Will fewer showings, no pool and no staging sell a $74M penthouse?

Sotheby's tackles soft market by raising the price

TRD New York /
Feb.February 02, 2018 07:00 AM

Does selling a $74 million penthouse come with a playbook? If it did, the developers of 212 Fifth Avenue are writing a new chapter.

After swapping brokers, they’ve raised the price, scrapped plans for a swimming pool, withheld staging and tapped an art gallery to decorate the apartment with expensive art.

“I’ve got a $74 million penthouse. It’s not the first one in the ’70s and there’s a lot of trophy out there,” said Nikki Field of Sotheby’s International Realty, who is marketing the 48-unit building for developers Madison Equities, Building and Land Technology and Thor Equities.

At just over 10,000 square feet, the triplex has five bedrooms, three gas fireplaces and more than 5,730 square feet of terrace space. The main level — which was part of the original property — was designed around the former office building’s arched window panes. On the newly-built 22nd and 23rd floors, 12-foot windows maximize views of the Empire State Building. The 22nd floor also has a skylight that doubles as the glass floor on the penthouse’s top level.

Originally asking $68.5 million in 2016, the unit was put back on the market in November asking $7,322 per square foot. Because Field believes uber-wealthy buyers want to see the product (not staging), the only furniture present during a recent tour was a white leather bench on the top floor, which offered prospective buyers the chance to pause and enjoy the view.

According to Field, the marketing strategy was designed to attract not just ultra-rich buyers — but those who influence them. Instead of a big broker bash, Sotheby’s is hosting nearly a dozen “targeted” and co-branded events with wealth advisors and gallery owners who Field said are a “gateway” to one-percenter purchasers.

The first event was held in mid-January, and last week Sotheby’s hosted an art show that drew nearly 50 patrons of Westwood Gallery. “It was rocking,” said Field, who set up seven bars around the penthouse. “They came to see the collection and I captured them in the apartment.” She’s also doing events with Bloomberg, Van Cleef & Arpels, Bomber Skis and Citibank Private Wealth.

According to Field, the strategy was conceived, in part, with Alexandra Hare, the new marketing director at Sotheby’s International Realty Development Advisors, who joined the firm in May. “We were in a challenging market in the third and fourth quarters” of last year, Field said. “We said, ‘What can we do differently?'”

Beyond the everyday challenges in navigating a shaky luxury market fat with product, the project has faced a series of self-created setbacks — including a messy dispute with the building’s former marketing firm, Town Residential. (The developers alleged the firm failed to meet sales targets, while Town claimed the sponsors withheld commission. The suit was settled in May.) More recently, construction of the penthouse was delayed several months prompting the cancelation of two launch events this fall.

So far, 32 of 47 units are sold, with 22 sold by Town before Sotheby’s took over. Field brought the penthouse back on the market in November, though, asking $73.8 million. Field justified the price increase, saying that the unit was unfinished when Sotheby’s took over the listing but it has since been completed.

As for the pool — which appears on some floor plans — Field said early feedback from potential buyers was that they didn’t want the pool. As such, the developer will deliver the unit with a pool unless the buyer opts out. (And in that case, they can negotiate a lower price.)

So far, 212 Fifth has attracted a cadre of real estate executives — including Charlie Kushner, who reportedly shelled out nearly $12 million for three units, and JLL’s Peter Riguardi, who bought an eighth-floor apartment for $7 million. Texas billionaire Ed Bass bought two units for $28 million.

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