Related Companies’ residential projects have made headlines with recent deals, but heavy discounts and a load of inventory lie underneath the sparse successes in the Far West Side megadevelopment.
The developer’s slow-moving residential sales at the condo towers at 15 and 35 Hudson Yards have left them with more than $1 billion of condos left to sell, according to analysis by The Wall Street Journal.
Luxury residential tower 35 Hudson Yards still counts roughly 50 percent of units unsold, more than four years after sales launched.
The units that do sell are going for 30 percent less than the original prices filed with the attorney general’s office and active listings were discounted by nearly 50 percent. Four large units recently sold for more than 40 percent off.
“When we first opened the job, we thought we’d be able to get a higher price,” Related’s Sherry Tobak who works in sales for the building with Corcoran Sunshine, told the outlet. “The message [from the market] was that we were overreaching a little bit.”
The discounts being offered at 35 are bigger than developer concessions in other areas as a result of higher mortgage rates, appraiser Jonathan Miller told the outlet. Local brokers said Related is slashing prices and covering buyers’ taxes and closing costs.
The far-West location, the glass skyscrapers that some have deemed “soulless,” and the the Vessel, a walkable sculpture designed as a tourist attraction, that was closed after four people died by jumping since its March 2019 opening. The developer’s proposal to build a Wynn-branded casino in the area has also slowed sales, worrying potential buyers about large crowds that could make the area feel tacky.
The tower at 15 Hudson Yards, which has the lower prices of the two buildings has fared better since its 2016 debut.
The 88-story, 285-unit building with 40,000 square feet of amenities, is about 90 percent full. The property benefitted from a hot condo market, selling more than $500 million of apartments in its first year. The Journal noted it was particularly popular with foreign buyers, especially from Asia, thanks to marketing and trade shows conducted by Related abroad.
Still, more than 25 units remain unsold, with the majority of them being higher-priced apartments. Some buyers are struggling to get a return on their investment: Ann Cutbill Lenane, a Douglas Elliman agent, bought her condo in 2017 for $4.84 million. She’s listing it for just under $4.5 million, having accepted she’s likely to take a loss.
“I can’t beat myself up,” she said to the Journal, explaining that she feels embarrassed to be a real-estate agent losing money on a unit. “You always take a risk when you step into a new product. That’s just the nature of the beast.”
When 35 Hudson Yards launched in 2019, it debuted with higher prices in a less favorable market. The 92-story, 143-unit building sold 15 apartments in its first year before the onset of the pandemic, and the developer temporarily rented units at the building with an option to buy to generate activity.
Many of the units listed at 35 Hudson Yards are asking significantly less than their original asking price. Agents told the Journal they’re pleasantly surprised by Related’s level of negotiability.
Tobak is somewhat optimistic, saying foot traffic is picking up and multiple contracts have gone out in recent weeks.
“We’re at a decent point,” she said to the Journal. “Are we making a ton of money? I don’t know.”
— Harrison Connery
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