Selling luxurious new development is now an online game best played en masse, according to industry veterans Louise Sunshine and Fredrik Eklund.
The Sunshine Group founder and Douglas Elliman broker spoke on the latest episode of TRD Talks Live about how and where pandemic-era sales are happening.
“It’s been terrible and it’s been a very sad, difficult year but there’s been a lot of, to me, exciting distribution of wealth,” said Eklund. “I mean there’s so much money that has gone outside of New York.”
Eklund left New York City last year to set up shop in Los Angeles and says he is now doing deals from San Francisco to Palm Springs. Working remotely has allowed many clients to consider markets far away from their offices, he explained.
(Though Eklund focuses on California, he still works on projects across the Eklund-Gomes Team’s three markets: Miami, New York and L.A.)
Sunshine, who is based in Miami but built her career in New York and continues to work on projects in the city, attributed the outflow of people and money to the local political climate, the real and potential threats of higher real estate taxes, and sky-high price tags.
“Pricing in New York has become arbitrary and capricious. I mean people just pick prices out of the air,” she said, though she took some responsibility herself.
“I am the culprit,” she said. “I was involved in a building called 220 Central Park South, which to date is getting the highest prices in New York — $10,000 a foot — and you know it is really a quality building. … The question is, will it maintain its value of $10,000 a square foot? I don’t know.”
Beyond New York’s troubled new-development market, Sunshine and Eklund noted that developers are beginning to change project designs and marketing as a result of the pandemic.
Sunshine said some of her clients are adding home offices, larger kitchens and in-unit fitness facilities to plans. And Eklund said that developers’ budget for digital advertising has grown.
At one point, Sunshine, speaking about how to offload a $35 million penthouse at the Four Seasons Fort Lauderdale, said: “How do we sell it? We give that exclusive to Fredrik Eklund because of his social media following.” Eklund has 1.3 million Instagram followers.
When it comes to who is buying major new developments, both Sunshine and Eklund said they expect to see institutional investors shop for condos in bulk to rent out the units.
“It becomes a business,” said Sunshine.
Eklund said he and Sunshine are working on putting together portfolios of units in various projects for “some large funds.” He added that Churchill Real Estate Holdings was a client.
Sunshine also noted that virtual dealmaking has become the norm across the projects she handles.
“The last group of sales that we have made — and high-end sales have made — the people have not come to the property at all,” she said. “It’s all been done digitally.”