Manhattan’s luxury home buyers are paying premiums to live in buildings designed by the world’s top architects.
Over the past decade, buyers have spent 24.5% more on average to live in developments that Pritzker Prize winners designed than those by non-laureates, according to a Mansion Global analysis of sales at Manhattan’s top developments.
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The sales data, provided to Mansion Global by real estate consultants CityRealty, covered every transaction in the past 10 years for 50 of Manhattan’s most expensive condominiums. Of those, 17 were by Pritzker winners and 33 by architects who haven’t won the prize, though many are still well known.
The analysis showed that buyers paid an average $3,238 per square foot in Pritzker-designed buildings, compared to $2,599 per square foot in comparable buildings by non-laureates.
Buildings by star architects pretty consistently outperform the overall luxury market, said Gabby Warshawer, director of research at CityRealty, which compiles a separate "Starchitect Condo" index that covers 37 buildings by notable designers.
That index is currently tracking above all 28 of the data firm’s various market indices.
"It really shows that there’s a premium that buyers are willing to pay for units in buildings by starchitects," Ms. Warshawer said.
Developers Turn to Starchitects for More Cache
The Pritzker Architecture Prize is considered the field’s highest honor, akin to a Nobel Prize, and has been awarded annually since 1979 to one architect whose work demonstrates "consistent and significant contributions to humanity" and "the art of architecture."
More developers are turning to these preeminent architects to bring their projects cachet among discerning buyers, who at the moment are spoiled for options in Manhattan’s crowded luxury market.
"Developers are in an arms race to check off boxes" and deliver something distinctive, said Erin Boisson Aries, a New York City broker with Christie’s International Real Estate.
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"It is no longer about amenities in the sense of gyms and pools, saunas and steam rooms, it’s about architecture. It’s about the concept, about how one wants to live," she added.
Indeed, west Chelsea, in particular, has become an epicenter for architecturally significant buildings, including the new Whitney Museum of American Art by Renzo Piano and Frank Gehry’s IAC Interactive Headquarters. A wave of Pritzker-designed condominiums is also transforming the skyline there, including 520 West 28th St. by the late Iraqi-British architect Zaha Hadid, the first woman awarded a Pritzker; 152 Elizabeth St. by Japanese laureate Tadao Ando; and 100 Eleventh Avenue by Pritzker-winner Jean Nouvel.
Not every building is a guaranteed success just because it has a world-class architect behind it, especially if more attention is given to the facade than the homes people are actually buying, Ms. Boisson Aries noted.
"There are examples of buildings where a lot of thought went into the facade but the architect did not really touch on the way people wanted to live," she said.
She highlighted the 19-story condo at 551 West 21st St. by Foster + Partners (the firm of Pritzker-winner Sir Norman Foster) as an example of the well-executed design. The team designed the Chelsea building from the inside out, focusing on the layout of the units first and later draping a facade over the building, she explained.
Sales at the building have averaged $2,839 per square foot in the past 12 months, nearly 50% higher than the neighborhood average of $1,930, according to CityRealty data.
The Potential Pay Off
Ultimately, buyers are "paying a premium for the branding," said property appraiser Jonathan Miller, president of Miller Samuel, though he warned of the pitfalls of tying a building’s identity to the reputation of a single architect.
For instance, two major designers, Peter Marino and Pritzker-winning Richard Meier, have fallen from grace following accusations of alleged sexual misconduct.
It would be "somewhat passe in this moment," to tie their brands to the various buildings they created, Mr. Miller said.
Starchitect-designed condos can payoff in the long-run, however, for architects whose style and image endure, according to Mansion Global’s analysis.
The most expensive condo building in New York City remains 15 Central Park West, by Pritzker-winning Robert A.M. Stern, even a decade after it was built. And developers have had Mr. Stern’s firm replicate his classic limestone-clad towers from the Upper East Side to Tribeca.
Last month, musician Sting sold a duplex penthouse at 15 Central Park West for $50 million—nearly double the $27 million he paid in 2008. His profit wasn’t all that unusual, as the average sales price at the building, at $6,543 per square foot, has more than doubled since it opened in 2008.
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Meanwhile, prices at a neighboring celebrity-magnet, the Time Warner Center, are roughly the same as they were a decade ago, around $4,500 per square foot, according to Mansion Global’s analysis
Another example of Pritzker price appreciation is 40 Bond St., an industrial-looking SoHo condo designed by Pritzker laureate Herzog & de Meuron, headed up by Jacques Herzog and Pierre de Meuron. The most recent transactions in the building closed for around $2,900 per square foot, a more than 20% increase from a decade ago. One mystery seller from London offloaded two apartments in the building last year for a combined $11.3 million, $3.6 million more than the owner bought them for in 2009 and 2011, records show.
Scarcity is likely to keep pushing values at notably designed buildings up in the long-run, Mr. Miller said.
"They are unusual in terms of their availability," he added, "and that sustains value."