Coke Anne and Jarvis Wilcox wanted to sell their East Hampton inn, the Maidstone Arms, all along. During the summer season, the famed, 1850’s inn is fully booked, but the winter dry spell sends year-round occupancy rates plunging to around 40 percent.
When no acceptable offers came in, the Wilcoxes decided to begin what was ultimately an “arduous” and unfruitful condo-conversion process. Mrs. Wilcox, a trained architect and mother of three grown children, was planning to convert Maidstone’s 19 rooms and three cottages into 12 separate condos and keep one four-bedroom unit for the family.
“We had interest from older folks who can’t drive and want to walk to the village or the beach, and bachelors who just want a pad to crash in and don’t want to take care of everything,” she said.
She first submitted plans to the Village Architecture Review Board in February 2007, igniting a firestorm that culminated about a year later in the passage of a new law making it nearly impossible for any inn or hotel owners in the Village of East Hampton, a historic district that pre-dates zoning, to convert their properties to residential usage.
“The word condominium conjures up this vision of a tall, brick high-rise,” Mrs. Wilcox said of the community’s opposition to the plan. “They are afraid of change and couldn’t wrap their head around the idea that we were just combining some rooms. We were not doing any demolition.”
Now the Maidstone Arms is back on the market, listed for $8.75 million by Sotheby’s. But demand for hassle-free summer apartments from baby boomers in search of simplicity and life-time city renters intimidated by homeownership persists.
Despite the barriers to entry, this summer, East end developers are picking up where the Wilcoxes involuntarily left off with condo conversion projects and new buildings in the pipeline from Westhampton to Montauk.
Following in the footsteps of the Stanhope and the Plaza in Manhattan, Hamptons hoteliers are realizing that the yield on condos is much higher, said Kevin Sneddon, the CEO of commercial brokerage Project Real Estate. With a limited amount of land left in the Hamptons and no end in sight for demand, he expects condos to be “the next wave of development” there.
“Instead of people spending $5 million on a house, more people are looking for a townhouse or cluster housing for $1.5 million, where you get five-star living without the maintenance,” he said.
The impending condo boom is good news for homebuyers looking for a no-strings-attached, high-end summer pied a terre, but possibly less so for weekend visitors in the market for a jaunt out of the city.
A week before Memorial Day, three Southampton inns—about 40 percent of the town’s hotel capacity—went on the market, The New York Post reported, and may be converted for residential uses.
Distinctive Ventures is in the process of converting the 50-year-old Panoramic View Hotel in Montauk into 76 high-end condos and transforming the Harborside Hotel in Westhampton into 10, 4,000-square-foot townhouse units that should be ready for occupancy in July, said spokesman Adam Manson.
Half of the Westhampton units have been sold for $2.85 million and a sixth one just went into contract.
In Montauk, Distinctive has sold about 30 percent of the duplex and triplex units, which start at $1.75 million for a one-bedroom to $5 million for five-bedroom. “We have young couples who are afraid of buying a house,” Mr. Manson said. “They are used to living in condos in the city, so they’re comfortable with the condo concept and would rather allow a professional company to deal with their home. We also have older couples who have owned homes for a long time and got tired of taking care of them.”
In Westhampton a couple sold their home directly across from the Baypoint Yacht Club and bought a condo, Mr. Manson said, and another couple in Montauk will move just a mile away from their home into a new Panoramic Villa.
Condos might also appeal to the disaffected city-dwellers who don’t realize they are not cut out for homeownership until it is too late, said Cee Scott Brown, a senior vice president at Corcoran in Sag Harbor who has worked in the Hamptons for 15 years.
“Sometimes, I work with people who come from the city and are used to apartments who don’t have a clue about what it’s like to own a home,” he said. “They are used to apartments so they don’t know how furnaces, hot
Mr. Brown has had a few “high-profile clients” who “toughed it out for a year or two and then decided… to move back to the hotel they live in in the city.”
Sag Harbor is also a preferred stop on the international yacht circuit for recreational sailors. After hopping between ports as far-flung as Monte Carlo and St. Barth’s during the year, many Europeans with currency to burn arrive in Long Island looking for a high-end, low-maintenance crash pad on terra firma, Mr. Brown said.
Cape Advisors was hoping to attract such buyers to the 48 lofts and 17 townhouses planned for the former Bulova Watchcase Factory. Cape acquired the property for $16 million in 2006, according to their Web site, and finally won approval from the community board after promising “to give the town a chunk of money” in lieu of earmarking a portion of condo units for affordable housing, said Simon Harrison, the owner of an eponymous brokerage firm.
After cleaning up the site and 30 meetings with the community, the project is now on hold indefinitely.
“The rumor is that they had some financing issues, which can mean anything from it doesn’t make sense to build right now so let’s table the project to the bank who was going to lend to us doesn’t have any money,” Mr. Harrison said. “I’d say it’s as done as Microsoft and Yahoo.”
Sag Harbor already has two condo complexes—the 31-unit Sag Harbor Villas and the 36-unit Harbor Close—which rarely come on the market, if that’s any indicator of demand. Mr. Harrison sold the 14-unit, West
Other condos planned for Sag Harbor have been sent back to the drawing board because they did not fit with the character of the village. An architect rejected one on the grounds that it “looked like a hospital,” Mr. Harrison recalled.
But condos are coming to the not-so-sleepy, former whaling village nonetheless. A 19-unit complex at 21 West
That being said, most potential homeowners do not come to the Hamptons, let alone the comparatively quaint town of Sag Harbor, to hunt for an apartment.
Most people eyeing property there envision themselves in one of its historic, white-picket-fence-bound cottages or a renovated captain’s house, Mr. Harrison said.
“There is demand for all sorts of property here. I don’t think a condo is their first choice, but in the absence of other options they look," he said. "If you have a town home on West 10th Street and a ski chalet or a home in Florida it makes sense to have a condo that’s easy to take care of during the off-season.”