The NYC luxury condominium market is renowned for its high-rises. With over 45 luxury high-rise condos sprinkled throughout the city, blue-boarded scenes of constructions hoping to scrape the sky is nothing unusual. Indeed, what is unusual is when Manhattan mega-condos aren’t rising. Because the NYC condominium market rides in waves of booms and falls, glass towers shoot up somewhat cyclically. In 2011, Manhattan condominium developers have decided to throw their dice in on residential boutiques and conversions.
According to theReal Deal’s published statistics of the New York State General Attorney’s office (whose stamp approves condo constructions and conversions) only 466 new condo units have risen in Manhattan in 2011. In 2006, there were 10,660 new NYC apartments for sale. But what accounts for the fewer luxury apartments going up is the shrinking pipeline of submissions to the AG, and developers’ shift to the smaller, scaled-back amenity boutiques and conversions that have a shorter turnaround time and smaller price tags. As New York City condominium developers are given tricky budgets, less risky downsized Manhattan residential buildings with immediate ribbon-cutting ceremonies are more likely to get financed. Current federal loaning hurdles often require condo buildings to have closed substantial presales before backing a homeowner’s mortgage--smaller boutiques in Manhattan districts like Tribeca and Chelsea with fewer apartments for sale can jump these hurdles easily.
Another way to get Manhattan condos on the market is to convert rentals and other buildings. Conversions are currently underway in many parts of the city, from Harlem to the Lower East Side, and are hoping to follow the trends of previous success, like the conversion project at P.S 90 in Harlem turned 75-condo unit. Compared to the 7 planned conversions in 2010, there were 18 in 2011. According to other Real Deal statistics of the NYS General Attorney’s office, there were 89 proposed new NYC condos building in 2011 so far (not including the 18 conversions). The Real Deal predicts that the next wave of mega condo projects won’t likely come to market till 2014.
As developers fill the pipeline with boutiques and conversions that are a little closer to the ground, the unique offerings display a Manhattan business savvy that prefers the mega, but knows when to downsize. Manhattan luxury real estate buyers should consider boutiques and converted condos as units for sale in mega-condos aren’t in substantial rise.