The Current Investor
The investing market can be a very personal thing, especially when it comes to real estate. In the New York City market, buyers and prospective investors have very different tastes, needs, and desires for use of properties. Even within residential property, there are often many different directions buyers lean toward when investing.
A few seasoned real estate agents and experts on the market weigh in on what their buyers are looking for. Fredrik Eklund states that “it’s very amenity driven. It’s living in five star hotels, with swimming pools, automated parking. There’s one building – Madison Sqaure Park Tower — where we have a tower room with 360-degree views on the 54th floor with an extra large kitchen where you can have your friends over for dinner parties. You’re buying an apartment, but also in buildings where there are tens of thousands of beautiful amenities” (1). Antonia Watson states that “We have been seeing a trend where local buyers are seeking properties that combine pre-war character and charming facades with contemporary interiors. For this reason many of the new condo conversion projects in areas like the Upper East Side, Soho, or the West Village are appealing to the end user. We are seeing interestingly a similar trend with our international buyers and investors from Europe and South America. Generally, the international pied-a-terre buyers and investors from Asia and Russia tend to be mainly intrigued by newly constructed tall glass towers, central locations, and novel in architectural design. For this reason many of the new developments along 57th Street, also known as “Billionaire’s Row” have become a target area for these buyers, in addition to other midtown locations. Investors from around the globe also seek to keep their monthly costs low, especially when their purpose for purchasing NYC real estate is strictly or primarily investment. In these cases, the Financial District, Williamsburg, Long Island City, and nearby areas are in high demand where 421A or J51 tax abatements can still be found, providing more favorable cap rates for the overseas investor.”
Some buyers are looking for a one of a kind apartment that sets it apart from others in its area. Steve Gold weighs in to say that his buyers look for “uniqueness.” That is, “If there is something different about the apartment that you can’t replicate, especially in this market where you have a lot of new inventory, you can command a better price for it because you know the buyer can’t be like, well then I’ll just buy the neighbor. Unique features include protected use, outdoor space, protected views” (1). In order to appeal to the current investor, the agent has to focus on tailoring the neighborhood, space, and amenities to fit the buyer’s current needs.
Curbed NY reports that “….there are already a plethora of buildings offering ostentatious, attention-grabbing perks—IMAX theaters, private jet rentals, your own “jam room,” and the like—so what’s the next phase of the residential amenity? Put simply, experiences: a slew of developers have begun offering residents of their buildings access to a host of events and ventures that are more experiential—and, in some cases, more tied to the communities in which they’re building” (2). Jeanette Dobrowski, the Marketing Director of Node Living states that “Understanding the full scope of this next phase of residential amenities can be seen clearly in how experience driven perks are disrupting markets even in [the neighborhoods of] outer boroughs like Bushwick, Brooklyn. Node living, for example, with there first of a series of boutique, furnished buildings in Bushwick almost at capacity, bases their model around community living within luxury design that reflects local style. Demonstratively, node living offers tenants full access to Community Curators that provide monthly events and volunteering opportunities for tenants, as well as neighborhood insights and updates on current local happenings. This, combined with over the top perks for the local market, like free wifi and laundry, a multitude of communal spaces for residents like roof tops with city views and fully loaded backyard spaces with grills, fire pits and activities, and smart devices like Nest thermostats, Sonos speakers, and smartphone intercom systems, are taking resident experiences to the next level.”
More or less, when buildings have amenities that are over the top, the property managers are incentivizing future residents and attracting buyers that are accustomed to that lifestyle. Instead of each resident to go out of their way, the building is essentially providing them an in-house “staff.” Some buildings even have in house chefs: Amy Plitt of NY Curbed writes “chefs will teach gardening classes for those who’ve ponied up for the privilege of living there. The wine shop, meanwhile, will have an on-demand sommelier who can work with residents on private parties and other events” (2).
New York City real estate will always be on the cusp of anticipating investor and consumer needs. It will be interesting to see how these luxury amenities affect the demand in the buyer’s market.