The tallest green condo shoots

Go to: Condos with most spring contracts

While troubled projects have dominated the headlines, there are a number of condos sprinkled across New York City’s skyline that have actually seen boosts in sales of late. After what was by all accounts a dead winter, life seems to have returned to the market for some new condominium buildings this spring — even if the numbers are still relatively small.

For example, while the Harlem market has been getting a lot of ink lately for being in peril, its most prominent new project, the tribally inspired Kalahari, sold the most apartments citywide between March and May with 10 contracts signed.

This month, The Real Deal looked at the number of contracts signed and closed in newly constructed buildings in Manhattan, Brooklyn and Queens, and ranked the buildings with the most activity (see accompanying charts starting on page 58).

The data, which were provided by StreetEasy, showed that this past spring only 373 newly constructed apartments went into contract citywide, down 41 percent from last spring, when 632 new apartments went into contract. But the numbers are far better than they were during the stagnant winter.

“Although there is a decline in activity from a year ago, this is actually showing an improvement of activity compared to the previous season, where there was a 57 percent drop in contract activity from the year prior,” said Sofia Kim, StreetEasy’s vice president of research.

Many of the buildings that appeared on the best-seller list tended to share a number of traits, including hitting the key 70 percent sales threshold, generous incentives, negotiability in price, high-end finishes and spacious layouts.

They also tend to be in less-prime neighborhoods.

“Right now, we are seeing increased activity in areas that have had typically less cachet-neighborhoods such as East Harlem, Yorkville and Clinton,” said Kim. “Areas that have seen the most dramatic declines in contract activity are Financial District, Chelsea, Flatiron, Midtown East, and Upper West Side … Very little activity is happening in areas like Soho, Central Park South, East Village and Murray Hill.”

In Queens, Long Island City had a strong showing, with four of the top buildings in that borough.

Andrew Gerringer, managing director of the development marketing group at Prudential Douglas Elliman, which is marketing a number of projects on the list, including four of the five buildings on the Queens list, explained, “When 75 percent of the sales in the market are under $1 million, it’s no surprise that people are flocking to an area where most of the product is under $1 million.”

At one of the buildings, Arris Lofts, which is priced at $635 per square foot, a major selling point has been its easy access to the Court Square subway station, which is across the street and only one stop from Manhattan.

Of newly constructed apartments, Kim said 66 percent that went into contract during the spring are under $1 million, compared to 63 percent of newly constructed apartments being priced under $1 million.

Unlike in The Real Deal’s examination last month in “Spooked by Ghost Towers” of the buildings that were selling the worst in the city, the top-selling buildings are, in many cases, nearly full.

While the number of contracts signed in many of the buildings is admittedly small because of the slow market, it does illustrate which projects are doing best and provides the best real-time gauge of activity in the market during the three-month stretch examined through the end of May.

The data is supplemented by a more abbreviated list of projects with the most closed sales in each borough, a more lagging indicator.

The contract data was, however, dependent on brokers voluntarily updating the status of their listings. In some cases, developers and brokers claimed the number of apartments that went into contract during the spring was greater than the figures reported by StreetEasy. Corcoran Sunshine and the Developers Group said, for example, that in many of their firms’ buildings, signed contracts aren’t reported until the units actually close.

And Scott Avram, senior project manager at Toll Brothers City Living, said Northside Piers in Williamsburg sold 29 apartments this spring, which would make it the top seller in the city. But only projects that updated their listings on StreetEasy were counted because the database appears to offer the most comprehensive information on otherwise elusive contract information.

Playing the lottery

Half the buildings that made the lists have closed sales of at least 70 percent of their apartments, critical in a marketplace where many lenders won’t issue mortgages to new construction that hasn’t met that sales threshold.

Some of the other buildings have made big strides in getting closer to that marker over the last few months. According to Joe Ferrara, a principal at BFC Partners, the developer of the Toren in Downtown Brooklyn, the building has 49 percent of its contracts signed.

Both the Kalahari in Central Harlem and the Toren had a head start because a percentage of their apartments were immediately sold through housing lotteries. Kalahari sold half its units in a housing lottery to middle-income buyers, while Toren sold 40 of its 240 units in a lottery.

“To fill 250 units with 100 percent market-rate buyers in an emerging market, that would have been a daunting task,” said Kalahari developer Carlton Brown, CEO of Full Spectrum NY. “It in some ways mitigates everybody’s risk when you’ve got 5,000 to 6,000 people on a waiting list for half your inventory.”

