Developers Emphasize Luxury Amenities to Attract Buyers
The luxury condo and apartment market are in the midst of an amenities battle to win over consumers and get them to pay more for their living space. More buildings are offering up everything from yoga studios, playrooms, pet spas, smart tech, concierge services, and more to try to lure luxury buyers.
Developers are focusing on ultra luxury because that is where they think they can make the largest profits, Jessica Lautz, vice president of demographics and behavioral insights at the National Association of REALTORS®, told The New York Times.
Also, the greater focus on luxury amenities may be a sign for the condition of the market. “What we have in any market cycle when the talk turns to amenities are signs that sales are slowing,” says Jonathan J. Miller, president and chief executive of Miller Samuel, a real estate appraisal and consulting firm in New York.
Miller says one of the most popular amenities during the housing bubble was a “pet spa.” “That branding gives you the impression of dogs and cats lounging in chairs by the pool with a drink and an umbrella,” he told NYT. “All it was was a slop sink in a closet.”
Raymond Chalmé, the developer of the 40 Bleecker building in Manhattan, says he didn’t want amenities that made it look like they were “trying too hard” to lure tenants. The apartments cost about $2 million for a one-bedroom to $18 million for a penthouse. His building touts a wellness theme. He leased space to Clean Market, a provider of cryotherapy, acupuncture, and IV drips that re-energize residents. “It has this exclusivity, but you’re not paying it,” Chalmé told the NYT.
Economists, though, say it’s the classic amenities that may offer the biggest boost to purchase prices. Nancy Wu, an economist at StreetEasy, says the following five core amenities still matter: doorman, elevator, laundry, roof deck, and gym. She told the NYT that those can add about 20% to the purchase and 20% to 30% to the rent that an owner can charge.
But she adds: “It’s hard to say which amenity is adding or taking away value, because there are often so many amenities bundled together. If they have a climbing wall, they probably have a yoga studio too.”