Builders’ flip-flops = architects’ headaches

Designers scramble as developers switch from condos to rentals, and back again

Oct.October 31, 2011 07:06 PM

Many New York City real estate developers are back in business, reviving once-stalled condo projects or converting office buildings into rentals. But while developers are patting themselves on the back, their architects may be stifling groans.

These days, architects are increasingly being asked to design buildings that can change from rentals to condos or vice versa, as developers seek to hedge their bets in a still-uncertain economy. But rental units tend to be smaller, with lower-end finishes and amenities, so designing buildings that serve as both is no easy task.

Architect Hugo Subotovsky, of Bronx-based Aufgang + Subotovsky, is currently designing an East Harlem residential project at 318-320 East 112th Street that will start as a rental, then flip to a condo in a few years.

“You have to be always thinking, ‘Would that be a good fit for the condo market in the future?'” Subotovsky said. “It’s a fine balance.”

Waffling on design

With financing for construction projects scarce in recent years because of the economic climate, architects have faced difficult times. Architecture employment in the U.S. peaked in 2008 at 220,500 jobs, according to the federal Bureau of Labor Statistics, but the profession has since cut 55,000 people, or one in four.

When architects do get work, the assignments are often frustrating because many developers are not sure what kind of project to build in today’s uncertain market.

“There’s a lot of indecision going on,” said John Cetra, cofounder of Manhattan architecture firm CetraRuddy. On a new Midtown residential project he’s working on, he said, the developer hasn’t yet determined whether to go condo or rental. Cetra said he’s waiting for a decision before beginning the design.

That’s because in New York, condos and rentals are usually quite different. A one-bedroom rental in Manhattan is typically around 600 to 675 square feet, while a one-bedroom condo is usually 700 to 800 square feet, according to architect Randolph Gerner of Gerner Kronick + Valcarcel, which has worked on residential projects like 500 West 23rd Street and 2 Cooper Square.

Switching from a condo to a rental, or vice versa, in the middle of development means higher fees for developers and more work for architects. When a project flip-flops, architects receive added compensations for the extra time required to amend their design, explained Gerner.

“There’s obviously a renegotiation of a contract, and you never know how much work can be involved,” he said.

To hedge their bets, some developers are asking for designs that can work as both condos and rentals.

At the 112th Street project, which is being developed by Volmar Construction and Galaxy Construction, Subotovsky is creating flexible layouts.

“We make large closets that can be very easily converted into a second bathroom or a powder room, for example,” Subotovsky said. “If you’re renting, you may not need a second bathroom, but buyers are more demanding. They’re going to be living there for a longer time.”

Sometimes, architects are asked to make two separate designs — one for condos and one for rentals — in the early stages of a project. That can be frustrating for architects, because it means putting a lot of effort into a design that will never see the light of day, said developer Matthew Blesso of Blesso Properties.

“Architects, their job is to create things,” he said. “They don’t like to change the program unless it presents an opportunity for them to design something better.”

Blesso designed his project at 421 West 22nd Street as a condo, but when it hit the market in 2010, he decided to rent out the units instead. Now, he’s started buying out tenants in preparation to sell the units. (At press time, Blesso said rents at the building are so high that he is considering continuing as a rental after all.)

Luckily, this flip-flopping doesn’t impact the project too much: The units were already relatively small for condos, and had high-quality finishes, he said. That meant his architect, Andrea Steele of ANDArchitects, didn’t have to make many changes.

“The type of developments we do, we try to focus on high-end product anyway,” Blesso said.

Scrapping a vision

A developer’s decision to change course can also compromise an architect’s artistic vision for a building.

At the Orion at 350 West 42nd Street, which launched sales in 2005, developer Extell originally wanted a hybrid building, with rentals at the bottom and condos on the upper floors, said Cetra, who worked on the project.

As a result, “the base of the building [was] bigger than the top half,” he said, so the developer could fit more units on the lower floors.

When Extell decided to make the building entirely condo, it was too late to go back and rethink the design, Cetra said, noting that he might have designed the tower differently had he known in advance.

“We might have done something different with the elevator-ing and the lobby had we known,” he said.

Architects do have one thing going for them. In New York, the difference between condos and rentals has declined in recent years, as more high-end rentals, like the Frank Gehry-designed 8 Spruce Street, have come on the scene and started competing for wealthy tenants.

Prolific architect Costas Kondylis, who has designed more than 80 New York City towers, said the difference between condos and rentals is far less than it was when he started in the business in the 1960s.

“You will never be able to notice the difference,” said Kondylis, who worked on Silver Towers on 42nd Street and Glenwood Management’s Marlowe on 81st Street, both of which switched to rentals after being designed as condos.

Aside from “perhaps switching Greek marble for Chinese marble,” architects no longer have to make extensive design changes when switching from a rental to a condo, he said.

And most architects today recognize that “the market is constantly changing, so we have to adapt,” Gerner said.

A stereotype about architects is that they are egotistical, and that “we would rather live on saltines and water than compromise,” he admitted. But in this market in particular, he said, “it’s more of an image we have than a reality.”

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