Go back 5 years give or take and Billionaire’s Row in New York City was the place to park your Dollars, Rubles, Yuan, Reals, Euros…….. This once non-descript thoroughfare of 57th Street from Park Avenue to 8th Avenue (5-crosstown blocks) suddenly changed its image from a mixed-use retail/gallery strip to one where mega-tall residential towers catering to the uber-wealthy could purchase condominiums with helicopter views and no invasive questioning by persnickety co-op boards.
While some suggest 425 Park started the trend, 157 West 57th Street was considered the pinnacle of the multiple opportunities. The mega-tall designed by French architect Christian de Portzamparc included a luxury Park Hyatt Hotel on the lower floors and opulent residences delivered in vanilla shell condition on the upper floors. Of note, the towers being built on the former Steinway site as well as Central Park Tower above Nordstrom’s have yet to receive their Certificate of Occupancy.
It was in January 2015 when the news broke; a duplex penthouse at 157 West 57th closed for a record price in excess of $100M (of note the record has been broken by Ken Griffin’s purchase at 220 Central Park South). The duplex penthouse is 10,923 square feet and spread across the 89th and 90th floors officially closed on December 23, 2014. Of note the buyer, Michael Dell of Dell Computers fame.
Fast forward to 2020. While multiple buildings on Billionaire’s Row wait for their Certificate of Occupancy the real estate market decided to take a breather. Last month, June 2020 the most expensive sale of the month was at 157 West 57thStreet. Unit # 88, a full floor condominium located just below Michael Dell’s holdings sold for $28M! The 6,231-square-foot apartment features four bedrooms, four bathrooms and a powder room, along with floor-to-ceiling windows that provide panoramic park, water and cityscape vistas. Impressive?
Of course, until one does a look back i.e. the same apartment sold in 2015 for $47.4M. Simple math a 41% loss! Did I mention the HOA not including taxes were at the time of purchase $12,600/month or in excess of $150,000/yr.
There are countless other examples filtering out of New York City of similar purchases within the last decade taking substantial losses upon resale. While some may suggest New York City is an anomaly especially considering all the headlines advising real estate’s resiliency I would be more cautious.
In real estate downturns and corrections the deluxe and luxury market shows the first sign of fatigue (and notably is the first market to recover). Losses experienced at 157 West 57th may be notable due to the amounts yet should send a message of caution into the larger marketplace.