The NY Times reported this week that, as the ultra luxury real estate market in New York City continues to cool, developers appear to be making two kinds of product adjustments: (1) they are converting the penthouses and rooftops of their buildings from premium residential space into amenity spaces for the broader building and (2) they are shrinking unit sizes to help with overall sales and leasing velocity.

According to the New York Times, condo prices on Billionaires’ Row in midtown are down 20-40% since the peak of the market in 2014 when this record was set. So developers are responding with more studios and 1 bedrooms, and amenity spaces – many of which now include high end restaurants also open to the public – that ensure no other building has something you don’t have.

However, there are naturally some differences between condo and rental buildings. Since 2016, 35% of rentals projects in the city have had some sort of penthouse amenity, whereas the number is only 13% for condo buildings. This makes sense given that amenities are such a big driver of leasing. You definitely want your amenities ready for when your leasing office opens.

What product changes, if any, are you seeing in your market right now?

Photo by Aaron Burson on Unsplash

I spent this morning in the suburbs bouncing around to a few different meetings. I then came back downtown so that I could get some actual work done in the office. And then after that, I was around downtown getting a bunch of different things done.

I am mentioning this to you all because today I was reminded of how different the metabolic rate can feel in the city compared to the suburbs. There are even studies suggesting that people walk faster in larger cities.

Some businesses, of course, require a lot of space and the economics simply do not work in the core of the city. We all get that. But if you’re competitive advantage is human capital, then this is something to think about.

I feel like I spent most of my morning driving around, which I’m not complaining about, except that I could have probably had 3x as many meetings in the city during that same period of time. If you multiply that out over time, then we’re talking about a material spread in overall productivity.

And we haven’t even touched on those fortuitous urban encounters, which do happen and do provide all sorts of benefits. As much as we’re all connected like never before – through things like, well, this blog – there’s nothing like shaking somebody’s hand and looking them in the eyes.

The NY Times reported this week that, as the ultra luxury real estate market in New York City continues to cool, developers appear to be making two kinds of product adjustments: (1) they are converting the penthouses and rooftops of their buildings from premium residential space into amenity spaces for the broader building and (2) they are shrinking unit sizes to help with overall sales and leasing velocity.

According to the New York Times, condo prices on Billionaires’ Row in midtown are down 20-40% since the peak of the market in 2014 when this record was set. So developers are responding with more studios and 1 bedrooms, and amenity spaces – many of which now include high end restaurants also open to the public – that ensure no other building has something you don’t have.

However, there are naturally some differences between condo and rental buildings. Since 2016, 35% of rentals projects in the city have had some sort of penthouse amenity, whereas the number is only 13% for condo buildings. This makes sense given that amenities are such a big driver of leasing. You definitely want your amenities ready for when your leasing office opens.

What product changes, if any, are you seeing in your market right now?

Photo by Aaron Burson on Unsplash

I spent this morning in the suburbs bouncing around to a few different meetings. I then came back downtown so that I could get some actual work done in the office. And then after that, I was around downtown getting a bunch of different things done.

I am mentioning this to you all because today I was reminded of how different the metabolic rate can feel in the city compared to the suburbs. There are even studies suggesting that people walk faster in larger cities.

Some businesses, of course, require a lot of space and the economics simply do not work in the core of the city. We all get that. But if you’re competitive advantage is human capital, then this is something to think about.

I feel like I spent most of my morning driving around, which I’m not complaining about, except that I could have probably had 3x as many meetings in the city during that same period of time. If you multiply that out over time, then we’re talking about a material spread in overall productivity.

And we haven’t even touched on those fortuitous urban encounters, which do happen and do provide all sorts of benefits. As much as we’re all connected like never before – through things like, well, this blog – there’s nothing like shaking somebody’s hand and looking them in the eyes.