The luxury real estate trends for 2023 may surprise you, Alyssa Shelasky reports. We all know that during the pandemic, real estate skyrocketed in places like Florida and the Southeast — but the market is starting to cool. Still, ultra-high-net-worth individuals are looking for specific properties, including indoor-outdoor concepts, homes with multiple pools, guest houses and alternative space. Places like Nashville are red-hot, but when it comes to real estate there, it’s all about location, location, location.
Conference season is upon us in the wealth management and family office space. Institutional Investor recently hosted its inaugural East Coast Family Office Symposium in Florida, and New Yorkers are gearing up for the return of SALT this week. Keynote speaker Stephen Cohen of Point72 — and recent owner of the New York Mets — kicks off the event Tuesday with a highly anticipated fireside chat.
Crain Currency’s Marcus Baram will be in attendance, covering the highlights of the event and sharing with our readers the most sought-after ideas from finance’s top experts.
As always, we appreciate any comments, ideas and insights that would make this newsletter more useful. I look forward to growing this family office community with your help. Please email me at [email protected].
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HANDPICKED: 2023’s luxury real estate trends might surprise you
By ALYSSA SHELASKY
There are many ways to enjoy the last days of HBO’s Succession. One way is through the lens of luxury real estate, which is why penthouses, townhouses, compounds and castles are top-of-mind right now for ultra-wealthy people and family office members.
“Right now, top wealth wants to put their money into townhouses,” said Tyler Whitman, a power broker from The Agency in New York who specializes in such properties. “It’s for privacy and control. Many of my wealthy clients don’t want the condos, with the hundreds of neighbors and all the rules. They don’t want anyone monitoring how and when they use their home.”
It should come as no surprise that, as Whitman puts it, “Really wealthy people enjoy their freedom.”
Are his ultra-wealthy clients simply over condos? “There are still trophy purchases in the condo world. Special New York properties with true architectural significance will always perform, but it’s hard to put a true calculated valuation on that. Those properties trade more like a piece of art would.”
As for the Hamptons, Whitman confirms that the main issue this year in its luxury market is the inventory crunch. As far as what’s in demand, Whitman said, “It’s not all about a beachfront property.” Waterfront comes with its own set of problems, he explained.
“It’s always going to fetch a huge price point, sure,” Whitman said. “But what we’re seeing are people gravitating to bigger pieces of land a few minutes away from the beach, with vast and beautiful landscaping. If it’s a compound, all the better. If there are guest houses on the property, that’s ideal. With the extra space and land, you can get nonbeach properties — for, say, $60 million and over, we see homes that can entertain hundreds of people, which matters to certain people out East.”
When it comes to aesthetics, the trend toward modern farmhouses has faded, he said. “More and more of my clients are like, ‘If I see another modern farmhouse, I’m going to be sick.’ ”
Whitman’s wealthiest clients are also buying property in Florida and Texas. “But you know what trend I’m really seeing? Montana. They’re buying gorgeous mountain homes that are truly private and remote.”
A WEALTH OF ‘WELLNESS’
Hilary Farnum-Fasth owns Corcoran Reverie, a high-end real estate brokerage and an affiliate of Corcoran Group LLC that specializes in luxury properties in Florida and Nashville. “When you step into the luxury space down here right now, in 2023, the sky’s the limit,” Farnum-Fasth said. “We are seeing simulator rooms to elevate your golf swing, to the ultimate in man caves — where your entire garage is built around exotic cars; his-and-her bathrooms to complement oversized private closets; and elaborate game rooms that include virtual reality, pool and throwback arcade games.”
Any popular outdoor design for the houses being sold top-dollar or custom-built likely must include pickleball and sand volleyball courts, putting greens, private rooftop pools and obviously a primary pool. Don’t forget, she said, “wellness-based features for the home, like saunas, elaborate home gyms and cold plunge tubs – those are all the rage!”
In Florida and Nashville, the luxury real estate market is thriving. An analysis of U.S. Census data by the Inspection Support Network shows that Nashville has been the fifth-fastest-growing large metro area in the country in the past five years. “The most luxurious properties in northwest Florida are the ones that fuse indoor and outdoor living,” she said. “This means that you may not have a huge interior footprint but may have twice as much deck and exterior living space, making it perfect for embracing the Florida lifestyle.” Think infinity pools and, once again, the essential pickleball court.
While the real estate boom has slowed in much of the country, high-end Nashville real estate is booming. “In Nashville, location is huge,” Farnum-Fasth said. “Being close to the right lifestyle matters, whether that includes proximity to private or public schools, parks, or best dining and shopping.”
In Nashville, a move-in-ready home is crucial, “whether they are seeking an estate for acreage, historical detail, a renovated home with a modern professional kitchen and an infinity pool, or a subdivision with luxurious amenities like a luscious community garden,” she said.
What advice would Farnum-Fasth give an ultra-wealthy client with the world at his or her fingertips? “I would tell them to buy land and develop it,” she said, adding that although it takes considerable work, time and effort, there is plenty of upside to dramatically increasing the value of the property.
“The reality is most people don’t have the ability or desire to wait multiple years to bring a piece of property to life,” she said. “But for those who do, there’s a strong financial reward there in the end.”
This year's SALT iConnections conference to focus on disruption
By MARCUS BARAM
Amid ongoing market turbulence and recession fears around the globe, this year’s SALT iConnections conference will focus on alternative investments and disruptive innovation in finance, economics and geopolitics — with panels on everything from the rise of artificial intelligence and climate change to longevity and the search for extraterrestrials.
It runs May 16-18 at the Glasshouse in New York City and features speakers from leading fund-of-funds, institutional allocators, sovereign-wealth funds and more.
It begins Tuesday with a “fireside chat” with Point72 Chairman and New York Mets owner Steven A. Cohen. Some of the other interesting events feature Voya Investment Management’s Gareth Shepherd on machine learning in asset management, Tally Health’s Melanie Goldey on life-extension therapies, JPMorgan Alternative Asset Management’s Paul Zummo on leveraging alternatives amid volatility, and AI Fund’s Andrew Ng on the next breakthroughs in artificial intelligence.
For the full lineup, click here.
Crain Currency will be covering the conference, so look for real-time updates on our site and on LinkedIn.
LOOSE CHANGE
Despite hype, family offices still only make up small part of Singapore’s wealth: In light of reports of the influx of family offices pouring into the city-state due to its tax incentives, it’s worth noting that family offices account for less than 2% of Singapore’s total assets managed. Most of its wealth comes from institutional investors, not "high-end individual investors and even less so family offices,” says Alvin Tan, minister of state for trade and industry.
F.L. Putnam Investment Management Co. names new leader: The investment management firm, based on the north shore of Massachusetts, announced that it has hired Stephanie Bruckner as principal and managing director. She previously led a consulting practice and managed a family office for five years.
Family office gets $50 million loan to complete Alabama multifamily property: Hillcrest Acquisitions, a New York-based family office, received the loan from 3650 REIT to complete its construction of The Gabriel, a 288-unit community in the Huntsville area.
Help us with a story: We’re working on a luxury travel feature and hotel roundup. If you have any comments on the topic, reach out to [email protected].