Saturday, January 9, 2016

Manhattan Real Estate, Part I

The Top of the Market

Above is a rendering of One 57, a 1,000-foot-tall condominium tower that sits atop the Park Hyatt New York and across the street from the southern end of Central Park.

The year before One 57 opened, the most expensive Manhattan home sale had been a condo that fetched $88 million.  The buyer was a Russian billionaire who wanted a home for his daughter, a college student in New York.  (Also, it was rumored, a spot to shelter assets as he and his wife were divorcing.)

Then, One 57 condos began to sell.  In December 2014, a deal closed on an 11,000 square-foot apartment.  It was a duplex (89th and 90th floors; duplexes in New York are two-story apartments).  The buyer, an LLC whose owner is not known, paid $100.5 million.

Last year, the most expensive condo sold in New York was another one at One 57.  Bill Ackman, the Pershing Square hedge fundie, paid $91.5 million for a 14,000-square-foot duplex on floors in the mid 70s.  It was reported that Ackman didn't plan to live in the unit but instead to flip it later for a profit.

Not all the 94 apartments at One 57 are this expensive.  Some are priced around $50 million, and others are even more affordable.  Many of these are owned by faceless corporations; the general belief is that most are fronts for people from other countries who have greater faith in the security of wealth stashed in the United States than in their native lands.

(This trend started long ago in trendy London neighborhoods, where many expensive townhomes and apartments have largely absent owners;  the displacement of full-time local residents has in some cases starved neighborhood businesses of custom.  Nobody who has spent time in midtown Manhattan recently expects such an effect, no matter how many One 57 wannabes and other sumptuous residences are sold in the area.)

In fact, the 34 apartments on One 57's lower floors -- 32 to 39 -- were designed to be rentals, not that ordinary mortals could afford their monthly rates, which ranged from $13,000 to more than $50,000.  Recently, however, the building's developer said these less premium units too would be sold, perhaps a reflection of the health of New York City's property market.

Tomorrow:  Manhattan's Middle Market

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