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Apthorp drops prices by one-third, largest overall condo reduction since the fall
March, 26, 2009
Elliman Chairman Howard Lorber (left) and the Apthorp
The owners of the Apthorp, an iconic but troubled apartment building on the Upper West Side, have slashed prices by roughly one-third in the wake of their recent brush with foreclosure.
Renovated condominium units at the block-through limestone building will now sell for an average of roughly $1,950 per square foot, according to Karen Mansour, director of sales and marketing for Prudential Douglas Elliman's Development Marketing Group, who is overseeing sales at the condo conversion. That represents a dramatic drop in prices from the building's initial offering plan, released in June, which called for prices of nearly $3,000 per square foot.
Early buyers at the building, which spans an entire block between Broadway and West End Avenue on 79th Street, have the option to buy either renovated or "as-is" apartments, said Howard Lorber, chairman of Elliman. Unrenovated units will sell for roughly $1,650 per square foot.
The price chop is the largest across-the-board reduction for a new condo or conversion project since the Wall Street meltdown this fall, said Jonathan Miller, president of appraisal firm Miller Samuel. The closest contender was a recent price cut at Northside Piers in Williamsburg that averaged 20 percent.
"I'm not aware of a listing price adjustment that large for a new construction project," Miller said.
Lorber said the intent of the price reduction is to quickly sell the first 30 units in order to get the condo plan declared effective.
"The fact is we want to make sure it gets declared effective, and then after that, [prices] will go up," he said.
The Apthorp, known for its three-story vaulted gateway and circular drive-in courtyard, was built by the Astor family and modeled after the Pitti Palace in Florence. Over the years, it has been home to celebrities like Nora Ephron, Conan O’Brien and Al Pacino, and more than half of the units remain rent-regulated.
Developer Maurice Mann and billionaire Lev Leviev acquired the 163-unit landmark building in 2007 -- at the height of the real estate bubble -- for a record $426 million.
But sales of the high-priced units were slow. By October of 2008, four months after the attorney general approved the offering plan, not a single apartment was in contract. A subsequent amendment offered some units for sale "as-is," allowing them to be sold for lower prices. Still, before long, the parties were enmeshed in a legal struggle that ended with Mann stepping down as managing agent, though he retains his stake in the building.
In the wake of the dispute, the Apthorp's lenders, including Anglo Irish Bank and Apollo Real Estate Advisors, asked the newly restructured Apthorp team to come up with a revised business plan to avoid foreclosure. Lorber said the revising price structure has been now established, and the owners are ready to proceed with a new marketing push.
"All the documents are done and signed and it's ready," he said. "They have all agreed on everything."
While Mann recently filed a lawsuit to block the new loan agreement from being executed, a source close to the negotiations said the parties are working on finalizing a settlement.
One- to four-bedroom units in the building will now range in price from $2 million to $7 million, Elliman's Mansour said. Prior to the reduction, the lowest priced unit was a 1,750-square-foot two-bedroom listed for $3.45 million, and the most expensive was a 12-room spread for $15.5 million.
"We came up with pricing that was very fair to the market," Mansour said, adding that the price cuts are accompanied by a renewed marketing effort. A model unit at the building will be ready within 10 days, she said.
Mansour said that two condos at the Apthorp have been sold to date, although Streeteasy.com shows no units in contract.
The Apthorp's prices are still high compared to other condos in the area, said Amelia Gewirtz, an executive vice president at Halstead Property, who has listings in the neighborhood. Still, "the Apthorp is a very special building," she said. "It's definitely a building that people will pay extra to live in."
The price drops might not be enough to entice people to buy in the building.
Leonard Steinberg, an executive vice president at Elliman, said he has shown units in the Apthorp to potential buyers, but they were put off by the building's legal troubles, the fact that so few apartments had been sold, and the presence of so many rental tenants.
He added that the initial pricing was overly ambitious. "If you aren't on Central Park, those prices are high," he said.
The current pricing, however, is more likely to motivate buyers to sign on the dotted line. "At this price, you could sell out the building," Steinberg said.
As for the drama surrounding the project, its impact on buyers depends on whether the squabbling is over.
"Once [the legal troubles] are resolved and the parties make it clear that it's over, I don't think [they will have] any impact on sales," Miller said.
Elliman's Lorber said the legal squabbles have certainly been an impediment to sales in recent months.
