During Haute Residence’s second annual New York Luxury Real Estate Summit, which took place November 18 in The Oak Room of The Plaza Hotel, New York’s real estate experts spoke about current luxury real estate trends, success stories, and what’s next for The Empire State’s booming real estate market.
The summit featured three panels, the first of which was the “East Coast Titan Developers”––moderated by Gerri Willis, business news anchor and reporter for Fox Business––followed by the second and third panels, the “New York Real Estate Power Players” and the “Next Generation of Power.”
In the first panel, big-name developers Robert Gladstone, Francis Greenburger, Miki Naftali, Don Peebles, Michael Stern, and William Zeckendorf, discussed where buyers are coming from, new opportunities for foreign capital, and defining a “luxury” property.
Gerri Willis: Where are the majority of the buyers in the New York City luxury market coming from and what are they looking for in a potential property?
William Zeckendorf: “We believe that 85 percent of the market is New York-driven, coming from the tri-state area, and 15 percent is from oversees. And that’s always been the number I’ve seen for as long as I can remember. The countries change in terms of which countries are coming to New York and which are not, but this market, unlike London, is mostly driven by the local market.”
Robert Gladstone: “One of the issues in New York is that there is flight capital and it’s coming here. Those buyers are afraid to be taxed like everyone else in this room is. So, that is the only deterrent to there not being a London experience in New York City. And if we did change our tax policies, and move the slogans aside, and try to encourage the wealth of the world to take homes here… Imagine what this city would be like if there was a loosening of some of the tax rules to really attract wealthy foreigners and not so wealthy foreigners.”
Willis: Where do you see the next great influx of foreign capital coming from and why from there?Miki Naftali: “In the last six months I would say, we have, once or twice a week, Chinese billionnares or CEOs or chairmans of very big companies coming to our office and trying to see if there is anything that they can invest in with us… the majority of the Chinese wealthy people believe for the next few years in China that it’s going to be very difficult for them to make money, and probably difficult for them to maintain their wealth. They are desperately looking for investments outside of China… They feel very safe about the economy here. They feel very safe about the currency. They feel very safe that everything is transparent here, which is not exactly the same in China.”
Michael Stern: “The number of Chinese groups that are out looking for a home for their capital is enormous now. I think we’ve barely scratched the surface. I think that we as New Yorkers and Americans don’t really understand the scale of the Chinese economy the way maybe we should… I think the Chinese have sort of been putting their toe in the water and feeling the market out for the last few years, and I think that we’re just at the beginning in that wave in capital.”
Don Peebles: “I think one of the emerging international buyers for this market is South American buyers. If it weren’t for the disruption of the real Brazilian currency, you’d already see more of it already because most of the affluent South Americans have already invested in Miami… So, they are looking for an additional investment and New York is becoming much more interesting… I don’t see them as a big consumer of our condos as much as I see them as potential capital partners for large-scale development.”
Willis: What is a “luxury” property? Talk about the factors that are most important in classifying a property as luxurious––interior, location, amenities, price per square foot? How do you differentiate your properties in the luxury category when every unit over 2 million is classified as luxury?
Peebles: “I think 15 Central Park West set the standard, captured the essence I think of what a luxury building is.”
Gladstone: “Many years ago, every project was advertised as a luxury high-rise to distinguish it from being an FHA. So, the word ‘luxury’ had no meaning. Since 15 CPW, and a couple others, the word luxury has been redefined… You have to adapt your luxury. The number one luxury amenity is a golf simulator. ”
Francis Greenburger: “I think the truth is that when you create a certain project, you have a certain market demographic in mind, and I don’t think that it’s one size fits all. I think there’s a market place for minimalist modernism. There’s a market place for post-modernism. And they’re different; and they’re different expectations. With 50 West, we sort of took a lifestyle approach. We wanted to make sure we had very, very generous amenities.”