A Fifth Avenue address has never been cheap, but when it comes attached to a Manhattan mansion, the price tag may strain the bounds of belief.
Over the past decade, gargantuan homes have started to move in New York City, and recent asking prices are breaking records.
Relatives of Doris Duke, the late tobacco heiress, are asking $50 million for the Duke Semans Mansion at 1009 Fifth Avenue, a Beaux Arts style mansion with 19,000 square feet of space on eight levels.
Brokers who deal in this rarefied market of the city’s largest homes–over 25 feet wide–anticipate more sales, primarily driven by families with young children where at least one member owns or works at a hedge fund.
“Townhouses are a natural move for high-net-worth individuals who, for many reasons, don’t want to be in co-ops,” said Alf Naman, a principal with Alf Naman Real Estate Advisors. “They don’t want to disclose income, and they want more privacy. They can staff their own buildings and are more self-sufficient.”
The priciest town house sale in Manhattan took place last year when Woody Allen sold his Carnegie Hill home for $24.5 million, according to Stribling & Associates. Currently, a number of Upper East Side mansion properties in mint condition could further push prices upward and set the tone for many years in the market, said Sami Hassoumi, a director with Brown Harris Stevens.
Hassoumi is representing Seagram’s distillers scion Matthew Bronfman, the owner of 7 East 67th Street, who will not settle for less than $31 million despite numerous offers just shy of it.
Another home, owned by interior designer Joanne de Guardiola, at 20 East 64th Street, is listed at $29.5 million, he said.
And the Gianni Versace mansion, a 35-footer at 5 East 64th Street, is listed by the Corcoran Group at $32 million. “It’s true that the prices are much higher than they used to be three, even two, years ago,” Hassoumi said. “There was a period where it was a little slow to unload properties like these, but that doesn’t mean nobody wants them.”
“One of these three properties will trade, and it will command what the others will trade for,” he said.
Naman’s firm, along with Sotheby’s International Realty, has the exclusive on 35-37 East 63rd Street, a 41-foot-wide house with ceilings as high as 25 feet, listed for $29.5 million.
The whole first floor is a gigantic parlor in which various potential buyers have envisioned building a spa with swimming pool, a squash or basketball court, or a movie screening room.
“There’s substantial interest in mansions, due to the lack of housing inventory, but also because people want to create their own identities in their homes,” Naman said. “That’s very difficult to do when you’re buying a 5,000- square-foot apartment in a cooperative building.”
One limitation the super-rich face has to do with their aesthetic tastes. Many wealthy people collect contemporary art, and an apartment with 11- foot ceilings, even one beautifully designed by architect Rosario Candela, can’t showcase large art installations, Naman said.
“What happens is certain buyers will go Downtown into loft spaces, but other buyers with children in school can’t make that move,” he said. “Their lives exist on the Upper East Side.”
They are prime candidates for a mansion, and their demand for spacious living is driving up the price of townhouse space. Luxury townhouses in mint condition are trading for a price that approaches the dollar figure of the dearest high-end condominiums in Manhattan.
While condos and co-op sales set the records in New York real estate Rupert Murdoch bought the late Laurance Rockefeller’s triplex co-op at 834 Fifth Avenue last year for $44 million, and the highest- priced condo sale was a close $42.5 million at the Time Warner Center in 2003 townhouses are starting to catch up.
“We see the top apartments trading in the high $3,000 to $4,000 a square foot range,” Hassoumi said. “The townhouses used to trade for $1,000 to $1,500, but now this is jumping to well over $2,500 a square foot.”
Even Brooklyn is getting into the act. In Brooklyn Heights, a townhouse at 140 Columbia Heights overlooking the promenade went on the market last month with a record asking price for the borough – $20 million.
Trends are slow to be set in the market for mansions, which occupy the pinnacle of townhouse stock, since there is so little inventory. Brokers say fewer than 50 homes qualify as mansions in Manhattan, stand-alone homes more than 25 feet wide with 10,000 square feet of space or more. Most are located on the Upper East Side in the 60s and 70s.
Also, mansions defy trend watchers because sellers are typically not as driven by financial need to sell. Homes often will languish, or go on and off the market for years, Naman said.
The current mansion market, with its relatively large inventory, is most likely due to foundations and nonprofits that sold out in recent years to take advantage of cheap office space rents.
“After the dot-com debacle of 2001, office space became very reasonable,” Naman said. “So it was a logical progression that someone who needed 18,000 square feet of space could take something for $18 to $24 a square foot, where that space may have been $35 a square foot at the height of the dotcom market.”
Naman said some mansions are being bought by developers to cut into apartments. Dominion Management is converting the Carhart Mansion at 3 East 95th Street, part of the former Lyc e Fran ais, and looking to quadruple its margins. In that home, which is nearly 100 feet wide, each of four units, the largest of which is 14,550 square feet, may go for as much as $21 million, said Carrie Chiang of The Corcoran Group.
But converting mansions may not be the biggest bang for your buck, Naman said.
“When you convert a townhouse, it isn’t always that efficient, just because you’re losing to public space,” he said. “In a 20,000- square-foot house, you’re going to lose 4,000 to 5,000 feet just from the elevator and this and that.”
“And the big winding, wonderful staircases are the first thing to go,” he added.
Richard Steinberg, a managing director with Warburg Realty Partnership, recently closed a deal on the 13,500-square-foot Cello Building at 53 East 77th Street, where the purchaser wants to convert it to two triplex condos. That deal is not the norm, said Steinberg, a specialist in opulent townhouses who has handled about 15 mansion properties over the past two years.
Most current sellers of mansions are owners who broke up their home into an owner unit and rental units, most foundations having sold out years ago, he said.
About 75 percent of Steinberg’s mansion clients are hedge fund moguls, and the other 25 percent are generally entrepreneurs, he said.
“There’s always a pocket of great new wealth that fuels the market, and the great new wealth currently is the hedge fund,” he said.