When discussing amenities in New York City luxury condos and rentals, popular assumptions dominate the conversation.
Similarly, decision-making on the developer side is often rooted in perceived trends, anecdotal information, broker opinions, and speculation. However, very few firms, if any, have analyzed the correlation between amenities and price per square foot. In our most recent study, CHARNEY thoroughly investigates what amenities and features actually drive higher rents.
Before we get into the results, it’s important to clarify the parameters of the study. We compiled data from hundreds of buildings across prime locations in Brooklyn, Queens, and parts of Manhattan, specifically in relation to amenities and price per square foot, and controlled for as many variables as possible to ensure an accurate analysis. Our findings differed across neighborhoods, each with unique characteristics, providing us with precise insights into what amenities are most desired by market type.
For the purpose of this summary, we will focus on Downtown Brooklyn. We studied 16 new development buildings (built in 2017 or later) and measured results for each amenity. Additionally, if an amenity was particularly larger, nicer, or unique relative to the average, we included it in a separate category (marked by ‘^2’ in the chart below).
To highlight, buildings with a spa/sauna exhibited the highest correlation to PPSF. The data also indicated that having a roof deck is an important driver of rent prices, followed by especially nice fitness centers (gym^2), unique rec space such as high end bar/lounges, basketball courts, rock climbing, etc, and finally pools. The worst performing amenity according to our findings was rec space for pets - sorry pet lovers but it seems these spaces are better utilized for humans!
In a post-COVID climate, it’s not surprising to see health and wellness amenities thrive as well as outdoor focused amenities such as roof decks. Our biggest takeaway, however, which comes from a more thorough analysis across multiple markets, is the value of being unique. I.E., if you build your amenities the same as every other building, you will forever be competing on price and floor plans alone. If you build what others don’t have, you create leverage and maneuver the competitive landscape in your favor.
To further drive home that point, let’s look at some of the top rent-driving amenities. Starting with our number one: only 2 buildings out of the 16 comp set feature a spa/sauna. Just 3 contain “especially nice fitness centers” and, lastly, pools are represented in merely 4 out of the 16.
With that in mind, our single piece of advice to developers when it comes to amenities is to build different, create leverage opportunities, and change the landscape from competing against comps on price to establishing a unique market with higher potential for maximum returns.