By Jessica Fiur, Senior Editor
New York—When it comes to marketing multifamily communities, the term “luxury” is thrown around an awful lot. But what does it mean, really? Bigger? Better? Newer? The term is certainly relative, especially in the world of Manhattan real estate, where apartments and condos could cost millions, and still not be considered “luxury.”
The recent “Luxury Living—The Future of the Five-Star Market” panel discussion at the MiMa apartment building in New York, hosted by Related Companies and presented by the Real Estate Board of New York (REBNY), discussed what luxury means going forward for Manhattan multifamily communities. The panel, moderated by Amir Korangy, founder, The Real Deal, included speakers Leonard Steinberg, president, Urban Compass; Jeffrey Brodsky, president, Related Management; Marc Murphy, chef and owner, Benchmarc Restaurants (Landmarc and Ditch Plains) and Benchmarc Events; and Andrew Goldberg, partner, Strategic Hospitality Group/Tao.
The speakers first tackled the problem of defining luxury, a term that could mean different—and multiple—things to different people. According to Steinberg, it could mean design, wellness, or a sense of community. “It’s personal and it’s aspirational,” he said.
Surprisingly, though, luxury in real estate doesn’t necessarily have to be defined by exclusivity. “Luxury is accessibility,” Murphy said. “I think people who want luxury want something they can do every day. Even the people buying the $40 million apartment still might want a $40 dinner.”
And for Goldberg, luxury is the experience. “Luxury is the people. Take care of the people, and the money will follow,” he said.
There was one aspect that everyone on the panel agreed on, however. “There’s one luxury left,” Steinberg said, “and that’s time. That’s the only thing we all have in common and that’s what we’re all running out of.”
Because of this, luxury apartments will probably move toward making residents’ lives easier—providing ways to have a work/life balance (and making it easy to work from home) and making technology more accessible.
“Technology has to be seamless [in an apartment building],” Brodsky said. An example he provided was making it so someone can walk into a lobby and then an elevator and not lose a phone signal or have Wi-Fi interrupted.
Technology is also important for the brokers who are showing the apartments. “We have to combine high-tech with high-touch,” Steinberg said. “Today’s role of the broker is really to provide a great service and provide value. They have to combine tech with offering a service. If not, they’ll become extinct.”
The luxury multifamily market is also taking its cues from the hospitality industry. In fact, some new communities are looking to integrate high-end restaurants as amenities, though it hasn’t been an easy battle. For one thing, the average rents the restaurants would have to pay are prohibitive. Additionally, real estate investors have to figure out if it would be cost effective.
“People only invest in restaurants to get a reservation,” Murphy joked.
A way to make restaurants at apartments a reality would be to open the restaurant to everyone, not just residents.
“It’s nice when people can access [restaurants] from the building and the street,” Steinberg said. “When it’s so exclusive, it’s like a country club. And have you ever had really great food at a country club? ‘We eat here because that’s all there is.’ I love the concept of having food in your own building, but I can’t imagine an operator that would want it unless it has a door open on the street.”
An interesting shift in luxury is that now high-end developers are catering to families.
“There’s always going to be a need for family-sized apartments,” Steinberg said. “The schools and the amenities a city has for families are very important.”
According to Brodsky, in the last five years, his company has started designing space in the common areas of their buildings to accommodate strollers.
Of course, what’s considered luxury now might not be what’s considered luxury in 10, or even five years from now.
“Everything goes through trends, and everything goes through cycles,” Steinberg said. “We’re entering a strong phase of the economy, but things change from one minute to the next.”
Steinberg continued, “The speed of change that takes things down is reversed in how they recover.”