Copyright (c) 2012 The New York Times Company. Reprinted with Permission.
The 30-Minute Interview: Kelly Kennedy Mack
By Vivian Marino
June 12, 2012
Ms. Mack, 38, is the president of the Corcoran Sunshine Marketing Group, which specializes in the marketing, sales and planning of luxury residential developments. Its projects include the Laurel, the Rushmore and the Riverhouse condominiums.
Ms. Mack began her real estate career in 2002 as the vice president for new business development at the Sunshine Group, which merged with Corcoran Group Marketing in 2005. She was named president of Corcoran Sunshine in 2006.
Interview conducted and condensed by
Q. How is business?
A. Business is great. The market is very, very strong. In the overall market in the new-development sector, the average price per square foot is $1,400, which is consistent with pricing in 2007. It’s up about 5 percent year over year. But there are certain submarkets in the city trading at or above the peak, like the prime Midtown sector, which, on average, is trading at close to $5,000 a square foot. The downtown luxury market is trading at around $2,100 a square foot, which is really consistent for what it was at the peak.
The biggest issue today. which is actually keeping prices from growing even more, is the lack of inventory.
Q. Has this affected transaction volume?
A. Sales volume is actually unchanged across the market because of a lack of inventory. New-development inventory available year over year is down 44 percent. There’s only 2,800 new-development units on the market.
Q. Is there much in the pipeline?
A. Over the next three years — and we keep track of every single thing that’s going to be potentially in the pipeline — you’re looking at 1,500 units entering the market, on average.
Whereas, in 2007, you would see 8,000 new-development units enter the market in a given year. So we’re really working ourselves into an undersupplied condition.
Q. Are you seeing more people then buying off the floor plans?
A. This has been the biggest shift in what’s happening in new development; we started to see hints of that 12 to 18 months ago. We’re seeing this shift for a few reasons: the biggest one is scarcity of product; the second is just a return of confidence in the market; and when you look at how New York has performed over the past 20-plus years and compare that against alternative investments, it’s a strong return.
Q. Let’s talk about some of the coming developments.
A. We have $7.5 billion of new development coming to market between the fall and the next three to four years that Corcoran Sunshine is representing. It’s everything from large-scale projects like the St. Vincent site with the Rudins; 30 Park Place, which is the Four Seasons residential project downtown by Larry Silverstein that Robert A. M. Stern is designing; to smaller-scale projects like the Baccarat Hotel and Residences that Starwood Capital and Tribeca Associates is doing across from the MoMA, which will launch in the first quarter of next year.
Another exciting thing to watch is the relaunch of 56 Leonard in TriBeCa. It opened for sales at the end of 2008, then the market turned. The developers made a decision to wait until the market returned; we’re hoping to get that open as soon as possible.
Q. What’s the status of 30 Park Place?
A. Right now they’re actively working on securing their financing. My best guess is that it will probably come to market in about 18 months — within two years.
Q. How many projects are you working on now?
A. We’re actively representing 17 properties. The vast majority of the 17 are immediate occupancy.
Q. Nearly all the new developments seem aimed at the well-heeled buyer.
A. Yes. The vast majority of developments coming to market today are luxury developments. There’s such intense competition for buildable sites that it’s not affordable to build housing anymore that’s not really going to trade for luxury pricing. If you look at the kinds of trades that have been happening at the high end, it’s remarkable: the One57 penthouse for $90 million, Sandy Weill’s apartment for $88 million at 15 Central Park West.
Q. Many of these big sales involve rich foreigners. By how much has your foreign clientele increased?
A. Ten years ago I would say 10 to 15 percent of our buyers were international, whereas today they’re closer to 25 percent. The fastest-growing international buying demographic is coming from Asia, mainland China.
Q. Corcoran Sunshine recently announced a partnership with Century 21 China.
A. Century 21 is the fastest-growing real estate company in mainland China. The percentage of buyers that we see coming through our properties from China has more than doubled in the past few years, whether they’re buying a $30 million apartment or a $1.5 million apartment as a potential investment or for a child attending N.Y.U. There’s more diversity in the buying power than you see in the Russian community right now.
Q. You took the helm of Corcoran Sunshine at such a young age. Do you get much reaction from business associates?
A. Every once in a while when I speak to someone over the phone and then I meet them they’re surprised by my age. A lot of the success that I had in taking over the company was because I really have what I believe to be a talented team.
I also had the luck of having two pretty amazing mentors: Louise Sunshine, who really brought me into the company, and Pam Liebman, who I continue to work with every day.
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