Lobbying for sales
You only get one chance to make a first impression. And in today’s tough real estate market, that impression — the lobby — is costing some residential developers more than ever before.
“It’s a very, very educated and discerning buyer in the market right now,” said Tom Elliott, executive vice president of marketing at El-Ad Group, developer of 250 West Street in Tribeca. “We’re spending a lot more money on common areas because the buyer is much more discerning.”
During the mid-2000s’ real estate boom, most new condominium developments finished sales before construction was completed, Elliott said, so lobbies didn’t play much of a role in buyers’ decision-making process.
Now, however, the lobby is the first thing many buyers see when contemplating an apartment purchase. As a result, developers are spending a higher proportion of their construction budgets on them than they did during the boom.
Developers have “realized that a portion of their units will be sold after construction is completed,” Elliott said, “so the common areas, and lobbies in particular, need to be knock-outs.”
That doesn’t come cheap. Developers these days can expect to spend $500,000 to $750,000 on the lobby of a typical 300- to 400-unit condo building, according to Clifford Finn, president of new development marketing at the brokerage Citi Habitats.
With apartments selling like hotcakes in the mid-2000s, “it used to be that developers left the lobby till last — and we’d have no money left to finish it up,” said Funda Durukan, of the architecture and interior design firm Durukan Design. “Now, almost every developer I work with wants to add some amenity spaces, higher-end, and spend more money. They don’t mind because they see a return on it.”
At the Driggs, an under-construction rental project at 205 North 9th Street in Williamsburg, Durukan initially designed a 2,170-
square-foot lobby and recreation room. But the developer then increased the construction budget by roughly 40 percent in order to expand the lobby and add extra common spaces.
It seems to be paying off. Fiddler Realty’s David Korn, who is handling rentals at the Driggs, said the building is now 85 percent leased after two months on the market.
“We had 50 percent of the units rented before the lobby was even completed, though of course everyone was very curious about the plans,” he said. “But now that the lobby has been completed, rentals have been coming in much quicker.”
In other cases, a better lobby also means a bigger lobby. Michael Lichtenstein, the developer of the new-construction rental building 227 Grand Street in Williamsburg, asked Durukan to double the size of the original lobby from 560 square feet to 1,060 square feet — increasing the budget by roughly 30 percent in the process — in order to help attract prospective tenants, she said.
At 250 West Street, a warehouse conversion where units are listed for an average of $1,452 per square foot, Elliott said El-Ad put extra money and effort into the lobby to help make the building stand out.
The building’s lobby has an adjoining library, and the stone floors have a special herringbone pattern. “It’s difficult to do, but it’s a little more special,” Elliott said.
He declined to say exactly how much El-Ad budgeted for the lobby, but said it was more than the company has paid in the past.
Many developers feel it’s worth it, believing that a well-done lobby is helpful for boosting sales in today’s tough market. Developer Kenneth Horn, founder of Alchemy Properties, said at most of his projects, the building architect designs the lobby.
But at his most recent project, the Isis Condominium at 303 East 77th Street, he decided to bring in a separate designer, BNO Design, to upgrade the lobby.
The initial lobby plans, designed by the building’s architect, were “bland,” Horn said.
“We wanted to spend a little more money and get a little more style,” he added, though he declined to say how much.
BNO Design used custom-made furniture and ornate mirrors to try to help bring the Isis’s small lobby to life, Horn said, adding that he believes it’s slowly helping sales. The building is now 60 percent sold after three years on the market.
Today’s lobbies also tend to have a different look than those built in the mid-2000s. Consumers these days want lobbies that are visually appealing, with higher-quality materials and more thoughtful finishes. But they don’t want to overpay.
To accommodate those seemingly conflicting desires, some developers are taking an opposite approach and making lobbies smaller than in the past, which helps cut costs, sources said.
“There was a time when luxury meant size in a residential lobby,” said Nancy Ruddy, principal of Manhattan-based Cetra/Ruddy, an architecture and interior design firm. Today, “we are designing lobbies that have a sense of privacy and intimacy —more like a boutique hotel than a cavernous and anonymous space.”
Randy Gerner, a principal at Gerner Kronick + Valcarcel Architects, has designed a number of hotels and rental buildings with this “boutique” lobby feel, including at Ten23, an Equity Residential luxury rental at 500 West 23rd Street.
At Ten23, Gerner said he aimed to “design a lobby that’s not intimidating and that’s really intimate in character.” To do that, he said he “borrowed a lot of the aesthetic cues that we typically use in our hotel work.”
Instead of large wood panels, for example, he used brick-sized pieces of Australian walnut wood to create a “mosaic, wood brick wall,” he said. He also broke the lobby down into niches — for the mail room, the concierge and the elevators — to create an intimate feel, a design trick often used in hotels.
No matter how elegant a building’s lobby, of course, first impressions aren’t everything; a lovely entryway can’t disguise a subpar project, Horn noted.
“The lobby is the theoretical cherry on top of the cake, but the cake has to taste good,” he said. For buyers, “if apartments aren’t done well, [the lobby] is not going to make a difference.”
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