The Real Deal recently visited the Plaza Hotel, which has been converted into residential units, condo-hotel rooms and hotel rooms, for a special Webcast segment. With sales fetching as much as $50 million for at least one apartment, these residential units epitomize the luxury condo boom of New York City.
All but two of the 181 residential units have already sold, but now the Plaza is entering a new phase of its real estate cycle: resales and the sales of the remaining condo-hotel units.
The Real Deal’s Jen Benepe sat down with Stribling & Associates’ Elizabeth Lorenzo, director of sales at the Plaza, to find out how both of those types of sales are doing. They also discussed whether rentals are lingering on the market as they had been earlier this year.
Log on to www.therealdeal.com to see the full interview. Check back every week for a new edition of The Real Deal’s Webcast, featuring a recap of the week’s breaking real estate stories and exclusive interviews with industry insiders.
The Real Deal: Tell us the first thing about the Plaza: A lot of people don’t know
that there is a hotel side and a residential side.
Elizabeth Lorenzo: It seems that a lot of people don’t know that there is a new Plaza Hotel. It’s significantly smaller than it was before — now just 282 rooms. I think the minute people walk into the hotel lobby, which is much smaller and more intimate with the Champagne Bar and the Rose Club, they really get a sense of the change in the hotel.
TRD: All of those changes were completed on or around March 1. That probably had a significant boost for you in terms of placing the condo-hotel units in front of the public.
EL: Yes, absolutely. We were at that point able to have this beautiful suite that we’re sitting in right now for all of our prospective clients to enter. We had been selling from floor plans in a construction site, so there really was not a built-out space for people to really see what they were getting.
TRD: Almost all of the condo residences have been sold except for two. Can you tell us about the two that are left?
EL: We have a wonderful apartment that’s about 4,000 square feet. It has a private entrance from the lobby.
TRD: Has the fact that a lot of the units
are up for resale become a selling point
for you?
EL: Well, the resales actually have made our remaining developer units look extremely well priced.
TRD: So there is a big price differential.
EL: Yes, the owners are very aggressive in their pricing for the resales.
TRD: Can you give us some examples?
EL: In general, the owners are very optimistic in their resale pricing.
TRD: Doubling? Tripling?
EL: I wouldn’t say tripling, but certainly looking to double.
TRD: There was a report by the New York Times in February before the hotel side was open, and they interviewed a woman who felt that she didn’t know her neighbors. What did you think about the report?
EL: I think that some of it is just New York. But I do think that as decorating is finished on a number of the apartments, there [will be] more and more people that are residing in the building. There is always a period of adjustment in a new building.
TRD: It’s clear that it’s harder to sell a pied-à-terre than one of the residences. What are some of the challenges, and how do you overcome them?
EL: The hotel pied-à-terres are like a hybrid product, and at the showings and presentations for them, there is a tremendous amount of information that we need to relay to people. In that sense, it’s demanding to, first of all, try to understand who that person is and figure out, ‘How do I say this the best way?’ So, yes, that is a bit of a
challenge. But there is the component with the hotel suites that the hotel can rent them for them, and this is something of interest with most of the people buying.
TRD: There are also rentals in this building on the residential side. At some point in February, there were reports that those rentals were lingering. Are they still lingering?
EL: For the private residence apartments, the minimum lease is an annual one-year lease. And for a one-year leaseholder to have a building still in process, there’s
construction still going on around other floors, where the Caudalie spa is not here yet [and] our Cadu gym is not here yet. And back in February, the hotel wasn’t even open yet. So, yes, I do believe that affects the rental market.
TRD: So, would you say that the rental
market is proceeding a bit more smoothly, or is the economy having a dampening effect on that?
EL: Although the building itself is now further along, I do believe that the overall rental market has been affected.