The Real Deal New York

Guberman’s gamble

New York City builder hits the Hamptons with a supply of extra-large spec homes
By Candace Taylor | January 01, 2013 07:00AM

Josh Guberman

When Josh Guberman set out to market the house he’d just constructed at 78 Pheasant Close East in Southampton Village, he wasn’t content to hire a professional stager, as most developers do.

Instead, he personally stocked the 1,500-bottle wine cellar with rosé and champagne, and decorated the home’s great room with orchids and trays of wheatgrass.

In fact, while staging is now standard in New York City new-construction condos, it’s rare in Hamptons spec homes, explained Susan Breitenbach, the Corcoran Group senior vice president who listed 78 Pheasant Close for $8.75 million last month.

“Not a lot of the spec builders do that — they don’t stage the project,” she said. Guberman, by contrast, is “putting everything in there, not just the furniture. He’s stocking the bar. He’s hands-on in every aspect.”

Guberman, a longtime New York City developer who turned his attention to the Hamptons last year, is aiming to set himself apart from other builders. Taking what he calls a “revolutionary approach” to homebuilding on the East End, he said his goal is to bring a new level of luxury to the already-exclusive Hamptons.

In addition to Pheasant Close, Guberman has two other newly constructed spec homes on the market with Breitenbach: 38 Harvest Lane in Southampton Village, listed at $3.6 million, and an 18,000-square-foot mansion in Bridgehampton asking $11.995 million.

For example, his houses have multiple laundry rooms, home theaters with stadium seating and Savant “smart system” technology that allows homeowners to adjust their lighting, air-conditioning and pool equipment from anywhere in the world.

Guberman said he plans to start work on up to eight more East End properties this year, priced from $6 million to $20 million. He also has several upcoming projects in Manhattan — a 16- to 20-unit new condo in Tribeca and two townhouses — but said the Hamptons projects have become “a labor of love.”

He faces some formidable challenges, however. The Hamptons real estate industry is notoriously close-knit and often skeptical of newcomers.

“I think new is always a challenge in the Hamptons, since it’s such a closed market,” said Michael Daly, an agent with Sotheby’s International Realty in Sag Harbor. “Builders have to build relationships with the real estate community.”

Meanwhile, Hamptons buyers are among the most discerning in the world. And Guberman has stiff competition from the likes of long-established builders like Jeffrey Collé, Joe Farrell and Michael Davis, Daly said.

“The Hamptons have shown us time and again that it will reward you if you do something that is really well-conceived and well-executed,” said Andrew Saunders, founder of the eponymous Hamptons brokerage. “But it brutalizes you, frankly, if you don’t do those things.”

“Out here,” he added, “you can make a mistake by what side of the street you build a house on.”

 

The test case

The 1,500-bottle wine cellar that Guberman personally stocked with rosé and champagne at the house.

Guberman isn’t entirely new to building single-family houses: He had a business redeveloping suburban homes in the late ’90s. But for the past 15 years, he’s focused on developing boutique New York City condo projects, including Lux74 at 433 East 74th Street, Union Square Lofts, the Legacy on 84th Street and the Russell Court condominiums in Greenpoint.

Sales at Lux74 had just finished when the real estate downturn hit, and Guberman decided to take a temporary break from developing in the city. With time on his hands, Guberman, who had vacationed in the Hamptons for years, began helping a friend build and sell a Bridgehampton spec house. When the project sold at full ask just a few weeks after it went on the market, “the bug hit me,” he said.

He started buying properties in the Hamptons last summer, and decided to gut-renovate his own vacation home at 38 Harvest Lane, using it as a kind of “test case.” He’s since added four additional bedrooms, a movie theater and a guest house, and the property is now on the market with Breitenbach for $3.6 million.

The Pheasant Close house, meanwhile, is on a 1.64-acre lot with nine bedrooms, 14 baths, a screening room, a pool and a tennis court.

When she first saw the 11,000-square-foot house, Breitenbach said, what most impressed her was the landscaping.

“I was really stunned with the amount of money and the amount of detailing he did in the outside hardscape,” Breitenbach added.

 

Pricing problem?

An exterior of 78 Pheasant Close East, which went on the market last month for $8.75 million.

Some Hamptons brokers, however, said Guberman’s homes are “overbuilt,” and that the sites he’s chosen don’t warrant such large and luxurious houses.

Particularly ambitious is Guberman’s project at 94 Day Lily Lane in Bridgehampton. Asking $11.995 million, it’s among the town’s priciest listings north of Montauk Highway.

When completed, the 18,000-square-foot house — which Guberman called his “masterpiece” — will sit on five acres on a hill overlooking a nature preserve, with distant ocean views.

“It’s a pretty unique spot,” Daly said.

Still, some brokers said the home’s pricing and positioning isn’t appropriate for its location north of the highway, which is considered less desirable than the ocean-front homes to the south.

The Bridgehampton project is “too big for the area — it’s just not typical in that spot,” said one broker who requested anonymity. Guberman “wants to get really big money for it. I’m not sure if it’s going to be achievable at this price point.”

Guberman, undaunted, said he’s heard such criticism before. In the early 2000s, when he began developing Russell Court in then-emerging Greenpoint, “we were told that it was ridiculous to pour so much money into forward-thinking design,” he recalled, but the project “sold quickly and set the pricing standard for the community.”

Guberman said he’s continuing the same “no dollar spared” mentality with his Hamptons homes. At Day Lily Lane, he said he’s spent “well over a million dollars” on the exterior landscaping, pool and tennis court.

Collé, who has been a builder in the Hamptons for more than 30 years, said he wishes Guberman well. But he warned of the difficulty faced by newcomers building on the East End.

“If you’ve never built out here and you don’t know who the best sub-[contractors] are and where to buy the best materials and you don’t know the lay of the land, you’re going to be vulnerable,” said Collé, who has not yet seen Guberman’s homes.

One factor working in Guberman’s favor, however, is while Hamptons sales activity has picked up recently, there’s a shortage of newly constructed Hamptons homes due to a slowdown in spec building after the financial crisis.

“Building stopped, for all intents and purposes, after 2007,” Daly said. “If you want new, there’s not a lot to choose from right now.”

And Guberman does have industry connections and relationships due to his New York City development experience, Daly noted.

“I think the fact that he has a track record in New York helps him,” Daly said. “But people are going to want to look and check out the product themselves.”