What happens when a multi-million-dollar Hamptons spec home gets caught in the crosshairs of an economic downturn and ends up sitting on the market? Naturally, the developer looks to rent it out for the season.
With more speculative homes going on the rental block as buyers become scarce, spec builders are facing a new challenge: interior design.
Brokers, developers and decorators in the Hamptons say they are increasingly in the market for sofas, coffee tables, armoires and beds to fill their empty spec homes.
Diane Saatchi, a broker at Corcoran, explained that furnishing an ultra-high-end Hamptons house can be a pricey proposition.
“[If] it’s a 6,000-square-foot multi-million-dollar house, it’s probably going to cost half a million to furnish,” Saatchi said.
She said furnishing a high-end home also helps make it more attractive to a potential buyer. But, she said, if the home is scooped up for the season as a rental, it often makes it logistically harder to show and effectively tougher to sell — at least temporarily.
Ed Brody, a broker at Devlin McNiff Real Estate and a developer, works with his partner, interior designer Jeffrey Santonastasi, developing and furnishing homes. Together, they furnished a spec home at 37 Hunting Avenue in East Hampton to stage it as a turnkey and give it a better chance of selling in a down market.
The property went on the market around Memorial Day, but when it didn’t sell, Brody decided to rent it out from August through Labor Day, listing it at $85,000 — $25,000 more than it cost to decorate the four-bedroom, 7,000-square-foot home. Brody put the property on the market around mid-July and said he’s already found an interested renter.
“We feel we have to do everything a little bit extra in this
market to make people pull the trigger,” Brody said. “It would have sold prior to completion in a stronger market.”
“The rental will more than cover the cost of furnishings,” Brody added. “We had that in mind when we made the decision to furnish it.”
Santonastasi, who works for Devlin McNiff and has an interior design firm called Along the Way in East Hampton, said that when choosing the decor, he tried to offend the least number of people.
“Anyone could walk in there and be comfortable,” he said.
The pair hopes to sell the home with the furniture, but if they can’t, they said they’ll use it in another spec home.
“Everything is nice enough and easy enough on the eyes that I don’t think I’m going to be stuck with a white elephant,” Santonastasi said. He shopped mostly at local stores, especially English Country Antiques in Bridgehampton.
Santonastasi said he is seeing more spec homes being furnished, either to sell or rent out.
Prudential Douglas Elliman’s regional manager for the Hamptons, Paul Brennan, said if done correctly, spec builders “sell the furniture they stage it with [as a part of the house].” And it can be a selling point if the buyer actually shares the same taste as the developer in upholstery and design.
Barbara Feldman, an interior designer who works in the Hamptons through her company, BF Designs, said that furnishing an average home in the Hamptons costs approximately $50,000, with an additional $4,500 for each bedroom. She said an average cost of furnishing a five-bedroom house would be $75,000 — less than what Saatchi put the figure at.
Feldman, who has been designing for 35 years with a focus on spec homes, gets paid a fee of 35 percent of the cost of furniture. She said that many developers are wary of renting out homes.
“The minute they do that, they are no longer new construction,” she said.