The story of 823 Park Avenue reads like a developer’s dream the kind where everything happens like a speeded-up film but with one big difference. When Elliott Joseph of Property Market Group realized the merry-go-round had stopped, he was holding the brass ring.
The story went something like this: In 2004, Joseph found out the 13-story building was going for $61 million, and was potentially the only condominium project in a sea of pricey co-ops.
The property needed a gut rehab, which would run another $20 million. He had 48 hours to decide, the seller said. No negotiation. Take it with a $5 million non-refundable deposit or leave it. For the developer, it was a no-brainer.
According to Joseph, “It was impossible to do any meaningful due diligence in 48 hours, but as luck would have it, our general counsel had worked with the Manocherian Brothers [the former owners] in connection with emptying out the building. He was able to quickly determine that all the tenants were legally evicted.”
The battle with tenants had a mostly happy ending, with rising prices providing enough money for the Manocherians to sell it and make a profit while providing millions for cash buyouts of tenants, the New York Times reported last year. The exact amount paid to the final 17 tenants was undisclosed.
When restoration is complete in the spring of 2006, the Greek Revival landmark building will be one of New York City’s most elite condos: The penthouse will be $35 million.
But the building’s road to the top has been a rough one. Built in 1911 as one of the first prewar rentals on Park Avenue, it originally offered luxury floor-through apartments, until it was forced into foreclosure during the Depression. In 1941 it was chopped up into 38 apartments, about three per floor.
The building remained the odd rent-stabilized rental building rubbing shoulders with some the most exclusive properties in the city, and slipped into foreclosure once again in the early 1990s for failure to pay real estate taxes. The Manocherian Brothers purchased the property at a city auction for $4.175 million in 1994.
“What do you do with a 13-story building on Park Avenue with all these rent stabilized tenants?” posits Joseph. “You file a plan to demolish the building and get them out. That started lawsuits, then negotiations and settlements. Nine years and tens of millions in buyouts later, they got their last tenant out.”
That’s when the property was presented to PMG. The $61 million, or more than $1,050 a square foot, they paid for the property last year was among the highest prices per square for a large apartment building, according to brokers.
The PMG partners asked the Landmarks Commission for the right to build an additional floor at the top and a 20-foot-by-20-foot extra room running straight up the building’s rear. The neighbors protested vociferously, calling the rear addition a “monolith” and a “tumorlike growth,” and said they feared it would block their light.
Concerned about such details as visibility and design, the Landmarks commissioners denied the rooftop addition but allowed the room at the back, a modest bonanza for the new owners, who intend to sell the apartments at upwards of $3,500 a square foot.
Architect Barry Rice devised the period restoration of the building and the apartment layouts. The building will be remade entirely, save for the steel beams and concrete floors, and the façde re-bricked.
Ten of the 12 condominiums will be 4,100-square-foot, full-floor, five-bedroom apartments. Prices range from $11.7 million to $13.86 million.
Then there’s the penthouse. The 7,500-square-foot triplex has 3,100 square feet of terraces with spectacular, unobstructed views.
The building is being marketed by Douglas Elliman broker Daniela Kunen. The sales program, which begins in mid-summer, will be suitably low-key and quiet, mostly direct contact with an exclusive client base.
The developers are equally serene. “If the deals happen right away,” says Joseph, “that’s OK. If they don’t, that’s OK, too. Trendy areas come and go, but Park Avenue is here to stay.”