Residential towers by name-brand designers are outperforming others, even in a weak real estate market.
A decade after a bumper crop of residential buildings designed by internationally renowned “starchitects” began rising around the city, the early results are in.
As predicted, such residences were indeed pricier to put up. But especially in Manhattan, the supply of people willing to pay more to live in architecturally celebrated environs seems to be more than adequate.
The biggest surprise, however, may be the degree of flexibility shown at times by such celebrity architects as Frank Gehry, Richard Meier, Jean Nouvel and Robert A.M. Stern. Some have gone so far as to lower the ceilings of their creations and even change facings to meet fast-changing economic conditions and New Yorkers’ (especially rich New Yorkers’) less-adventurous architectural tastes.
“These architects are great both at helping developers resolve whatever issues come up and creating notable designs for buildings that can command high prices,” said Vishaan Chakrabarti, director of Columbia University’s Center for Urban Real Estate.
Such compromises come in the context of cost expectations that are raised from the outset. For openers, starchitects can command fees up to twice those of their mortal brethren. Such buildings can also be more expensive to build. Everything from higher-than-standard-quality materials and mechanical systems added as much as 15% to the cost of constructing the 96-unit condo known as On Prospect Park in Brooklyn, according to Louis Greco, a principal with SDS Procida, the developer that tapped Mr. Meier for the job.
Despite all that, buildings constructed before the real estate crash were “incredibly effective,” selling quickly and at steep premiums compared with plain-vanilla projects, according to James Lansill, a senior managing director at brokerage Corcoran Sunshine. Even today, they still outperform the market.
A 2002 takeoff
The starchitect phenomenon started in earnest in 2002 with the completion of 173 and 176 Perry Street, a pair of sleek, 15-story glass boxes in the West Village on the Hudson River designed by Mr. Meier. They were followed in 2007 by such notables as Mr. Nouvel’s 40 Mercer, a 13-story glass palace built by Hines, and Robert A.M. Stern’s wildly successful 15 Central Park West, designed for developers Arthur and William Zeckendorf. The latter features two limestone towers inspired by the Art Deco architecture of their neighbors—and has racked up several of the city’s highest-priced sales in recent years.
But not all starchitect projects took off. In TriBeCa, developer Sleepy Hudson paid out $36.6 million for 5 Franklin Place and promptly hired Dutch architect Ben van Berkel to produce an ambitious design. The 20-story project died, however, when the recession hit.
With the economy still soft and construction financing continuing to be hard to find, the current crop of starchitect buildings in the works is small. There’s Extell Development’s 1,003-foot-tall apartment tower and hotel on West 57th Street and Seventh Avenue, designed by French architect Christian de Portzamparc. Mr. Nouvel’s controversial 75-story tower next to the Museum of Modern Art from developer Hines is also under way.
Having proven themselves so well and so widely, starchitect-designed residences look like they will be around a long time in New York.
“When building picks up, there’s going to be a greater sensitivity to higher-quality work,” said Mr. Meier.
Others agree that there may now be no turning back.
“It may not be optional,” said Stephen Kliegerman, president of Terra Development Marketing, which provides sales and marketing to developers, including many builders of luxury buildings. “Buyers are going to expect a certain level of design and, to obtain the highest price point, you’re going to have to give it to them.”
Location: 40 Bond St., Manhattan Architect/based: Herzog and de Meuron/Basel, Switzerland Completed: 2007 Number of units/size range in s.f.: 24/1,200 to 2,400 Construction cost per s.f.: $500 Sales price per s.f.: $3,000 Current occupancy: 100% Most striking features: Inspired by neighboring 19th-century cast-iron buildings, it has a shiny façade of thick, richly articulated green-glass, plus high, cast-aluminum faux-“graffiti” gates.
The timing was good for 40 Bond, the first U.S. residential building designed by Pritzker Prize-winning Swiss architects Jacques Herzog and Pierre de Meuron, the firm behind the Beijing National (Olympic) Stadium, aka the “Bird’s Nest.” It turned a nondescript block in NoHo into “one of the hippest places you could possibly live in New York City,” said James Lansill, a senior managing director at brokerage Corcoran Sunshine, which handles the building.
The property has a daring design and prices to match. They were nearly triple the going rate in the market, according to Ian Schrager, whose company developed the building. He attributes his success in getting those sums to a combination of star power and avant garde design. In June 2008, Mr. Schrager himself bought the 8,500 square-foot triplex penthouse.
