Luxury is a Moving Target, Developer Says
Shahab Karmely sees the biggest ‘take a pause’ moments coming from New York right now
Developer Shahab Karmely’s New York-based KAR Properties has expanded considerably in southern Florida, with projects that most recently included luxury condominiums One River Point in Miami and 2000 Ocean in Hallandale Beach.
The company also has projects in Los Angeles.
Mr. Karmely, 56, moved to the U.S. in 1978 from Tehran at the age of 16.
We spoke to him about fulfilling his New York City townhouse dream, why you should spend money on homes more than other luxuries, and more.
Mansion Global: Describe your dream property.
Shahab Karmely: If I was going to continue to live in New York City, it would be a townhouse, which I actually moved into recently. That’s always been my dream. That’s the ultimate way of living in New York City. I remember in 1978, taking the train from Long Island and walking near Park Avenue and not being able to believe there were houses in New York City. I remember that clearly. I was fortunate enough to end up being able to buy a townhouse.
MG: Do you have a real estate property that got away?
SK: So many. If only I could tell my young self, don’t walk away for a 5% or 7% price difference. I was so close on a lot of deals, but walked away.
MG: What does luxury mean to you?
SK: “Luxury” is overused, like how “genius” is overused in Hollywood.
Luxury is a moving target. What was considered luxury in a previous cycle because it was rare becomes an amenity and then becomes fully expected.
In the 1970s, a 12-by-12 green marble bathroom was a luxury. In the ’90s, limestone bathrooms were popular.
But the true definition is putting together something where the sum is greater than its parts. Unless they come together and work in harmony, you don’t have a great meal or symphony. Luxury is just like that. You need great design and functionality and execution. But it’s also about location, and maintenance. If you don’t have all those things you can’t call yourself luxury.
MG: What area do you think is the next hub for luxury properties?
SK: The biggest transformation is happening in Miami. It used to be cookie cutter, and buildings were all designed by the same architects.
Now you have major architects doing impressive towers.
MG: What’s the biggest surprise in the luxury real estate market now?
SK: The number of people from all over the world who continue to pay record-breaking prices for properties.
There are geopolitical reasons. Whether it’s asset transfers or wealth transfers.
I was a refugee here and I know it’s a great place to be; it’s a safe haven. But I’m still surprised by some of the numbers that are achieved in the U.S. luxury market.
MG: Where are the best luxury homes in the world and why?
SK: “Best” is partially absolute, but greatly relative. I would say that depending on where you are in your life cycle, there are so many factors. In terms of where the super luxury properties are being developed—L.A., New York and Miami—those places are driven by lifestyle and foreign money. Internationally, London and Hong Kong seems to break any price records.
MG: What’s your favorite part of your home?
SK: The kitchen. Kitchens are very, very important. Kitchens become the hub of family living.
In the townhouse, we have a large kitchen with a dining room that’s attached and opens to the outside. And we set aside a part to be for the kids to do their homework.
The least-used areas are the formal entertaining spaces.
MG: What best describes the theme to your home and why?
SK: I’ve always liked to have classical style with contemporary elements. If I was living in a penthouse as opposed to a townhouse, though, I’d have a different approach.
But I certainly don’t subscribe to white boxes. Those are good for galleries, and good for pictures, but they’re not how we live. Tactility, elegance and comfort are important. Eclecticism— that is thoughtful, and not random—is the way to go.
MG: What’s the most valuable thing in your home?
SK: Artwork. I worked and studied at Sotheby’s in London. My preference, and my own leanings have always been toward European Old Masters oils and drawings. Those are areas that have appreciated the least, unfortunately.
MG: What’s the most valuable amenity to have in a home right now?
SK: It used to be a rarity to have hotel-like amenities unless the condo was attached to a hotel. But now we’re seeing hotel-like amenities in full condos. And of course technology keeps getting better—LED lighting, security, online concierges.
Services need to go along with all the amenities. You cannot have one without the other.
But you want to have perfectly functioning mechanical and plumbing systems at the more basic level. It’s great to have a fireplace and beautiful windows, but A/C system, lighting system, and security system are important, too. People don’t pay attention to those enough when they’re admiring a stone countertop.
MG: What’s your best piece of real estate advice?
SK: Buy. Don’t try and time the market. It’s been proven over and over again that real estate is one of the safest places to put your money.
Own the best house you can afford, not the best art or suit or car you can afford. That’s where you live, where you bring up your family, where your money is made. And more likely than not you will make money.
MG: What’s going on in the news that will have the biggest impact on the luxury real estate market?
SK: It’s hard to predict major things. But I’m cautiously optimistic about the strength of the market. Within the U.S., for affluent people it’s a good time to buy. People are a little more hesitant in New York as compared to Miami and L.A. The biggest “take a pause” signals are coming from New York.
MG: What is the best area now for investing in luxury properties?
SK: You’re going to see great upticks in Florida. New York is always good long-term, when holding and owning you can’t go wrong there. If you have the bandwidth, you may want to look at Seattle. It’s close to San Francisco, but less expensive, and it doesn’t have personal income tax.
MG: If you had a choice of living in a new development or a prime resale property, which would you choose and why?
SK: I’m agnostic. It depends on the property, and there are so many other factors. I’m considering moving to Miami myself, and what we decide on is schools. We figure that out first.
MG: What area currently has the best resale value?
SK: Anything that’s exceptional in this market sells— you see that with watches and with vintage cars. Quality real estate will always find someone to buy it on the other side.