The next records to be broken
A look at the residential and commercial properties that may have what it takes to break new barriers
It’s been a year of firsts for Manhattan real estate. Six months ago, the $88 million deal for Sanford Weill’s 15 Central Park West apartment set a new record for the most expensive Manhattan condo ever sold. Only a few months later, a mystery buyer reportedly signed a contract to pay between $90 and $100 million for a duplex penthouse at Extell Development’s One57. Then in April, a new record for Manhattan’s priciest co-op sale was set when Howard Marks, the chairman of global investment management firm Oaktree Capital Management, paid $52.5 million for Courtney Sale Ross’s duplex at 740 Park Avenue.
Aiming to replicate this success, a bevy of properties have hit the market with asking prices that could potentially set new records. And while residential properties often grab the headlines, retail and office landlords are also testing the limits of the market, asking record rents for Fifth Avenue retail and Midtown office properties.
This month, TRD talked to brokers and market analysts to find out which of these high-priced properties actually have what it takes to set a new record — and which don’t.
Highest total purchase price for a Manhattan condo
Much attention has been focused lately on the $100 million listing for Steven Klar’s penthouse at Midtown’s CitySpire, which hit the market in July with Prudential Douglas Elliman’s Raphael De Niro. If it sells for the full asking price, the 8,000-square-foot triplex would set a new record for the priciest-ever Manhattan condo sale.
But the consensus among brokers is that the eyebrow-raising price tag is simply too much for a 25-year-old building. Even Elliman’s chairman, Howard Lorber, indicated that the unit may be overpriced when he said in a CNN interview last month: “Pricing apartments today, it’s not a science, you know. If this is what the owner wants for the apartment, it will either sell or it won’t sell.”
And in fact, two other condos currently on the market may actually have more potential to set records, brokers said. (The number to beat depends in part on the final sale price of the One57 duplex, which hasn’t yet closed.)
One strong contender is an apartment listed by Leroy Schecter, the 85-year-old steel tycoon. His two-unit combination spread at 15 Central Park West hit the market for $95 million early last month. The two 35th-floor units, which Schecter bought for a total of $18.9 million, are listed with Core’s Emily Beare, who declined to comment. The Wall Street Journal reported that while the spread is slightly smaller than Weill’s, it actually has better views.
Another highly desirable unit, brokers said, is a duplex penthouse at the Ritz-Carlton at 50 Central Park South, also listed for $95 million. The apartment, which is reportedly owned by an Argentinean ballroom dancer, is listed by Halstead Property’s Dianne Weston, who declined to comment. The 5,078-square-foot unit is said to have a 42-foot-long ballroom that overlooks Central Park.
High-end Sotheby’s broker Nikki Field, who has no affiliation with any of the listings, said the 15 CPW and Ritz-Carlton properties could sell for close to their asking prices. After all, $100 million sales have already closed in markets like London, Hong Kong and Moscow.
“These elite properties are in a global league of their own and are now priced comparably to other markets that these buyers invest in,” she said.
The Ritz-Carlton listing, in particular, is in an extremely attractive location and “will trade high,” Field said.
Highest total purchase price for a Queens condo
At TF Cornerstone’s The View in Long Island City, a penthouse listed for $3.25 million would set a record for the priciest condo sale in Queens if it achieves its asking price. Located at 4630 Center Boulevard, the 2,260-square-foot resale unit has three bedrooms, four bathrooms and a private terrace. It was listed in July with Silvette Julian of Nest Seekers International.
The record for the most expensive Queens condo is currently held by a unit at Long Island City’s Arris Lofts, which sold for $3.04 million in 2008, according to city records.
So far, prospective buyers have been surprised that such a pricey property exists in Queens, Julian said, but she believes the property’s size and views make it “one of a kind.”
Jennifer Dorfmann of Modern Spaces — the firm marketing the View’s remaining sponsor units — said that Julian’s asking price is within “the realm of reality,” given the apartment’s outdoor space and “showstopper view.” And as demand for Queens properties grows, she said, “you’re going to have more $2 million-plus buyers in Queens.”
But Citi Habitats agent Christopher Butt disagreed.