“This might be one of the best examples of the power of working with world-class architects and letting them be free to design something radical,” said Mr. Lansill.
8 Spruce Street
Originally Beekman Tower Location: 8 Spruce St., Manhattan Architect/based: Gehry Partners/Los Angeles Completed: 2011 (interiors of upper floors still under construction) Number of units/size range in s.f.: 930 when finished/480 to 550 (studios) to 1,700 (3-beds) Construction cost per s.f.: NA Rent per month: $3,100 to $4,000 (studios), $12,000-$15,000 (3-beds), $45,000 to $60,000 (penthouses) Current occupancy: 530 units of the 620 completed Most striking features: Undulating stainless-steel façade resembles the folds in a large piece of cloth. The many bay windows create numerous interior configurations, with more than 300 unique floor plans.
Frank Gehry’s 76-story rental just south of the Brooklyn Bridge, built by Forest City Ratner, has attracted much critical acclaim. And it’s filling up quite nicely, despite studio rents that typically top $3,000, according to Susi Yu, Forest City’s senior vice president, retail development.
In fact, apartments are going at a 15% to 20% premium over the average luxury building rental, according to Clifford Finn, president of new market development at Citi Habitats. At the same time, the $875 million cost ran higher than normal, but not hugely above, according to Ms. Yu.
The building went through a series of twists to get where it is today. Forest City bought the land in 2004, planing to build condos, but switched to rental units two years later. Mr. Gehry then had to lowering ceiling heights and make other changes to lower costs so the building could work as a rental. After the crash, it looked like the project would have to stop at the 38th floor, but Forest City renegotiated union costs and went back to work.
On Prospect Park
Location: 1 Grand Army Plaza, Brooklyn Architect/based: Richard Meier and Partners/Manhattan Completed: 2009 Number of units/size range in s.f.: 96/962 to 3,500+ Cost of construction per s.f.: $350 Sales price per s.f.: Around $1,000 net, $800 gross Current occupancy: 75% Most striking features: A stark contrast to the neighborhood’s surrounding brownstones and brown-brick buildings, the glass and white metal structure features an ultra-modern design and noteworthy views of the park and plaza.
Pritzker Prize-winner Richard Meier designed the 15-story pristine modern building, carefully taking into account lighting and shadows from the park it overlooks. But when the bottom fell out of the market, On Prospect Park was 60% sold and half of those buyers dropped out, according to Louis Greco, a principal with SDS Procida, the project’s developer.
SDS halted construction, re-examined prices and re-opened for business in the spring. Now, prices are at about 90% of their original level and Mr. Greco hopes to have the building’s 96 apartments completely sold in a year.
While about half of the residents are from Brooklyn, the rest are from around the world, according to Cheryl Nielsen-Saaf, senior vice president and associate broker at the Corcoran Group. “To a great extent, that’s because of the architect,” she said. “He widened the market and broadened the net.”
Condominiums and Townhouses Location: 400 West 12th St., Manhattan Architect/based: Robert A.M. Stern Architects/Manhattan Completed: 2009 Number of units/size range in s.f.: 68 plus 7 townhouses/800 to 3,200 (apartments), 3,800 to 4,750 (townhouses) Construction cost per s.f.: $500+ gross Sales price per sq. foot: $3,000 net Current occupancy: 100% in tower, 5 of 7 townhouses sold Most striking features: Red-brick facing is designed to fit in with the surrounding West Village neighborhood and exploit Hudson River views. The townhouses hark back to residences of 100 years ago.
Robert A.M. Stern, dean of the Yale School of Architecture, designed this building after local preservationists objected to the original plan for a 270-foot modern glass tower. In an effort to retain the feel of the site, which housed an ink factory built in the early 20th century, Mr. Stern created a 17-story red brick building with 68 condos and a row of seven townhouses with private garages.
Its cost per square foot of construction made the project “one of the most expensive buildings we’ve built,” said Bruce A. Beal Jr., an executive vice president of Related Companies, Superior Ink’s developer. On the other hand, sales for tower units, which started well before construction was completed in 2007, “exceeded our expectations,” he said.
Interest is still high. One buyer who bought an apartment for $25 million in 2009, resold it a year later for $31.5 million, which worked out to a whopping $4,983 per square foot.
Source: Crain’s New York Business