Luxury with a view
Developers learn direction matters.
SETTING prices for the high-end Arabella high-rise seemed like an easy call: charge more for the condos with eastward-facing views toward downtown, leafy River Oaks estates and the popular Memorial Park.
Then buyers showed up with a whole other perspective.
As their customers increasingly opted for units with Uptown optics — toward the shorter but closer office and residential towers around the Galleria skyline and the attendant urban buzz — developers Randall Davis and Roberto Contreras realized that’s where they should place a premium.
They adjusted, and an average unit facing west now sells for $1.7 million, about $100,000 more than a comparable pad on the other side.
“At night, this is a much better view,” Contreras acknowledged. “It’s much more urban.”
Davis said he came to see the development around the Galleria as “right in your face ... whereas downtown is in the distance.”
The experience at Arabella, a 33-story tower under construction just inside the West Loop off San Felipe, highlights the fact that, in Houston’s relatively young high-rise market, developers are still learning what their buyers want. Picking a floor is easy: the higher, the better. But when it comes to view, the decision gets more complex. Urban or suburban? Treeline
“Forwho have people lived in high-rises, orientation is a big decision.” Scott Ziegler, architect
or airline? East sun or west sun?
“For people who have lived in high-rises, orientation is a big decision,” said architect Scott Ziegler, who designed many of Houston’s modern residential towers.
Overall, well-to-do Houstonians still choose to live at ground level in one of many affluent neighborhoods where custom homes sprawl across spacious lots. But buyers are increasingly warming to the idea of living in a vertical gated community of sorts.
High-rise developers have found success targeting a wealthy population of aging baby boomers by marketing a “lock-andleave” and low-maintenance style of living for those with homes in other cities or with plans to travel after retirement.
“Most of our sales have been to local empty nesters from Memorial, Tanglewood, some from Sugar Land and The Woodlands, and River Oaks,” Davis said.
Through mid-June, buyers have purchased 329 high- and mid-rise condominium units around the area at a median price of $300,000, data from the Houston Association of Realtors show. That’s up almost 18 percent over the same period last year, but the median price hasn’t budged.
The definition of a luxury home is considered by those in the industry to be around $750,000 and above. When Arabella is completed later this year, it will have 99 luxury condos. Units get more expensive the higher they get, with the average price in the low $600s per square foot.
Jacob Sudhoff, whose firm Sudhoff Cos. markets luxury real estate, said condo prices are constantly being adjusted based on supply and demand.
When his firm was preselling units in The River Oaks, a high-end redevelopment of an older residential building on Westheimer, the northern and eastern views overlooking River Oaks and downtown were popular.
“Now that you can see the model, everybody’s loving the south view,” Sudhoff said.
But buyers also seek the same sorts of things they’ve always sought: space. That’s where Denise Daniel, her husband and their son were looking to upgrade when they purchased a unit in Arabella.
They currently live in another Galleria-area high-rise. When decid- ing on a unit in Arabella, Daniel said, the view was important, but the couple’s primary interest was getting the right floor plan.
“We’re most concerned about getting the square footage we needed, which can be tough in high-rises here,” she said. They settled on a 3,500-square-foot condo on the 19th floor, with a view of downtown and Memorial Park.
The placement of building amenities like the swimming pool or fitness center can also play into a building’s financial success.
The pool at the Hanover Southampton in Rice Village is on the roof and has a 360-degree view of the city.
“When you travel in Europe, every hotel, it seems, has a rooftop bar and terrace,” said Ziegler, the building’s architect. “That’s an experience Houstonians haven’t had.”
In some cases, he said, developers can charge more for the units if the amenities come with a certain level of cachet. In a 56-story building Ziegler designed in Austin, the developer made the bold decision to forgo a top-floor penthouse in favor of an over-the-top resident area.
“My clients from Madrid changed my thinking about where to put the health club and fitness center. We’d normally put them down on the pool level, and you’d save your top view for penthouse buyers who pay top dollar,” he said.
But they argued, “rightfully so,” that residents in the 40 stories of units below would pay more per square foot to have the fitness center and pool at the very top.
“It’s really a showpiece,” Ziegler said. “When you go there, you’re really on top of the world.”