Developers are betting big on residential skyscrapers, building them at record breaking heights and selling them at record prices the Wall Street Journal reported. Very-tall residential high-rises began growing in popularity 10 to 15 years ago during the building boom, when dozens of new high-rise condominiums rose in cities around the United States as many middle and upper class residents preferred to move back into urban cores. However, the recent economic downturn and credit crisis also took a toll on the development of residential high rises which resulted in many empty buildings, while construction ground to a halt.
Recently, prices have shown signs of stabilizing on the high end, as an influx of foreign buyers has absorbed empty inventory in many cities around the country. As building big takes off again, it is projected that this year the majority of the world's tallest buildings will be residential spaces and not office towers. Given the economic climate and financing for new projects still tight, many developers are focusing strictly on high-end residential, where demand is strongest and profit margins are largest.
At the same time, a number of record-breaking sales over the past year have led some to believe that the demand for trophy properties is growing. In February, a penthouse on Central Park West, in New York sold for $88 million, while a 89th and 90th floor duplex penthouse at One57, one of the newer high rise developments in New York recently sold for $90 million. Another unit on the 78th and 79th floors, known as the Winter Garden, is in contract for an undisclosed sum; its asking price was $115 million.
In Dallas, Texas, The Dallas's Museum Tower will be the city's second tallest residential building at 42 stories, when it opens later this year, while in Florida the upcoming 57 story, Porsche Design Tower Miami could be the tallest residential building in Sunny Isles, Florida with condos priced between $ 4 million to $20 million.
It is reported that this trend is not only being seen in the United States but worldwide. Soon to open in Tel Aviv is Meier-on-Rothschild, a 37-story building that will become the city's tallest residence, designed by architect Richard Meier. A two-story apartment in the Shard, London's tallest building that's expected to be mostly completed later this year, could hit the market for an estimated $80 million. Princess Tower in Dubai recently became the world's tallest residential building with 763 apartments going up 107 stories, according to the Council on Tall Buildings.
Many of these new residential skyscrapers are being marketed worldwide, aiming to attract wealthy buyers from around the world. At least 10 units in One57, in New York have been bought by Chinese nationals; for foreign buyers, buying into a newly constructed building in New York is easier than getting approval from cooperative or condominium boards in already existing developments. When Trump International Hotel & Tower Toronto in Canada was completed earlier this year, it is estimated that 60% of buyers were from outside the country.
These magnificent skyscrapers popping up in cities around the world, are a source of pride for many cities as they try to compete for the crown of world’s tallest building or world’s most skyscrapers; yet they still remain out of reach for most ordinary residents. As the prospects of the world increasingly shrinking and countries continuing to merge and share ideas and resources, one can’t help but wonder if this is what a future divide in social-economic class will look like in a global village.
Michael Hobbs, PahRoo Appraisal & Consultancy
Twitter @PahRoo
Comments (0)Subscribe to CommentsComment