On the Upper East Side, a broker recently spent two days painting and staging an apartment on 85th Street overlooking the two-year-old construction site for the Lucida, the new 110-unit luxury apartment building.
The redecorating was not just an exercise in aesthetics.
“We are making sure that the apartment looks very nice again so that the focus is not so much outside as much as inside,” said Sara Rotter, a sales manager at Citi Habitats, who is representing the property.
In Tribeca, construction for a new residential high-rise on Broadway was set to wipe out the view for an entire wall of windows in a loft for sale. To prevent potential buyers from falling in love with the soon-to-be disappeared views, the broker covered the windows with butcher paper before showing the apartment.
Meanwhile, in Nolita, a property owner looking to sell two apartments in a building on Bond Street with expansive views researched the lot behind them, which was home to a one-story building, and discovered it could not be razed because of zoning regulations. He hired an architect and an engineer to write a report that he gave to potential buyers, and then sold the apartments for higher than his asking price.
The real estate acrobatics that all three engaged in to work around the construction issues affecting their properties highlights a tricky flip side to the city’s omnipresent building. City officials often tout construction as a sign of economic vitality, but in the midst of the building comes the very real challenge of how to sell or rent properties affected by dust, debris and noise.
As noted above, brokers’ tactics for selling and renting around these dusty and noisy zones range from researching construction regulations and schedules to decorating the apartment’s interior. Many say taking those extra steps can make or break a deal.
To ease buyers’ initial concerns, brokers have answers: Construction hours are during the workday when they won’t be home, it’s easy to install noise-reducing windows, and dirt can be easily cleaned from surfaces. Brokers also attempt to paint nearby construction as a positive for the long term, pointing out that while it might be a disruption now, when it’s complete, it will likely bring new neighborhood amenities and increase the apartment’s resale value.
“Clearly, being next to a construction site is not a pleasant thing, but at the end of the day, it will be worthwhile because it will increase your property value,” said Tamir Shemesh, a managing director with Prudential Douglas Elliman.
Because open houses are typically on weekends when construction sites are not in full swing, many brokers say that being upfront is valuable.
“The best strategy is just to be honest,” said Chris Poore, a broker and vice president at Corcoran.
“Every apartment you market, there’s usually construction somewhere. It might not be directly next door, but it might be across the street. You’re always in that situation,” Poore said. “That’s Manhattan.”
Take the area around Ground Zero or in Chelsea, where in the last year, four new or converted buildings have gone up on one block: West 22nd Street between Sixth and Seventh avenues. The projects include 125 West 22nd Street (the Verde Chelsea), 133 West 22nd Street, 140 West 22nd Street (the Clement Clarke) and 145 West 22nd Street.
Indeed, in 2007, building permits in Manhattan rose 8.3 percent, and Brooklyn saw the biggest jump of all the boroughs with a 18.9 percent climb.
Steen Rasmussen, a broker with Warburg Realty, echoed the point about being frank. “I would hate for one of my agents or myself to have sold something to someone under false pretenses,” he said. “The sale is not that important.”
Becoming an expert on nearby construction is one of the first steps brokers take when marketing an apartment. Some present prospective buyers or renters with reports about the project’s construction schedule, its hours of construction and renderings of the finished product with its façade, building height and proposed ground-floor retail plans.
“Sometimes when [clients] see a hole in the ground or construction coming up, they might think it’s going to be worse than it is,” said Rotter, who regularly creates such reports. “We want to be able to preempt those concerns.”
Patty Lehan, the manager of Tamir Shemesh’s group at Elliman, which represented the seller of the two units at the Bond Street building, said the report that their client prepared, showing that the one-story building next door could not be razed and replaced with a taller one, increased interest.
“The first thing that people would do is walk over to the windows. The first question people had was, ‘Oh my gosh, what’s happening here?'” Lehan said. “To be able to give them a report as to the likelihood of that lot being developed, and that it was unlikely, really did put them at ease. It made all the difference, actually. Most buyers without that probably would have walked away.”
Buyers too are getting smarter, brokers said, and many are quick to inquire about what might happen to low buildings in the area, for fear they may lose their light or views.
“These days, everybody is pretty well trained. If there’s a parking lot, everyone asks, ‘What are the development plans on that parking lot?'” said Sandy Mattingly, a broker with Coldwell Banker Hunt Kennedy who has worked with clients who specifically look to avoid construction hotspots.
“The worst thing that agents can do for sellers in that kind of situation of losing views is either ignore it or get very vague about it,” he said.
But for every buyer who doesn’t want the disruptions of a construction site, there are those who seek it out. Mattingly calls them the “value players,” or the buyers looking for apartments with a temporarily low price because they know, once the construction is complete, the value will shoot up.
“The profile would be somebody who is strongly value-sensitive, is always looking for a deal, hates to pay retail,” Mattingly said. “And people who don’t have children and work really hard away from their home.” An added benefit, he said, is the smaller pool of potential buyers seeking out those properties.
Another point that brokers make is that nothing is certain in an ever-changing, construction-laden landscape. Forgoing one apartment now for another doesn’t mean that neighborhood too is safe from future construction.
“People have to understand that this is the city, and like everywhere else, construction can happen next to you,” Shemesh said.
Jonathan Miller, executive vice president and director of research for Radar Logic, put it more bluntly: “Unless you’re fronting the river or Central Park, the phrase ‘the view is guaranteed’ carries very little weight to most buyers,” he said. “It’s part of due diligence when a buyer’s purchasing and there’s a vacant lot next door or a gas station that raises eyebrows.”
Because construction is viewed as a short-term inconvenience and common within the ebb and flow of sales activity, it is not included as a factor when pricing an apartment and is instead simply disclosed to the buyer, said Miller.
“You don’t have that level of precision,” Miller said. “If there was a long-term change, that would be different, but short-term construction would have a relatively nominal impact, if any, to the apartment’s value.”