While new construction attracts many buyers in Manhattan there are many pre-war buildings that have received gut renovations in highly coveted neighborhoods that are also receiving a lot of attention.
Which one gives you better value? There is no reason for a high quality gut renovated prewar building not to compete with new construction. In many cases new buildings win over the gut renovated pre-war buildings.
One would think that it would be a faster turn -around for a developer to get a pre-existing gut renovated building to market. However, in reality there are often conditions that developers can’t anticipate that make gut renovations difficult.
New construction provides the developer the freedom to build a high quality , modern building that is a great fit for the targeted buyer.
When a developer takes on an old prewar building there can be a lot of surprises from historical land marks protection that may prevent him from changing the exterior of the building or type of windows. Also the developer needs to work with the pre-existing template and some layouts could end up being a bit awkward due to pre-existing structure. Also introducing new HVAC state of the art heating and cooling systems can present a challenge because they need to fit within the confines of the existing space. However many pre-war buildings have received gut renovations and have turned out to be the best of both worlds offering old world charm with the latest state of the art amenities.
A restoration may end up being much more expensive than a ground up building. Unknown factors can tack on additional costs. You can budget for the known but not the unknown.
One way developers are attracting buyers who want the characteristic style of pre-war buildings and all the 5 star amenities of new buildings is to construct buildings from the ground up that resemble the classic styles of Emory Roth and Rosario Candela by copying the pre-war exterior designs. Examples of this kind of construction are 15 CPW with its historical look. 15 CPW was one of the most successful new construction sell outs in New York history. Another present example is 443 Greenwich Street that is turning out to be a big success as well even in this softer luxury market.
Buyers and developers are drawn more to new development because it is less risk. Investors also find it better to purchase in new developments. Renters more often desire the new.
The good news is that whether you choose new development or a gut renovated beautiful pre-war building that your value your value will grow about the same. That is if you choose a building in a great location with great design and high-quality construction. These factors will increase the value of property regardless of type.