CNBCJune 08, 2012Here’s another reason F. Scott Fitzgerald was right when he wrote about the rich being different from you and me.
For most people, real estate deals are made under pressure — you have to sell fast because you’ve made an offer on another place, or you’re moving to a new city and you don’t have time to really indulge your perfectionist streak.
Not so for the superrich. At the highest end of the global residential real estate market, trophy properties, like expensive art, are rarely bought under duress.
Billionaires from all over the world can afford not only the price of Manhattan’s top penthouses and full-floor residences, but also to wait, since they are never scrambling for a place to call home.
“These billionaire buyers are really united by one characteristic: their choice of residence is completely discretionary,” said Kelly Mack, the president of the Corcoran Sunshine Marketing Group. “More often than not these buyers are willing to sit on the sidelines, often for years, to wait for that stratospheric trophy property that is truly unique and stands perfect in every way.”
Not that there’s a lot to choose from now, anyway. The inventory of apartments that might be of interest to the world’s wealthiest people has been thin of late, with demand from a growing pool of foreign billionaires eager to park their money in Manhattan outpacing new developments, especially downtown.
As of Tuesday, according to the appraisal firm Miller Samuel, 28 condos and 5 co-ops were listed for $30 million or more in Manhattan. Fifteen of the condos were in one building: One57, the tower under development at 157 West 57th Street, Miller Samuel said.To open a window on this world, I put this question to high-end brokers and other real estate professionals: If you had a client willing to spend $30 million or more, what five apartments would you show them?
Before we get to the specifics, a few broad guidelines about trophy-property shopping emerged from this exercise. “When you go above $25 million you better have a great view, a great building and a great location,” said Leonard Steinberg, a broker with Prudential Douglas Elliman. To that point, the lack of a great view is probably why the condo penthouse at the Mark on the Upper East Side, with a $60 million asking price, wasn’t mentioned by many brokers. Sure, it has a chapel-like 26-foot-high ceiling in the living room and 2,400 square feet of roof space, and it’s one of only 10 condo units in the famed hotel. But the penthouse just doesn’t reach high enough to capture the sort of breathtaking views that would seem to justify the price tag.
Something else that turns out to be true about these trophy properties: They are often made, not born. Rare is the trophy penthouse or full-floor residence that isn’t the result of creative combinations of several apartments to create a suitable mansion in the sky. Only in the past decade have developers designed massive units with the picky billionaire buyer in mind, said Shaun Osher, the chief executive of CORE.
Privacy matters, especially separate entrances in buildings with hotels. Foreign billionaires demand concierge services night and day, and a long slate of amenities like gyms, spas and children’s playrooms. But these buyers are not overly concerned about security, said Angela Rapoport, a broker with the Corcoran Group. “Russian buyers I work with see New York as a political and economic haven and a secure place to live,” she said.
Brokers say they have learned to be patient, even though they are eager for a big commission check. Two years ago, Mr. Osher said, he was working with an Asian billionaire to find a trophy apartment and came up short. He approached the owner of a duplex on the 76th and 77th floors of the north tower at the Time Warner Center that wasn’t on the market. The owner said he would sell for $100 million. The man bid $60 million. The owner said no.
“He is still looking,” Mr. Osher said.
In the end, I confined my list to condos because co-ops are inaccessible to most foreign buyers, who either cannot get past the co-op boards or are unwilling to try.
One co-op, though, was mentioned by several brokers: a triplex penthouse at the Pierre owned by the hedge fund manager Martin E. Zweig that has 16 rooms, 4 terraces and a 2,800-square-foot grand salon, the former ballroom of the Pierre Roof. It hasn’t (officially) been on the market since 2008, when Mr. Zweig listed it for $70 million, but that would not stop brokers from showing it to a rich client willing to run the co-op board gantlet, said Raphael De Niro, a broker at Prudential Douglas Elliman.
The following list is a snapshot from the last week or so. Several brokers said they were waiting for new downtown developments that will provide fresh trophy penthouses to challenge uptown’s dominance. Projects like Walker Tower in Chelsea (at 212 West 18th Street), where a two-floor, 12,470-square-foot penthouse is expected to list for $94 million later this summer; and 56 Leonard (due, finally, to start selling later this year, Ms. Mack said), in particular a full-floor penthouse, may shake up the status quo, and are likely to draw at least some patient billionaires off the sidelines.
