Living large: The market for super luxury homes

As seen on CBSNews:

The number of billionaires is expected to increase in the next decade – and so are market prices for ultra-high-end residences. Anthony Mason reports:

When the Woolworth skyscraper opened in lower Manhattan just over a century ago, it was the tallest building in the world.

Now, the Neo-Gothic tower Frank Woolworth built as a temple to the five-and-dime is about to become condos for the “one percent.”

“What we intend to do is to make these into 34 residential, really magnificent condominiums,” said Ken Horn, president of Alchemy Properties, which is developing the top 30 floors.

“Every single unit in the Woolworth Building will have remarkable views of Manhattan. And there aren’t many properties in New York where the view is almost framed by something as spectacular as the terra cotta we have here.”

“What does the luxury customer who will buy in a building like this want?” asked Mason.

“The best kitchen you can imagine,” said Horn. “The most spectacular bathrooms. They’re gonna be spectacular pieces of art.”

The interiors of the Woolworth condominiums are being designed by Thierry Despont, who’s also working on the Ritz Hotel in Paris.

“Do you think it’s important for your potential buyers that you have an interior designer?” asked Mason.

“Yes. Many of our buyers are going to know who Thierry is,” Horn said.

So, Mason asked, cutting to the chase: “What is an apartment in this building gonna cost me?”

“We haven’t quite determined that yet,” said Horn.

What is clear is that the ultra-luxury market is booming, and the billionaires shopping for trophy apartments want brand name architects and designers.

A Russian billionaire paid $88 million for a penthouse overlooking Central Park, in a building designed by Robert A.M. Stern.

The owner of the NBA’s Houston Rockets reportedly paid $42 million for the penthouse of another Stern building overlooking Gramercy Park.

The trend began a decade ago, when apartments in two towers on New York’s Perry Street were snapped up by buyers like Calvin Klein and Martha Stewart.

“When Perry Street was sold, your name was kind of on the marquee,” said Mason.

“That’s right, for better or worse,” laughed Pritzker Prize-winning architect Richard Meier. He is now working on a new high-end project on the ocean in Miami Beach.

The hotel/apartment complex is called the Surf Club:

“The top floor penthouse apartments are two floors,” said Meier. “And then you come up to the roof, and each of the penthouses has a small little cabana and a swimming pool. It also has an open space, which gives light to the floor below.”

It even has a personal elevator. “Well, you don’t want to have to walk up,” said Meier.

The price? $35 million.

“There’s a certain branding that goes into it,” said Meier. “Sometimes the developer asks people if they want to come to the office so I can explain to them what it is they’re getting.”

“It’s a little bit like meeting the artist of the paintings,” said Mason.

“Yes, that’s right, exactly” laughed Meier.

His firm is also working on luxury apartments in Tel Aviv, Taiwan, and Bogota, Colombia.

But when asked how in demand he is for these kinds of projects, Meier laughed, “Oh, not enough!”

The number of billionaires is expected to rise 38 percent in the next decade.

And what is that doing to prices? “It’s moving them up,” said Horn of Alchemy Properties. “It’s moving them up, because the competition for the better units is fierce.”

What will that mean for the apartment at the pinnacle of the Woolworth Tower? Horn says the copper-domed cupola will become a five-story penthouse.

“Almost a castle in the sky,” he said. “We can’t think of anything in the world that will be similar to that.”

Luxury real estate was expected to rebound after the recession. But could anyone have predicted four years ago that there’d be relatively no ceiling on prices in New York? Horn says no.

“We’re talking about $40, $50, $60 million apartments,” said Mason.

“I think that’s true,” said Horn. “Of course, when we introduce our pinnacle, probably no ceiling on that one.”

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