Stephen G. Kliegerman
President of Development Marketing
By VIVIAN S. TOY
MITCHEL MAIDMAN and his family live in a Manhattan penthouse with 360-degree views of New York City.
Louis D’Angelo chose one of the first buildings converted to apartments south of the Chicago River, near the Loop, for his sprawling family duplex.
Donald Capoccia is about to move to the Brooklyn waterfront, where he will have views of eight different bridges.
The choices were easy. They knew exactly what they were getting: the best condos in the building.
They should. They’re the builders.
Some developers inhabit their own buildings rather famously. Donald J. Trump has even given his Fifth Avenue spread in the Trump Tower a cameo role in his television show, “The Apprentice.”
Others prefer to fly under the radar.
Either way, developers who choose to live where they build often get first choice, sometimes at a substantial discount. If they have partners, they might have to pay retail or forgo some part of their profit for the space, but chances are they will be able to customize to their heart’s content, without going through the difficulties the average buyer would encounter.
Mr. Maidman has lived in several buildings owned by the Townhouse Management Company, the New York real estate business his grandfather founded in 1933.
“When I lived in the rental buildings, I wasn’t terribly interested in having other tenants knowing that I was part of the family,” said Mr. Maidman, who is now the president of Townhouse. Eventually, he said, someone would figure it out anyway after seeing his name on a mailbox and “then I’d get a note or a complaint.”
But Mr. Maidman is not bashful about having moved with his wife, Arlene, and their two children into a penthouse with sweeping city views at the family’s latest project, the Aurora, a 32-story tower on Third Avenue near 37th Street that has seven floors of condos above a long-term-stay Marriott apartment hotel.
Hotel residents are not likely to know who he is, and he’s not too worried about the other penthouse residents, who will be paying up to $4.7 million for their apartments. Living in the building is a clear sign of his commitment to the project, Mr. Maidman said.
“It’s also a clear sign that the lobby’s going to be clean and the gym’s going to be clean, too,” he said. “On the other hand, we couldn’t live in a 4,200-square-foot apartment like this one if I couldn’t make a deal with my family.”
(Mr. Maidman said his duplex might sell for about $6 million, adding that he paid “more than it cost to build and less than market value.”)
Mr. Maidman, like many other developers in New York City and across the country, is taking full advantage of his role as a home builder — getting first choice before anything goes on the market.
“As long as you’re building somewhere you wouldn’t mind living, I can’t imagine not considering living there,” Mr. Maidman said. “And I can’t imagine you could get a better deal anywhere else.”
But there are potential downsides. Aside from having to field an occasional complaint from neighbors, resident developers risk the speculation, especially in a soft market, that they’re living there only because they couldn’t sell the place.
Buyers often say that having the developer as a neighbor can be a bonus, especially when a project is forging into uncharted territory, either in terms of location or design.
Take the Peninsula on the Indian River Bay, a waterfront golf resort being built in Millsboro, Del., about 12 miles from Rehoboth Beach. When completed, the gated community will include a mix of 1,400 detached houses, town houses and condominium apartments.
Larry Goldstein, the developer, bought a three-bedroom condo on the first weekend the project opened for sales in May 2004, and he expects to move into his new vacation home early next year.
“There were doubters when I said I was going to build a high-end resort destination in this location,” said Mr. Goldstein, who lives in Potomac, Md. “So I knew all along that I would buy something to show people that the developer was confident in the project.”
Mr. D’Angelo, the president of Metropolitan Properties of Chicago, felt the same way when he moved into a penthouse six years ago at the Residences of 330 South Michigan, a redeveloped office tower that was one of the first luxury condos to be completed near the Loop south of the Chicago River. “When we started marketing the building in 1997, I told everyone there’s no better place to live in Chicago, and I believed it, so we moved in,” he said.
Because the building was developed by a partnership, Mr. D’Angelo said he did not get a price break when he bought his apartment as raw space. In fact, unless a developer is building a project on his own or through a family business, he will probably have to pay retail since he has partners and investors to whom he must answer.
But Mr. D’Angelo definitely had a leg up on other buyers when designing his penthouse, which he shares with his wife, Kehaulani, and their 9-year-old daughter. The 5,300-square-foot apartment is the only duplex in the building, and he was able to build what he calls a “pillbox” room on top of the roof. The room has floor-to-ceiling windows and was intended as a party room but now serves as his daughter’s art studio.
“The beauty of being the developer is you’re able to do some really special things to your space,” he said. “Being able to go beyond the envelope was definitely one of the benefits for us when we built our home.”
Getting permission to add unusual features or to expand an apartment is always likely to be much easier for a developer than for the average buyer.
Mr. Capoccia, a principal in BFC Partners, one of three partners developing Schaefer Landing, a three-building waterfront complex nearing completion in Williamsburg, Brooklyn, said he paid the market price for his three-bedroom penthouse. He chose the apartment for its breathtaking view, which includes eight bridges, from the Verrazano-Narrows to the Throgs Neck.
Workers were busy on his rooftop terrace earlier this month, installing an Endless Pool, a small lap pool that works like a runner’s treadmill by pushing a steady current against the swimmer.
