Stephen G. Kliegerman
President of Development Marketing
By JOSH BARBANEL
WITH buyers scarce, some developers have begun shutting down their flashy showrooms and pulling their sales agents and advertising campaigns for the winter. They are hoping that spring, traditionally the peak selling season in Manhattan, will bring renewed confidence in the economy and abundant low-cost mortgages.
Stephen G. Kliegerman, the executive director of development marketing at Halstead Property, said he had suggested that developers working with Halstead on projects at least 12 months from completion suspend sales and try again next year.
“This isn’t the sign of collapse; it is a sign of a prudent business plan,” he said. “Buyers aren’t feeling urgency right now, which is why we are making a wise decision to hold off. We are suspending sales for now.”
So far two Halstead projects that were begun in the last few months are hibernating, at least for the winter. The company will shut down the salesroom for +Art, a building under construction at 540 West 28th Street near 10th Avenue, close to the path of the High Line. Out of 88 units, priced at from $520,000 to $4.16 million, only three are in contract, Mr. Kliegerman said.
Halstead will also halt sales at the Steelworks Lofts, an 88-unit condominium in a former steel warehouse on North Fourth Street in Williamsburg, Brooklyn, a few blocks from the waterfront.
Just a few weeks ago, both projects had offered buyers a contract with a price-protection plan guaranteeing them lower prices if buyers of similar apartments received a discount. But it seems that the offer was not reassuring enough to overcome fears about the recession.
Mr. Kliegerman said that Halstead would save the cost of paying two sales agents and an administrative assistant in the sales office, although construction at +Art will continue during the marketing hiatus. He said that Steelworks Lofts expected to continue construction as well, but that its financing still needed to be finalized.
Other developers and brokerages are trimming costs as well.
Last week, the Corcoran Group disclosed that it had laid off some support staff. The company did not reveal how many employees had been let go, but said its sales agents had not been affected.
“We are doing everything we can in assisting impacted employees in transitioning to new employment,” Pamela Liebman, the president of the Corcoran Group, said in a statement.
Shaun Osher, the founder and chief executive of Core Group Marketing, said that in this uncertain market, buyers had been reluctant to buy in a building that is still a gleam in a developer’s eye.
“It is more difficult to sell off a plan,” Mr. Osher said.
Earlier this year, another developer, Kenneth S. Horn, the president of Alchemy Properties, held a broker party for a new 32-unit boutique condominium called the Isis on East 77th Street. But he recently decided to postpone sales until the spring to enable buyers to see a finished product.
Sunday, December 07, 2008