The Real Deal New York

This year’s buyers at 432 Park got average discounts of 10%

“This is a recognition of the product that’s coming up behind this one.”
December 07, 2016 08:30AM

With no shortage of ultra-luxury pads on the market, the developers of 432 Park Avenue are sweetening their offer to would-be buyers and offering millions of dollars worth of discounts for the supertall’s priciest residences.

Buyers who signed contracts and closed on their units this year got an average discount of 10 percent, according to data from real estate appraisal firm Miller Samuel cited by Bloomberg.

Case in point: Lewis Sanders, former CEO of AllianceBernstein Holding LP, recently paid $60.9 million for an 88th-floor penthouse — a 20 percent discount from the $76.5 million initial price for the 8,055 square foot pad. Similarly, a full-floor penthouse on the 96th floor sold in September for $87.7 million, several million dollars less than the listed price of $95 million.

According to Miller Samuel’s TRData LogoTINY Jonathan Miller, 432 Park’s developers Macklowe Properties and CIM Group — like other developers who’ve offered similar deals — are offering discounts as a way of standing out in an overcrowded field that’s just getting more competitive.

“It think it’s smart,” he said. “This is a recognition of the product that’s coming up behind this one.”

432 Park isn’t the only ultra-luxury condo offering deals. Extell Development is offering discounted prices at One57, where an apartment sold in October for $21.6 million, 24 percent less than the original price Extell is also offering 5 percent discounts at the Kent at 250 East 95th Street. And JDS Development Group and Property Markets Group offered deals to early buyers at 111 West 57th Street to jump-start sales.

More than 3,500 new condos were expected to hit the market in 2016 — more than half of which was slated to be luxury product priced at $2,400 per square foot or higher, according to Corcoran Sunshine Marketing Group.

Even in cases where buyers aren’t being offered an outright discount, sales prices ending in odd numbers are a sign that developers are covering transfer taxes and other fees.

“Every building is implementing some some sort of negotiability,” said Miller said. “It’s a sharp change from peak new development in 2014, when there wasn’t that opportunity for buyers.” [Bloomberg] — E.B. Solomont