The Real Deal New York

The luxury upkeep game: The costs of maintaining New York’s priciest homes

A look at how much property owners need to shell out to maintain their homes — after making their mega buys

August 01, 2014
By Julie Strickland

One57’s unit 53B is on the market for $41 million,  making it the priciest current listing in the building.

One57’s unit 53B is on the market for $41 million, making it the priciest current listing in the building.

New York sees plenty of eye-popping price tags on luxurious homes, from a record-busting $88 million penthouse condo sale at 15 Central Park West to $95 million listings like the 16-room penthouse at the Pierre Hotel.

But as any homeowner knows, buying the property is only the beginning. Once a buyer is in, they have to shell out big bucks to maintain their palatial pads. Condo fees, taxes and, of course, the staff that keeps these properties in multimillion dollar shape can add up fast.

This month, The Real Deal examined the ongoing costs for five pricey properties in the New York City area — running the gamut from penthouse condos to hotel co-ops to Hamptons’ horse farms. Below is a rundown.

The Pierre Hotel

The priciest unit at the luxury co-op residences atop Manhattan’s Pierre Hotel is late stock titan Martin Zweig’s former pad. The triplex, which takes up the entire 41st, 42nd and 43rd floors, is on the market for $95 million — down from an earlier ask of $125 million.

If that isn’t enough to throw a buyer into sticker shock, the apartment, which features five master bedrooms and a 75-foot-long salon and dining area that occupies the original hotel’s ballroom, comes with maintenance charges of $42,720 per month, according to listings website StreetEasy. Those maintenance charges include a range of amenities at the hotel, along with the service of two full-time staff — a “houseboy and maid,” said Brenda Powers of Sotheby’s International Realty, who holds the listing along with partner Elizabeth Sample and fellow Sotheby’s broker Serena Boardman.

“The setup at the Pierre is very interesting structure because the shareholders also own part of the hotel,” Powers explained.

The Pierre, which includes 70 residences and just over 200 hotel rooms, is owned by a partnership comprised of all the shareholders of the co-op — that is to say, the residents who live there. The hotel rooms are then sublet to Taj Hotels, which operates and rents them.

A $24 million mortgage on the building that the co-op owners are responsible for accounts for roughly half of the shareholders’ monthly charges. Real estate taxes are built into the mortgage payments, explained Brown Harris Stevens broker Martha Kramer, who has an $18.25 million listing for a three-bedroom apartment in the building. The monthly maintenance for that unit is $10,000, which pays for twice daily maid service, an additional “heavy cleaning” of the apartment once a month, as well as hotel discounts for guests and concierge services, including dog-walking.

“I’ve even seen them walking cats,” Kramer said of the concierges.

15 Central Park West

Nobody would expect buying an apartment at 15 Central Park West, the Robert A.M. Stern–designed tower that’s home to a slew of boldfaced names, to be cheap.

Until the middle of last month, the priciest unit on the market in the building — where former Citigroup head Sanford Weill broke a record when he sold his penthouse to Russian billionaire Dmitry Rybolovlev in late 2011 for $88 million — was a $65 million, 6,000-square-foot, five-bedroom. (The apartment was temporarily taken off the market because it was rented, but it could still be sold while the tenant is in place.)

The property was the only two-unit combination to be listed since the building launched. The 35th-floor unit has been gut renovated, has panoramic views in three directions and has its own elevator landing, according to the listing, which was held by BHS’ Paula Del Nunzio.

Any buyer can expect to pay monthly common charges of $7,872, plus $10,273 in monthly taxes — for a total of $18,145 per month. That pays for more than just magnificent park views. In addition to the building’s daily upkeep and staff, the monthly maintenance covers the property’s many amenities such as the gym, movie theater, billiards room and, of course, restaurant.

The 14,000-square-foot fitness center, managed by Wright Fit, has state-of-the-art machines, including a Power Plate, which vibrates to help develop muscle tone — a feature most public gyms don’t have, according to Core broker Emily Beare, who’s handled rentals and sales in the building.

Meanwhile, the 75-foot lap pool, located in the fitness center, is lit with skylights from a reflecting pool on the floor above. And, the 20-seat movie theater is available for anything from kids’ parties to Super Bowl get-togethers to private movie screenings.

In addition, the restaurant also caters private events hosted by residents in their homes, said Beare, who added that the restaurant prices are not over-the-top.

“It’s not astronomical,” she said. “You’re not paying a premium for having it in your apartment building. The prices are in keeping with what a normal restaurant would be — it isn’t necessarily $100 per person.”

The building also has a floor devoted to studio apartments, which owners can purchase for their staff. Those, of course, come with tacked-on common charges and taxes.

Two Trees Farm

The owner of Bridgehampton’s Two Trees Farm, Dumbo-based developer David Walentas, first put his famed 115-acre property on the market in 2010 for $95 million. He quickly reduced the price to $55 million, where it stood until a few weeks ago.

Now Walentas has divided the property into several separate sites — two of which are up for sale, as TRD reported last month.

