The Real Deal Magazine reports that the residential development at 400 Park Avenue South is something of an anomaly.
The 40-story building is part rental, part condo, with two developers sharing a general contractor and little else. At the base, Sam Zell’s Equity Residential is installing 269 rentals that will occupy floors two through 22. At the top, Toll Brothers City Living, run by David Von Spreckelsen, is building 81 condos on floors 22 through 40.
“It’s almost as if we’re developing two separate buildings within the same shell,” said Todd Dumaresq, marketing manager for Toll Brothers City Living, which is reportedly spending $155 million for its part of the building, compared with Equity’s $251.9 million.

While hybrid projects have been around for more than a decade, and became especially popular in the wake of the 2008 financial crisis when the sales market was weak, they are now back in vogue — but for different reasons. Today, the sales market is strong, yet rising land prices have diminished the viability of rental projects in Manhattan. At the same time, developers and lenders are looking for ways to mitigate risk, particularly as lenders shy away from underwriting large condo projects, which they did frequently before the recession.

Two-in-one projects like 400 Park Avenue South, where two developers are joining forces, are also new.
Recently launched hybrid projects as well as those in the pipeline include Stahl Organization’s 388 Bridge in Downtown Brooklyn, with 234 rentals and 144 condos, and 250 East 57th Street, where World Wide Group is planning 93 condos and Rose Associates is developing 173 rentals. Rose is also developing 70 Pine Street, which will have 612 rental units and 165 extended-stay suites.
The key driver of this new wave of hybrid buildings, according to developers and marketers, is the rising cost of land.
Citywide, average prices for development sites jumped 17 percent, to $224 per buildable square foot, during the first half of the year, according to Massey Knakal Realty Services. Manhattan saw a 14.7 percent jump, to $511, during that time, while Brooklyn saw a 23.2 percent increase, to $166.