Predictions for the 2018 Luxury Market

By Keith Loria

Manhattan developer David Amirian, CEO and founder of The Amirian Group, has built a strong reputation in the real estate industry, overseeing the development of a myriad of properties, building them from the ground up, overseeing construction and ultimately converting largely undeveloped areas into revived neighborhoods. 

His firm focuses on projects that are unique in design and location, such as 316 East 3rd St., a ground-up rental project in the Lower East Side and 540 West 49th St., which broke the record for the highest price per square foot ever achieved in Hell’s Kitchen.

Currently, The Amirian Group is building The Twenty1, a 40,000-square-foot, nine-unit, boutique condominium on 21st Street in Chelsea and Thirteen East/West, a 26,000-square-foot project which spans over two mirror image six-story buildings on 13th Street in the East Village.

Amirian’s also built two schools for free in the Gramercy Park neighborhood and donates 10 percent of all profits to charity.

He recently discussed what he foresees for the 2018 market.

What are your predictions for 2018 about the luxury multifamily market?

Amirian: There are plenty of buyers in the luxury multifamily market and a majority of them are looking for a deal. Anything above the $10 million price point is going to be hard to sell going into 2018. The market the last quarter or two has become very competitive and there is plenty of supply/product out there right now—and not a lot of urgent buyers. Smart buyers know this and have seen the trend of developers lowering costs and offering increased incentives for brokers. Going into 2018, that is going to be the realism of all luxury product out there. Buyers will be savvy to this and it will be nearly impossible to sell residential units at/above the $10 million mark. The $3-5 million will be the sweet spot, at least at the beginning of the year.

What do you see as the trends to keep an eye on in the year ahead? What’s on your radar and why?


Amirian: The decreased pricing and higher incentives are the trend, and it’s the effects of this trend that will be interesting to watch. There are no longer comparatives that projects will use against each other—each project has to be unique in order to get a buyer’s attention and a contract signed.

What are the challenges impacting the luxury market in New York?

Amirian: Resale is phenomenal right now. Many properties are selling at ask and within one month of going onto market. New development is hurting just a little. Inventory is increasing, making this segment very tough. We’ve hit the top of the market and we are not seeing flattening across several sectors.

How would you characterize what we’re seeing with land sales and land trades in the city?

Amirian: The market is changing and has recently led to historical highs in land and construction prices. Land sales are now down 92 percent and there is no debt financing available and development costs are at $1,000 per square foot. The cost of capital is also increasing, while the number of lenders willing to issue construction loans is decreasing. However, high-end apartment sales in the city will always be tied to the performance of the market and its effect on liquidity for high-net-worth individuals seeking to purchase luxury apartments.

What do you feel is the most important thing that developers need to be aware of in today’s multifamily environment?

Amirian: Developers need to be very mindful about what they build and what their prices are. They need to understand all of the players and the entire market as a whole. Most importantly, they need to understand what it takes to get a deal done.