Studios are the only type of Manhattan apartment that people always talk about in stark economic terms. Other homes here get gussied up with rosy adjectives and the history that happened within, but studios get typecast: the starter apartment, the glorified room you buy just to stop renting, the place you fall into when times turn tough, etc.
It seems the reality has caught up to this perception.
Although studios have never claimed a hefty chunk of the Manhattan housing market, developers are even more now shying away from creating new ones. Of the 3,674 units in a sampling of 20 newer Manhattan condo developments, only 325—or just under 9 percent—were studios.
The sample involved condos where in the past two years construction was finished or had gotten under way, including the Ariel West and East at 100th Street and Broadway developed by Gary Barnett’s Extell (zero studios out of 138 units); 20 Pine The Collection in the Financial District, marketed by Michael Shvo (zero out of 410 units); and the Related Companies’ The Brompton at 86th Street and Third Avenue (38 studios out of 204 units). The sample didn’t include new co-ops, as such things are now rare in Manhattan.
“Very rarely do you see a developer building studios these days,” said Scott Aaron, a developer of the 100 West 18th Street condo, which has no studios among its 43 units.
Kent Swig is turning the mammoth Sheffield rental building on West 57th Street into luxury condos. It had 845 rentals when he and his partners bought it in 2005. About 40 percent of those were studios, Mr. Swig said. Not anymore.
“We have reduced the number of studios dramatically that we had,” he said. “We’re at 570 units total at this point, and the number of studios we probably have is maybe 25 percent. So, we’ve cut them by half.”
If developers aren’t slashing studios during conversions, they’re ensuring studios make up a small slice of the condos in ground-up construction.
David Perry is the sales director for The Clarett Group’s 200 West End Avenue. “We had a building with 193 units,” Mr. Perry said. “So, having 20 studios is not that big a deal.” About half those studios, he said, have sold at about $1,200 a square foot since sales started in January, slightly above the Manhattan average.
And if there are studios at all in a brand-new building, they’re not necessarily for buyers. At 15 Central Park West, an ultra-luxury building developed by the Zeckendorfs, all 21 studios are for the help.
“They are strictly for staff quarters or office space,” according to an e-mail from a 15 Central Park West spokesperson. “As you know, the property is known for its expansive, gracious apartments.”
And that’s just it. Size, more so than in perhaps any other American city, is a premium in New York housing. The second bedroom in Manhattan is like the backyard pool in other towns—to get it is to not merely add real estate, but to ascend to an instantly recognizable strata worthy of envy.
So if they must plunge into the sales market, buyers tend to go for broke size-wise. One- and two-bedrooms have traditionally comprised the bulk of Manhattan home inventory and its sales. And developers, of course, respond to this market demand by creating more.
“If people can,” Mr. Swig said, “they tend to buy one-bedrooms or larger because they tend to hold their values a little bit more. Studios tend to be the first to soften in bad markets, and when the market comes back they tend to be [among] the latter part to come back.”
Indeed, in any market, studios make up a paltry percentage of new-development and existing-home sales. This is due largely to the greater numbers of larger apartments, but also due to the buyer reticence expressed by Mr. Swig. Simply put: If they can help it, Manhattan buyers would like to aim for the envy and not settle for that so-called starter.
In the latest full quarter of 2007, studios represented just under 17 percent of all condo and co-op sales, according to appraisal firm Miller Samuel. The peak market share for studios in the past three and half years came in the third quarter of 2004, with over 18 percent. By contrast, two-bedrooms that quarter accounted for 38 percent, and one-bedrooms 35 percent; those percentages have basically held steady over the past several years, with studios joining larger apartments (three-bedrooms and way up) on the whispering edges of inventory and sales.
And on these edges, studios play their role reliably, however beyond the spotlight.
“Usually,” said Mr. Perry of The Clarett Group, “when you build a new development, as I see it, the studio buyer who’s going to be using the space isn’t looking that far into the future. Studios are a start for a new buyer.”