Toll Brothers’ Spreckelsen sees ultra-luxury market glut

Developer's 55 West 17th Street embodies its scaled back ambitions

From left: David Von Spreckelsen And 55 West 17th Street in Chelsea
From left: David Von Spreckelsen And 55 West 17th Street in Chelsea

There are only so many billionaires in the world. Fortunately, multi-millionaires, of which there are slightly more, need apartments too.

David Von Spreckelsen, president of Toll Brothers City Living, expressed skepticism that the string of record-breaking sales at the top end of the luxury market can continue.

“The days of super pricing and of raising prices every other week, I think, are probably past,” he told Bloomberg. “Supply has started to catch up with demand.”

Spreckelsen joins other major players who have spoken their doubts about the segment, such as HFZ Capital Group’s Ziel Feldmen and Vornado Realty Trust’s Steven Roth.

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“We’re starting to see an oversupply of really large units and really expensive units, and we think those are sitting on the market,” Von Spreckelsen said.

Indeed, new apartments that sold in the second quarter averaged 130 days on the market, compared to 117 days a year earlier, according to Miller Samuel and Douglas Elliman.

Average prices for the 53 units for sale at Toll Brothers’ 55 West 17th Street in Chelsea will cost about $2,200 per foot, about $450 less per foot than the Manhattan average for new developments, $2,663 per foot, according to Halstead Property Development Market’s quarterly report.

In June, The Real Deal performed a rough analysis of the global level of demand for the city’s top-end condos. That analysis similarly pointed to limits in in the buyer pool. [Bloomberg] – Ariel Stulberg