Broker Alon Chadad's client purchased a $14.3 million apartment on Manhattan’s Central Park South, then spent nine months seeking approval for plans to overhaul it. In January, the buyer changed course, listing the unit for sale at more than double what he paid just a year ago.
"He filed all the documents for renovation and he was ready to go and he decided, 'You know what? I see opportunity in the market,'" said Chadad, co-founder of Blu Realty Group and the agent for the 6,160-square-foot condominium, which has an asking price of $29.5 million.
Luxury-apartment owners in New York are listing a record amount of properties for sale, testing the upper limits of what buyers are willing to pay even as median prices remain off their peak set almost six years ago. Sellers have taken notice of a handful of record-shattering deals, triggered by an $88 million purchase at 15 Central Park West, and demand for trophy homes by international investors seeking havens for their cash.
There were 145 Manhattan residences listed for more than $20 million last year, the most in records dating to 2005, according to data from StreetEasy.com, a real estate website owned by Zillow Inc. The average asking price per square foot of those homes was $4,977, 18% more than the year before and also the highest on record. Two resellers are asking at least $100 million for their properties.
Such sky-high valuations may not fully reflect the market. While the number of apartment sales for more than $10 million—about the top 1%—more than doubled last year, the median price of those transactions was $13 million, or 7.9% less than such properties sold for in 2008, the year Manhattan residential prices peaked, data from appraiser Miller Samuel Inc. show.
"There’s definitely an argument to be made that some apartments are asking prices that make absolutely no sense whatsoever," said Leonard Steinberg, a luxury broker with Douglas Elliman Real Estate in New York. "Everybody wants $100 million for their apartment these days. The good news is that $100 million is, what—60 million pounds? Only 73 million euros? So on world standards, it’s still a pretty good buy."
The $88 million sale, by former Citigroup Inc. Chairman Sanford Weill two years ago, was the "starting gun" for the current frenzy, according to Jonathan Miller, president of Miller Samuel. The 6,744-square-foot, four-bedroom condo—featuring a wraparound terrace, two wood-burning fireplaces and a library—was purchased for the daughter of Russian billionaire Dmitry Rybolovlev. The transaction is still Manhattan's most expensive residential deal and it's become a symbol of what wealthy buyers are willing to spend for a unique property, Miller said.
Since then, two contracts have been signed at more than $90 million each for condos at Extell Development Co.’s newly built One57 tower in Midtown. Bill Ackman, founder of New York hedge- fund firm Pershing Square Capital Management LP, is part of an investor group that agreed to purchase one of the apartments, a duplex spanning the 75th and 76th floors of the 90-story skyscraper.
A penthouse at nearby 432 Park Ave. found a buyer who agreed to pay $95 million. Buyers in the tower, set to be Manhattan's tallest residential building when finished, have come from around the world, including South America, the Middle East, China and Russia, according to developers Harry Macklowe and CIM Group.
A 5,955-square-foot, full-floor penthouse atop the Walker Tower in Chelsea sold last month for $50.9 million, a record for an apartment south of 34th Street. The unit went under contract in October, a month after it was listed with a $55 million asking price. The five-bedroom condo, on the 24th floor of a redeveloped former Verizon Communications Inc. building, has three fireplaces, 479 square feet of outdoor space and "360-degree unobstructed views," according to the listing.
Such high-profile deals are anomalies, according to Miller.
"It’s escalated into this trophy phenomenon which was really just a handful of sales, but it's these half-dozen sales that everybody points out," he said. "It gives the impression that it’s commonplace. It washes over everything else, like a magic blanket that we lay over the market and everyone feels better."
The first $100 million listing emerged in July 2012, when Steven Klar, a Long Island developer, decided to sell his triplex at Midtown’s CitySpire tower, listed as the highest terraced residence in the U.S. It’s still on the market at that price and is Manhattan’s most expensive resale listing after a gut-renovated, 19-room East Side townhouse whose owners are seeking $114 million. The townhouse was bought in 2005 for $20 million, according to StreetEasy.
Other resellers trying their luck in the market include designer Tommy Hilfiger, who in October listed his custom apartment at the Plaza for $80 million, a price that would shatter the previous record of $48 million paid for a unit at the building on Central Park South.
"Not everyone will dare to ask those kinds of prices" unless the properties are "very, very special," said Charlie Attias, a Corcoran Group broker who has arranged deals in buildings such as the Plaza and represented shoppers from countries including France, Switzerland and Luxembourg. "Buyers are not stupid, they’re educated about the market," he said.
Sellers of Manhattan homes priced at $10 million or more in 2013 had to whittle about 15% from their original asking prices to strike a deal, up from a 10 percent cut in 2008, Miller Samuel data show. Properties in that range spent an average of 347 days on the market, the most since 2007.
For apartments priced at $20 million or more, the average price cut was 12% last year, compared with 15% in 2008, according to StreetEasy.
Steven A. Cohen, the billionaire founder of SAC Capital Advisors LP, is still seeking a buyer for his 9,000-square-foot penthouse at One Beacon Court, on the market since April. He initially sought $115 million for the duplex—the only one in the 53-story tower, according to StreetEasy—for which he paid $12.9 million in 2005.
In December, he knocked down the price to $98 million, or $10,888 a square foot, for the four-bedroom property, described in the listing as "a unique NYC treasure" with interiors designed by Charles Gwathmey. Two walls of windows in its double-height living room overlook Midtown and Central Park.