THE OTHER PENTHOUSE AT 15 CENTRAL PARK WEST Sanford I. Weil may have seized the headlines this year with the $88 million sale of his 6,744-square-foot penthouse in the complex’s “house” to a trust benefiting Ekaterina Rybolovleva, the college-student daughter of a Russian fertilizer billionaire, but there is another fabulous penthouse available.
Daniel S. Loeb, who runs the hedge fund Third Point LLC, owns the largest penthouse in the taller “tower,” which brokers in my sample unanimously ranked among the Top 5 trophies. Brokers and developers around town say Mr. Loeb and his wife are quietly shopping the 10,674-square-foot space, which he bought in 2008 for $45 million, and are in search of something larger. “I heard he wants $100 million,” Mr. De Niro said.
Wishful thinking? The real estate community seems primed to keep shattering records, so a little hype never hurt. A spokeswoman for Mr. Loeb’s hedge fund declined to comment on whether he is looking to sell.
As for who is on top, Michael Gross, who is writing a book on 15 Central Park West, has no doubt. “Rybolovleva’s penthouse, grand though it is” he said, “is so far beneath Daniel Loeb’s — 19 floors to be exact — it is barely worth mentioning in the same breath, and he would have to crane his neck quite a bit downward to see it.”
THE PENTHOUSE AND WINTER GARDEN AT ONE57 The developer Gary Barnett sent shock waves through the market last month when he revealed that he had sold the two-floor penthouse atop the still-under-construction One57 for $90 million to $100 million. The buyer remains a mystery, and the closing is at least a year off, Ms. Mack said. Until then, the 10,923-square-foot residence, with its “grand salon” lording over Central Park facing north from the 89th and 90th floors, deserves a place among the Top 5 condos. But supposedly still on the market is the “Winter Garden” apartment, which occupies the 75th and 76th floors. It rates a close second. At 13,554 square feet, it’s even larger than the penthouse, with a private solarium and a formal dining room that looks as if it could seat all of King Arthur’s Court. Price tag: $115 million.
TIME WARNER CENTER: NORTH TOWER, 76TH AND 77TH FLOORS The Asian billionaire may have lost out, but the duplex apartment still makes the list. With a rare wraparound terrace at Time Warner — featuring northward views of Central Park, and of the East River and the Hudson — the residence has some ceilings that are 24 feet high, a private reflecting pool and an interior elevator. And it is on the only floor in the north tower with private terraces, Mr. Osher said. The owner is an American businessman in the finance field.
THE PENTHOUSE AT SUPERIOR INK Brokers rate the penthouse at Superior Ink, at 400 West 12th Street, as one of the two best available downtown today, though it is not for sale.
The original owner, the Houston Rockets owner Leslie Alexander, sold it in 2010 for $33.5 million to Mark Shuttleworth, an entrepreneur who became the first South African in space in 2002 when he flew as a cosmonaut to the International Space Station. The 6,300-square-foot apartment has yet to be finished, Mr. Steinberg said. For those dying to capture the Hudson River views from the building, which was designed by Robert A. M. Stern and developed by Related Companies, the full 14th floor of 7,687 square feet is listed for $35.75 million.
THE PENTHOUSE AT 145 HUDSON While some brokers say 145 Hudson Street, a conversion of a 1929 Art Deco industrial building in TriBeCa, is too commercial for some discriminating billionaires, few disagree that the penthouse is stunning. The 7,500-square-foot four-bedroom four-bathroom duplex looks like a glass box in the sky. Designed by James Carpenter, it has “museum quality, high performance, insulated glass,” specially designed walls that allow artwork to be hung without fear of damage from sunlight, and 4,500 square feet of outdoor space on a wraparound terrace. It was the most expensive apartment ever sold south of Columbus Circle when it went for $30.5 million in 2009. After going back on the market for $45 million last May it was taken off less than a month later, according to Streeteasy.
This story originally appeared in The New York Times.