At NYC’s tallest lux­ury-condo tower, dis­counts come in mil­lions

China Daily (Hong Kong) - - Q&A WITH CEO - By BLOOMBERG

Buy­ers at Man­hat­tan’s tallest ul­tra-lux­ury condo tower are get­ting dis­counts worth mil­lions, a sign of the times in a mar­ket that’s swamped with costly homes.

At 432 Park Ave, buy­ers who signed con­tracts and com­pleted those pur­chases this year got price re­duc­tions av­er­ag­ing 10 per­cent, ac­cord­ing to an anal­y­sis by ap­praiser Miller Sa­muel Inc. In one of the most re­cent big trans­ac­tions to close, a pent­house on the 88th floor sold for $60.9 mil­lion, a 20 per­cent mark­down from what de­vel­op­ers ini­tially sought, city prop­erty records made pub­lic on Dec 2 show.

As new high-end projects mush­room across the sky­line, de­vel­op­ers of ones that came to the mar­ket ear­lier are cut­ting deals to un­load units be­fore com­pe­ti­tion gets even more heated. Sales at 432 Park, a 426-meter tower on 57 th Street off Park Av­enue, started in 2012, when the build­ing was just an idea on pa­per. Now, with con­struc­tion fin­ished, pur­chases are able to close and the de­vel­op­ers are high­light­ing that, along with price cuts, as ways to seal a deal with buy­ers who have many choices.

“I think it’s smart,” said Jonathan Miller, pres­i­dent of Miller Sa­muel. “This is a recog­ni­tion of the prod­uct that’s com­ing up be­hind this one.”

San­ders’ pent­house

The $60.9 mil­lion pent­house was pur­chased by Lewis San­ders, the for­mer chief ex­ec­u­tive of­fi­cer of Al­lianceBern­stein Hold­ing LP. His price for the 748-squareme­ter home was down from the $76.5 mil­lion ini­tially sought by de­vel­op­ers Mack­lowe Prop­er­ties Inc. and CIM Group.

A wave of lux­ury con­dos is com­ing to Man­hat­tan just as in­ter­est from in­vestors slack­ens. More than than 3,500 newly built units were ex­pected to be listed for sale this year, ac­cord­ing to a Septem­ber es­ti­mate by bro­ker­age Cor­co­ran Sun­shine Mar­ket­ing Group. More than half are con­sid­ered lux­ury, or priced at more than $25,800 per square meter.

San­ders, now CEO of San­ders Cap­i­tal, didn’t re­turn a phone mes­sage seek­ing com­ment on his pur­chase, for which he signed a con­tract in May. Joey Arak, a spokesman for the build­ing, said Mack­lowe Prop­er­ties de­clined to com­ment on sales at 432 Park.

The tower, whose record­set­ting height will even­tu­ally be topped by two other build­ings ris­ing nearby, also sold its high­est unit at a dis­count. The pur­chase of the full-floor pent­house on the 96th story closed for $87.7 mil­lion in Septem­ber, pub­lic records show. It was listed for $95 mil­lion.

Price breaks

That trans­ac­tion was among nine deals at 432 Park in which the buyer signed a con­tract this year and re­ceived a dis­count, ac­cord­ing to city records of com­pleted sales.

On the 73rd floor, the buyer of a 373.8 sqm, three-bed­room apart­ment who signed a con­tract in June paid $30.1 mil­lion, or 11 per­cent less than the apart­ment’s of­fi­cial listed price. A deal agreed to in July for a 245 sqm three-bed­room on the 82nd floor, came with a big­ger dis­count. The own­ers of unit 82A paid $18.6 mil­lion — a 14 per­cent mark­down — when the pur­chase closed in Septem­ber.

The re­cent sale prices at the tower — usu­ally end­ing in odd, non-round num­bers — also sug­gest the de­vel­oper is cov­er­ing those buy­ers’ trans­fer taxes and other fees, Miller said. San­ders’ full pur­chase price, for ex­am­ple, was $60,893,873.

The build­ing isn’t the only re­cently com­pleted ul­tra-lux­ury tower that’s low­ered prices. A few blocks away on 57 th Street, a 390 sqm at Ex­tell De­vel­op­ment Co’s One57 sold in Oc­to­ber for $21.6 mil­lion, or 24 per­cent off the last ask­ing price, ac­cord­ing to list­ings web­site StreetEasy.

Newer tow­ers

Dis­count­ing is also hap­pen­ing at Man­hat­tan projects that are still un­der con­struc­tion — only less vis­i­bly be­cause trans­ac­tions at those prop­er­ties, which haven’t closed, aren’t re­flected in pub­lic records.

At the Kent, ris­ing on 95 th Street near Third Av­enue, 5 per­cent dis­counts were be­ing of­fered as a way “to in­cen­tivize peo­ple to pull the trig­ger,” Ex­tell Pres­i­dent Gary Bar­nett said in Septem­ber. At 111 W. 57 th St, where a pent­house with Cen­tral Park views will be listed for $57 mil­lion, the ear­li­est buy­ers were given price cuts as a way to log a few deals be­fore the be­gin­ning of a for­mal sales ef­fort, co-de­vel­oper Kevin Maloney said ear­lier this year.

“Ev­ery build­ing is im­ple­ment­ing some sort of ne­go­tia­bil­ity,” Miller said. “It’s a sharp change from peak new de­vel­op­ment in 2014, when there wasn’t that op­por­tu­nity for buy­ers.”

See more by scan­ning the code.

Jonathan Miller, pres­i­dent of Miller Sa­muel

Newspapers in English

Newspapers from China

© PressReader. All rights reserved.