One of the biggest risks of buying into a new development is timing.
Projects can be delayed by months or years, and in some cases people buying into new developments have to move twice because the building isn t ready.
The Richard Meier towers at 173-176 Perry Street might be the most prominent current example of this problem, as the project is beset with reports of construction delays and water leaks.
Martha Stewart, Nicole Kidman and Calvin Klein are all reportedly looking to sell their unoccupied units in the building.
“They had this great concept to build an incredibly dramatic space that would be sold as rough space to let the buyers finish them. But they had to cooperate with each other, for example, in going through the ceiling for plumbing,” said Lynn Sullivan of Coldwell Banker Hunt Kennedy. “It was a great idea in theory that hasn t been nearly as great in practice.”
Now with Meier s third building going up at 165 Charles Street, the space will be completely finished, with the architect doing everything right down to the door knobs.
For new construction, buyers have learned the hard way that any number of complications can arise. A tough winter can cause building delays. In an older building undergoing a gut renovation, delays can crop up because the construction crew doesn t know what it will find.
Resale buyers don t face the same prospect of move-in delays. “If it s a resale, there is a closing and it cannot vary by more than 30 days,” said Helene Luchnick of Douglas Elliman.
But there is still the return on investment to consider when buying into a new development – even the Perry Street towers.
Stewart paid $6 million four years ago and is now asking $7.2 million for her unoccupied penthouse. Klein s vacant triplex has undergone a bigger markup, with an asking price of $19.5 million, up from the $14 million he paid for it in 2000. Kidman hasn t officially listed her property yet.