Living the high life

by Lisa Antonelli Bacon
for Virginia Business
June 2006

When Bob Scudder and Dougie Bowman decided to get married, a second decision had to be made. Who is going to move?

Scudder, a retired naval officer who is now an executive and organizational coach, didn’t mind leaving his home in Newport News for Richmond, where Bowman works as a senior relationship manager for First Clearing Corp. But they longed for something different, a taste of real city life. The couple had a chance to choose an environment just for them since their children from previous marriages were grown and out of the nest.

An item in the local newspaper in June 2004 caught Scudder’s attention. A luxury high-rise condo on the James seemed just the ticket. But ground had yet to be broken for the condo project called Riverside on the James.

“When we called, there weren’t many reservations left,” he says, adding that choices were limited, so they took what they could get, even if it wasn’t exactly what they wanted. After some buyers opted out, the couple was able to upgrade to a unit that offered what they originally sought, not the least of which was a grand view.

Six months into the move, they have nary a regret. “We look downriver from our living room and bedroom, and we look at the skyline in the rest of the house,” says Scudder. “It’s spectacular during the day, and it’s more spectacular at night.”

The Scudders are part of a movement toward less complicated, but more luxurious, living. Seeking ease and simplicity, empty nesters are selling their lawn mowers and shucking suburban trappings such as car pools and cul-de-sac parties. They are returning to the urban lifestyle that many enjoyed before family needs drove them beyond the city limits.

“They want to be in a city center environment,” says John Chappelear, senior vice president in charge of condo operations for KSI developers in Vienna. And, since it’s difficult to find a prime parcel large enough for a horizontal luxury development in a city center, developers are building vertically, with high-rise condominiums. As Leonard Bayer, senior vice president of Goodstein Development Corp. in New York, notes, “In real estate, you can’t make more earth.” But you can build skyward.

That is what Bayer and local partners plan to do with Centennial Towers in downtown Richmond, a site Goodstein agreed to back after reading about the corporate relocation of Philip Morris USA from New York City to the Virginia capital. When completed next year, the $200 million project will rise 25 stories. The building will include a boutique hotel and 250 “ultra luxury” residential units. The penthouse will sell for more than $1 million. Goodstein is one of the many developers seeking to cash in on the trend toward luxury living.

Condo sales gained momentum in 1998 when a legal change no longer required a seller to purchase a more expensive property to avoid the tax hit for capital gains. And when baby boomers began buying second homes, condos became even more appealing. “If you leave a house to go somewhere else for three or four months, it’s an iffy proposition,” says Chappelear. In a high rise, though, when you’re away, someone else is watching out for your investment.

But the days when downsizing meant downscaling are gone. In 2004, for the first time since analysts began tracking such figures in the 1980s, the national median sales price for condos rose at a faster rate, 17 percent, than single family homes, 8 percent.

Last year, in Richmond, for instance, developers were crowding the riverfront with new construction of office, retail and residential projects. Some developments (like Riverside on the James, an $86 million mixed-used development downtown) had more reservations than residential units before the mortar was dry. Barely taking a breath between projects, the same developers, Dominion Partners, now are building Vistas on the James nearby, a $50 million, 18-story condo tower. Condo prices there range from $140,000 to $595,000.

Not just any condo will do. Finally off the financial hook in supporting their children, empty-nest boomers want luxury and convenience. And they’re willing to pay for it — at prices double, triple or quadruple the national median sale price of $215,000 for condos. Developers are answering the demand by going all-out to satisfy not only needs but whims, too. Swimming pools, once a drawing card, have become de rigueur. Now potential buyers are comparing private screening rooms, health clubs and concierge services to tip their decisions.

Reston Town Center provides a good example of where the condo trend is headed. The development is the kind of urban village you find in a snow globe. Pretty buildings surround a skating rink set in a dream-perfect landscape, all the architecture alike or complementary. And there, next to the towers, a doorman in a top hat waits with a smile. Here, all your basic needs are met in anything but basic style.

At Midtown Reston Town Center, a 21-story high-rise, workers are putting the final personalized touches on 1,000 units in anticipation of its first residents, who will move in around August. These residents will have only to step out of their cars at the entrance to the building. Valets will whisk the vehicles away for parking while the liveried doorman ushers the residents into a spacious two-story lobby. Upstairs in a condo, the window shades will roll down, and the television will tune into CNN, all with the click of a remote control. The price range for these condos is $550,000 to $2.8 million.

In Reston, as in most city centers, a plethora of restaurants, shops and theaters are right out the front door. But that’s just the beginning. Worried about reservations? A concierge is there to help. And should you find yourself in Palm Beach with pangs for Daniel Boulud’s creamy risotto, just call the seemingly magical VIP Desk at Midtown Reston Town Center, a 24/7 service to which all residents possess a membership that immediately elevates one’s status, no questions asked. Chappelear recalls a time in Las Vegas when he wanted to entertain a party of eight at Gallagher’s in The Hotel at Mandalay Bay. “The maitre d’ laughed and said the earliest he could accommodate us would be 10:30. I called the VIP Desk,” he says. “They called back five minutes later with confirmed reservations at 7:30.”

All the units in the high-rise come with a standard wiring package that is a springboard to total customization, which can run from $2,000 to $40,000, depending on the owner’s desires. Want to see who is pulling into valet parking? You can watch on your TV. Want to nanny-watch from work? Log on to your computer for a secret bird’s-eye view. The more you spend, the more you can control with the touch of a button. “If you want to come home to a well-lit unit, you can control the lighting through a BlackBerry or a Web browser,” says Jennifer Piercy, KSI’s condominium options coordinator. “It’s almost like ‘What can’t you get?’ They want what they want, and we want to give it to them.”

Budding empty nesters looking for such a condo lifestyle are in luck. Industry players say the boom in luxury housing has crested. “There isn’t the urgency there was a year ago,” says Chappelear. “Investors [buying condos for resale] are no longer in the market to the extent they used to be. They came flocking to get in early.” Now that investors have backed off, he says, the regular buyer doesn’t feel like he has to buy right at opening. “Buyers can see we have a reasonable selection now. No one is under the gun.” Consequently, the buying market this year is more thoughtful about their expenditures. “They visit the sales center more than once before they make the actual decision,” he says.

Piercy concurs. When it comes to luxury, Boomers looking for a home are all over it. “They really have done their homework. They know all about the technology and the best finishes,” she says. “They know what’s out there, and they have high expectations.”