High living brought low(er)

As luxury prices continue to slide, the sellers of Manhattan’s swankiest homes face a daunting 2017

Feb.February 01, 2017 07:00 AM

111 West 57th Street (credit: Hayes Davidson)

For more than a year now, weakness in Manhattan’s ultra-luxury condo market has been making headlines. But just how real (and deep) is the softness? “The market fell short of its golden years of 2013, 2014 and 2015,” said Donna Olshan, president of Olshan Realty and publisher of an eponymous weekly report on Manhattan’s $4 million-plus residential sales. In the back half of last year, 511 Manhattan luxury homes went into contract. That’s a drop of 14 percent from the second half of 2015. And, as many observers began noting early last year, discounting has become de rigueur. “The average negotiability is about 6 percent,” said Olshan, using the polite term for price cuts. That’s two times the rate in 2013. Tellingly, most of the upper-end closings last year were legacy contracts agreed to a couple of years earlier. And even some of those had to be sweetened, with some developers shouldering closing costs. For some homes, not even dramatic price drops will do the trick. In 2013, a still-listed penthouse at the Pierre Hotel owned by the late financial seer Martin Zweig hit the market at $125 million. After a number of cuts, the price was reduced last April to $57 million, a slash of more than 54 percent. And, as Bloomberg recently reported, even under-construction projects like 111 West 57th Street have offered discounts to early buyers before officially launching sales.


The value of American Express gift cards given to brokers last summer by developers of 101 Wall Street, a 52-unit condo conversion in Lower Manhattan. To spark interest, developers are increasingly gifting brokers and hosting parties.


The average number of days $4 million-plus Manhattan homes were on the market in the second half of 2016, more than 100 days longer than the same time in 2015.


The sale price last month of a Soho duplex at 10 Sullivan St. that was originally part of a planned $45M triplex. The developers, Property Markets Group and Madison Equities, split the pad into two units, listing the duplex for $28.5M last May. It’s unclear whether the developers will take a financial bath on the units — the remaining apartment is still listed for $10M —  but they did install a hot tub on the private rooftop as another concession.


The per-square-foot price paid by Saudi billionaire Fawaz Al Hokair for the most expensive penthouse at 432 Park Ave., the tallest residential tower in the Western Hemisphere. He closed the purchase for $87.7M, a discount off its original asking price of $95M, which averaged out to $11,500 per square foot.


The total loss rung up by Hollywood A-lister and “Wolf of Wall Street” star Leonardo DiCaprio on the $8M December sale of his three-bedroom apartment on 66 East 11th St.
Just one year earlier, he shelled out $10 million for the place.


The number of price chops that hedge fund titan Steven Cohen has made to his penthouse at One Beacon Court. In 2013, the five-bedroom unit was listed for $115M. It is now on the market for $67.5M.


The average price cut for all the units that closed in 2016 at 432 Park Ave. Among the big transactions was a penthouse that sold for $60.9 million, but only after getting a 20-percent markdown.


The spot that Liu Yiqian, a real estate and stock investor, took on Forbes’ latest Chinese billionaire list. Last October, he bought a $23.5M three-bedroom pad at One57. The unit was listed for almost $41 million in 2014, meaning Liu scored a $17.5M discount.

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