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November 6, 2009
If the Gehry premium is 15%, why have estimates for AY condos (sans Gehry) gone up so much rather than been reduced?
Atlantic Yards Report
Norman Oder catches Forest City in a conundrum, thanks (inadvertently, and no doubt, unintentionally) to Professor Stuckey.
A Real Deal article, headlined Forest City goes one for two with Gehry: As Atlantic Yards stalls, Beekman Tower skyscraper sprouts, quotes a former Forest City Ratner official as saying, not unreasonably, that residences in buildings designed by starchitect Frank Gehry should command a premium.
..."I think people will pay extra to live in this building," Stuckey said, estimating the premium at 15 percent.
That's plausible. And that also means that Forest City Ratner should be moderating, rather than increasing, the per square foot (psf) estimates it has been making for Atlantic Yards.
Fuzzy math
In 2006, at the top of the market, the developer's working estimate for condos was $850 psf. Now, according to a report KPMG prepared for the Empire State Development Corporation (ESDC), Forest City Ratner is counting on sales prices of $1217/sf in 2015 up to $1369/sf in 2019.
Posted by eric at November 6, 2009 7:18 PM