I just read an article in the New York Times that confirms domestic First Class on airlines is just a slightly bigger, wider version of the horrific Coach class airlines offer to fliers, regardless that they are spending triple or more for their seat. In fact, the perks for flying first class have shrunken more and more as each year goes by. I see the same trend happening in the new buildings coming to Manhattan.
It used to be that delivering a doorman with a nice lobby, a workout room/gym and a kitchen with a Sub Zero fridge, Viking oven and granite counters qualified as first class luxury real estate in New York: That has changed rather dramatically, and will change even further going forward. I am fortunate in that I see many of the plans for new buildings well before they come to market. And with many developers focusing their attention on the MEGALUXE market (a term we coined in Luxuryletter), the flying equivalent of the private jet commuter, a doorman and fancy kitchen are the expected basics. Now with a more educated and demanding buyer who has been seduced and spoiled internationally not only by very super-luxe residential buildings, but also some exceptional hotels, the bar has been raised even further.
The MEGALUXE building has to deliver on many levels. It has to develop a very prolific personality, with something exceptional about its entirety. Strong ceiling heights, views, solid windows, superior finishes throughout are expected. Beyond that, systems have to be discretely installed. In fact, everything has to be installed with a level of quality that New York is not accustomed to. If I hear a London-based or Beijing-based buyer say it one more time, I could lose my mind: quite frankly, they are appalled by the quality of craftsmanship in the majority of new buildings….APPALLED! Yes, this is not your first class cabin flyer……they are used to the customized cabin of a Gulfstream. Often their interior designers have designed the interiors of their jets as well as their homes, and they demand a consistency. Developers in Manhattan have not yet catered to this buyer properly: Candy & Candy of One Hyde Park have certainly done so, even though I find their taste level very Nouveau-BRIC-chic….if you know what I mean. One Fifty Seven, the new condominium/Park Hyatt hotel tower on 57th Street epitomizes New York’s version of this market.
A nice gym is not good enough: a gym has to cater to the hyper-demands of a client who has a personal trainer commissioned to deliver their subject with an Olympic athlete’s body. The gym has to adjust to the changing styles of workouts. Personally I cannot think of a high end client who wants to share their gym with hotel guests, although in some of these new buildings they will be forced to do so. Hotels have been exceptionally demanding on condominiums in the conveniences they deliver…..and the MEGA CLASS has become spoiled. Finding a balance between home and hotel will be tough, although maybe a good chunk of this new wealth from BRIC countries knows no other life.
I personally believe the MEGA CLASS will demand security and privacy more than ever, although the trend to wealthy-display-discretion appears to be fading.
This MEGA CLASS of building will set new pricing records everywhere, and unfortunately if it is not separated from the commercial/coach/business/first-class-traveller-style real estate, it will distort pricing across the board. For those not eager for this extreme of lifestyle, the savings will be large. It will be important for all to recognize the vast difference in these buildings and understand that their value will be driven mostly by scarcity. Just like domestic first class, take a closer look at that pillow: if it’s not significantly better than the pillow in coach…..