Developers are slashing prices — and 432 Park is no exception
At TRD forum, panelists riffed on condo concessions, StreetEasy and why people think brokers are like used car salesmen
With an abundance of high-priced condos on the market, developers who rolled out promotions and sweeteners to entice buyers are now turning to cold, hard discounts. And 432 Park Avenue [TRDataCustom] is no different.
“Anyone that tells you they’re not making concessions, I think, is not being fully transparent,” said Douglas Elliman’s Richard Steinberg, who’s part of the marketing team for Macklowe Properties and CIM Group’s luxury tower. “We are negotiating.”
Speaking Monday at The Real Deal’s annual New York new development showcase and forum, Steinberg said the developer isn’t “giving the units away.” But with 80 percent of 432 Park sold and the debt paid off, the tower’s remaining inventory — some $600 million in potential deals — is “gravy” for the developers. “I think they’ll be happy to make $450 million,” Steinberg said.
That new reality was echoed by other agents who joined Steinberg on a panel discussing the state of the luxury market, including Dolly Lenz, Compass president Leonard Steinberg, Ryan Serhant of Nest Seekers International and Brenda Powers of Sotheby’s International Realty.
“If [developers’] penthouses aren’t moving and you have a bid on a penthouse, chances are you’re going to get a deal,” said Lenz. According to the broker, some buyers in new developments who signed contracts before the market turned are now trying to renegotiate before closing.
The panelists disagreed, however, on how to handle developers with aspirational pricing in today’s market. Serhant said he’s having more “come to Jesus” conversations with sellers, and some smaller condo developments are going rental.
But Richard Steinberg relayed a sober truth. “If we become too realistic in our pricing, [developers] will say, ‘Thank you very much.’ And they’ll call 10 other brokers,” he said. “I’d be crazy at any price to say, ‘I think you’re pricing 432 [Park] too high so I’m going to pass on it.’”
Panelists also took on StreetEasy’s controversial agent advertising program, Premier Agent, which Serhant publicly slammed but is now using. He said after meeting with StreetEasy — and threatening to post more critical videos to his Instagram — the company seems to be modifying its approach to include a way for buyers to contact listing agents directly. “I’m also not an idiot. The Internet will grow and expand and so must our business in the way we attract and gain business,” Serhant said.
Leonard Steinberg said the residential community shot itself in the foot by missing an opportunity to share listings. And Lenz argued that StreetEasy and sites like Realtor.com, which also feed agents leads, have a right to be in business.
But Richard Steinberg questioned why REBNY wasn’t policing agents who are advertising on StreetEasy and misleading buyers into believing they represent certain listings. “I work hard enough, I don’t want to be a policeman for these unethical brokers,” he said. “Shouldn’t REBNY have to take it on?”
Speaking from the audience, Bill Staniford, former CEO of PropertyShark, asked the panelists what they’d have REBNY do.
Provide a single feed of data to the industry, so it actually has data that’s accurate and consistent, answered Leonard Steinberg. “If we were the banking industry, we’d all be in orange jumpsuits right now,” he said.
Richard Steinberg said REBNY ought to beef up its staff, even if it means charging agents and firms more dues, to boost professionalism in the industry. “Most people — and I’m the first to admit — think of us one level above used car salesman,” he said.
(See more coverage from The Real Deal’s annual New York new development showcase and forum here and here.)