While it may seem counterintuitive to have the embattled FiDi project 20 Pine: The Collection listed as Manhattan’s third best-seller during the spring, given how troubled the project has been, (see story on page 50) the building has finally reached the 70 percent threshold after three and a half years of selling and offering deep discounts (one studio was marked down 44 percent).

Still, the rooftop deck was buzzing on a recent Saturday afternoon with residents sunbathing and drinking cocktails under the shared cabanas. Marc Palermo, regional sales director for Shvo, the brokerage marketing 20 Pine, denied rumors reported on the popular real estate Web site Curbed.com that the developer was considering selling 80 units at half off as part of a bulk sale deal.

Many of the buildings on the list are either offering promotions or negotiating generous discounts, according to brokers’ own admissions and the listings history available on StreetEasy of some contracts signed in the spring that have closed.

The data show that 500 Fourth Avenue in Park Slope ranked No. 1 in Brooklyn for most units in contract with only seven contracts signed. The building has not only been promoting the “white-glove experience” it offers on the otherwise dressed-down Fourth Avenue, but is also trying to boost sales with its “early bird special.” Buyers who ink a deal at the building by July 31 get an instant 10 percent off. After they move in, an around-the-clock concierge and doorman service is easily accessible via a video intercom system that includes a special call button for a car service.

According to a building spokesman, more than 80 people show up at every open house.

Meanwhile, the first 50 buyers at One Rector Park in Battery Park City will get 20 percent off, giving them a rate of about $800 per square foot.

Buyers get a “coupon” redeemable for the combined city and state real estate transfer tax, equivalent to 1.825 percent of the purchase price, at Yorkville’s Century Tower, a rental-to-condominium conversion that is among the lowest priced on the list with an average sale price of $575,000 during the spring. Rae Gilson, director of sales for Classic Marketing, said the incentive shaves an average of $10,493 off the upfront costs for buyers.

Alchemy Properties is upping the ante by covering the mansion tax, city and state transfer taxes, and closing costs — the equivalent of 6 percent of the purchase price — for buyers at all four of its projects, including the Oculus Condominium, which tied for No. 9 on the list in Manhattan for the most contracts signed during the spring.

At 5SL in Long Island City, Avram said Toll Brothers imported the “live free for one year” program because it was such a smash at the developers’ Northside Piers.

Under the program, Toll Brothers covers the carrying costs, including mortgage payments, Homeowners Association fees, common charges and taxes for one year.

According to listings history available on StreetEasy, one contract that closed at 5SL during the spring was also discounted 27 percent off its original asking price.

Such steep discounts were also seen at the Kalahari, Century Tower, Twenty9th Park Madison, 20 Pine, two small North Brooklyn buildings, and at the Powerhouse in Long Island City.

In a few cases, brokers and developers noted that the discounts were enabled by the original buyer backing out of his or her contract — a common phenomenon these days — and walking away from a deposit.

Fine finishes

The buildings on the lists that The Real Deal visited tended to have higher-quality finishes and more comfortable layouts than the typical new construction in their respective areas.

In general, the hardwood floors seemed solid and didn’t seem to have the thin layer of air just beneath the surface which creates that telltale tapping sound of a job poorly done.

Also absent were awkwardly placed windowless “offices,” intended to maximize profits by boosting the number of units and the number of rooms crammed into each unit, as is often found on shoddy projects.

Ferrara, of BFC Partners at the Toren, said the building has top-of-the-line kitchen cabinets and noted they will throw in customized islands for people who like to cook.

Meanwhile, the kitchens and bathrooms in 500 Fourth Avenue and Twenty9th Park Madison in Midtown South, the second-most expensive building on the list with an average sale price of $2.28 million during the spring, also stood out for their intricate tile work and high-quality materials. And at 20 Pine, which has become known for its over-the-top amenities, the sprawling basement space has two levels of floor-to-ceiling marble.

Alchemy Properties, on the other hand, is light on amenities in order to keep prices lower than the competition, explained the company’s president Kenneth Horn. The lobby at Oculus is about the size of a master bedroom, and there is no gym in the building (the broker pointed out that there are several health clubs within a block).

And Brown of Full Spectrum NY said his firm decided to go with a green building that has fewer units in favor of more generous floor plans.

“What we agreed was that this boom was going to end, and in hard times, good product wins,” he said.