Building contractors can conjure images of coarse, cigar-smoking tradesmen. But in Manhattan’s high-pressure, high-dollar residential market, some contractors have risen to a new social sphere, as cosmopolitan, jetting-setting moguls in their own right.
Developers of luxury residential properties are under seemingly ever-increasing pressure from designers, brokers and buyers to deliver ultra-high-end finishes. Costly wide-plank hardwood floors, top-of-the-line name brand appliances and marble everything is now the status quo. It’s what makes a 1,500-square-foot apartment worth millions in the eyes of a buyer.
But it costs real money to deliver these opulent apartments, and so some elite contractors have cut out the middleman by building relationships directly with manufactures in China, South America and Europe, thus delivering unparalleled savings on wood, marble and fixtures to developers.
Jake Phipps, the CEO of Phipps & Co., a contractor and manufacturer that workers directly with factories in China, took LLNYC on a tour of a new luxury housing development rising just west of Union Square to demonstrate how this new breed of builders are working with developers.
“Traditionally, the general contractor was the managing company in charge of a building project,” said Phipps, whose company handles buildouts of both luxury residences and affordable housing. “But now, developers and owners are more involved and assume more control. Contractors are being held to higher standards and their prices are expected to be more competitive.”
Inside the sprawling mid-construction tower, where a full-floor unit is already in contract for $17 million site unseen (and where the developer asked that we not reveal the address), Phipps pointed to a slab of hand-cut marble being installed in the powder rooms. “The materials in the powder rooms cost something like $10,000,” he said. He added that the solid white oak floors were the widest planks possible to cut. Across town, another developer has tapped him to install $6,000 medicine cabinets in the bathrooms of a rental building.
“Developers aren’t cutting back anywhere, they can’t afford to. Buyers at this price point expect everything to be the best,” he said.
Phipps spent six and a half years in China — even learning Mandarin — to develop partnerships with factory owners. When he isn’t in China, he works with manufacturers in Mexico, Nicaragua, Hungary and Italy.
“Working directly with factories abroad makes the whole process smoother, and it creates tremendous savings overall,” he said.
The upshot: In Manhattan’s ceiling-less residential market, who isn’t making a killing?