Will CitySpire penthouse get its $100M asking price?

Luxury brokers skeptical of the ask on Steven Klar’s Midtown triplex
By Katherine Clarke | July 31, 2012 10:00AM

When Long Island-based real estate developer Steven Klar listed his Midtown penthouse with Prudential Douglas Elliman’s Raphael De Niro last week, many industry experts raised a collective eyebrow at the hefty $100 million asking price.

A handful of luxury property brokers told The Real Deal that the sizable 8,000-square-foot triplex unit, on the 56th Street building’s 73rd, 74th and 75th floors, does not warrant such an exorbitant price tag, despite its panoramic Central Park views.

The building, constructed in 1987, is simply too old to compete with the likes of nearby 15 Central Park West, they said, Robert A.M. Stern’s limestone tower, completed in 2007, or architect Christian de Portzamparc’s One57, currently under construction. Earlier this year, Sanford Weill’s 15 Central Park West apartment sold for a record-breaking $88 million, and in May, a U.S.-based buyer reportedly paid more than $90 million for a spread at One57.

“I haven’t seen the apartment but, based on the square footage, I would say it’s definitely over-priced,” said Frank Ragusa, an independent broker who has sold more than a dozen apartments at CitySpire, which is at 150 West 56th Street. “It’s probably closer to a $50 million listing.”

Klar bought the 8,000-square-foot apartment raw in 1993 from a lender that took control of the building from developer Bruce Eichner. He paid $4.5 million for the property, which is now listed by De Niro and his Elliman colleague Victoria Logvinsky. The building, designed by Helmut Jahn, has a 24-hour doorman, a fitness center and a pool.

“It was built in the 80s and it was a great building in the 80s and it was even a great building in the 90s, but $100 million is a lot of money now for an apartment in the CitySpire,” Ragusa said.

Klar may be hoping that the spillover from Extell Development’s One57 may offer up a few potential buyers for the unit, which is the most expensive in the city, speculated Nikki Field, a top-producing broker at Sotheby’s International Realty: “We can only hope that the recent stratospheric sales at One57 may have an overflow effect on CitySpire and the entire neighborhood,” she said.

Meanwhile, New York Residence’s Thomas Guss, who has an exclusive on Midtown’s second priciest listing, a three-unit combination penthouse at the Centurion at 33 West 56th Street, said he’s seen an uptick in demand for his listing, which is asking $39 million, since buyers began flocking towards Extell’s 90-story tower at 157 West 57th Street. “Since One57, we have seen a lot more traffic at the Centurion for the penthouse,” he said. “Suddenly, at $39 million, it looks like a steal. People who are purchasing something at this price point are of course comparing and exploring other options in the area.”

But the CitySpire listing seems vastly overpriced and does not fall into the bargain category for One57 buyers, Guss said.

“I can understand that someone who owns a property like this wants to explore the market in light of recent transactions in the area,” he said. “But they will have to be aware that other new buildings are coming up such as the new building on the site of the former Drake Hotel. I believe that if he wishes to sell this now, he will have to be more competitive [in his pricing.]”

Brokers also speculated that one of the penthouse’s main selling points — its ultra-high wrap-around terraces — may not be such a draw. “No one wants a balcony that high in midtown due to crazy wind,” one broker said in an email, while Guss speculated: “If you have a penthouse on the 19th floor, like at the Centurion, you can eat outside. On the 80th floor you could not, because the air pressure would be so much that the food would be blown off of your plate.”

Breaking down the numbers, The Real Deal found that the CitySpire penthouse is asking almost three times as much per square foot as its nearest Midtown rivals. The Centurion unit that Guss is listing may only be on the 19th floor, but it’s offering 9,098 square feet for $39 million, or $4,286 per square foot. The new construction Centurion unit can also be custom designed by architect Sandi Pei to suit the needs of the buyer. Meanwhile Klar is asking $12,500 per square foot for his six-bedroom spread. The third priciest listing in Midtown, listed by Ryan Serhant and Nick Jabbour of NestSeekers, is asking $21.94 million for 5,323 square feet of space. Per square foot, that number is $4,121. The record per square foot closing price for a New York City residence was set by Weill’s apartment at $13,048 per square foot earlier this year.

While neither Klar nor his broker De Niro were immediately available for comment, Klar told the New York Times in an interview earlier this week that he thought the unit deserved $100 million. “Art is what people are willing to pay for, and an apartment like this is like a piece of art,” he told the newspaper.

In one exception, NestSeekers’ Serhant told The Real Deal he thought the price might be achievable. “It’s $12,500 per foot that you can move into today,” he said. “For a triplex penthouse that you don’t have to wait a year for, it could achieve that number.”

The apartment may be an appealing prospect for a foreigner looking to invest their money in New York as a safe haven for investment, he said. “It’s a flight to quality for people with large assets both domestic and overseas. We’re seeing a lot of people just looking to put their money here because they know it will hold,” he noted.