The developer and marketing agent for the renovated Plaza Hotel are keeping a tight lid on progress reports, but there are indications sales are booming, with some deals approaching record territory.
However, Elad Properties, which bought and renovated the landmark Midtown hotel, and sales agency Stribling Associates won’t confirm initial reports that one of the 181 residential condominium units fetched $45 million, a near-record price.
Brokers who sold units there told The Real Deal that the Plaza is performing well, although sales are not as brisk as those at 15 Central Park West, a project on the southwest corner of the park developed by the Zeckendorf family.
Kirk Henckels of Stribling said that no one at Elad or Stribling is allowed to disclose Plaza sales information, but said the majority of buyers are New Yorkers instead of the many foreign buyers anticipated by market watchers.
An attorney who said he manages 25 percent of the sales at the Plaza residences said that he has “business up to his ears,” implying that Plaza sales are booming.
The Plaza is releasing only 25 residential units at a time (there are two types of units, condos and hotel-condos). As of late December, the Plaza had released for sale units ranging from $4.6 million for a 1,770-square-foot two-bedroom to $29.5 million for a 5,600-square-foot five-bedroom.
At 15 Central Park, sales recently topped $1.2 billion, a record for a North American residential project. Units first hit the market in September 2005. In April 2006, an apartment there sold for $45 million, then the most expensive New York City home sale on record. The record was broken later in the year by the $53 million sale of the Harkness Mansion.
Still, prices at the Plaza could go higher yet. As one broker said, “It’s a world-class address. Who wouldn’t want to live in the Plaza if it was done in the right way?”
That’s been a source of contention between the developer and the construction union, which has lobbied against destruction of historical interior spaces. Lloyd Kaplan, a project spokesman, said Elad took measures to restore the interior and exterior to their original 1907 glory.
Elad, an Israeli development group, bought the Central Park South building in the summer of 2004 for $675 million from its previous owners, a partnership between billionaire Saudi Prince Al-Waleed bin Talal and Millennium & Copthorne Hotels.
That sale price worked out to $838,000 a room, lower than the current record prices seen for hotels, now a hot property segment in the robust tourism market. Last month’s sale of the Mandarin Hotel at the Time Warner Center reached $1.4 million per hotel room, a new record. Unlike the Plaza, the Mandarin will continue to operate as a hotel, opting for a steady cash flow, rather than pursuing a capital-intensive conversion to condominiums.
“When [Elad] acquired the property, they were paying pioneering pricing,” said Mark Gordon of the international lodging group at Sonnenblick-Goldman. “One-and-a-half years later, it looks like a very smart reinvestment that will likely be very successful.”
The outlook appears positive for the Plaza, since, as one broker emphasized: “It’s the Plaza.”
With such a grand legacy at stake, several brokers criticized Elad’s policy of extreme secrecy.
“I think it’s stupid,” said one broker. “Buyers are very savvy and brokers are even savvier. Smoke and mirrors fool very few people. So why not just put everything out in the open, especially when you can flaunt what you’ve got?”