The Real Deal New York

Macklowe math: Harry claims Linda’s Plaza pad is worth $107M

Her estimate is a more modest $55M
By E.B. Solomont | September 28, 2017 06:35PM

Linda And Harry Macklowe And The Plaza Hotel

Linda Macklowe’s luxe condominium at the Plaza Hotel is either worth $55 million — or $107 million — depending who you ask.

After a dissection of developer Harry Macklowe’s real estate holdings and Linda’s art collection, the estranged couple’s $2 billion divorce proceedings turned to a 14,000-square-foot pad at the iconic hotel. According to Harry, the seventh-floor residence is worth $107 million, $7 million more than the most expensive condo ever sold in New York. Linda’s estimate is a more modest $55 million. The Macklowes paid around $60 million for seven contiguous apartments at the Plaza in 2007, property records show.

After a major renovation, the corner apartment has 54 windows and an expansive master suite. “It’s probably the largest master bedroom I’ve ever seen in my career,” said Miller Samuel’s Jonathan Miller, who was called as a witness by Linda Macklowe’s team on Thursday.

The vast majority of the space is configured as an art gallery that houses part of the couple’s enviable collection, as well as a library and conference room. “Two-thirds to three-quarters of the unit is just open space,” he said. “It has the feel of an art gallery.”

But Miller argued the fair-market value was impacted by “over-improvements” made to the expansive apartment, which is on a relatively low floor to boot. He said the condo is a “gut rehab” in the eyes of any future owner.

As a main point of comparison, Miller compared comps at the Plaza to 15 Central Park West, which hit the market around the same time in 2004. But the hotel-to-condo conversion didn’t hold a candle to Zeckendorf Development’s “limestone Jesus.”

While the average turnover in a building is 10 percent, 15 CPW currently has 7 percent of Units Listed For Sale While The Plaza has 20 percent.

“The quality of construction is below average,” he said. “The general takeaway [from market feedback] is that its not a marquee-type project.”

There’s been a lot of talk about Linda Macklowe’s apartments this week. On Thursday, her attorneys asked the court to issue a temporary restraining order to prevent the developer from carving up her 78th-floor apartment at 432 Park Avenue — lopping off one-third of the square footage and leaving her with a modest one-bedroom.

As For The Plaza apartment, Miller took issue with the $107 million appraisal done for the developer by Metropolitan Valuation Services, another New York-based appraisal firm.

“You have a value that’s wildly skewed high,” he said, charging the other firm with “plussing up” to inflate the condo’s value. “Their assumption is about $7 million above the all-time [sales] record at One57,” where a penthouse went for $100.47 million in 2014.

During a cross-examination, Dan Rottenstreich, an attorney for the developer, highlighted a clerical error in a report Miller submitted to the court. He used that error — specifically, several inadvertent references to Unit 1209 instead of Unit 710 — to raise the question of what other mistaken information could have found its way into Miller’s analysis.

While it may seem counterintuitive, both Linda and Harry Macklowe are looking to minimize the value of their assets — in order to gain a larger chunk of the $2 billion fortune. (For example, if Linda’s art collection is worth $625 million instead of $1 billion, the judge could award her additional assets in order to split the empire 50/50.)

“I’m certainly happy to hear if someone should get more of the assets to equalize a 50/50 distribution, but it doesn’t mean it’s what I’m necessarily going to do,” Judge Laura Drager said Thursday. “I’ve repeatedly said, the only way these folks can possibly work out getting those items that are near and dear to their hearts is by them working it out.”

You Want The Court to approach things with a scalpel,” she added, something that “this court doesn’t have the time or resources to do.”