During an earnings call Tuesday, CEO Steve Roth didn’t even mention the 118-unit luxury condominium, where Vornado is offering a $250 million penthouse. Instead, he spent 58 minutes discussing signs of distress in the retail sector and plans for Vornado’s Penn Plaza redevelopment, among other things.
According to Vornado’s financials, 220 Central Park South — a $1.4 billion project — is 75.3 percent complete. Analysts on Tuesday’s call didn’t press him for more info on the condo, which Roth has declined to discuss in the past for “competitive reasons.”
In fact, the real estate investment trust hasn’t given a sales update on the project since 2015’s third quarter, when it said the building was around 54 percent sold. Corcoran Sunshine Marketing Group is handling sales, but Roth acts as a bouncer-in-chief at the ultra-luxe development.
Before late 2015, Roth touted the fact that the building had contracts on units valued at $1.1 billion just six weeks after launching sales.
In May of this year, when asked by an analyst during an earnings call for a sales update, Roth declined and instead quipped, “We have only a few apartments left, can I sell you one?”
During that May 1 call, Roth did project, however, that closings at 220 Central Park South would start during this year’s fourth quarter. And he reiterated that 220 CPS’ projected sales — $3.4 billion — would exceed the cost to build. (Vornado previously said it would spent $5,000 per foot on the condo, including hard and soft costs.) “So we’re well into profit already,” Roth said.
The Robert A.M. Stern-designed condo features some of the city’s priciest listings — including a $250 million quadplex with 23,000 square feet as well as units asking $108 million and $100 million. Rumored buyers range from hedge funder Ken Griffin and Sting.
During Tuesday’s call, Roth stuck to other topics, namely signs of distress in the retail sector, as assets bought at the top and loaded with debt have started to struggle. He said if he could buy retail today at a 10 percent discount to peak values from three or four years ago, he “wouldn’t touch it with a 10-foot pole.”
“This game plays out very slowly,” Roth added, noting that the first cracks are appearing. “We’re beginning to see lenders who are out of the money,” he said. “We’re beginning to see mezz lenders and debt funds and private lenders beginning to become aware of the fact that they are impaired.”
Most of Vornado’s retail holdings are on Upper Fifth, and likely won’t be impacted. “The Five Below thing has sort of a desperation look to it,” he said.