Condos--The Comeback Kid

The basic condominium has been on the East End for decades with little fanfare, but a revamped version has turned it into the comeback kid, this time in the luxury market.

Less than a year after the opening of some condos, and with others in various stages of completion, forecasts on how these developments will affect the community are mixed.

Condos first arrived on the East End in the 1970s on Dune Road in Westhampton, although they were far more bare-bones than what is being built today.

“They were shelter,” said Douglas Elliman broker Enzo Morabito, whose focus is generally on the western part of the Hamptons, including Westhampton, Westhampton Beach and Quogue. “They had the basics, they were on the ocean or on the bay with access to the ocean, [and] they had air conditioning.”

These units were designed primarily to be used during the summer, and ultimately not looked upon favorably by the rest of the region. “Westhampton was the first Hampton to be developed and I would say overdeveloped, and that’s what scared everyone,” said broker Paul Brennan, Hamptons regional director for Douglas Elliman.

Subsequent zoning laws sought to restrict condo development throughout many villages and towns in the Hamptons. There were a few municipal holdouts, however, and the glammed-up condo and similar turnkey townhouse developments have been cropping up across the East End.

Sag Harbor is notably the site of two luxury condos, Watchcase and Harbor’s Edge, both of which opened last spring.

Watchcase is composed of 63 factory lofts, penthouses, and stand-alone homes. It is more than 70 percent sold, a slight increase over what had been sold last spring.

“Nearly 40 owners have moved into Watchcase since closings began,” Cee Scott Brown of the Corcoran Group, and head of sales for Watchcase, wrote in an email. “A handful of buyers are truly full-time, and nearly every buyer is enjoying their home for weekends and long weekends in every season.”

The residences available for purchase range from $1.55 million to more than $10 million, with anywhere from one to five bedrooms. The complex was designed to provide resort-style amenities, including a heated 60-foot saltwater pool, fitness center, private training studio, sauna, club room and catering kitchen for recreation and private events for residents. There is also access to a concierge, live-in resident manager, superintendent and a porter. Monthly common charges for the remaining available residences range from approximately $1,115 to $4,550, based on residence size.

A few blocks away, overlooking the water, Harbor’s Edge has 15 two- and three-bedroom units, all facing the water. Only two units in Harbor’s Edge are in contract. Prices range from $2.25 million to $6.25 million, with a monthly maintenance fee from around $2,000 to $3,000. Amenities include a rooftop pool with a wet bar, four separate elevators so that residents will share theirs with only one other apartment, concierge service from spring to fall and a year-round porter.

The slower than expected sales have made it difficult to examine how these condos have affected the already bustling village. They have also become a cause of concern for Sag Harbor Mayor Sandra Schroeder.

“It has yet to be seen what the impact is,” said Ms. Schroeder. “It’s a sit and wait thing … My concern is empty buildings … what if they decide they’re not doing well enough and close shop?”

Andrew Saunders, founder of Saunders & Associates, which recently took over the marketing of Harbor’s Edge, does not appear to share that concern. This condominium complex, he said, can appeal to a wide audience.

“The profile of the condo buyer has been aging baby boomers, the empty nesters, whose kids are in college or older,” Mr. Saunders said. “They want something different and easier.” But, because of its location in a thriving village and near marinas, he also believes Harbor’s Edge can draw the interest of the young banker or boating enthusiast.

Meanwhile, Hampton Bays, a traditionally working-class community, is also setting the stage for high-end development.

One of the newest additions to the hamlet is Ponquogue Point, which opened last fall. With 24 units spread out over four buildings, four have sold, according to the developer’s website. The units range from 982 to 2,053 square feet and are selling for anywhere from $950,000 to $2 million.

And, expected to break ground by the end of the year, is a new luxury townhouse development presently named “The Boathouse.” It is part of a large-scale renovation project of the nearby Canoe Place Inn property.

There will be 37 townhouses along the eastern bank of the Shinnecock Canal. Still in need of approval, they are proposed to have up to three bedrooms and range from 1,500 to 2,500 square feet. The houses are expected to cost about $1,000 per square foot. “Those are going to be high-end units,” said Mr. Morabito, who will market the properties.

Southampton Village may offer the most complete picture to date of how these all-in-one luxury developments affect an area. The luxury townhouse complex known as Bishops Pond, which first opened in late spring 2014, is now nearly sold out.

More than 95 percent of the units are sold and closed on, according to Steven Dubb, principal of Beechwood, the developer.

There are 69 units—villas, apartments and townhouses. An additional 10 units, known as Bishops Enclave, were added last year. The prices range from $1.9 million to more than $2 million, and residents have access to a clubhouse with a lounge and fitness room, an outdoor pool and tennis courts, billiards, a fire pit and a barbecue area, as well as a concierge service. The monthly maintenance fee is around $720.

“We have empty nesters, young families, working professionals and retirees. Some are with us year-round and for others it is a second or third residence in addition to the metro [New York] area or Palm Beach,” Mr. Dubb wrote by email. “Buyers want a home in the Hamptons with resort-style living and without the hassle of traditional estate ownership.”

Nearby, on the corner of County Road 39 and Tuckahoe Lane, another luxury townhouse condominium complex that broke ground last spring is more than halfway finished. Known as Fairfield at Southampton, the complex will feature 32 three-bedroom units and 18 two-bedroom condos, and the units will range from almost 1,200 to 1,800 square feet. There will also be a clubhouse, two garages, a recreation center and an outdoor pool.

There will be 15 community benefit units set aside as affordable housing—part of an agreement the developers, Fairfield Southampton LLC, made with Southampton Town to get a zone change from commercial to a planned development district.

Southampton Village Mayor Mark Epley has been in support of condos, pointing out how they add revenue without burdening the municipality’s infrastructure and services, such as the schools, because most of the residents are using them as second homes.

Ultimately, many believe these luxury developments will have little negative impact on the region.

“I don’t think it’ll change,” said Mr. Brennan. Traffic, for example, has already been a problem for years, he added.

Real estate, too, may see little change. Since these developments tend to serve as second homes, they draw the attention of the 55 and older crowd, who may be tired of the routine labor that comes with home ownership, such as snow removal, pool cleaning and lawn care. Some are putting their homes back on the market in order to transition to condo life.

“It won’t impact [real estate] at all, because house buying is between ages 30 and 50,” said Mr. Morabito. “There’s going to be trade-down, and as people get older, other people will step in.”

The only noticeable change may be what visitors have come to expect on the East End. Spending time in “the country” is no longer an exercise in detaching from the glitz and grind of urban life. Instead, luxury creature comforts are now woven into amenity-rich developments.

“You don’t come out here for the character of the community any more, the wide open spaces, the farm stands, and the farming aspect of it,” said Mr. Brennan. “There’s been a definite transition in the mindset of the people … It has become much more site specific than area specific.”