The unit’s price tag of more than $1,400 per square foot “doesn’t sound realistic,” he said, noting that similar units in the area have been selling for $800 to $900 per square foot.
Butt is currently listing a three-bedroom at Arris Lofts for $1.49 million, and said he has “been having a really hard time” getting what he feels is the right price for the unit.
“I think Long Island City is in a better position than it was pre-recession,” he said, but still, “post-recession, it is not getting what it should.”
Highest total price for a Brooklyn home
A triplex apartment atop One Main Street in Dumbo has been sitting on the market for over three years, most recently listed with Michele Kleier and Samantha Kleier Forbes of Gumley Haft Kleier.
The 7,000-square-foot penthouse — well-known for the four giant glass-faced clocks that serve as its windows — first hit the market in 2009 asking $25 million. But the property, developed by Two Trees Management, has seen several price chops, and is now asking $19 million, almost twice the highest price ever paid for a Brooklyn home. A Brooklyn Heights mansion once owned by Truman Capote sold last winter for $12.5 million, setting the record for a single-family residence in the borough.
Kleier told TRD that it’s difficult to put a price on such an unusual property.
“It’s obviously not for everyone,” she said. “With a property as unusual as this, you almost have to pick a number out of a hat and wait for the right buyer to come along.” Kleier, who declined to comment on the possibility of further price cuts, said she sees a celebrity or tech mogul as the most likely buyer of the property.
Other industry sources said the property is unlikely to sell for close to its current asking price.
“It’s been on the market for a long time,” said one broker with knowledge of the Dumbo market. “People that have $19 million or $20 million to spend would rather be in Manhattan.”
Another source said: “It’s a totally ridiculous price. It’s a very dramatic apartment, but the layout is not very family-friendly. A lot of the square footage is taken up with elevators and staircases. I don’t think it’s better than everything else that’s ever sold in Brooklyn.”
Still, industry sources said the apartment would most likely sell for $12 to $14 million.
Asher Abehsera, a vice president at Two Trees, did not respond to a request for comment.
Highest price per square foot for a Manhattan office building
The Lehman Art House, a Beaux-Arts commercial townhouse at 7 West 54th Street, hit the market in May for $65 million, or just under $4,000 per square foot. If it sells for that price, it would crush the existing record for a city office building sale, set this spring when Spanish tile company Porcelanosa paid some $2,600 per square foot for the Commodore Criterion building on Fifth Avenue.
Once the home of former Lehman Brothers chief Philip Lehman, the Art House is currently owned by investment group Zimmer Lucas Capital, which uses the six-story building as its headquarters. The company paid just $13 million for the building in 2005.
The property has a rusticated limestone exterior, but has been renovated with übermodern conveniences inside, including video-conferencing and trading rooms, as well as a gym, sauna and retractable glass roof system on the sixth floor, which opens directly onto a 737-square-foot outdoor terrace.
“No other commercial townhouse has ever come on the market with that caliber of renovation in my 23 years of dealing with this segment of the market,” said top residential broker Paula Del Nunzio of Brown Harris Stevens, who is marketing the property. “The same people that spend $80 million for somewhere to live can spend $65 million for somewhere to have the most exquisite corporate headquarters.”
Del Nunzio said she expects a high-end jewelry or fashion retailer, along the lines of Swiss watch and jewelry company Chopard or luxury goods designer Hermès, to take the space as its headquarters.
The building, which comes with 9,000 square feet of air rights, is commercially zoned, making an office building its only allowable use. Still, brokers said it was not entirely fair to compare the townhouse to a traditional office building; “They’re different animals,” one broker said.
Another broker, who asked to remain anonymous, called the asking price “outlandish,” saying: “It would be a miracle if [Del Nunzio] got 50 percent of the asking price.”
Others said they believe the building’s widely reported size — 16,676 square feet — is exaggerated, and that the building is actually smaller than that.
Asked if he thought the listing price was realistic, however, Eastern Consolidated’s David Schechtman said that “in 2012 and hopefully in 2013, wealth from all over the world, and especially from Europe, is fleeing to New York City. When a broad enough net is cast, it’s incredible the users who surface.”
He added that Del Nunzio shouldn’t be underestimated.
“I know enough about New York City real estate to never bet against this broker,” he said.
