You don't need to pay the nearly $9 million asking price for Martha Stewart's "Turkey Hill" property in Westport, Conn., to live like the lifestyle doyenne.
Instead, simply head to Cary, N.C. There you'll find a community built by KB Home called Twin Lakes. Each of the 1,500- to 4,100-square-foot residences features exteriors, flooring, fixtures and cabinets chosen by Stewart; the model homes are decorated with Martha Stewart Living products. (The first phase has sold out, and there will be 650 in all, ranging from the low 200,000s to the mid-400,000s.) There is already a burgeoning Stewart-affiliated community in Fairburn, Ga., and two more are set to open early next year, in Katy, Texas, and Perris, Calif.
Stewart's not alone in the celebrity real estate game. In fact, several less-commercial stars — including tennis great Andre Agassi, basketballer Shaquille O'Neal and hotel heiress Nicky Hilton — have become involved in real estate developments in the past year, underscoring a trend that continues even in the softening housing market: celebrity-branded real estate.
What's in it for the star? In Stewart's case, a licensing fee. Others receive entrée into the real estate market, a design payment or, as investors, equity in the property. The home buyer gets to associate his or her lifestyle with the celebrity's image. And for the developer, there's ever-alluring buzz.
"Developers are doing it to attract eyeballs, to garner attention to the project," says Jonathan Miller, president and chief executive of Miller Samuel, a New York City real estate appraisal and consulting firm. "This is the way to do it. It's another hook."
Sales across the country are slowing — last week the Federal Reserve reported a "widespread cooling" of the housing market, with some areas reporting dips as much as 18 percent over the prior year — so developers are looking for new ways to lure buyers. But it's not enough to have just a celebrity name attached to the project. In this market, developments must inject extras into the mix.
In New York, real estate marketer Michael Shvo is selling a condo project called The Jade, a 57-unit building in Manhattan's Chelsea neighborhood whose design was influenced by Jade Jagger, a jewelry designer and daughter of Rolling Stones rocker Mick. It features studios to three-bedroom apartments outfitted with "pods" — kitchen, bath and storage units with retractable lacquered walls that close off unused portions — as well as a Jagger-designed, Moroccan-themed communal rooftop reminiscent of her home in Ibiza. Prices range from $500,000 for a 460-square-foot studio to $3.7 million for a 1,822-square-foot penthouse with 635 square feet of outdoor space.
Since the condos went on the market this summer, Shvo says, two-thirds of the units have been sold.
"This is successful, because we have many ingredients that work together," says Shvo, who is also working on a project at 20 Pine St. in Manhattan with Giorgio Armani interior design firm Armani/Casa. "Yes, Jade is a great ingredient. But we went after a younger buyer that really understands the design and is willing to live in a smaller space but wants that space completely outfitted with the highest level of design."
Nicky Hilton is lending her name to a hotel/condo project on Ocean Drive in Miami Beach. Set to open next month, the 94-room Nicky O South Beach will include amenities such as an E! news ticker in the lobby, two nightclubs, poolside cabanas and suites styled by fashion designers such as Roberto Cavalli. What's more, hotel guests will be able to purchase anything in their room with a flip through the Nicky O catalog.
Celebrity-branded real estate isn't solely the domain of the residential market. Last month, Andre Agassi and his wife, Steffi Graf, announced the formation of Agassi Graf Development and a partnership with luxury destination club Exclusive Resorts to develop high-end vacation communities in the United States and abroad. In the future, tennis fans can practice their serve at the resorts' Agassi/Graf-branded fitness facilities. And Florida residents eager to buff their bods might want to join the 24-Hour Fitness/Shaq Ultra Sport gym, which will be a part of the yet-to-be-completed, mixed-use project Metropolitan Miami, in which the Miami Heat star is an investor.
But having a celebrity name attached to a project does not guarantee success. In the last year, two high-profile Las Vegas developments — Las Ramblas, a casino and hotel backed very publicly by George Clooney and Brad Pitt, and Ivana Las Vegas, a luxury skyscraper affiliated with Ivana Trump — failed when construction costs became too high. And last month, developers of Manhattan's 485 Fifth Ave., which featured apartments with interiors conceived by fashion designer Peter Som, reacted to sluggish sales by returning deposits to buyers while they lull over converting the building into a hotel.
"Attaching a name to a property is definitely not enough at the high end of the market," says Kelly Mack, president of Corcoran Sunshine Marketing Group, a Manhattan-based firm that markets luxury residential properties. "Buyers are very sophisticated, and they have sophisticated taste. And although it might be nice to have panache attached, you have to have service."
Indeed, when KB Home opened the doors of its Twin Lakes development to the public in March, local real estate agents say there was an initial flurry of interest. But once buyers began touring the homes, it didn't really matter that they had Martha Stewart's name attached — especially when the models go for more than other area KB Homes, a sign of the company's desire to target more upscale buyers.
"I have brought people out there," says Sharon Riccabono, a broker for Cary-based brokerage Coldwell Banker Howard Perry and Walton, who has yet to sell a house there. "It has a good location. But the people I showed it to were concerned with square footage and price. They didn't care about the fact that it was Martha Stewart."
Lesson learned: A celeb name attached? It’s a good thing. Celeb-worthy prices? Not so much.