Shvo Motion

Tabula Rasa Michael Shvo on the East River, Long Island City. He plans to carve out a piece of the skyline for himself. And he just might pull it off.

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As a child in Israel, Michael Shvo created an unusual tribute to the metropolis he and his parents had left behind. Along the baseboard of his bedroom, in the small beach town of Arsuf, Shvo pasted a cut paper silhouette of the New York skyline, with its arching bridges and iconic towers.

Twenty-eight years later, Shvo is poised to bring that childhood fixation to life, by literally transforming the skyline of Long Island City--the tatty industrial section of Queens, just across the East River from Manhattan--into the city he had built in his mind.

It won't be easy. Years of nightmarish political wheeling and dealing are a given. And it's certain to raise hackles, if only for the sheer hubris of Shvo's vision. But the 34-year-old real-estate marketing wunderkind has been girding for this challenge his entire life. "In 10 years, I want to say we're responsible for this skyline," he says. "We're in the greatest city in the world, and there's still an opportunity to put your signature there."

No one ever accused Michael Shvo of thinking small. And with a distinct softening in the property market, even in New York, the odds that his ambition will derail are not inconsiderable. But Shvo's strategy--to turn each building he markets into a luxury brand of its own--is calculated to insulate his developers from such turbulence. His basic contention is that real estate should be marketed in the mode of Cartier, Gucci, or Rolex: massive market research; devotion to demographic and psychographic analysis; extreme attention to customer experience and service; integrated marketing across every touch point, every function, every channel.

That's not news in the consumer-products realm, but it represents fresh thinking in an industry that, until recently, worried less about seducing customers than about simply feeding their insatiable demand.

"The real-estate industry is accustomed to being very conservative," says Anna Klingmann, author of the upcoming Brandscapes: Architecture in the Experience Economy (MIT Press, fall 2007). "They have, by and large, relied on tried-and-true formulas." In the urban condo market, that meant selling based on location, square footage, and predictable amenities ("Working fireplace! Park view!"). But as consumers have become more design savvy, demand has escalated for more upscale, sophisticated dwellings that serve, essentially, as a residential shorthand for a buyer's style, aesthetic, and weltanschauung.

And that niche is where Shvo sees his opening. If the product is extraordinary, he says, it's insulated from the dreaded competition that invariably afflicts commodity properties when the market softens. He raises a bottle of branded Shvo water-- Shvo₂O--to make his case. "If you're buying this water from me for $1, and somebody else says she'll sell it to you for 99 cents, you're in a race to the lowest price," he says. "But if I bring you a bottle of water from the Holy Land, you'll pay $2 for it because you can't get it anywhere else."

He's cocky, and he's blunt--two Myers-Briggs characteristics required to compete for Gotham real-estate moguldom. Indeed, it's tempting to write off Shvo as yet another ego in a business that's saturated with them--tempting, that is, until the sheer scale of his operation sinks in. In New York alone, through the end of 2007, he's handling 6,335 residential units in 30 buildings (including 9 in Long Island City) that are collectively worth about $7 billion. And he's primed to extend the reach of his eponymous company to Washington, DC; Texas; Florida; Singapore; Mexico; and the UK. By 2008, he expects to have $8 billion in property under development outside New York, putting his total marketing and sales portfolio in the neighborhood of $15 billion. Nice neighborhood, especially for a business founded in 2004.

So, can Shvo outsmart a teetering market? Nationally, the median price of a previously owned home fell 3.5% in October, to $221,000, according to the National Association of Realtors; by November, it had dropped further, to $218,000, down from $225,000 a year before. Mark Zandi, chief economist at Moody's Economy.com, predicted that housing prices would continue to sink in 2007, marking the "first [annual] decline in national housing prices since the Great Depression."

The condo market in many cities is already in free fall. In Boston, for example, the asking prices for a Philippe Starck--branded project were lowered by an average of 12%. Some developers, meanwhile, have opted preemptively to convert their buildings into rental units (seven apartments in a serpentine Manhattan tower by starchitect Charles Gwathmey are now rentals), hotels (the old Tommy Hilfiger headquarters in New York were to become a Peter Som--designed building but ended up being sold off to Hyatt), or offices. And across the country, some high-end developments have been abandoned outright, from Miami (15 developments representing 1,900 units) to Bethesda (a planned $1 billion Canyon Ranch Living mixed-use complex) to Las Vegas (Aqua Blue, an 825-unit, $600 million condo-hotel resort with Michael Jordan as an investor).