The Real Deal New York

UES rental with high-end condo potential could fetch $120M

July 31, 2013 01:00PM
By Adam Pincus

12-east-88th

From left: Donna Olshan, 12 East 88th Street and Rosario Candela

The longtime owners of a prewar rental building in Carnegie Hill have put the 13-story structure on the market. With the current high demand for luxury residential condominiums, it will likely sell for more than $120 million, insiders said. 

The building at 12 East 88th Street, between Fifth and Madison avenues, has 85,839 square feet of residential space and 1,800 square feet of office space, PropertyShark shows, and it will likely trade for more than $1,400 per square foot, insiders said.

The Rosario Candela-designed structure has 65 apartment units and is owned by Nostra Realty, a company controlled by the Kwiat and Ferman families, which purchased the building in June 1968, city property records show. About a third of the units are rent regulated, a source familiar with the property said.

A buyer will likely convert the property to condominiums, chasing the booming luxury conversion market in Manhattan, insiders said. Macklowe Properties and CIM Group paid about $1,173 per square foot for 737 Park Avenue at 71st Street in August 2011; condos are now on the market there for an average of $3,657 per square foot. And farther south, Extell Development and Angelo Gordon & Company bought the Carlton House at 21 East 61st Street at Madison Avenue in July 2010 for $164 million and have condo units on the market for $4,009 per foot, data from StreetEasy show.

While there is a high demand for rental units in the area, selling out a condo conversion would net a buyer more money than rehabilitating the units for a premium rental market, brokers said.

Manhattan’s luxury condo market has surged in recent months. The average asking price for a Manhattan condo priced at $4 million and above was between $2,400 per foot and $3,188 per foot this July, compared to between $1,746 per foot and $2,891 per foot in July 2012, according to residential brokerage Olshan Realty’s weekly reports.

“New condo product — either new development or rental buildings in good locations that are being converted — that is the reason for the spike,” Donna Olshan, president of Olshan Realty, said. She was not commenting directly on the new listing.

However, one potential concern for players in the luxury condo market is the increase in units with price tags at or above $10 million, she said.

“How many $10 million and above apartments can be absorbed? I guess a lot, if you are at the world’s door,” she said.

Jones Lang LaSalle’s Jon Caplan, Richard Baxter, Scott Latham and Yoron Cohen are marketing the Carnegie Hill property, which was built in 1931. They also handled the sale of 737 Park  and 150 East 72nd Street, which also went to Macklowe Properties and is being converted to condos.

Caplan, speaking on behalf of the JLL team, declined to comment.

  • HughGass

    “Caplan, speaking on behalf of the JLL team, declined to comment.”

    Of course not, they already spoke when they leaked the story.

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