UPDATED: Feb. 9, 11:40 a.m.: Buyers who get in early on new condominium developments may shoulder more risk, but they’re typically rewarded with a perk: lower prices.
In boom times, developers – and marketers – are known to raise condo prices throughout the sales and marketing of a building to maximize sales. To get a sense of the biggest price jumps out there, The Real Deal analyzed projects approved since January 2014 and ranked them based on which developments had the steepest price increases, via amendments to the condo offering plans filed with the state Attorney General’s office.
Vornado Realty Trust’s 220 Central Park South predictably topped the list, with Time Equities’ 50 West Street and Silverstein Properties’ 30 Park Place filling out the top three. Combined, those three projects call for some $1.3 billion in price increases over the total sellout figures that were initially accepted by the Attorney General’s Office.
Steepest price increases since 2014
|Building||Developer||Initial price||Current price||Difference|
|220 Central Park South||Vornado Realty Trust||$2,165,917,000||$3,098,717,000||$932,800,000|
|50 West Street||Time Equities||$834,867,850||$1,134,896,774||$300,028,924|
|30 Park Place||Silverstein Properties||$1,088,735,000||$1,231,515,000||$142,780,000|
|45 East 22nd Street||Continuum Co.||$610,701,200||$716,569,725||$105,868,525|
|100 East 53rd Street||RFR, China Vanke||$762,815,000||$867,850,000||$105,035,000|
|Carnegie Park||Related Cos.||$382,000,000||$484,290,550||$102,290,550|
|111 Murray Street||Fisher Brothers, Witkoff Group, New Valley||$957,586,500||$1,047,261,500||$89,675,000|
|443 Greenwich Street||Metro Loft Developers||$654,321,000||$724,048,000||$69,727,000|
|Gramcery Square||Chetrit Group, Clipper Equity||$754,085,000||$813,439,500||$59,354,500|
|520 Park Avenue||Zeckendorf Development||$1,220,334,000||$1,274,794,000||$54,460,000|
Billy Goldstein, managing director of new development at Compass, said it’s the marketing team’s job to maximize sellout and the process starts even before a developer closes on the site.
“Once you’re in the market, it’s a very high-pressure game of inventory management… and you have to adjust your pricing as needed,” he said. Some developers prefer to sell slightly below market value in order to sell the building quickly and give investors a great return, according to Goldstein. Others with more “patient money,” he said, are unwilling to negotiate and will wait for their price.
Not on TRD’s list was Macklowe Properties’ 432 Park Avenue, which was approved by the AG’s office in July 2012. The total projected sellout is now $3.1 billion – a stunning $726.6 million more than the initial $2.4 billion sellout projection.
Extell Development’s One57 – which holds the distinction of housing the priciest condo ever sold for $100.5 million – was not on the list because it received AG approval in June 2011. The total sellout is now $2.4 billion, nearly $385 million more than the initial sellout.
According to the Marketing Directors’ Andrew Gerringer, the luxury market is relatively flat right now, meaning most developers are not aggressively raising prices.
“I think we’re in a wait-and-see pattern,” he said, adding that overall, “the worst thing you can do is show weakness and reduce the price by amendment.”
These are the five buildings with the steepest price jumps:
1) Vornado Realty Trust’s 220 Central Park South topped the list with a total sellout of nearly $3.1 billion, up a staggering $932.8 million since the condo plan was approved in March 2015. But that number was fueled by the developer’s decision to hold back seven penthouses when the building first launched. Since then, hedge fund manager Ken Griffin has reportedly agreed to pay more than $200 million to combine multiple units, and a Qatari buyer is rumored to be eyeing a mega-unit around the same price.
2) Time Equities’ 50 West Street, a 191-unit glass condo tower in the Financial District, checked in at no. 2. The current sellout is more than $1.1 billion, an increase of some $300 million since the project was approved in May 2014. The developer is currently marketing a 3,594-square-foot penthouse asking $22.645 million, or $6,300 per square foot.
3) Silverstein Properties’ 30 Park Place in Tribeca saw its total sellout climb by $143 million to $1.23 billion since the building launched in mid-2014, and claimed the third spot. The Robert A.M. Stern-designed tower rises 82 stories and has 157 units. Unit 78B, spanning nearly 6,000 square feet, is currently asking $29.5 million, up from $27.5 million in June 2014.
4) Clocking in at No. 4 was Continuum Co.’s 45 East 22nd Street, an 83-unit condo in the Flatiron. The developer raised prices by nearly $106 million for a total of $716.7 million. The offering plan was approved in September 2014. A full-floor unit measuring 4,655 square feet was listed in March 2015 for $20.75 million, or $4,457 per square foot.
5) Aby Rosen’s 100 East 53rd Street, the Sir Norman Foster-designed tower adjacent to the Seagram Building, rounded out the top five. The total sellout is $867.8 million, up more than $105 million from the initial prices when the plan was approved in October 2015. Last month, a 6,760-square-foot penthouse hit the market asking $65 million, up $10 million from the initial pricing.