1 BR, Fully Loaded
As New York Housing Cools, Sales Gimmicks Heat Up

By David Segal
Washington Post Staff Writer
Wednesday, November 1, 2006

NEW YORK -- For $3 million, you can own a two-bedroom apartment at 255 Hudson St., a boxy building of blue-tinted glass at the southern end of SoHo. The money will buy you architectural touches that include "the warmth of textured concrete," as a brochure puts it, not to mention a killer view of the twice-a-day traffic snarl at the entrance to the Holland Tunnel.

What you don't get, unfortunately, is parking. So earlier this year, the developers of 255 Hudson cut a deal with an outfit called the Manhattan Classic Car Club, a lending library of sorts where, for a rather hefty sum, members can borrow any of a fleet of luxury vehicles including a Rolls-Royce Corniche. As it happens, the club is right across the street from 255 Hudson, allowing the project's overlord to turn what by any account would seem like a liability -- there is nowhere for your car -- into an asset.

After years of soaring prices, the unstoppable New York real estate market has either taken a breather or a truncheon to the skull, which will send it staggering soon enough. Already, apartments are lingering for weeks on the market, and for the first time in years, sellers are cutting prices.

So marketers of super-pricey buildings in Manhattan are engaged in a sort of high-end amenities arms race, where extravagance and gimmickry are the weapons of choice. It's a bit like those banks that used to lure new customers with toasters -- except much, much crasser.

The alliance of 255 Hudson and the car club, for instance, was celebrated at a cocktail party in the club's showroom/garage months ago, with a couple of women hired to mingle and grin wearing little more than pasties and body paint meant to evoke racing stripes. The words "Condo included. Girl Not Included" were painted on their backs.

If this is the smell of developer desperation, New York is about to inhale a lot of it.

"I count 40-plus construction projects in my neighborhood alone," says Nouriel Roubini, a professor of economics at New York University's Stern School of Business who lives in Tribeca. "There's going to be a huge glut in six months here in New York, well above the national average. And unless you see a huge increase in hiring in the financial industry -- and that is not going to happen -- you have to wonder, who is going to buy all these units?"

One apparent answer: fans of Jade Jagger. Mick's daughter, a designer and pioneer of something called "pod living," created the combination kitchen-bathroom modules that sit in the center of the apartments on sale at Jade, a building in Chelsea. To the uninitiated, the pods look like something from the motor home of the future. But the owners calls them "jewel-like lacquered boxes that seem to float in each residence."

One-bedrooms start at $945,000.

Basically, a decent gym and a whirlpool won't cut it any more. Residents at 20 Pine in the Financial District can sweat out the day's stress in a Turkish sauna in the building's fitness center, or drive and putt with an 18-hole golf simulator, or just wallow in the building's public spaces, designed by Giorgio Armani. Those on the 25th floor and above have access to a personal concierge who would be happy to book your travel plans or buy you an English bulldog in an afternoon, if that's what you want.

One-bedrooms start at $960,000.

"It's a lifestyle package," says Michael Shvo, a "real estate force to be reckoned with," as it says on the Web site of his eponymous company, which conceptualizes and markets luxury condos. "The market today has become a smart market, which means the buyer today has options. He doesn't have to eat what you put on his plate. Product that has an advantage is product you can't buy from your next-door neighbor. You can't buy an Armani Casa residence from anyone else. You have to buy it from Shvo."

If you'd rather not buy it from Shvo, perhaps you would consider Miraval Living, a new offering on the Upper East Side. The developers here have allied with a New Agey spa called Miraval near Tucson, and they're attempting to import the resort's regimen of tranquillity and fitness to Manhattan. "What if you simply let go?" asks the project's Web site.

First, simply let go of a couple mil. Then, you have an apartment plus access to a workout area with a Pilates studio, outdoor yoga garden and 20-foot climbing wall as well as an arts studio and a spa where, at additional cost, you can get a "blue mint foot repair" or "desert rain scrub" or something called "Ayurvedic herbal body treatment." A team of experts on nutrition and exercise is available, too.

As an added bonus, life at Miraval is guilt-free because the complex has been built to eco-fabulous specifications. The floors are made of "sustainable American black walnut." There's a special filtration system in the pool, to eliminate chlorine vapors, and the paint and carpets are free of unhealthy stuff that you didn't even know existed. The "platform gardens" have been designed to absorb rain, "significantly reducing sediment runoff," as it says in promotional material.

A spokeswoman for Miraval declined to be interviewed.

Where is this going? "Smart condos," says Manhattan real estate broker Christopher Mathieson, with computerized control panels that allow owners to tinker with their apartment from anywhere in the world.

"So you can say, 'Turn on my air conditioning, I want my shades up three-quarters of the way, I want the football game on mute and my favorite CD playing when I get home."

Like nearly every real estate pro in this city, Mathieson sounds optimistic about the future. To him, the amenities race isn't a sign of flop sweat, but a natural top-that progression brought out by a competitive market.

Roubini, the economics professor, thinks any forecast that doesn't include the word "bubble" is pure fantasy. To him, amenities and the array of deals now being cut around the country -- to cover closing costs, for instance -- are just incentives, and ones that generate better publicity than, say, cutting prices.

"Most of these deals are worth about 5 to 8 percent of the value of the property," Roubini says. If your property falls 10 percent for three years in a row, as the professor predicts will happen in New York City, that's a pretty lousy deal.

Of course 5 percent off is a whopping discount compared with what the residents of 255 Hudson are getting. Under the Manhattan Classic Car Club's elaborate cash-for-drive-time system, 255ers can burn through their highly limited membership in under a week.