“Any of my penthouse neighbors could also install one if they wanted, provided they got permission from the condo board,” he said. His pool, though, was part of the initial condo filing and will be finished long before a condo board has even been created.
When Barnet Liberman decided to expand his penthouse at Printing House Square, the industrial building in Greenwich Village that he and his partners converted to luxury lofts in 1979, he decided that rather than combine his space with another apartment, he would build into the building’s attic space.
He said he paid market rate in 1986 for the additional square footage, but he called the talks about his taking over the space “a Señor Wences conversation.” Squeezing his two hands into talking fists, his left hand asked, “S’all right?” and his right hand quickly answered, “S’all right.” Enough said.
Winthrop Chamberlin, Mr. Liberman’s partner in Printing House Square, also lives in a penthouse apartment there. He said that in more than 14 years, he had gotten only one call from another owner. “A woman came and knocked on the door to tell me she might have a fire in her apartment,” he said. “I rushed over and unplugged the toaster oven where she had burnt some toast, told her everything would be O.K., and we lived happily ever after.”
Geoffrey Edmunds is a West Coast developer who has lived in 12 out of about 30 luxury-home developments he has built in Arizona, California and Colorado.
“Others said we were crazy, but in 32 years, our door has only been knocked on twice,” he recalled. “Once it was by someone who was kind of a crazy person and once by someone who thought I would have a key to their house. I didn’t.”
Brokers trying to sell apartments or houses in any given development say that having resident developers is a perfect marketing tool.
“If buyers see the developer wants to live in the building, too, they see it as an extra stamp of approval on the quality of the construction,” said Stephen Kliegerman, the director of development marketing at Halstead Property in New York.
Raj Mirchandani, who is renting the model apartment at the Aurora while the one he bought is being completed, said he had been undecided about the building until he learned that Mr. Maidman would be living there with his family. “I felt if the developer was willing to stay in the building, it meant the location is nice and he has confidence in the building,” Mr. Mirchandani said. “That meant a lot to me.”
Having a developer living on site should also assure buyers that the typical problems that come up as any development is being completed will be dealt with quickly.
“Every new development has some growing pains,” said Shaun Osher, the chief executive of Core Group Marketing in New York. “Things like plumbing and electricity issues that usually take a couple of months to get ironed out or getting the common areas finished.” But if a developer is living in the building, he added, “they’re more likely to hurry the contractors along.”
Residents particularly benefit when developers decide early on that they will live in a project. Edward Baquero, the managing partner in Coalco New York, which is a partner in the Element, a 198-unit luxury condominium being built on the far west end of 59th Street, said that a developer’s preferences always have an impact on a building’s design.
“When you start out, it’s not a conscious thing, but your tastes and preferences are going to come out,” he said. “When you’re choosing a lounge chair for the lobby, for example, you’ll pick one that you’d want in your house.”
He plans to move into a three-bedroom apartment at the Element with his wife and two sons and admitted that “maybe I am making some conscious and subconscious changes because I’m sort of protecting where I’m going to be living as well.”
There were two features that he added to the building because he knew he would appreciate them. One was a guest bathroom in the lobby and another was an elevator button that the concierge could push as soon as a resident entered the building, to shorten the wait for an elevator.
Developers also often tailor projects to suit their current lives. Mr. Liberman said that when he and Mr. Chamberlin first started building apartments, they were single and built only studios and one-bedrooms. They started building larger apartments when they both married and started families. “We’ve built to our own demography,” Mr. Liberman said. “It’s hard not to project yourself into what you do.”
Mr. Edmunds, the Arizona and California developer, did the same thing. He said he started off building family houses that were child-friendly and went on to build “adult houses” after his children were grown, houses that were more formal and had more stairs. Now that he’s a grandfather, he has built “grandchildren’s houses,” which come with a guesthouse or casita that can be used as a clubhouse for visiting grandchildren. His casita is a giant playroom filled with arcade games, game tables and a large-screen television.
His current projects include upscale condos in Phoenix and Irvine, Calif. “That type of thing will be a future home for us,” Mr. Edmunds said. “When the grandchildren are grown, and we want to move to an urban community because we don’t want the maintenance of a house anymore.”
It’s natural for a developer to want to move into successive projects, said Mr. Osher, the chief executive of Core Group Marketing. “By nature, they’re very creative people, and they’re always trying to outdo themselves,” he said. “So if they have the capacity to live in something better, then they probably would want to move on.”
Mr. D’Angelo, the Chicago developer, said that he and his wife were “flirting with the idea” of moving into his current project, the redevelopment of Metropolitan Tower, an office building just two doors down from where they now live.
They could have the penthouse, which will have a wraparound terrace and will include the space inside the building’s ziggurat pyramid that would give the apartment 20-foot ceilings. It would also have sentimental value because Mr. D’Angelo’s father used to have his offices in that space.
But even developers can get tired of moving.
“We’re very happy where we are,” he said. “Besides, building a custom home takes an enormous amount of time and work, and I don’t know if either my wife or I are up for doing it all again.”
Sunday, October 29, 2006
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