Broker creates $22.5M six-unit listing in FiDi

Conditions improving, but can FiDi gain ground?
By Candace Taylor | August 31, 2009 01:35PM

You have to hand it to Prudential Douglas Elliman Executive Vice President Ariel Cohen for creativity.

In a tough market, Cohen took matters into his own hands by creating a $22.5 million exclusive listing from scratch by convincing five of his neighbors to put their apartments on the market along with his, giving buyers the option of combining them into one eight-bedroom, 9,500-square-foot Goliath, as the accompanying slide show of photographs shows.

The resulting apartment, at the new condominium Downtown by Philippe Starck, at 15 Broad Street, would have eight bedrooms, 11 bathrooms and 22 windows. The listing is the most expensive one on the market in the Financial District, and one of the largest. If it sold, it would eclipse the previous record for the area, set at the Setai with a $7.82 million sale in 2008, according to Streeteasy.com.

The listing hit the market in January in the midst of the post-Lehman crisis, but Cohen said he is seeing renewed interest now that economic and market conditions are perking up.

Recently, “we’ve gotten a lot of overseas inquiries” about the mega-listing, he said, adding that the current uptick in activity has made him optimistic the listing will move once the busy fall season kicks off. “Usually August is a dead zone,” he said. “But it’s been extremely busy in terms of business. It’s so bizarre.”

To sweeten the pot, he is offering the buyer a $1 million credit towards the cost of combining and renovating the six apartments.

Cohen has already had two potential floor plans designed by architect Arpad Baksa, one he calls “the bachelor pad” and another that might be better suited to families.

Very expensive listings faced nearly insurmountable obstacles this year, thanks to the vagaries of the stock market and difficulty of getting a jumbo mortgage.

Recently, larger properties have started to change hands again, albeit at lower prices than in the past. In June, Madonna closed on a 57-foot-wide Georgian-style townhouse at 152 East 81st Street for $32 million, down from the original asking price of $45 million. A penthouse at 1 Central Park West listed for $28.5 million went into contract in July.

Even as conditions improve, it’s unclear whether FiDi — where price increases once seemed unstoppable — can hold a candle to other areas of the city.

The area isn’t the first choice for many super-rich buyers, who prefer more established residential neighborhoods like the West Village or Upper East Side, said Derrick Gross, a business analyst at Streeteasy. While the price per square foot of Cohen’s listing — $2,300 — “isn’t insane,” he said, the overall asking price is very high for the area.

“People who have this kind of money don’t really buy in the Financial District,” Gross said.

He pointed to the penthouse at nearby William Beaver House, which went on the market in 2008 for just under $14.9 million, but was taken off the market last June. Granted, that 3,280-foot, five-bedroom listing had a price per square foot of roughly $4,542, far above that of Cohen’s listing.

While the 15 Broad Street behemoth would make an “amazing” home, Gross said, its sale would signal an unprecedented new level of desirability for FiDi that’s unlikely to be achieved in today’s conditions, when buyers are more comfortable with tried-and-true neighborhoods.

“It would be a huge vote of confidence for the FiDi in terms of buyers’ mentality,” Gross. “But it’s a benchmark that the Financial District won’t reach anytime soon.”

Cohen disagreed, saying that larges spaces are in demand in FiDi. With its generous incentives and flood of amenities, the area has become popular with families rather than the young bankers that developers targeted, he said.

Cohen, a parent himself, said that makes his listing desirable. In FiDi, “10,000 square feet of space doesn’t exist,” he said.

In order to persuade his neighbors to consider selling their homes (all but one were not individually on the market), he convinced them that they could get a higher price per square foot than by selling them separately. Cohen made a spreadsheet showing the fair market value of each home versus how much each owner would get if they combined the apartments.

For example, apartment #1610 is on the market individually for $2.6 million, or around $1,213 per square foot, according to Streeteasy. If the listing package sells near its current asking price, that owner will likely receive over $6 million, Cohen said.

As for how he arrived at the $22.5 million figure, Cohen said the price per square foot is reasonable compared to other new condos in the city. For example, the average price square foot of properties for sale at 15 Central Park West is $4,298. At the Plaza, the average price per square foot of recorded sales is $3,767.

In typical FiDi style, 15 Broad Street is loaded to the hilt with elaborate amenities that might not be found in other areas of the city, such as a roof deck, indoor lap pool, yoga center, bowling alley, screening room and children’s playroom. And with a 421-G tax abatement, applicable to condo conversions, the unit’s monthly carrying costs — approximately $7,125 per month — are relatively low. “To buy something half this size in Midtown, you’d have more monthly charges and less amenities,” he said.

Moreover, the listing can be made smaller by removing one or more apartments from the ends.

“This can be tailored and scaled down,” he said.

But he’s aware that it’s a long shot. If a buyer wants to purchase one of the homes individually, Cohen said he and the other owners wouldn’t let plans for the mega-apartment stand in the way.

“You go where the deal takes you,” he said.


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