NEW YORK CITY—While many other real estate moguls have been focused on the high end of the market, and building as tall as possible to attract buyers from the luxury segment, HFZ Capital Group chairman and founder Ziel Feldman has taken a different tack.
“We saw a market that wasn't being addressed—its what we're calling affordable luxury; apartments that sell for less than $3 to $4 million,” asserted Feldman in a talk before the Young Men's/Young Women's Real Estate Association last week in Midtown.
“So we bought four buildings from Westbrook Partners,” he continued, and HFZ plans to redevelop the 750-unit portfolio—which it purchased in 2013 for $600 million—in a manner suited to enticing that mid-scale buyer.
“Construction costs have soared and are close to $1,200 a foot for a high rise. So we think we can get them down by $300 to $400 [by building less]; we're hoping to re-build for $700 to $900 per square foot,” he said.
“The project, at 76 11th Ave., spans two buildings and one might be a hotel but it could even be an office building with the right buyer. Both buildings will face the water.”
Ultimately, asserted Feldman, prospective tenants' budget is the top factor in conversion. “More important than the per square foot price is the total dollars people are going spend, they're very keen on that. We hope to make units cost $4 to $5 million and create what will be the place to be.”
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Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
