Stephen G. Kliegerman
President of Development Marketing
Event-Based Amenities Attract City's Social Set
By CANDACE TAYLOR
With New Yorkers tired of buildings laden with expensive features like meditation rooms and volleyball courts, developers are offering a new generation of amenities to make their products stand out from the pack. Focusing on one-of-a-kind experiences rather than physical objects, they've made it possible for residents to experience a bevy of cultural and social events, from private opera performances to sushi nights, without leaving their homes.
"There's only so much that you can offer within the building," the vice president of marketing for the Gotham Organization, Katherine Sabroff, said. "This is the next wave."
Attorney Greg Cangiano attended a recent Wednesday evening event at a Midtown building developed by Gotham, the Atlas, with a friend who lives there. The 20-somethings in sports jackets and designer jeans who gathered on the roof deck swilled complimentary Heinekens in between bites of spicy tuna rolls as they waited for the entertainment — a performance by recording artist Lady GaGa, free for building residents and their friends as part of a new weekly concert series sponsored by the developer.
Mr. Cangiano, 27, said he'd be willing to pay a little more rent if his Murray Hill building provided events like the Atlas's concert series, which kicked off May 5. "This to me is better than granite countertops," Mr. Cangiano said. "I'd rather my social life be better."
Increasingly, developers are aiming to attract residents who have Mr. Cangiano's attitude. Event-based amenities don't affect buying decisions — or add instant value — as effectively as nuts-and-bolts amenities such as fitness centers, roof decks, or doormen, experts say, but they can help to attract buyers' interest and keep them satisfied once they move in.
"It keeps people happy," the executive director of development marketing at Halstead Property, Stephen Kliegerman, said. "Would that be more effective than providing them with a really nice gym? It depends. I would think that was more of a luxury amenity and not a necessity, compared to other items that have become standards."
At a new Extell Development building at 68th Street and Riverside South, the Avery, buyers don't have to choose event-based amenities over traditional perks. When the building is completed this fall, it will have a billiards room, children's playroom, and gym, and will host private performances by Lincoln Center dancers, singers, and musicians in its private theater. At quarterly "Meet the Artist" sessions, residents will be able to speak with artists, as well as watch them perform. The building also offers residents access to the Lincoln Center patrons' desk, for discounted and last-minute tickets.
Many of the Avery's buyers were interested in the building to start with because of its proximity to Lincoln Center, but the partnership helped seal the deal, the director of sales at the development, Melissa Ziweslin, said.
"The partnership pushed them over the edge," she said. "It creates the whole lifestyle that our buyers were looking for." Moreover, it's not an amenity that can be found at every building in town, she said. "This is something very different; it's unique."
Developers are attracted to amenities that don't detract from the building's sellable space, Mr. Kliegerman said. "Every inch of amenity space is space that the developer isn't selling directly to a buyer," he said.
The vice president for marketing at Extell, Tamar Rothenberg, said she could not divulge how much the company has spent on the Lincoln Center partnership, saying only that it was "beneficial for both sides."
According to Ms. Ziweslin, all but 13 of the building's 274 units have been sold since it went on the market in 2006, although the prices on many of the remaining units have dropped, according to the real estate Web site StreetEasy.com.
And at the Laurel Condominium on East 67th Street, where residents are treated to customized fitness programs from triathlon coach Orion Mims, just eight of the 31 units have sold since going on the market in September 2007, according to StreetEasy.com.
"An amenity like that doesn't add that much value because it's so specific," a business analyst for StreetEasy.com, Derrick Gross, said. "No one's searching for a triathlon center."
Real estate is considered a "high-involvement purchase," where buyers do their homework and make careful decisions, an associate professor of marketing at Fordham University's Graduate School of Business Administration, Dawn Lerman, said. Elaborate amenities may help them notice a building or convince them to commit sooner, "but at the end of the day, it's less about the amenities and more about the property," she said. "The amenities wouldn't sell anybody on something they wouldn't have otherwise considered."
However, cultural events may help to create a positive association with the building, making it appear more attractive to prospective residents. "Experiences are very important for getting people emotionally attached to a brand," Ms. Lerman said.
That can be particularly useful when a product compares less favorably to others, she said. At the Atlas, for example, where a studio rents for $3,000, the developer had to counterbalance the location — the fashion district — an area that isn't widely considered residential.
To make up for it, "We knew we wanted to do something special for this building," Ms. Sabroff said. The solution was to host events in the building's common spaces, such as sushi nights, concerts, and Oktoberfest.
"I would pay more to stay here because of these events," a 30-year-old resident who attended the Lady GaGa concert with his sister, Jay Solanki, said. "For young professionals in Manhattan, all social events are important."
But Gavin Wolf wasn't so sure. The 23-year-old investment banker, who shares a two-bedroom in the Atlas with his friend Joseph Flaum, usually works 90 hours a week. "I don't think I'd be able to come to many of these events," Mr. Wolf said.
"It's kind of a cool perk, though," Mr. Flaum added.
Thursday, May 29, 2008