building at 400 Park Avenue South

A bit overpriced for what you get, most layouts have cramped living rooms / dining rooms, and square footages are exaggerated.

Look at the floor plans. Building appears designed to look nice outside but be impractical inside.

Plus it is not in a normal neighborhood for resident owners and the market for foreign owners is the biggest part of the current decline.

Not sure I buy the abnormal neighborhood view, but 2500 sq ft is certainly abnormal for the neighborhood. And, the available rentals demonstrate that the pricing in untenable.

almost bought here, glad i didn't. feels very cramped and ceilings also seem too low for a new development.

How tall are you?

wow, what a price chop: http://streeteasy.com/building/400-park-avenue-south-new_york/29e

wow, the rental part of this building: http://streeteasy.com/building/prism-at-park-ave-south/22c

Haha I'm 6', not a giant by any means. The stock photos are misleading, if you check out the 1 bedrooms ( go to the rental 1 bedroom's as all the sale listings use stock photos of $5M+ apartments), the layouts feel extremely cramped to me. Barely any space for a kitchen table, couch, and TV stand.

29E asking price was ridiculous. $2500psft is not out of line with either the location or the market. But even low end luxury is starting to cool down a bit.

Plus being a new development, they should be able to command $2500psft, but 400PAS' lack of ability to do so should be concerning to early buyers and for the resale outlook of this building/neightborhood.

This is not a good location.
That half the building had to be offloaded to a rental firm should say something. That a lot of owners of the remaining apartments are renting them out should say more.
That there is no bathroom in or near the bedroom of the listing I posted above says more - and that's a non angular layout. That 1br should have a proper bath by the bedroom and the half bath where the full bath is - yes you are right it is cramped.

We probably have the same sentiment about the building but I disagree about the location. The rentals were always part of the plan, it's not a sign of weakness. It was a joint effort by Toll and Equity. There would have just been too many units to sell otherwise. Unfortunately they just got greedy and should have opted for more generous layouts and not made the cramped apartments you see now. The location is fine, but not great. The area is an intersection of 3 different types of crowds - 1) finance bros leaking over from Murray Hill, 2) bridge & tunnel people going out at the trashy Gansevoort / mediocre dive bars that flood the area 3) people getting off work flooding the 6 train on 28th. Yes, even though they market is Nomad (even though it's barely close to Mad Park) - the location has improved significantly in the last few years. The Huys on 404 Park right across the st has sold well, so it's not the location. 404 Park has higher ceilings, better design, more thoughtful layouts, and no problem renting out.

400 Park is unbelievably cookie cutter it's embarassing. I went to their sales gallery 2 summers ago, kept getting pressured by the Toll Bros rep to buy quick as they were selling out quick and that they would easily command $3K psqft. Called them out on their BS and never looked back. Serves these greedy guys right.

Haha good point about the bathroom. But not too much of a problem as the unit is so tiny that walking across the apt to go to the bathroom is not a huge deal. Whoever thought of these plans should be fired. The side with the corner windows should be where the living room is. This would put the bedroom close to the bathroom where apparently the plumbing is for the kitchen. What a joke.

distress?: http://streeteasy.com/building/400-park-avenue-south-new_york/23a

Check out 400 Fifth Avenue in contrast.

newyc, what do you think is appropriate price per sq reflecting all the issues highlighted in the convos above? $2000 per sq ft, 1800 per sq ft?

For example this one. What will make it move? I think $5mm will certainly make is move. But guessing will trade at $5.3mm.
http://streeteasy.com/building/400-park-avenue-south-new_york/26c

It's being sold by Luis Ortiz, so full asking price or higher.

You lost me with that.

Hi 300_mercer, I'm no expert but it's incredibly telling that this brand new development is having a hard time topping $2K psqft. If I'm recalling correctly the median selling price per sq ft of all Manhattan condos (incl. all old buildings) is around $2K psqft, and new developments routinely command at least $2.5K-3K psqft. No doubt the high end luxury market is cooling down, but this "affordable" luxury market that Toll Brothers caters to still is relatively healthy. I think people are realizing 400PAS has little value aside from the unique architecture, and existing unsold inventory will sell around $1.8k psqft, especially the undesirable and cramped 1 bed and 2 bed units. I'm assuming Toll Brothers is still making a healthy margin even at the reduced ask. They just got greedy and tried to take advantage of a hot RE bubble that's cooled down.

The original ask on 23A is a joke. That unit looks nowhere close to 1,250 sq ft and the master bedroom barely has two tiny windows. Can't do anything with the living room/dining room. $2.25M for a 2 bed seems very reasonable though, I think it'll clear around there, definitely not below $2M.

26C is beautiful, very unique layout and oversized ceilings. Current ask seems fair, at barely above $2K psqft, but buyer should be weary that this hasn't moved 1.5 years and that they've had to keep reducing the ask...so I think it'll clear around $5.5M.

So, Toll Bros. stock, buy or short?

newyc.

See this report. Average new development $2200 per sq ft which I am guessing includes some ridiculous prices sale at $4k per sq ft. I am guessing this should trade at 10-15% discount which indeed brings us in 1800-2000 per sq ft territory.
http://www.millersamuel.com/files/2016/01/Manhattan_4Q_2015.pdf.

Right. Looks like I wasn't far off, avg. selling price psqft of all condos is $1,959. Sad that 400PAS can't even clear that.

So sad.

The finishes look pretty "meh" for a high end luxury building, especially the hospital white kitchens and the interior decor on the common areas (gym). Seems like they are trying to save some pennies compared to other luxury developments.

Ccl3, while I am not a buyer on new developments at the current prices, I did like the finishes very much including white back painted glass on kitchen. Bathrooms are simply beautiful. However, some ceiling heights are much lower than others.

Check the floor-to-floor heights at https://a836-acris.nyc.gov/DS/DocumentSearch/DocumentImageView?doc_id=2015071501248002

Most are 9'9", which makes ceiling heights a bit less than 9'. Even lower near kitchens and baths, where there're mechanicals in the ceiling. A few of the higher floors go up to 11' or so.

Thanks. 9 foot is a little low for new development but still ok. Thought most new developments were at least 9.5 or even 10.

Half the building is a rental. What is the surprise here? The developer didn't build this to the same luxury standard of a full condo development.

If everything else is equal, how much more is new construction worth?

Hanklin, very hard to answer as the product is very different now. For example floor to ceiling Windows, higher ceilings than typical 8 foot ceilings of 70s and 80s. Gun to head, 20 percent premium due to factors I describe above and less of a need for major infrastructure upgrades for a while.

a lot more than 20%.

simply ceilings from 8' to 10' should get you a 25% premium. Then all the other factors.

Infrastructure upgrades alone should be worth a lot.