Whaaat? Studio Offered for $2.1 Million

In Rocco Lettieri's West Village apartment, the floor-to-ceiling view is only so-so: There's a chorus of construction to the east, the soon to be condo-converted Whitehall storage building to the south, and a glimpse of Hudson River Park to the west. It's an expensively furnished unit in the Charles Street building designed by architect Richard Meier, but there is no bedroom — it's a studio apartment, and Mr. Lettieri is betting he can sell it for $2.1 million in today's real estate market.

The 703-square-foot West Village flat has been the ideal pied-à-terre for Mr. Lettieri, a developer-contractor from the Hamptons, but last week he listed the unit. If he finds a buyer willing to pay his price, it would be one of the most expensive bedroom-less apartments ever sold. Its closest competitor on the market right now is a $2 million, 870-square-foot studio with a Juliette balcony at the Plaza.

Mr. Lettieri, who bought the apartment for about $1.4 million, and his broker, Jon Capobianco, a vice president of the Corcoran Group, are banking on a growing group of wealthy buyers who value luxury hotel suite amenities with a home-sweet-home feel but don't mind sleeping on a custom, Italian-made Murphy bed.

"I get calls from Deutsche Bank guys who say, ‘I stay at the Four Seasons and I'd love a place in the city with a pool and a gym,'" Mr. Capobianco said. "You get the same finish as the $10 million apartments upstairs."

Adorned with Dornbracht fixtures and outfitted with a Bang & Olufsen stereo system, the studio boasts white Corian countertops, a Ligne Roset white leather couch, Wenge floors, and Mr. Meier's signature power shades. The building has a pool, a gym, a theater, and an assortment of well-to-do neighbors, including actress Natalie Portman. Even the building's bowels, with their $75,000 storage spaces, sparkle.

The $2 million-plus asking price for a studio highlights a surprising market trend: the growing demand for smaller units. Long viewed as a last-resort investment with little appreciation, the studio now comprises 15% of all Manhattan real estate transactions as part of a booming entrylevel market that encompasses 51% of all the borough's sales, the president of the real estate appraisal firm Miller Samuel, Jonathan Miller, said.

"One of the characteristics of the housing market over the last several years, on a per-square-foot basis, is that the smaller apartments have started to go for more than their larger counterparts," Mr. Miller said. "The purchase prices are lower, but, per square foot, they're higher."

The housing boom, combined with dropping mortgage rates, means that many first-time buyers are competing for an inadequate supply of smaller units, he said.

Last year, the average price of a Manhattan studio apartment was $445,607, with an average square-footage of 519. The average one-bedroom sold for $705,439, with an average square-footage of 765. The discrepancy in price-per-square-foot is just $63, according to data provided by Mr. Miller.

Unlike the 1980s, when buyers paid a premium for larger bedrooms, developers now are tweaking their designs to accommodate the changing marketplace, emphasizing larger living spaces in the smaller apartments that are prevalent in new buildings.

The president of the Corcoran-Group, Pamela Liebman, attributes the popularity of studios to a new crop of expensive one-bedrooms. "To be a buyer instead of a renter, many people started buying studios. They are finished better, bigger, and are being built in some of the best buildings."

Ms. Liebman adds that buyers now have different lifestyle needs. "A lot of people buy studios as an adjunct to their apartment for a parent, a maid, a college-aged kid, or an office," she said.

What kind of buyer drops $2.1 million for a Meier studio with a pass-through kitchen? Entertainment types from the West Coast or financiers from Europe, brokers say. The alternative is a $915-anight, 600-square-foot deluxe room at the Four Seasons, which offers twice-daily housekeeping, 24-hour room service, and complete spa services.