"I think it impacted it up until now," he said, adding that some buyers were dissuaded from purchasing in the building by their lawyers on account of the uncertain fate of the project.
But he believes the building is now priced attractively enough that buyers will overlook past drama.
"Buyers are going to be looking for value," Lorber said. "It's [a] one of a kind [building], and they'll be ready to buy."
Mann and Richard Marin, chairman of Africa Israel USA, Leviev's company, declined to comment.
By Candace Taylor
Prices still ludicrous. Who would buy?
If you recall, this was the first on my list on the "what projects will flop" thread....
No way this one wasn't getting decimated.
still way too much.
My theme of the day: I wonder what impact the coming collapse of the ABSURD_BUBBLE MARKET (I define as anything above 1200psf) will have on the MERELY_INSANE_BUBBLE_MARKET (prices below 1200PSF). It just seems to me if you have a lot of buildings falling from say 2000psf to 1000psf, then a run-of-the-mill building that was 1000psf at the peak must have to go to.....I don't know.
I see these as related markets but somehow distinct because it took a kind of self-delusion, buying-into-ALL-the-hype, greater-fool thing to cross that mental line and say, "sure, I'll pay 1500psf for an apartment".
I'd overpay for the Apthorp sooner than I'd overpay for virtually anything else in Manhattan. It's a mighty handsome place to live.
"and billionaire Lev Leviev"
is the guy still a billionaire? if so, he has all the room to negotiate prices lol
"My theme of the day: I wonder what impact the coming collapse of the ABSURD_BUBBLE MARKET (I define as anything above 1200psf) will have on the MERELY_INSANE_BUBBLE_MARKET (prices below 1200PSF). It just seems to me if you have a lot of buildings falling from say 2000psf to 1000psf, then a run-of-the-mill building that was 1000psf at the peak must have to go to.....I don't know."
right on target jim, the lower end in bad locations will collapse. the only question is how long it will take.
Now we know where all the great apartments are in manhattan they're all rent stabailized or rent controlled. i think they'll be dropping those prices again.
With the larger number of "rent-regulated" tenants, I'm assuming the monthly fess + taxes would be INSANELY high since the rent cannot be raised for those guys?
Maybe the ppsf should be even more insanely lower to compensate for this?
i've been in a number of apts in the building over the years. all in, i kind of think it is a nicer place to visit than to live. very limited views, many dark cavernous spaces, in some cases rooms are almost too big for the way we live these days.
hey, for the right price (and when i saw it, the price was great) no problem. the question i'm raising though is that it's not the dakota and 79th & broadway will never be 72nd and cpw. for that matter, it's not 75th &* park either.
at those prices (and i mean the reduced ones) i want to be able to look out of the windows and see something and not a slice or a peak but a vista.
no kidding, the location is kind of trashy for those prices. getting a rent-stab there makes more sense than "owning". i remember that many got their sweet deal in a not so legal way anyway. better to be subsidized by others than to subsidize others i guess. what if they cannot sell the units? they will become market rentals?
if so, they will lose their shirts and all other assorted clothing and accesories.
"Lorber said the intent of the price reduction is to quickly sell the first 30 units in order to get the condo plan declared effective.
"The fact is we want to make sure it gets declared effective, and then after that, [prices] will go up," he said."
This is PRICELESS - this guy clearly has NO CLUE WHAT'S COMING. Yeah, right, prices will go up after the plan is effective. HAHAHAHAHAHAHAHA - good one.
not not 37? or 23?
how long till next drop?
"how long till next drop?"
do not underestimate the power of denial in NYC
so...do i have this right?
this one bedroom apartment (of course, you could use the foyer as a guest room) on the 5th floor overlooking broadway and the courtyard can now be purchased at the bargain basement price of $3.7 million.
that is hilarious.
"bargain basement price of $3.7 million"
Most NYers I know have $1 million in cash lying around for a downpayment - no problem.
this is a one bedroom.
Yeah, well what you're paying for is the loggia.
fancy talk for a hallway Priceless!
Do they have a garage? That promo film on their website with the car gliding through the courtyard is gorgeous, of course, but with 163 units, how many cars can that courtyard take? Then, God forbid, someone like one of the Olson Twins finds the place irresistable & you'd wish you'd never heard of the Apthorp. Oh, & did I mention the prices?
Yes, they have a garage. But they probably call it something more upmarket than that.
