Boutique buildings now catering to the latest tastes of home buyers

Real Estate Weekly, Feb 22, 2006 by Tiffany Razzano

More and more house hunters are thinking small and dropping their mortgage money on one of the growing number of luxury boutique apartment buildings sprouting in the city.

Typically 20-units of less, what these mini-masterpieces lack in size they more than make up for in the myriad of super luxury amenities available, from personal chefs to rooftop lounges.

However, more and more buyers are attracted by the exclusivity of a boutique building and the personal attention that comes hand-in-hand with small-scale development.

"There's a certain exclusivity that comes with a small building," said Barbara Fox, president and founder of Fox Residential, whose firm is currently involved with the marketing and sales of 985 Park Avenue, a ground-up development with seven units, two triplexes and five duplexes.

"Everybody loves the idea of a small, exclusive building. With fewer people sharing the building, it's almost like living in a townhouse, but much, much nicer."

"You're not going to have major gyms and garages and stuff like that, but you have a building staff taking care of seven families, rather than 200. This means that a lot more attention will be paid to the owner's needs."

According to Shaun Osher, chief executive officer of CORE Marketing Group, the high cost of construction and the lack of large plots of land have created the trend in boutique developments.

According Osher, the cost of concrete has gone up from $40 per square foot to $75. "And try buying a curtain wall for less than $90 [psf]" he said.

These high costs, coupled with a generally tight market creating land pressures, have helped these mini apartment buildings take the luxury niche to a whole new level. Not only do these apartments come with all the typical finishes of luxury apartments, which have come to be considered not only ordinary, but expected, they also offer many super luxury amenities.

"Obviously, these days luxury is broadly applied and seems to con note a minimum of stone or granite countertops, stainless steel appliances and stone bathtubs," said Dawn Tsien, president of new developments at Coldwell Banker Hunt Kennedy.

Boutique developments, which are smaller in nature, provide more personalized, unique amenities aside from what has come to be expected in regular, luxury developments. One of Tsien's buildings, 13 East 30th Street, offers a full-floor apartment with a key-locked elevator that opens into it.

76 Madison, which is being marketed by Prudential Douglas Elliman, offers tenants a private chef. Geoffrey Zakarian, who opened his restaurant, Country, at a hotel down the street from the building, provides tenants not only with room service until 1 a.m., but also serves as a private kitchen consultant. The building also features a more than 2,000 s/f rooftop lounge complete with wet bar, fireplace and sofas.

Other amenities offered by boutique buildings include private wine cellars, private balconies and in some cases, even a cyber doorman.

Osher wonders if developers and marketers have gone too far with the amenities, however. "The doorman is the first real and fundamental amenity. Anything more can backfire, as people don't want to pay for anything they're not necessarily using."

Elida Jacobsen, director of the development marketing group at Prudential Douglas Elliman, agrees that what people like about boutique apartment buildings is being free of the masses. "They like having a feeling of exclusivity and privacy," she said.

The boutique buildings have been attracting buyers from all walks, from single professionals to couples to families. And the neighborhoods they've been popping up in are as diverse as their tenants. Karen Mansour, director of sales and marketing for the development marketing group at PDE, said, "A lot of these boutiques are gut renovations of older buildings that are not huge, so they're geared towards less units."

Downtown especially is home to quite a few loft-conversion boutiques which are also becoming available on the Upper East and West Sides. It's expected more will crop up in the next year or two, helping to retain residents who might have looked downtown for such a development. Chelsea also is a big area for boutiques, with more likely to be developed there in the future.

"It's happening all over," Tsien said. "It's really opportunistic in terms of where there are certain sized parcels and now the consumer is willing to go almost anywhere."

Prices aren't as astronomically high for boutiques as one would think. According to Fox, boutique buildings are priced comparatively to the neighborhood. "Pricing is according to what's selling next door, only you're getting brand new everything," she said.

Mansour, who is marketing 76 Madison, said one-bedrooms in the building are in the $1 million range, with the penthouses costing $3.8 and $5 million. She added that there's a waiting list of over a 200 for the building, which was half sold within a month of being put on the market at the end of September 2005.

Prices for a three-bedroom loft with home office, 3.5 bathrooms, living room and kitchen at 21 Mercer Street in Soho, which is also marketed by Prudential Douglas Elliman, start at $3.875 million, while a three-bedroom loft at 744 Greenwich Street will cost buyers $3.6 million.