Highest total purchase price for a Manhattan co-op
At 828 Fifth Avenue — the former James Berwind Mansion, which went co-op in the 1980s —a three-unit combination is on the market for a total of $72 million.
If the eight-bedroom, 15,000-square-foot spread sells for that price, it would be the highest price ever paid for a single co-op residence in Manhattan. As noted above, that record is currently held by the $52.5 million sale of Ross’s Park Avenue apartment.
The units once belonged to the late builder Howard Ronson, who attempted to buy the whole Georgian mansion before he died in 2007, but was thwarted by other owners in the building. Ronson’s estate now owns 72 percent of the building, including the full second, third, fourth and sixth floors, plus half of the first floor. The estate also owns the English basement and the roof terrace, according to the listing.
Listing brokers Alexa Lambert of Stribling & Associates and Sharon Baum of the Corcoran Group did not respond to requests for comment.
Kathy Braddock of Rutenberg Realty said she would not be surprised if the listing sold for its full asking price.
“If you want to have a European lifestyle and feel like you’re living in Paris in New York, [then you’ll buy it,]” she said. “You’re talking about a stratosphere of buyer who, if they really want something, it doesn’t matter what it costs. If you’ve got a billion dollars, what is $72 million?”
Highest total purchase price for a residential Manhattan townhouse
It’s been on the market for roughly a year and a half, but if the Woolworth Mansion on the Upper East Side sells for its full $90 million asking price, it would shatter the record for the priciest residential townhouse sale in New York City history. The 19,950-square-foot mansion, at 4 East 80th Street, is listed by Del Nunzio.
The record is currently held by the Harkness Mansion on East 75th Street, which sold for $53 million in 2006, also with Del Nunzio.
The 25-foot-wide Woolworth townhouse, which was originally commissioned by discount store mogul Frank Woolworth, is owned by the estate of fitness guru Lucille Roberts, who died in 2003. But unlike the Harkness Mansion, which sold just a month after being listed, the Woolworth house has lingered on the market since 2011, leading some to suggest it may be overpriced.
Del Nunzio said she doesn’t think the price is overly ambitious, especially in light of recent deals at buildings like 15 Central Park West. The Sandy Weill apartment, for example, sold for $13,048 per square foot, she noted.
“The math makes sense,” she said. “If a condominium of 10,000 square feet can sell for over $13,000 per square foot … a townhouse of 20,000 square feet can sell for $5,000 a foot.”
The property’s renovation — which took place gradually over the last decade — also helps justify its asking price, Del Nunzio said. She noted that most high-end townhouses hit the market unrenovated, in which case buyers are “two or three years from moving in.”
Del Nunzio’s track record suggests that she knows what she’s talking about.
Still, it’s hard to tell if the price tag is achievable, brokers said.
“It’s clearly not an everyday property,” Braddock said. “It’s not like valuing a three-bedroom apartment, where you can look at other units in the building and draw some logical conclusion. Is there a comp for this property? Not really.”
Highest total purchase price for a Hamptons home
Robert Hurst, a retired Goldman Sachs executive, put his Sagaponack home on the market in June for $65 million with the Corcoran Group’s Debbie Loeffler and Julie Briggs.
If it sells for its full asking price, it would be the priciest-ever home sale on Long Island’s East End. The current record was set in 2008, with the $60 million sale of an oceanfront Southampton estate. (It would not come close to breaking the record for undeveloped land, which was set in 2007 by billionaire investment guru Rob Baron, who paid $103 million for a 40-acre waterfront plot in East Hampton.)
Hurst’s 11,000-square-foot house sits on an unusually large estate — 33 acres — and is surrounded by 19 additional acres of reserve property that can never be developed, said Ernest Cervi, an executive managing director in Corcoran’s Bridgehampton office. Buyers may be willing to pay more for the assurance that no one can ever build beside them, he said.
“It’s a 33-acre parcel in Sagaponack with 1,475 feet of waterfront,” he added. “It’s unlikely that anything else like this would come on the market again, because it doesn’t exist.”
However, industry sources are not convinced that the parcel can top $60 million.
“New price records or ceilings are set in great markets,” said Judi Desiderio, CEO of the East End brokerage Town & Country Real Estate. “In good markets, people feel flush and are willing to be a trendsetter. This is not that kind of market.”
