NYC condo developers find refuge in middle-market

Buyers are hard to find for the city's priciest pads, but cheaper options are selling quick

Renderings of the VUE in Sheepshead Bay and Steiner East Village
Renderings of the VUE in Sheepshead Bay and Steiner East Village

UPDATED, Sept. 7, at 12:24 p.m.: While all the news around the ultra-luxury condo market has been rather bleak of late, there’s more proof the entry-level and middle-market has a clean bill of health.

As of June condos between $500,000 to $999,000 took an average of 4.7 months to sell – much quicker than the market average of 8.6 months over the last decade, the New York Times reported. Condos over $10 million took just over two years to sell, on average.

Prices at the top of the market haven’t changed, and few high-end buyers are willing to pay those prices.

“We’re moving out of a market that’s solely focused on superluxury, and for the developers who can get the formula right, demand for entry- and middle-income new development — the heralded $1 million to $3 million — can’t be satiated,” Miller Samuel president Jonathan Miller told the Times.

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A number of developers are seizing on the opportunity to capitalize on the lower and middle markets by moving into less salubrious areas. Rybak Development, for example, is offering 58 condo units priced between $535,000 and $1.7 million in far-flung Sheepshead Bay, where land remains cheap.

Others, as The Real Deal previously reported, are targeting affluent-but-not-oligarch-rich buyers with high-end amenities. All the apartments at Extell Development’s 70 Charlton Street, which boasts a saltwater swimming pool and a birch tree arbor, for example, can be had for under $3 million.

“You can’t always bank on oligarchs and hedge fund owners to dump $20 million or $30 million into properties,” said Andrew Bradfield, of Orange Management, whose firm is shooting for between $1,200 and $1,300 a square foot at the Waverly Brooklyn in Clinton Hill. “The factors that drive demand at the lower price point are organic: people getting married, having a baby, their landlord deciding to sell or move back in.” [NYT]Miriam Hall

Correction: Andrew Bradfield’s name was misspelled.