The best-laid schemes of mice and developers oft go awry.
Yesterday, The Real Deal exclusively reported the Chetrit Group sold the Sony Building – the site of a planned ultra-luxury condominium – for more than $1.4 billion. The company’s boss, Joseph Chetrit, had proposed a 96-unit office-to-condo conversion, topped with a penthouse that would list for as much as $150 million. The new owners, Saudi-based Olayan Group, are expected to scrap that plan entirely and maintain the tower as offices.
The news followed months of reporting on softening in the city’s ultra-luxury condo market, due in part to an overabundance of supply on “Billionaires’ Row” in Manhattan.
TRD decided to fire up the office time machine and look back at five major Manhattan condo projects that developers ultimately abandoned.
Leviev Clock Tower (5 Madison Avenue)
Africa Israel Investments
Offering Price: $703.7 million
Lev Leviev’s Africa Israel Investments bought the Clock Tower at the former MetLife building on Madison Square Park for $200 million back in 2007. Leviev submitted a 55-unit offering plan – “Leviev Clock Tower Condominium” – the following year, with a total projected sellout north of $700 million, an ambitious figure for the Flatiron District.
Although the plan was accepted in 2009, the company began recording major losses across its international portfolio that year, leading to the sale of many of its U.S. properties, including the Clock Tower. Leviev ultimately traded the building to Marriott International in 2011. The Clock Tower is now part of the Edition luxury hotel, developed in partnership with famed hotelier Ian Schrager.
Liberty Luxe and Liberty Green (200 and 300 North End Avenue)
Milstein Properties
Offering Price: $675.8 million
Developer Howard Milstein filed this two-building, 471-unit plan two months after the collapse of Lehman Brothers in 2008. As the housing market plummeted, so did the fate of the Battery Park City condo development. Milstein opened a sales office for the project in 2010, but sparse foot traffic prompted him to abandon the offering plan and go with luxury rentals at the building instead.
The change didn’t dampen Milstein’s optimism about the property: in 2012, the developer wanted nearly $30,000 a month for the penthouse at Liberty Luxe. According to OLR, the penthouse unit rented for $25,000 a month as recently as December 2015.
165 East 66th Street
Crescent Heights
Offering Price: $337.5 million
Miami-based developer Sonny Kahn’s Crescent Heights bought this 150-unit Upper East Side rental building in 2013, and filed plans to convert it to condos. In late 2015, Kahn withdrew the plan before it had ever been approved for marketing, perhaps due to tough competition from other buildings planned near the Second Avenue Subway.
It wasn’t the first major condo project the Kahn has passed on. GOP presidential candidate Donald Trump took him to court in 2008. The reason? Crescent Heights decided it would sell the development site of Trump Plaza Tower in Tel Aviv to Shaya Boymelgreen, rather than construct a gold-colored condo with the Donald’s name on it.
301 East 47th Street
Stellar Management
Offering price: $234 million
Larry Gluck’s Stellar Management picked up the 252-unit, 290,000-square-foot Midtown East rental property known as Embassy House for $124 million back in 2006, along with partner Glory Capital, the investment arm of the Ben-Dayan family.
Though news reports at the time stated the partners had no plans to convert the building to condos, the 2008 financial crisis and the subsequent recovery seemingly changed their minds. Stellar Management submitted an offering plan for the building in January 2011, setting the projected sellout price at $234 million.
For reasons unknown, the firm withdrew those plans later that year. Stellar operates the property as a rental building.
MiMa Tower (460 West 42nd Street)
Related Companies
Offering price: $215 million
Stephen Ross’ Related Companies began developing the 1 million-square-foot MiMA building – for “Middle of Manhattan” – in 2007, and completed the project in 2011.
The 151 apartments on the building’s top 13 floors, called 1 MiMA Tower, had long been planned by the developer as ultra-luxurious condominium units. Related filed a condo plan with the Attorney General in Sept. 2010, which projected a $215 million sellout for the units. That plan was accepted in April 2011.
But the developer decided to change course in late 2011, announcing the units would instead become top-end rentals, with three-bedrooms asking as much as $20,000 per month. Related has been renting the apartments ever since.
That may soon change though. New York-based Chinese developer Kuafu Properties recently bought 1 MiMA Tower for $260 million with plans to convert it to “affordable luxury” condo units. The developer filed plans in July, with a $407 million projected sellout.