However, she continued, “I think they priced it to the uniqueness of the property. If someone falls in love with it — who knows?”
Another source with knowledge of the Hamptons market said a buyer would likely pay no more than $40 million for the property.
“This could be another Ed Gordon property,” the source said, referencing the 60-acre Montauk estate of the late Edward S. Gordon, founder of the eponymous commercial brokerage. That property is now asking $68 million after hitting the market in 2003 for $75 million. If it sold for its current asking price, it could also set the record price paid for a Hamptons home, but sources said a deal at that price is unlikely, given that it’s lingered on the market for so long.
Highest rent for a Manhattan retail space
Vornado Realty Trust is quietly shopping around a prime ground-floor retail space at 640 Fifth Avenue asking upwards of $3,500 per square foot in annual rent, TRD learned last month. If the 10,000-square-foot space — currently occupied by the clothing retailer H&M — fetches that amount, it would set a new record for retail rent in Manhattan.
A recent report released by the Real Estate Board of New York noted that $3,000 per foot was the highest asking rent on record for Fifth Avenue. M.A.C Cosmetics, which signed a lease for 1,400 square feet at Vornado’s 691 Fifth Avenue in February, reportedly paid roughly that.
H&M’s lease at the 640 Fifth space, which is on the ground floor of a larger 36,000-square-foot space, expires at the end of 2014. It’s not yet clear if H&M will seek to remain at the site, but the clothing store recently signed an even larger lease for 57,000 square feet in a nearby location at Fifth Avenue and 48th Street, perhaps indicating that it will not be seeking to renew its lease with Vornado.
While Vornado did not respond to a request for comment, CEO Michael Fascitelli said in an earnings call last month: “In the next couple of years, one of our best leases of Fifth Avenue expires. Re-leasing there could produce an annual increase in rent of more than $20 million.”
Elliman retail broker Faith Hope Consolo, who is not affiliated with the property, said the space could in fact achieve $3,500 per foot in rent.
“There is no more famous or heavily trafficked street in the world than Fifth Avenue,” Consolo noted. “Although people will think it’s a hefty rent, there is always an international or national retailer that wants to make a statement. It’s not about profit. It’s about position in the marketplace.”
Real Capital Analytics managing director Dan Fasulo agreed.
“A lot of folks are convinced that the format [of retail] is going to look a lot different in the future,” he said. “Instead of just expanding by adding more and more locations, retailers are going to have fewer physical locations, but be willing to pay more and more for the best locations. It’s almost a showroom. You come in and look at everything, and then go online to buy.”
Highest total purchase price for a New Jersey office property
A 450-acre New Jersey office complex, comprised of 13 buildings and owned by Bank of America, is poised to break state records after hitting the market in May with commercial brokerage Cushman & Wakefield.
The campus, in Mercer County’s Hopewell Township, totals 1.7 million square feet and is expected to sell for around $400 million. That’s almost $23 million more than the state’s current record for an office property sale, which was set by the $377.5 million sale of Newport Tower, a single building on the Hudson River in Jersey City in October 2011. Cushman & Wakefield declined to comment on the listing, which does not have an official asking price, though it was reportedly valued at $386 million in 2009. BofA took ownership of the office complex in 2008 when it acquired Merrill Lynch. Merrill had previously constructed it to house 6,500 employees.
A spokesperson for Bank of America said the bank is “looking for a sale and a full-site leaseback at this point.”
John Boyd, Jr., a principal at the Princeton-based Boyd Company, a consultancy firm serving corporate clients, said he could see a Fortune 500 company paying close to $400 million for the complex.
“Mercer County is the kind of market right now that’s increasingly attractive for major head-office relocations because cost structures in central Jersey are lower,” said Boyd. “The northern New Jersey office market has rebounded quite strongly, and there are some opportunities to attract industry from Manhattan.”
Timothy King, managing partner at CPEX Real Estate Services, said $400 million, or around $235 a square foot, is “not a wacky number” for the property.
“If you won the lottery and went to Home Depot and bought your own bricks,” he said, “you probably could not replace those buildings for a price less than $235 a square foot.”