American Cooper Buildings in Murray Hill, 125 Greenwich in Lower Manhattan and the Hub in Downtown Brooklyn.

However, Hub developer Doug Steiner told the Times he was not sure if using the top of the building as a lounge instead of two apartments was a good idea, saying he was unsure whether they got more for it.

“We didn’t want anybody to have something we did have,” he said, but “in the same circumstances, I wouldn’t do it again.” [NYT] – Eddie Small