To combat a near-stagnant condo market, Extell Development is offering to pay between three and five years worth of common charges for any apartment purchased by the end of the year.
At a broker event Tuesday, the Gary Barnett-led firm disclosed the portfolio-wide incentive meant to drum up business in what is decidedly a buyer’s market: The firm will pay for three years’ worth of common charges on one- and two-bedroom units put into contract by Dec. 31. It will pay common charges for five years on three- to five-bedroom units put into contract during that time.
“They felt they wanted to find an incentive that helped the brokers but also motivated the buyers,” said a source who attended the event, an unveiling of two model apartments at the Kent, Extell’s 83-unit condo on the Upper East Side. “They recognize it is a buyer’s market.”
But even in an era of deep discounts and incentives, the portfolio-wide offer is striking for one of the city’s most prolific developers, which has north of 1,000 condos for sale. Several of Extell’s buildings also offer tax abatements, meaning buyers would benefit from almost no carrying costs for several years.
Extell confirmed the incentive program, but declined to comment further. The developer’s portfolio includes some of the largest condos under development, including One Manhattan Square, with 815 units, and Brooklyn Point, which has 458 units.
The incentive also applies to One57 and Central Park Tower, Extell’s latest ultra-luxury offering with 179 units and a sellout of $4 billion. Common charges at Central Park Tower vary widely: A three-bedroom asking $21.56 million has projected annual common charges of $54,690, according to the offering plan. A five-bedroom asking $75 million has projected annual common charges of $124,352.
“Every buyer, no matter what the price point, is looking at how much it will cost them a month to carry the apartment,” said Douglas Elliman’s Tamir Shemesh, also in attendance Tuesday.
As the housing market softened this year, new development sales in Manhattan have crawled. There were 360 closings in the third quarter, down 21.9 percent year over year, according to the appraisal firm Miller Samuel. The median price slid 8.8 percent to $2.55 million.
Extell has billions of dollars worth of development underway. But the firm has been searching for a sales director, following the departure this summer of Anna Zarro, who started her own business. (She is still consulting on Extell’s rental projects.)
The recent sale isn’t Extell’s first. Last year, the developer offered brokers 50 percent of their commissions up front at properties including One Manhattan Square, 70 Charlton and the Kent. In October, at the launch party for Extell’s 1010 Park Avenue, Barnett said he’d already cut the prices three times.
Other developers, too, have dangled sweeteners to attract agents and their buyers over the past 18 months. Toll Brothers offered to cover the transfer and mansion taxes at certain buildings during a summer sales event. At the 99-unit 49 Chambers Street, the Chetrit Group was offering buyers’ agents 50 percent of their commission at the contract signing.
But not everyone agrees that sweeteners are the way to go. Donna Olshan of Olshan Realty said, “it’s just more sensible to take the price down.”