Steve Witkoff is among a growing number of New York developers who are up in arms over soaring land and construction prices. So now, he’s building elsewhere.
“I can’t do anything in this town today,” Witkoff said at a construction and development forum hosted by accounting firm Anchin. “The land is too expensive.”
He pointed to his firm’s development at 150 Charles Street in Greenwich Village as an example. Witkoff said the project, which started in 2012, was built at $650 per square foot. But today, at the nearly completed 111 Murray, the developer said he is paying $850 per square foot.
“The construction costs are out of control,” he said. “There’s no material difference in what we built there,” adding that if he were to start building today, the construction would be closer to $1,000 a square foot.
Instead, the developer has sought sunnier pastures and is overseeing projects in Florida and a $3 billion resort complex in Las Vegas, named Drew, after his late son. While he does have a handful of ongoing projects in New York, he confirmed he is not looking to develop in the city until land prices and development costs come down. Witkoff had planned to redevelop the Park Lane Hotel, but those plans never materialized because his co-investor Malaysian financier Low Taek Jho was accused of buying his stake in the hotel with stolen funds.
The Real Deal this month documented how land prices in Manhattan below 96th Street have bounced back to sky-high prices of 2015, at close to $685 a square foot, but the number of development sites that have traded dropped to just 59, a 53 percent decline from 2015.
During an earlier discussion, panelists lamented that land prices had increased so much that they were completely priced out of Manhattan. The uptick in prices has largely been driven by an oversupply of condos in the borough, according to SL Green Realty’s Robert Schiffer.
But there is an upside, noted Thomas Graham, head of Landsea’s New York division.
“Sellers are willing to talk,” Graham said during a panel on the development pipeline. “Whereas before it was, ‘ticket price or leave it.'”
Kathryn Brenzel contributed to reporting.