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In Down Market, Luxury Concierge Service Faces Tough Questions on Relevancy
In down market, luxury concierge service faces tough questions on relevancy
December 17, 2009 04:00PMBy Amy Tennery
Jenene Danenberg, Luxury Attache co-founder, and 100 11th Avenue, where closings began last week
In a residential market where most new developers are trying to cut costs, Jenene Danenberg is convinced she can still make them spring for an upgrade.
And she has -- most recently at 100 11th Avenue and 141 Fifth Avenue, both of which started move-ins last week.
Cape Advisors brought in Luxury Attache during the development of its 72-unit Jean Nouvel project at 100 11th Avenue near 19th Street. David Comfort, a senior executive with Cape Advisors, said that the service was helpful in moving sales.
"At the time we [began sales in February 2007], West Chelsea was not a [very] residential area, some of the niceties were not particularly known," Comfort said. Luxury Attache helped educate buyers on attractions in West Chelsea, Comfort said, and even helped arrange travel plans for prospective residents.
Luxury Attache, a four-year-old full-concierge service that developers and condo boards have on board to assist residents with everything from party planning to nabbing theater tickets, currently has a full-time station or at least dedicated services in place at 16 other Manhattan buildings. Those include Soho Mews, the Greenwich Club Residences, the Prudential Center, and Andre Balazs' William Beaver House. Other clients include the National Hockey League, with whom they recently signed, and financial bigwigs like Goldman Sachs and Morgan Stanley.
To try to entice buyers, developers hire concierge services at the commencement of sales, or toward the end, to finish up sales, said Danenberg, the co-founder of Luxury Attache. Once a condo board is in place, it can decide whether or not to keep the service, after the developers' contract with the company runs out.
"The concierge is able to specifically address… what it's going to be like to live in [the] building," Danenberg said.
But Danenberg said that her business has felt the burn of the tight economy somewhat, and that the decline in business has to do with fewer new developments -- which make up the bulk of her clientele -- in the pipeline.
"The rate of new developments in general has slowed down," Danenberg said. "There aren't as many fish in the sea to catch."
She says to stay afloat her business is working on staying relevant and making certain "that the kind of services we offer don't seem out of touch." The company relies on residents' feedback and specially tailors building newsletters and activities to those interests, Danenberg said. In a building with a more mature clientele, for example, Danenberg said her company might set up wine and cheese tastings. In a building with lots of children, the itinerary would focus on more family-friendly programs.
While other concierge services exist, Shlomi Reuveni, an executive vice president with Brown Harris Stevens, said he was drawn to the "luxury" in Luxury Attache. High-end residential building 15 Union Square West, where he represents units with listing prices ranging from $4.68 million to $8.95 million, has utilized the service to positive ends, Reuveni said. The price of the service is not a concern at a high-end building like 15 Union Square West, Reuveni said, and having Luxury Attache on board enhances the its image.
But not everyone thinks a concierge service is a good thing.
Douglas Wagner, executive managing director of sales at Bond New York, said that many buyers would rather have a less hefty price tag over a pricey amenity add-on, which is included in the offering plan.
"[While] I think it gives a developer a competitive edge… in my experience, the most popular motivator is price," Wagner said. "From a consumer standpoint… [they] might say 'why do I have to pay [extra]?' when they'd rather pay $100 to $200 less per square foot."
Danenberg from Luxury Attache would not disclose the fees the company charges but said they generally depend on the number of units in the building.
Some in the real estate industry are skeptical about whether Luxury Attache can survive in the down market.
Michael Fazio, co-founder of the New York City-based Abigail Michaels Concierge service, which has residential and commercial clients, said that pushing a luxury agenda is a risky business, something that his firm shies away from.
"It doesn't mean our clients aren't affluent, it's just that the values are shifting," Fazio said. He describes himself as "a fan" of Luxury Attache, but said his business would rather trend toward other needs.
"It doesn't take a rocket scientist to know that out of 10 theater ticket requests, nine will be for discounts," Fazio said.
Even so, to Comfort, who's behind 100 11th Avenue, the luxury edge can be "indispensable," while bracing for a market comeback.
