Lonely at the top

Sales stall at posh Harlem prewar 1200 Fifth

The building that has bragging rights to the most expensive closing in Upper Manhattan, with a penthouse apartment that sold for $15 million, has dozens of other units sitting empty and unsold.

Marketing at 1200 Fifth Avenue, a conversion of an Emery Roth building located between 101st and 102nd streets, first started in mid-2006, when the Harlem real estate market was peaking.

And while the marketing campaign claims the building is in the “heart of the Upper East Side,” some brokers say its lofty Upper East Side price tags minus that actual location have hindered sales.

Three years after marketing began, about 40 units remain unsold. According to StreetEasy, a real estate data Web site, 41 units are unsold. However, Carrie Chiang, a senior vice president at the Corcoran Group and exclusive broker on the project, lists 24 units as recently sold. If no other units have sold, that would mean 39 remain unsold.

Note: Correction appended

Chiang, one of the most prominent brokers in the city, has eight listings at 1200 Fifth posted on her Web site, with prices ranging from $1.49 million to $6.97 million.

Chiang’s recently sold category seems to include the $15 million triplex penthouse that closed in early January, which ranked as the most expensive closing to date in Upper Manhattan, said Sofia Kim, vice president of research at StreetEasy.

“It was priced like an Upper East Side building from the beginning,” said Todd Stevens, a senior vice president at Prudential Douglas Elliman who is not affiliated with the project.

The Upper East Side, which commands higher prices than its northern Harlem neighbor, terminates at 96th Street, according to most market observers.

Kim concurred, saying when the building first went on the market it was being billed as “Carnegie Hill.”

She added, “[the developers were] trying to push that cachet … back then it was a stretch, and now it’s even a bigger stretch.”

According to Klara Madlin of Klara Madlin Real Estate, an Uptown firm, the average price per square foot of East Harlem new construction condos ranges from $611 for three-bedroom units to $763 for studios. The average price per square foot at 1200 Fifth’s 10 active listings is substantially higher, at $1,691, according to StreetEasy. Kim explained that it is likely only some of 1200 Fifth’s unsold units are actively listed because developers prefer to release a “certain mix” of units to the market, rather than putting all units up for sale at the same time.

Stevens, a Harlemite, contrasted 1200 Fifth with another record-setting luxury condominium, 111 Central Park North, which began marketing at roughly the same time.

That building set a Harlem record in early 2008 with the $8 million closing on its penthouse unit. (Sales have been recorded at 44 of its 47 units, according to StreetEasy.) The listed apartments at 111 Central Park North have an average price per square foot of $1,177, about 30 percent lower than that of 1200 Fifth.

“When they put it up, they put up the right prices immediately,” Stevens said.

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The building, he said, was not billed as a “‘Central Park North community’ or an ‘Upper East Side or Upper West Side building’ — it was laid out as a gateway to Harlem and people grabbed [the units].”

It may not get any easier for 1200 Fifth anytime soon either. Harlem is mired in a real estate downturn along with the rest of Manhattan — and the Uptown luxury market has been hit hard. Condominiums in Upper Manhattan had average price declines of 10.2 percent for the first quarter of 2009 versus the year-ago period, according to a first-quarter StreetEasy report.

New luxury buildings in Harlem, particularly conversions, are also highly susceptible to the downturn because they tend to be filled with large units that target families who are often more sensitive to economic hardship than single first-time buyers, Madlin said.

Willie Kathryn Suggs, owner-broker at a self-named Harlem firm, said the price gap has narrowed between Harlem luxury apartments and condos south of 96th Street.

“As the market started to slide, people stopped coming Uptown; they could get the same thing Downtown for the same price.

“The high-end pricing in Harlem is the same as Downtown,” Suggs added.

The Real Deal was unable to obtain information about 1200 Fifth Avenue’s unit mix as of press time, but Chiang is advertising everything from two-bedrooms to five-bedrooms on her Web site.

Suggs notes that Harlem fringe areas that have limited access to services were “hit hardest” by price declines.

“New Yorkers are about one thing: convenience,” she said. “102nd and Fifth has no crosstown bus and no nearby subway.”

The cure to what ails 1200 Fifth could reside next door at Mount Sinai Medical Center. Robb Pair, founder of real estate brokerage and development firm Harlem Lofts, said the building should take aim at a captive audience of Mount Sinai employees, many of whom are high-income physicians. One suggestion: the creation of a rent-to-own program for foreign medical fellows to entice them to stay in the building after completing their fellowships.

In addition to niche marketing, it seems one possible solution to 1200 Fifth’s dilemma might be to drop prices.

However, Debby Klein, an associate broker at Bellmarc Realty who is not affiliated with the building, said sponsors generally opt for “affordability agreements” over price cuts, which may involve coverage of transfer taxes for the buyer.

Going that route can help buyers without creating the damaging appearance of a “fire sale” in public records, she added.

In lieu of price cuts, some sponsors in the area are offering concessions such as free parking and storage as well as free monthly gym access, Suggs said.

Manhattan Real estate investor Joseph Chetrit and Maurice Mann of Mann Realty Associates, two of 1200 Fifth’s investors, did not return calls.