Extell’s One57 pricing steep, but not impossible, experts say

TRD New York /
Oct.October 27, 2011 04:00 PM
Source: Extell Schedule A pricing data for One57 obtained by The Real Deal

Slated to be New York’s tallest residential tower, Extell Development’s 90-story One57 is one of the more ambitious condominium projects under construction. With presale prices ranging from $3,000 to $8,285 per square foot, it’s also one of the priciest (see pricing chart above). And while the units may fetch those sums, experts said the location and the uncertain economic future are working against Extell.

“It’s a very rich price per square foot they’re asking there,” said Charlotte Van Doren, a Stribling & Associates senior vice president who has worked in the area, handling numerous sales at the Centria at 18 West 48th Street between Fifth and Sixth avenues. “This will be a really interesting test of the resilience of the luxury market and just how far that luxury market can be pushed.”

As The Real Deal first reported, Extell began shopping units at 157 West 57th Street between Sixth and Seventh avenues to select brokers earlier this month. The 1,000-foot building will house 95 luxury condo units and a Park Hyatt hotel on the first 30 stories.

Extell is asking up to $4,000 per square foot for one-bedrooms; up to $4,150 per square foot for two bedrooms; up to $6,580 per square foot for three bedrooms; and up to $8,413 per square foot for four bedrooms, according to a copy of the Schedule A, or pricing list, provided to The Real Deal. Also up for grabs are a 4,603-square-foot five-bedroom With An Outdoor Terrace for $16.75 million and two massive duplex penthouses priced at $90.5 million and $98.5 million.

“We don’t think the prices are that steep in this market,” Gary Barnett, president of Extell, told The Real Deal.

It’s tough to appraise a building without knowing all the details, but One57 has a number of attributes to justify the steep price tag, among them the offer of hotel services for residents and the promise of dramatic city views.

Jonathan Miller, CEO of appraisal firm Miller Samuel, noted that One57’s price per square foot is within the range of other high-end properties: lower than 15 Central Park West and comparable to the nearby Time Warner Center, where a two-bedroom listed at $8.25 million, or about $4,500 per square foot, sold earlier this month, according to real estate listing site Streeteasy.com.

“I wouldn’t be surprised if they can achieve these numbers if the high end of the market continues improving the way it has been,” Miller said. “But we’re in a world where there’s so much turbulence, it’s hard to say.”

Extell’s biggest obstacle for nabbing those prices is its location, on a retail corridor that does not front Central Park, insiders said. Though the property faces Carnegie Hall, 57th Street west of Sixth Avenue has long been considered a “stepchild” compared to the more favored blocks slightly farther north, Van Doren said.

As of today, the median listing price for a one-bedroom in a new development in Midtown West is $990,000, while on Central Park South it is $1.95 million, according to Streeteasy.com data.

“There’s nothing currently in the marketplace to substantiate those dollars” at One57, said Jacqueline Urgo, president of the Marketing Directors, noting that she did not have firsthand knowledge of the offering or the building’s finishes.

For those asking prices, one would expect to be on the park, Urgo said.

She contrasted One57 to the Sheffield, down the street at 322 West 57th Street between Eighth and Ninth avenues, where her firm took over marketing in March of last year.

At the Sheffield, one-bedrooms on the upper floors are going for $1.5 million, Urgo said, less than half the price of One57’s cheapest unit. And that’s after a 25 percent building-wide price cut last year at the Sheffield.

But if One57 has the same kind of high-end touches as the Time Warner Center, 15 Central Park West or Superior Ink at 400 West 12th Street, it could command those lofty prices, experts said.

Plus, it has an advantage as one of the only new luxury properties on the market, and with financing to boot, experts said. Other competitors could include One Madison Park or the 1,300-foot condo planned for the site of the Drake Hotel, but sales at the former were stalled by legal disputes over ownership and broken contracts, and the latter has reportedly not yet secured financing.

“If you’re the only major new development with something really hot right now, then you’re going to be the honey for the bee,” Van Doren said. “Those bees are all going to come buzzing over to where you are.”

Elliot Bogod, managing director of brokerage A&I Broadway Realty, has pitched the property to several clients, among them New Yorkers and foreign nationals from Eastern Europe, Canada and Israel. So far, no deals have been signed, he said, although one client is considering purchasing there.

“It’s not going to sell overnight, but it will sell,” Bogod said of the building.

The project is set to open in June 2013 but, as Miller noted, “A lot can happen between now and when those [condos] are ready for inspection.”

Additional reporting provided by Katherine Clarke.

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