Toll Brothers is joining forces with Chinese developer Gemdale Properties and Investment to develop a 133-unit luxury condominium project in Manhattan’s Gramercy Park, according to The Real Deal.
The project was designed by the Office for Metropolitan Architecture, the architectural firm’s first residential tower in New York City, according to ArchDaily.
- The joint venture previously garnered a $237 million construction loan from a five-bank syndicate. It expects to generate $503.5 million from the units' sale, which would average $3.8 million apiece, The Real Deal reported.
The decision by Toll Brothers to partner with Gemdale comes as solid demand for luxury apartments and condominiums continues to catch the eye of foreign market players.
Developer GID recently partnered with Henley Holding Co., a subsidiary of the Abu Dhabi Investment Authority, on the luxury 1,132-unit Waterline Square on Manhattan's West Side, while Extell Development Co. teamed up with China-based backer SMI USA to construct the 1,550-foot-tall, $3 billion Central Park Tower in New York.
Meanwhile, demand at the top-tier of the luxury market may be cooling somewhat as developers focus on more moderately priced properties.
In a conference call to discuss its fourth-quarter earnings, Toll Brothers CEO Douglas Yearly said it’s City Living business unit is shifting its focus to the middle-luxury market in New York City, targeting price points between $2,000 and $2,500 per square foot on projects 150 units and less, which is a range where the Gramercy Park project roughly sits, according to The Real Deal. The company commenced deliveries on two high-end joint ventures in 2016: the Pierhouse at Brooklyn Bridge Park and Sutton, in Manhattan.
Yearley said City Living delivered 41% gross margins on $240 million of revenues from wholly-owned projects in the fiscal year 2016. For 2017, the company expects revenue growth of about 70% from the category at an average 37% gross margin.
For more housing news, sign up for our daily residential construction newsletter.