the {love} of buying NYC New Development

Is NYC real estate too expensive?  NYC residents ask who can afford Manhattan apartments? So who buys all these NYC New Developments?

In a NY Times article when age belies buying power it describes 30 somethings of a tech companies, pioneers of creative spirit, entrepreneurs have been purchasing most new developments downtown such as Walker Tower, 471 Washington, Sterling Mason and 285 Lafayeet.  They prefer the smaller buildings vs. the bigger buildings such as 15 CPW and One 57.

Of course there are different NYC buyers for bigger buildings and yes international purchasers do increase the market price.

Said best by one Luxury Broker:

“There’s definitely an argument to be made that some apartments are asking prices that make absolutely no sense whatsoever,” said Leonard Steinberg, a luxury broker with Douglas Elliman Real Estate in New York. “Everybody wants $100 million for their apartment these days. The good news is that $100 million is, what — 60 million pounds? Only 73 million Euros? So on world standards, it’s still a pretty good buy.”

Why is it so imporatant to know when projects start and to get in for first pricing?

When a new development project starts sales, the asking prices are set by an Offering Plan pre-approved by the Attorney General.  As sales progress, the developer files “amendments” to the offering plan in order to raise the asking prices for the remaining units.   Therefore, if you buy early in a new project, not only do you have a better selection of apartments but you get “first pricing” or “schedule A” pricing. Depending on the building type, its amenities, views, etc, buyers purchasing over the last 18 months have seen upwards of 20% appreciation between signing contract and closing.  These New Development buyers have equity before closing with only putting between 20-25% down.

• As per NY Times, First Resale in Walker Tower Flipped for 2.9 Million Profit. Its 2012 conversion to 47 condos produced a record-breaking downtown sale-PH1, after asking $55 million, recently sold for $50.912 million.
• Walker Tower’s first resale, a two-bedroom unit on the 11th floor, has generated a near $3 million profit for the owner. The unit was sold at $5,027,609 in December 2013 and relisted for $7.9 Million 2 weeks later.
• “The buyers paid more for the apartment than my client did,” Ms. Miller said, “but I don’t feel that they paid up; they paid what the market will bear today.”
• The co-developers of Walker Tower, JDS Development Group and Property Markets Group, said the stunning profit realized on the first resale was further proof of the building’s architectural pedigree and escalating popularity among elite buyers. “It makes us happy because it burnishes the brand,” said Michael Stern of JDS Development Group.
• In the heart of TriBeCas landmark historic district, 250 West Street the monumental former warehouse built in 1906 was transformed into a unique collection of 106 luxury condominiums. The first resale was sold in June 2013 for $2.4 Million after it was purchased for $1.573 Million in March 2013. Resale apartments at 250 West Street have sold between 25%-35% over original purchase price.

  

• Trophy new development buildings in Downtown, 150 Charles and 56 Leonard have reached high price threshold,topping even boom-time highs.  These new projects come at a time when buyers are starved for new inventory. 150 Charles Street, the CookFox-designed, Witkoff-developed condominium in the West Village achieved the largest, fastest sell-out in history. 56 Leonard is over 90% sold and one of the hottest buildings in TriBeCa.

  

  

• West Chelsea Arts District is already thriving with new developments such as 500 W. 21st, the Norman Foster at 551 West 21st and Thomas Juul-Hansen 505 W. 19th street.  It’s exciting to see how the demand for this neighborhood with the Avenues World School in place since 2012 and the Hudson Yards by Related changing the whole landscape of the West 30s.

I am committed to providing my clients and investors with the most up to date information so they are educated early and prepared to make a decision.  It’s vital and important to have a broker to represent your interests when purchasing.  Contact me at thenewyorklifecsf@gmail.com for further information.