This "discounted" pricing made me laugh out loud!! Seriously I could not stop cracking up! You can rent a 2bd in the west village for 2k/month, why would ANYONE buy ANYTHING right now? Insane! This building will likely go through bankruptcy, we'll see prices at $250/sq foot when all is said and done. Can't believe it these people are hilarious!
"This building will likely go through bankruptcy, we'll see prices at $250/sq foot when all is said and done"
Correct - it's only a matter of time before this thing gets foreclosed on - then we will see realistic prices on it. Wait a year and come back.
I would buy there before it hits $250 per f2. It may still go there, but at least one would have sold. I might call them now for a high floor 3,000 sq ft unit. I will bid $2,250,000. I may be overpaying, but I'll take the shot.
bugelrex, the sponsor holding the unsold units pays the same common charges as everybody else, so in their interest to keep them down.
Unless the mgmt. co., which they appoint and probably own, can run up lots of unnecessary spending and gets kickbacks from that spending. I'm just saying.
It's not CPW, but the Apthorp is an amazing building. I too was thinking about calling them and bidding.
It is an amazing building, but it is a Broadway address - although their listings now cite a WEA address. I did call them a few weeks ago to see if they had a 2BR with direct riverviews. None of their apartments do, apparently, because the building across the street on WEA is too high. The garage in the building has been closed for several months due to safety issues. Their legal issues are well-publicized. The Elliman broker tried to talk me into looking at a 3BR for $5 million. I think I'll wait this out ...
The W 78th & West End corner is the most desirable, due to lower traffic noise. No views. You are paying for the architecture of the building. Trust me, once you live in a 10ft+ space, 9ft seems cramped.
i'd rather give it the foot of height for a view of the river or the park.
all purchases will be made from a bank. This is an unsustainable development. I don't know about 250sq/ft, that might be a little too optomistic. I've written it before...600sq/ft. That's the price that you will be buying your swanky Anthrop apartment for.
Don't forget to invite me for drinks and dinner at fancy new abode.
Assuming you are correct, what would be the risks of purchasing a unit from the bank?
Huge maintaince and tax would be shared amongst purchased units as the sponsor no longer exists?
Lender is getting shafted. They should take over and do a one-day auction of all vacant units, as is. It's spring, people still love the Apthorp. I think they can still get 1000+/sqft but it's diminishing returns daily.
The common charges aren't shared amongst purchased units. They're shared amongst all units. The unsold units are still owned -- whether by the sponsor or the bank -- and that owner pays their common charges and hopes they'll rent for more than the common charges.
"more than half of the units remain rent-regulated."
when are these ones expiring? or they will last till the tenant dies? how on earth did this building become a rent regulated paradise?
It's not an unusually-large ratio of stabilized units for an old building.
For info on how stabilization works, see http://nysdhcr.gov/Rent/FactSheets/.
OneThousandNineHundredandFifty Dollars per squarefoot
The Apthorp owners are clearly talking their book when they say they intend to increase prices after selling the 30% to become effective. Their prognostication has no predictive value.
Weekend at Bernie's.
OK what happens if you do buy a condo for cash in this building, the developer goes bust (which seems likely in this case), and the lenders decide to make this a rental again? I don't see any urgency to get involved at this stage ...
Then the units owned by the lender will be rentals, you still own the condo. Because of the rent-regulated tenants which form a majority of the units, most of your neighbors will be renters anyway.
OK. But then, as others have pointed out, there is a risk, a high probability even, that the condo owners would be allocated a disproportionately high share of the maintenance expenses. Or the building's overall maintenance level could drop dramatically.
When you ascribed certain behavioral traits to renters vs. owner-occupants, you can lump the rent-regged tenants in with the latter category, given that they've mostly been there for decades and have more of vested long-term interest in neighborly relations than many owners these days. That might not hold true in gentrifying slum neighborhoods and buildings, but certainly for a building like the Apthorp.
Baron, each unit's percentage of the common expense is detailed in the condo declaration. The sponsor can't change that after the fact. A buyer would of course look at the percentages allocated to given lines and units within the line to satisfy herself that the sponsor didn't cook the figures to begin with. E.g., the sponsor usually retains ownership of the commercial unit(s), so you'd want to make sure they're not allocating a too-low percentage to those. Allocation among the residential units is pretty straightforward and not susceptible to fiddling.