Who would want to pay tens of millions to live in a full-floor apartment hundreds of feet above the city within a super-tall, ultra-svelte building?
The answer, it seems, is fewer people than developers had hoped.
With a cooling market, units left unsold, and developers being forced to slash prices, it seems the golden age of New York City real estate is over, a recent report in The New York Times warns.
Nowhere is this more obvious than on what was only recently christened “Billionaire’s Row.” This area around 57th Street in Midtown Manhattan was so named for its cluster of extremely tall apartment buildings ostensibly catering to the elite with 360-degree Manhattan views and top-notch finishes.
Construction was booming just two years ago, but there now seem to be more high-end apartments available than there are interested buyers.
On Billionaire’s Row, “it’s not just slow — it’s come to a complete halt,” Dolly Lenz, a real-estate broker catering to super-rich individuals, told The Times.
Of course, these condos had price tags to match, some even stretching into nine figures. These apartments were often used as a safe, steady place to stash capital rather than as an actual space to live. In years prior, buildings like One57 and 432 Park Avenue attracted foreign investors who hid behind shell corporations to conceal their identity.
Now, with an increase of scrutiny on shadowy, identity-hiding corporations by the US Treasury Department, and with new regulations on capital outflow abroad (especially in China), it’s becoming harder for foreign investors to use these apartments as investment properties. Pair that with an uncertain global market, and it’s clear why the developers of these unique buildings are feeling the pinch.
To sell these units, many of which are now considerably overpriced for the market, many developers are breaking full-floor units in half or adding out-of-the-ordinary bonuses like free yachts and luxury cars. Slashing prices is usually seen as a last resort, but that is happening too.
One of the newest iterations of these buildings, 111 West 57th Street, is even delaying marketing and selling its condos in light of the cooling market, according to Curbed.
Even as the market above $10 million cools, it’s unlikely that the average apartment buyer in Manhattan or New York will feel any relief, as the market at $3 million and below remains as heated as ever.