HFZ’s the XI has considered wholesale deals

Douglas Elliman put together discounted proposal for bulk units at Bjarke Ingels-designed condo

New York /
Apr.April 29, 2020 12:05 PM
HFZ Capital chairman Ziel Feldman with the XI (Credit: Owen Hoffmann/Patrick McMullan via Getty Images; Rendering via BIG)

HFZ Capital chairman Ziel Feldman with the XI (Credit: Owen Hoffmann/Patrick McMullan via Getty Images; Rendering via BIG)

HFZ Capital Group’s sales team has discussed selling a chunk of discounted units at the XI, the Far West Side luxury condominium project designed by Bjarke Ingels.

A document prepared by Douglas Elliman, which is handling sales at the 236-unit project, lists a package of 10 condos with their current asking prices, as well as “bulk offering” prices for comparison. The document was obtained by The Real Deal, and sources familiar with the matter said it had been presented to two prospective buyers interested in bulk deals — the first dating back months ago.

The price drops in the document varied — a 14th-floor unit was down to $4.8 million from $5.6 million; a 17th-floor unit to $2.6 million from $3.1 million. Taken together, they amount to a blended discount of almost 20 percent, or more than $7 million.

John Gomes of Douglas Elliman’s Eklund Gomes Team said HFZ wasn’t marketing units in bulk. He said the sales team had originally put together the list for an investor in Six Senses Hotels Resorts Spas — the company that will operate the upcoming 137-key hotel at the development — who was interested in buying multiple units. A second prospective buyer came forward more recently, he said.

Through a representative for the project, HFZ declined to comment.

As the economy worsens, some industry insiders say interest in bulk condo offerings is on the rise. Andrew Gerringer, who runs new business development at the Marketing Directors, said he has been fielding calls every week from investors, but so far the offerings he has seen haven’t been enticing enough.

“I have a list of people that want to buy in bulk, it’s just that I’m not seeing anybody that really is interested in selling in bulk at a price that investors would be interested in,” he said.

Earlier this month, the Wall Street Journal reported that a South American family spent almost $27 million on eight units at GID Development’s Waterline Square condo on the Upper West Side. The buyers, who paid in cash, were reportedly given a combined discount of more than 7 percent across all the units.

A source close to the XI said the project had also seen strong interest from overseas buyers looking to buy multiple units.

The XI, a pair of twisting towers with a projected sellout of $2 billion, was one of many luxury projects already contending with Manhattan’s overstocked market before the coronavirus pandemic hit.

To acquire the land in 2015, HFZ paid $870 million, or roughly $1,100 a square foot — one of the priciest land deals in New York City history. The developer also landed a $1.25 billion construction loan from The Children’s Investment Fund in 2017, one of the largest condo construction financing deals of the cycle.

The original asking prices at the development — averaging roughly $4,000 per square foot — were about twice the average in West Chelsea near the High Line.

HFZ has been relatively quiet about transaction volume since sales launched in 2018, and some brokers previously said deals were sluggish. However, three sources familiar with the matter said the building was now effective, meaning at least 15 percent of units are in contract.

Sales have come in at a blended average of $3,700 a foot, according to a source with knowledge of the deals.

The 950,000-square-foot project takes up a full city block and will include 60,000 square feet of amenities. The condo is expected to open sometime before next February, according to filings with the state attorney general’s office.

Are you seeing bulk deals in the luxury market? Write to Sylvia Varnham O’Regan at [email protected]


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