When it comes to selling condos, the trend in sales centers is all about location, location . . . and dislocation?
More and more often, marketers are using off-site sales offices that — combined with an appetite for scale and tech wizardry — can cost a hefty half a million or more.
Certainly, there are few hard-and-fast rules when it comes to opening a sales office for a new condo project.
The A Building on East 13th Street uses a 65-foot undulating electronic wall simulating the feel of a hip downtown club; 141 Fifth Avenue uses pixilated images of Gustav Klimt paintings morphing into the shape of a building.
“Every project is different,” said Nancy Ruddy of Cetra/Ruddy, the firm that developed both sales presentations. Ruddy’s firm designs buildings, as well as sales centers, for developers such as Extell Development and Forest City Ratner.
“You really have to weigh all of the factors,” said Ruddy, “and say, ‘what will best sell this project?’ ”
Bigger and bigger…
Typical sales centers used to be in the 2,500-square-foot range, but now Ruddy said she’s finding the average running between 4,000 and 6,000 square feet.
And now that the luxury lifestyle and real estate markets are so closely linked, image has certainly grown in importance.
“Our feeling is the minute you hit the sidewalk in front of the sales center and go through the door, you feel what life could be like, and so really it’s a whole process,” Ruddy said. “What you see, how you’re greeted, and what you touch creates a mood and a sense of quality.”
…and farther away
On-site sales offices have typically been preferred. “They allow the buyer to feel the quality of the future building in a spacious layout — and they’re much cheaper than renting off-site space,” said Michael Chapman, an executive vice president at Stribling Marketing Associates, which is handling on-site sales centers for both the Hit Factory and Thorndale Condominiums in Hell’s Kitchen.
Yet, with more new construction, Ruddy says that 85 percent of her sales offices are being constructed off-site.
Edward Baquero, a managing partner at Coalco, one of three development companies involved in the Element Condominiums at 555 West 59th Street, set up the sales office for the building a couple of blocks east in a high-rise across the street from the Time Warner Center.
He needed to pre-qualify prospective buyers, Baquero said, and so he gave little thought to a ground-level site that might generate walk-through traffic.
A 198-unit luxury building with one-bedrooms starting at $800,000, the Element features elaborate amenities packages such as three different pool areas, a residents’ club and a meditation garden. Customers “get an essence of what you’re about through the level of detail on finishes,” said Baquero, who notes he needed to go with more costly full-scale bathroom and kitchen layouts because the Element is a higher-end project.
In addition to Italian marble, another major cost factor for off-site sales offices is rent, which can run 20 percent above market price owing to short lease terms, according to Baquero.
Architect Ruddy noted sales centers typically run between $500,000 and $1 million-plus, with much of the cost attributable to technologically forward presentations, monthly rent, and a trend toward ever-larger spaces.
Scottsdale, Ariz.-based Shea Commercial, which is expanding to New York with its first development, the Prime, is locating its sales center in its corporate offices far from the new condo.
The Prime is a nine-unit luxury building at 333 West 14th Street, and Shea Commercial’s offices are on Lexington Avenue at 40th Street.
The developers maintain there is little competition in the neighborhood and the project has a short sales cycle with only nine units. Therefore, it wasn’t essential that the sales office be located within walking distance of the project, said Shea Commercial’s managing partner Daren Hornig.
“If anything can be sold with fewer marketing dollars, I’m happy to pass on the savings to the consumer,” Hornig said.
Not on Prospect Park
Then, of course, there’s the project that thinks it’s fine to locate its sales center in another borough.
On Prospect Park, a Richard Meier building now under construction at One Grand Army Plaza, is several miles inside Brooklyn. But the developers are catering to a Manhattan crowd and are therefore opening their sales office, also designed by Meier, on Leonard Street in Tribeca.
Billed as both a gallery and a sales office exhibiting the building’s furnishings and views, Mario Procida, whose SDS Procida Development Group is developing the project together with Gordon Group Holdings, said it wasn’t critical for the site to be in close proximity to the building so that both Brooklynites and Manhattanites could have easy access.
“You need to figure out who your market is and where they’re coming from, and if you can find the right spot in that location, everything else follows,” Procida said. “It’s also a great party space. We’re going to be able to have some great parties.”
Too much glitz?
Some real estate professionals, such as Shaun Osher of Core Group Marketing, balk at the notion that the sales experience has to be turned into a Hollywood-styled production.
“I still believe in the power of the salesman, the person who is an expert in the neighborhood and who can talk in an educated manner about competitive projects, existing co-ops and condos, the school system, local grocery stores,” Osher said.
“Ours is less than $500,000,” said Osher of the sales office for the 52-unit Onyx Chelsea, which has an off-site ground-floor sales center on 23rd Street and Eighth Avenue that opened last month. “If you’re spending more than that, it’s excessive in my opinion.”
Osher said he’s mindful of not passing on too many costs to the buyer, and he believes informed presentations need not rely too heavily on impersonal technology.
Osher, who has planned and opened 15 sales offices in more than a dozen years, took issue with project size necessarily translating into heftier budgets for sales centers. But, then, neither is it easy to gauge whether your sales office is giving you the expected return.
“If sales are doing well, you can validate almost anything,” Osher said. “It’s hard to argue with success.”