UPDATED: A handful of new developments have switched brokerages in recent months, suggesting that the developers and investors behind the condo projects feel a sense of urgency to sell.
The Broad Exchange Building, the Westly at 251 West 91st Street and Circa Central Park at 285 West 110th Street are now in the hands of Shlomi Reuveni’s brokerage, Reuveni Development Marketing.
The industry veteran credited the win to shifting market conditions and his firm’s old school approach.
“Developers are making creative deals” to get sales across the finish line, said Reuveni. It’s not like 2021. “People are not falling over themselves to buy.” Brokers come and go from projects all the time, but a firm that can show it’s able to bring in strong sales despite the down market is more likely to get the go-ahead on the project these days.
“It’s not about crazy videos and drone shots,” added Reuveni’s Daniel Pupke. “The question is who can deliver results.”
The new development market remains a strongpoint for residential sales, given high mortgage rates and low resale inventory after many owners locked in low rates during the pandemic. Still, condos in Manhattan are not exactly selling briskly. Only 501 new units were approved for sale in the borough so far this year, according to data firm Marketproof. In 2022, there were over 1,300 all year.
There are a large number of cash buyers investing in New York City real estate who are looking to avoid rising mortgage rates. Developers are keen to get their business, in part because carrying costs for unsold condo inventory have risen alongside interest rates (as construction loans typically have a variable interest rate).
“New development is buoying the overall market,” said Steve Kleigerman of Brown Harris Stevens Development Marketing, “where resales are dragging a bit although performing well given the change in interest rates.”
With its condos priced in the ballpark of $1,000 per square foot, the Broad Exchange Building at 25 Broad Street, represents “the best opportunity for affordable real estate” in the Big Apple, Reuveni said. In the Financial District this year, new condos have sold for a median price of $1,900 per square foot, according to Marketproof.
This is not Reuveni’s first time at 25 Broad. Developer LCOR, the real estate company owned by the California State Teachers Retirement System, hired the firm in 2021 to sell the upper penthouse units at the building, a few years after LCOR decided to convert the 307-unit rental building to condominiums. Corcoran Sunshine marketed the other units.
The developer had acquired 25 Broad Street from Kent Swig in a 2012 foreclosure auction after Swig had worked to convert the former office building to condominiums but defaulted on a Lehman Brothers mortgage in 2009.
The popularity of living Downtown changed dramatically in the ensuing years. There was a glut of condo inventory in Downtown in the late 2010s. Homes there took an average of about nine months to sell during summer of 2019. By last summer, condos there were spending just two months on the market, according to Redfin.
Many units at 25 Broad are still rentals, which may force Reuveni to play the waiting game, as new inventory will become available when renters decide to move out. LCOR recently placed 20 apartments back into its rental program, according to a Corcoran representative. Of the 147 units that remain unsold, 107 have never been listed, according to Marketproof.
Circa Central Park is another of Reuveni’s new projects. Corcoran’s Gold Team was managing sales there but has now “shifted its focus to sales at One High Line,” the Corcoran representative said.
A third project is the Westly, a 52-unit condo offering on the Upper West Side. It represents a homecoming for Reuveni, who worked with developer Adam American to brand and launch sales in 2021. Later, the brokerage Serhant took over the project and sales were led by Tamir Shemesh, before he was fired from the firm in February.
Developers or their investors may choose to change brokerages for a number of reasons, including a slowing of sales or a change in market conditions such that sales no longer meet the building’s underwriting. In other cases, developers will keep brokerages on a project for too long in order to save face, masking internal tensions that may ultimately undermine sales.
“It’s a very competitive industry,” said Pupke. “If you are not producing, you are off the job.”
Correction: A previous version of this story used an outdated name for Reuveni Development Marketing and named 2020 instead of 2021 as a strong year for the market.
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