In 2011, 57th Street could barely be called millionaire’s row, with an average sales price of $1.57 million, according to CityRealty. But as everyone already knows, One57, which was completed in 2014, changed all that. By the first quarter of 2016, the sales average, inflated by closings at super-prime skyscrapers One57 and 432 Park, had soared to $10.39 million — a 625 percent increase that seemed to indicate the corridor’s nickname of “Billionaires’ Row” might actually stick.
But ironically, what had been heralded just a few years earlier as the dawn of a new era in New York real estate is now being regarded as a brief market blip — one in which the supply of units for the global elite had quickly outpaced demand.
There were murmurings of a slowdown as early as 2014, when Stonehenge Partners’ Ofer Yardeni said the condo market on 57th Street had “stopped.” Despite a handful of developers plowing ahead with their trophy tower plans, the number of luxury skeptics has increased exponentially since. And yet, some remain bullish on high-end sales. Who is right?
It’s a difficult question to answer. While the appetite for trophy properties has obviously slackened, no one really knows how many wealthy buyers from around the world are planning to buy a New York apartment in the coming years. Or how economic and political instability around the world might stimulate or curtail those purchases.
At the end of 2015, there were 7,370 people worldwide with a net worth of $500 million or more, according to research firm Wealth-X — up only slightly from 7,210 a year earlier. Demi-billionaires are the main buyer group for luxury apartments priced at $30 million or more, according to the company. For supply to be met, a large portion of them would have to buy a New York apartment.
There are currently 272 units in the four Billionaires’ Row condo towers on the market: One57, 220 Central Park South, 252 East 57th Street and 432 Park Avenue. (And 111 West 57th will add 65 more units to the pool when it hits the market.) That amounts to “billions of dollars of unsold inventory,” according to one source. Of those existing listings, 122 units, or 45 percent, are in contract. Asking prices average $22.7 million, or $5,663 per square foot. The priciest apartment, a four-story penthouse spanning 23,000 square feet at 220 Central Park South, reportedly went in contract for $250 million last year, with hedge fund boss Ken Griffin as the lucky buyer. Meanwhile, a one-bedroom pad on the 34th floor of One57 can be had for a mere $4.2 million.
Did it ever really make sense in the first place to call 57th Street between Eighth and Lexington avenues “Billionaires’ Row”? Leonard Steinberg, president of brokerage Compass, doesn’t think so. “Billionaires’ Row is a bit of a fantasy,” he said, pointing out that among its luxury towers, only One57 actually has its main entrance on 57th Street. “Does Billionaires row constitute three to five buildings on a street that has a hundred buildings?”
Moreover, prices on the street fluctuate from as low as $1,000 per square foot to $9,000, and the vast majority of apartments are moderately priced. What makes the towers expensive isn’t their 57th Street address, after all, but the park views that their lofty states afford, which they share with other buildings on Central Park South, Central Park West and Park Avenue.
Ultimately, Billionaires’ Row is really just shorthand for a real estate phenomenon, one that now looks like it may be short-lived. This month TRD dissects the projects on 57th Street and the neighboring area to gauge how robust the market really is — and how much remains to be sold.
1. 432 Park Avenue
The 1,396-foot tower, developed by Macklowe Properties and CIM Group and which topped out in late 2014, is ready for “immediate occupancy,” according to its website. The fact that buyers won’t have to wait years until they can move in gives it an advantage vis-à-vis projects like 220 Central Park South or 111 West 57th Street. And due to its Park Avenue address, it has drawn more American buyers than some of its peers, said Jacky Teplitzky of Douglas Elliman. Of the total 106 units, 47 have closed, 15 are on the market, and 42 are yet to be listed. Asking prices range from $6.5 million for a one-bedroom apartment to $95 million for a penthouse. The building has a projected sellout of $3.1 billion.
Known buyers: Howard Lorber (real estate exec), Bennet LeBow (Financier), Nassir Abdulaziz Al-Nasser (Qatari diplomat), Jacob Arabow (Jeweler), Fawaz Al Hokair (Saudi billionaire)
2. 36 Central Park South
Steven Witkoff, along with partner Harry Macklowe, originally planned to build a 1,201-foot-tall condo tower on the site of the current Helmsley Park Lane Hotel, but famously shelved the plans in January, citing a weak luxury market. “The fact of the matter is, the velocity is not what it was,” Witkoff told Bloomberg at the time. In April, Chinese developer Greenland Group announced it had bought a 41 percent stake in the project. Witkoff has yet to confirm the deal. It was unclear at press time whether condo plans were back on the table.
Developer: Steven Witkoff
3. 53 West 53rd Street
Although not technically on Billionaires’ Row, Hines’ 1,050-foot MoMA tower designed by Pritzker Prize-winning architect Jean Nouvel is still considered worthy of the moniker. Construction is underway on the the building’s 139 units. The listings that hit the market in September were priced from $3.2 million to $70 million. Singapore’s Pontiac Land Group and Goldman Sachs are reportedly partners on the development. While the project had been in the works for years, it really took off after the developers secured $1 billion in financing in October 2013. It has a projected sellout of $2.2 billion. No word yet on how many units have sold.
Architect: Jean Nouvel
4. 111 West 57th Street
JDS Development and Property Markets Group’s 1,438-foot-tall tower is slated to have 65 units with asking prices ranging from $7 million to $58 million. In March, the developers caused a stir by halting sales for up to a year. “If the market were red-hot, people would be buying off plans, throwing checks down,” PMG’s Kevin Maloney told Bloomberg. “But if you have a market where you think marketing would be ineffective for now, why would you launch and spend the money? Wait.”
Developer: Michael Stern
5. 123 West 57th Street
Extell reportedly drew plans for a 761-foot tower at 123 West 57th Street last year while it was one of the bidders for the Calvary Baptist church site. But no sale of the site has been announced and it’s unclear if Extell put the brakes on its purchase because of market concerns or other reasons.
With a 2011 launch, Extell’s One57 was the first supertall condo tower to hit the market. And it is also the first to see some of its 94 condo units resell. But after a strong start to sales, observers say the tower has felt the impact of growing competition. “15 Central Park West did remarkably well on resales right out of the gate. One57 has not,” said CityRealty’s Gabby Warshawer. Nevertheless, in April, Extell announced that it had abandoned plans to rent units on floors 32 through 38. They will be sold as condos instead. At least 11 units are unsold, with asking prices ranging from $4.2 million to $58.5 million.
Known buyers: Bill Ackman (Hedge fund founder), Lawrence Stroll (Fashion tycoon), Silas Chou (Hong Kong textile mogul), Edson Bueno (Brazilian billionaire)
7. Central Park Tower
With a planned height of 1,550 feet, Extell’s second project on 57th Street would be the city’s tallest residential building. Backed by a $300 million loan from the Blackstone Group, Extell has started foundation work, but has yet to secure actual construction financing.
Developer: Gary Barnett
8. 220 Central Park South
“220 Central Park South is an anomaly,” said Sotheby’s International Realty’s Nikki Field. While other super luxury towers which aren’t close to completion have struggled to sell units, in early 2015 the developer, Vornado Realty Trust, announced that half the building’s 150 units were in contract. At least 43 out of 90 marketed units are estimated as being in contract, according to CityRealty. Prices range from $12.3 million to a reported $250 million for a penthouse out of combined units.