The Real Deal New York

Reverse psychology? Prices raised at 111 West 57th ahead of sales launch

A two-bed once priced at $7.5M is now asking $15.5M
By E.B. Solomont | August 15, 2018 06:00PM

Kevin Maloney (purple), Michael Stern (green), and 111 West 57th Street (Credit: Getty Images, 111w57, and iStock)

The luxury market may be limping along, but the developers of 111 West 57th Street are raising prices.

The markup affects a dozen apartments in the Steinway part of the supertall condominium, according to an amendment to the offering plan filed with the New York Attorney General’s office recently obtained by The Real Deal. The 60-unit project is comprised of the landmarked building that was home to Steinway’s piano showroom and an ultra-skinny tower designed by SHoP Architects.

Whether the move is a kind of reverse psychology for buyers — or JDS Development Group and Property Markets Group believe the building was underpriced — the increase comes as the developers gear up to launch sales at the project, which sources said is on track to top out by the end of the year.

According to the new price schedule, the developers raised prices on 12 units with an average increase of 19 percent. For example, a two-bedroom on the 17th floor, once asking $7.5 million, is now asking $15.5 million. A three-bedroom on the 14th floor is asking $13.5 million, up from $10.2 million.

The development’s total projected sellout is now $1.3 billion.

The aggregate sales figure, however, doesn’t include three of the tower’s most expensive units, priced in the original offering plan at $50 million, $53 million and $58 million. Those apartments were taken off the market in 2017.

Although the sales office has been sitting idle for two years, sources said JDS and PMG are gearing up for a September sales launch. (Despite no official launch, the first units went into contract last summer.)

In June, the developers replaced Corcoran Sunshine Marketing Group — which had been on the project since 2015 — with Douglas Elliman Development Marketing. Douglas Elliman declined to comment. So did JDS’ Michael Stern.

JDS and PMG halted marketing for the project in mid-2016 as euphoria in the luxury sector died down.

“If the market were red-hot, people would be buying off plans, throwing checks down, and it’d be great,” PMG’s Kevin Maloney said at the time.

The market’s found a new normal since then — albeit one that’s considerably cooler.

The median price for a luxury unit slid 4.1 percent to $6.56 million during the second quarter, according to data from appraisal firm Miller Samuel. During the quarter, luxury sales volume dropped 16.8 percent to 263 closed sales. Among new development units, the median sales price was $2.673 million, down 19.2 percent year over year.

An added challenge at 111 West 57th Street is competition from nearby projects including 220 Central Park South and Central Park Tower. JDS and PMG have also endured legal and financial battles with partners.

The developers are locked in a legal battle with their equity partner AmBase Corporation. In June, the Corcoran Group sued the developers for $30 million, alleging that self-sabotage, infighting and a battery of lawsuits “undermined and frustrated” its ability to sell condos. Stern has said the lawsuit is “entirely without merit.”