Sellers are taking huge losses on Billionaires’ Row. These are some of the biggest
Nearly 40% of resold Midtown condos took losses
Maybe billionaires really do have money to burn. Luxury residential resales have been some of the biggest loss-makers in recent years, according to a new StreetEasy analysis.
Whereas just 7.7 percent of the 16,000 apartments resold in New York from 2014 to 2018 sold for an outright loss, that percentage rose to 39 percent – 26 out of 66 – for luxury apartment resales in Midtown.
“One of the things that I struggle to wrap my head around is why people continue to park money in high-end New York real estate when it’s not a very lucrative asset class,” StreetEasy senior economist Grant Long told the New York Post.
The loss-making sales were located in some of the city’s most sought-after properties, including 15 Central Park West, 432 Park and the Time Warner Center. Extell Development’s One57 alone saw 10 resales for loss, including the largest loss for a single unit – a foreclosure sale on the 79th floor penthouse, and Canadian billionaire Lawrence Stroll’s $1.4 million loss on a unit he bought in 2014.
Also at One57, a certain Mohammed al Saud took a $15.2 million loss on two adjacent units last March, but with a curious caveat – the buyer was a company owned a trust of which al Saud is the beneficiary, so he had effectively sold the units to himself.
Though many of these losses can be attributed to the overheated luxury markets of 2011 to 2016, it appears that many one-percenters also took losses on purpose, either for tax purposes or because of divorce. Foreign buyers have also proved willing to take significant losses, as long as it allows them to move funds out of their home countries.
“When you have billions, millions don’t matter as much,” Compass luxury broker Leonard Steinberg said. “These are very rich people. This is a tiny fraction of their assets.” [NYP] — Kevin Sun