What is the premium on New Development?

We just sold a 1641-square foot unit at One Wall Street. Our buyers are thrilled! It’s seriously one of the nicest new developments I’ve been in, in quite a while. Classic touches, an historic building with a stunning lobby, and an endless list of amenties. They closed for $3.3mm (it’s public record, so we’re not telling any secrets). That works out to $2010/square foot.

Now, iIf you look at resale condominiums in the area, you can find properties like this that are asking $1978 per square foot, or even things like this– our non-doorman building that’s selling for much less, at $1119 per square foot. What to make of this? One is discounted slightly; the other, almost 45%!

The Premium to Resale

First, the resale condos that have been sitting are likely to end up trading at around a 10% discount to the deal we struck at One Wall Street. And we negotiated our deal down from $3,760,000…

The Premium to Non-Doorman

There is a chasm between properties with and without amenities downtown. You can see it. Buyers’ appetites swung from the freedom of 1980’s buyers in Tribeca and elsewhere downtown who wanted cool lofts etc. Tastes now demand a much higher-end product. And therefore, much of what is fetching top dollar are properties like what our customers bought.

The Secret Deal Our Buyers Got

Not only did our buyers score a deal on par with the market. They got a secretly amazing deal. For most of these buildings, the monthly charges are in the $3-4 dollars per square foot range.

One Wall Street is slightly higher, but with one wrinkle: until the building turns over to the condo board controlled by the owners, the buyers do not have to pay for common charges. Therefore, their common charges for at least 3-4 years (it’s a 500-unit building that will take time to sell) are paid by the developer.

How much are they going to save? About $100-150,000. This means about $91/square foot if you think about the value per square foot to the price. The net to the buyer feels like they paid about $1900/square foot, on par or even better than 10-15 year old resale units that need work.

Not bad for our buyers! Congrats to HRT agent Jonathan Goldstein for his work in helping our clients make this happen!