The convergent forces that have shaped this sudden juncture in Manhattan’s architectural development were examined in “Sky High and the Logic of Luxury,” an illuminating exhibition held at the Skyscraper Museum in New York just as these remarkable mutants were beginning to drastically alter the cityscape. If anything, this prescient overview—curated by Carol Willis, founding director of the museum and author of Form Follows Finance: Skyscrapers and Skylines in New York and Chicago1—came a bit too prematurely to fully benefit from the dawning public awareness that a singular departure was upon us. As Willis wrote for the exhibition’s wall texts:
Beginning around 2012, sales of condos in ultra-luxury buildings reached $8,000–$10,000 per sq.ft. and in some cases even higher. These records have set a new standard that developers use to raise the budget for project expenses. The “logic of luxury” is the idea that high development costs for a project are good business strategy if they can produce extraordinary profits….
Expensive land and air rights, “starchitect” design fees, special engineering and construction, extra-high ceilings, and abundant amenities all factor in a simple math that stratospheric sale prices justify….
Sophisticated engineering and advances in material strengths have made these spindles possible, but it is the excited market for premium Manhattan real estate that is driving both heights and prices skyward. Predicated on Central Park views and other exceptional vistas, these aeries appeal to a distinct clientele to whom developers direct their marketing psychology.
Happily, Willis plans to write a book that will expand on this exhibition’s findings, but she is not the only analyst to draw direct connections between the sudden emergence of this construction binge and the workings of high finance.
Today, more New York real estate than ever is held by absentee owners, and in at least five large Manhattan condominiums most units are not primary residences. Although many such pieds-à-terre are doubtless used by Americans, they are most attractive to foreign nationals eager to secure a foothold in the US in the event of trouble in their homelands. International capital flight has thus been the decisive impetus in this booming sector of the New York property market, as people from all over the world seek a politically stable and financially secure haven for themselves and their assets.
In February, The New York Times published “Towers of Secrecy,” a five-part investigative series by Louise Story and Stephanie Saul that focused on condominium buyers from four countries (India, Malaysia, Mexico, and Russia) and revealed how clandestine ownership of apartments in the city’s most expensive buildings is often abetted through shell companies, to say nothing of a veritable industry of New York City facilitators. For example, the reporters found that a majority of apartments in a half-dozen luxury condos are nominally owned through entities that are often obscure, including One57 (77 percent), Time Warner Center (64 percent), and 15 Central Park West (58 percent). And 58 percent of New York City condominiums are paid for entirely in cash, which makes buyers more untraceable because no mortgage documentation is involved. As Story and Saul write:
An entire chain of people involved in high-end real estate sales—lawyers, accountants, title brokers, escrow agents, real estate agents, condo boards and building workers—often operate with blinders on. As Rudy Tauscher, a former manager of condos at Time Warner, said: “The building doesn’t know where the money is coming from. We’re not interested.”
- 1. Princeton Architectural Press, 1995