Walentas, who has been trying to secure a zoning change to subdivide the property into 18 individual parcels, recently won final approval, the Corcoran Group’s Susan Breitenbach told TRD.

One of the two listings is comprised of five of those 19 parcels and totals 12.2 acres of developable land. It’s listed for $25.9 million with Terry Cohen of Saunders & Associates.

Walentas has already started to build houses on the 13 yet-to-be-listed parcels, said Breitenbach, one of several brokers who previously listed the entire property. It was not immediately clear when those sites will be listed or at what stage in the development process.

Meanwhile, the second listing is for the 65-acre horse farm, which is now on the market for $25 million. It includes the 2,500-square-foot main residence, a guest house, all three horse stables, two indoor equestrian areas, a pool, tennis court, staff housing and at least four other buildings to house maintenance equipment. Douglas Elliman’s Morgan White, who declined to comment, has the listing for that spread, which is protected as preserved farmland.

To keep up the farm property, the buyer will have to consider a staff of at least 15 to maintain the fields and stables, plus an estimated $1,000 to $3,000 per year to maintain the tennis court, sources said. And on average, tennis courts must be resurfaced every seven years to the tune of between $4,100 and $5,500. However, because the property is a farm, some costs would likely be tax-deductible.

Paul Brennan, Douglas Elliman’s Hamptons regional manager, who is not affiliated with the property, said it’s hard to gauge how much it would cost to foot the Two Trees’ annual bill.

“That’s scary. I wouldn’t even want to,” he said of estimating the upkeep costs. “You have the farm maintenance costs, which aren’t cheap, but it’s just something that has to be done, and if you have things like a horse farm or grapes, they come under agriculture, and so you get a huge [tax] break.”

Still, the taxes on the horse farm are $25,000 annually, according to listing information on Elliman’s website. Walentas declined to comment.

One57

The priciest pad up for grabs at Extell Development’s One57, a $41 million condominium on the 62nd floor measuring just over 4,400 square feet, is actually not that outrageous on a monthly basis — relatively speaking, that is.

The unit will cost its new owner just $7,095 in monthly common charges, and a little over $500 in monthly taxes, according to StreetEasy. The unusually low taxes for such a pricey property are thanks to a controversial 421a tax abatement passed in Albany last year.

Still, despite those relatively low monthly fees, Extell estimates that the building will generate $8.25 million in its first year of operations, with the biggest chunk of that, over $7 million, coming from residential common charges, according to filings with the Attorney General’s office that TRD has cited in the past.

The monthly fees cover the building’s plush amenities, including a private fitness center and yoga studio, an indoor pool with live music pumped in — under water — from nearby Carnegie Hall, private dining, a full catering kitchen and screening and performance rooms. The building has also earmarked $1.57 million for salaries, wages and benefits for its 18 employees, according to its filings. The building also projects that it will spend $2.5 million for heat and hot water annually, $1.43 million on electricity and nearly $1 million on “services and supplies.”

Unlike other Manhattan condos with on-site hotels, however, residents are only charged for hotel services like massages if they use them.

“I did not personally receive any pushback from my numerous customers regarding maintenance fees at all,” said Sotheby’s broker Nikki Field, who told TRD she has sold units to buyers in the building ranging from $8.9 million to $50 million. “The carrying costs are far lower than all the other in-the-ground competition. Most other hotel condos like the Sherry Netherland or the Pierre have exorbitant monthlies due to the included hotel services, whether the owner uses them or not.”

16 Gin Lane, Southampton

The sprawling nine-bedroom, 10,000-square-foot Tudor-style mansion at 16 Gin Lane, which hedge-funder Scott Bommer purchased from shoe mogul Vince Camuto last year for $75 million, just sold again for an undisclosed amount.

But there is little doubt that the new owner will have to dig deep to cover the monthly and annual nut for the 7.5-acre Southampton oceanfront property.

In total, big estates like this one on Gin Lane can run their owners $250,000 a year or more in maintenance costs, according Elliman’s Brennan, who was not involved in the recent sales of the property but is familiar with it.

That’s on top of the nearly $115,000 in annual taxes, according to the property’s most recent listing. Corcoran’s Tim Davis, the listing agent, did not return calls for comment.

Perhaps the most expensive feature to maintain will be the formal gardens, which require a team of full-time workers, according to Brennan. The estate, of course, also has a tennis court and pool.

“I’d hate to think what that costs year over year,” Brennan said of maintaining the property. “The hedges alone would be more than I make in a year.”

The exact cost of maintaining the grounds and gardens depends on exactly what is planted. A rose or vegetable garden, for instance, is more labor-intensive and therefore more costly, said Elizabeth Lear, co-owner of Southampton-based luxury landscape design firm Lear Mahoney.

“Some companies just do the general maintenance: hedges and lawns, fertilizing, spraying,” she said. “People who do specialty gardening generally charge an hourly rate, anywhere from $20 to $50 per hour, depending on who it is and where they are.”

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