Stephen G. Kliegerman
President of Development Marketing
Kate Glicksberg for The New York Times
Photo: DIGGING DOWN Lux 74, a condo on East 74th Street in Manhattan, is using the basement to create an $8.2 million triplex.
By VIVIAN S. TOY
IN a city where developers are best known for building higher and higher, some New York City builders are taking a decidedly different path in their bid to create more square footage — they’re digging down.
Along with multimillion-dollar penthouses in the sky, developers are now also creating duplexes and triplexes that come with luxurious basements offering 10-foot ceilings, imported wood flooring, marble bathrooms, wet bars and private theaters.
The lowly basement, long the province of New Yorkers who simply couldn’t afford anything else, is being transformed into a commodity with cachet. And with the recent decline in the real estate market, the focus on basements has become a welcome way to maximize the dollar for both developers and potential home buyers.
Space that developers might previously have used just for mechanical equipment or storage lockers, they are now selling for $1,000 a square foot and more. (The mechanicals and storage units are tucked away around the lower-level apartment space.) For buyers, a first-floor apartment with additional space in the basement provides much more room than they otherwise could afford or might even have considered buying.
While the practice of creating more space by finishing a basement is not new to town house owners in the city, Stephen G. Kliegerman, the executive director for development marketing at Halstead Property, said that he had noticed it happening more in new apartment buildings in the last two to three years.
“You see it more in smaller buildings that have less square footage and where the developer is looking to build out every nook and cranny to improve the bottom line,” he said.
Bruce Sherman, a painter and sculptor, will soon move into a “gallery duplex” at the Chelsea Modern, a 12-story condominium nearing completion on West 18th Street, where the last of four such apartments is now listed at $3.1 million.
The gallery part of his duplex is the 1,100 square feet of finished but open basement space to be lined with art-gallery-quality track lighting. “I wasn’t looking for something with a basement,” he said. “But when I saw this, the lower level looked like a great making-things spot.”
His top floor will be built out as a one-bedroom loft with a garden and will have a private street entrance. But the lower level, which he plans to use as a studio, is connected to the first floor by an open-tread staircase and will also have a separate entrance just steps from the basement storage units that he bought and from the building’s gym and steam room.
Dr. Sherman, a dentist who no longer practices, said he paid less than $1,000 a square foot when he signed a contract for the 2,200-square-foot apartment last year. “It seemed like a real estate buy to me, to be able to get something brand new in Chelsea at that rate,” he said. Prices for apartments in the building are now close to $1,400 per square foot.
Dan Tubb, the sales director at Chelsea Modern, said that people who have looked at the duplex apartments with basements have liked the fact that even without windows the space feels loftlike. “They like that it’s finished just as beautifully as the rest of the apartment, but they also feel they can put their stamp on it,” he said.
Even though the basement spaces in the Chelsea Modern have no windows, their ceilings do have several rows of glass blocks set into the sidewalk. On a sunny day, they pull in a remarkable amount of natural light. But many of the new developments that are incorporating basements into first-floor apartments have chosen not to try to channel natural light into the downstairs spaces.
Lux 74, a 12-unit boutique condo on East 74th Street, is asking $8.2 million for a triplex five-bedroom apartment with a basement level that, while devoid of natural light, has an indoor pool, a sauna, a screening room, a wet bar, a recreation room and a laundry room with two washers and two dryers.
“The evolution of basements has come a long way,” said Shaun Osher, the chief executive of the Core Group Marketing, which is marketing Lux 74. “Instead of looking at it as dead space because it’s light challenged, developers are putting in the kinds of things that we’d like to have that don’t need light.”
Josh Guberman, the chief executive of the Core Development Group and the developer of Lux 74, said that when he first started creating first-floor apartments with lower levels about 10 years ago, he would routinely create light wells and skylights to channel natural light downward.
“There was a little bit of buyer resistance initially because people didn’t see it being really usable space,” he said. “It wouldn’t have made sense back then to build a movie theater or a game room, but how we perceive lower-level spaces has evolved, and so has the high-end buyer.”
At 157 East 84th Street, another Core Development project, two of the six units are two-bedroom apartments with an entire lower level dedicated to entertaining. The basements in these apartments, which are priced at $4.175 million and $4.575 million, have been built out to include screening rooms with 103-inch high-definition screens, wine bars and tasting rooms.
Basement space that is below ground level is legally defined as “cellar space” in the city’s building code and deemed “uninhabitable” because it lacks natural light and ventilation. Cellar space cannot be sold or rented as a free-standing apartment or even as a bedroom, so floor plans label an apartment’s basement space as “accessory space at cellar level,” “recreation room,” or simply “storage.”
Because the space is not considered living space, the building code does not allow full bathrooms to be built in basements, so developers are building only half-baths.
But buyers often wind up renovating and create full baths and guest rooms or bedrooms, said Mr. Kliegerman of Halstead. “Although it’s not prescribed to be used that way, a couple might have a child and decide to use it as a dwelling area even though legally it’s not living space,” he said.
When it comes time to sell the property, the owners must market it as a one-bedroom with basement space, he said, “but other families will see it as a two-bedroom that’s selling for $150,000 less than a real two-bedroom, so why not? It’s an unwritten rule of thumb.”
Brokers agree that basement space generally sells for 30 to 50 percent less than space above grade, with the price closely tied to how built-out the basement is and also how valuable the upstairs is. The price will also be higher if a developer has excavated a few feet down to provide higher ceilings in the basement.
Developers use varying methods to ensure that the finished basements are waterproof, including the installation of sump pumps, drains and dehumidifiers and the application of special sealants to the foundation. Mr. Guberman routinely spends $25,000 to $75,000 on waterproofing each apartment with a basement level. “It’s an expense we’re willing to take on to keep the space bone dry and on par with the floors above,” he said.
Since the different levels of a duplex with a basement are valued differently, the square footage cost of such an apartment is called a blended price — an average of the two prices. For example, while upstairs apartments in a building might sell for $2,500 a square foot, a duplex with a basement might sell for $1,750 a square foot, an average of the $2,500 price for the first floor and $1,000 for the basement.
“These spaces are attractive to people who are interested in having a lot more space than other people in New York,” said James Lansill, a senior managing director of the Corcoran Sunshine Marketing Group. “The cumulative amount of space you can get is a lot more than you’d get above grade, because that would put you in a different price bracket.”
The space also appeals to people who work from home, but want to be able to keep work and home very separate.
At 40 Bond, the Ian Schrager-designed condominium where owners reselling their apartments are asking an average of $3,000 per square foot, units with basements were originally marketed as town houses.
“We sold them as very dynamic, multilevel structures,” Mr. Lansill said, “and buyers had very different ideas of what they were going to do with the lower level.”
While many of the new developments making use of basement space are luxury condos commanding multimillion-dollar prices, several buildings in Harlem have more affordable options.
The Fitzgerald, a 47-unit condo on West 117th Street, has six basement duplexes that cost $800,000 to $1 million. Norman Horowitz, an executive vice president at Halstead and the sales manager at the Fitzgerald, says that potential buyers have included “artists who need extra space to create, people who have a need for a home gym, or somebody who wants a live-work situation, maybe a doctor or therapist who wants the space for their practice.”
Two of the apartments have already sold, one to a photographer who wanted to use part of the basement as a dark room and the other to a media executive who planned to build a home theater in the space, he said.
Like the artists who a generation ago turned warehouses and former factories into now-sought-after lofts, these buyers and others like them are helping to redefine the city’s living space.
Sunday, September 14, 2008
All New York Yankees trademarks and copyrights are owned by the New York Yankees and used with the permission of the New York Yankees