So, where to begin. This apt, priced at $3.8 is massively overpriced. While it is a 3 BR/3.5 Bath apt, it is a very, very small 3/3.5. Adding up the sq ft from the layout, gets me livable sq ft of around 1,500 sq ft. That is small, esp compared to the almost 2,000 sq ft reported, not to mention most 3BR/3+ BA. The kitchen is ok but appliances look pretty basic (i.e. no luxury brands). The master... [more]
So, where to begin. This apt, priced at $3.8 is massively overpriced. While it is a 3 BR/3.5 Bath apt, it is a very, very small 3/3.5. Adding up the sq ft from the layout, gets me livable sq ft of around 1,500 sq ft. That is small, esp compared to the almost 2,000 sq ft reported, not to mention most 3BR/3+ BA. The kitchen is ok but appliances look pretty basic (i.e. no luxury brands). The master bath has a shower that is very small and this will be an issue for many buyers. The BIGGEST issue facing the valuation of this apt is the Maint + Taxes = approx. $8,600 PER MONTH!!! In other words, over $100,000 per year and this number will only be going up in the future. How to look at this extraordinary figure? Well, having seen enough apts, in a more "typical" building, an apt like this would have monthly maint + taxes of around $4,000 or $48,000/year. This apt is approx. $55,000 greater than the $48,000. Using a 4% cap rate gets you $1.375 million.
Now, for valuing this place. I'll be generous and use the figure in the listing....1,989 sq ft * $1,910 sq ft = $3.8 million. BUT, then any sane buyer will compensate for the beyond crazy monthly expenses and the $1.375 million (calculation above) is a fair number to use. So, we subtract the $1.375 from the $3.8 and we get.....$2.425 million. Even this is generous because many, many people will be scared away by the $100,000+ annual taxes/maint. Certainly, anyone paying more than $2.4 million will never, ever make money on this place.
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Response by 300_mercer
over 7 years ago
Posts: 10570
Member since: Feb 2007
Ethan, While the cc+taxes are high per square ft (call it 2400 sq ft counting outdoor space at 50 percent; $3.5 per sq ft), comparable penthouses will be typically $2.75 if not $3 per sq ft cc+taxes for a condo. $2.5 per square ft is now normal for a good location manhattan condo due to tax increases.
300, with all due respect, these 2 apts are apples and oranges. The 21 East 12th apt is a beautiful, brand new, full service building with taxes that are, as expected for all new condos, high. Even with high taxes, buyers will emerge for this type of high-end apt/building. Having said that, the combined maint+taxes are still 20-25% lower than 108 5th, which is a crappy, built in '86 condo that is not a full service, not to mention high-end, building. And no sane person will ever pay $2,000 per sq ft for a mediocre at best building that has monthly carrying costs of $8,600, irrespective of it technically being a "Penthouse". This apt will only sell once this way above what it should be carrying costs are factored into the apt price, which is another way of saying that the selling price needs a BIG discount to $2,000 per sq ft. I stand by my $2.4 million selling price.
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Response by ximon
over 7 years ago
Posts: 1196
Member since: Aug 2012
Never a good sign, this unit is also available to rent for $13,000 per month which by my math shows a basic return of 1.4%.
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Response by 300_mercer
over 7 years ago
Posts: 10570
Member since: Feb 2007
Ethan, I am not commenting on the price. Just that average condo maintenance plus taxes for even 1980s vintage pent house is $2.5 per sq ft in good areas of Manhattan. New ones are $3.
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Response by Ethan129
over 7 years ago
Posts: 157
Member since: Sep 2007
The 1st of many-to-come price reductions began today, only 9 days after this place hit the market. Price was decreased $300,000 to $3.5 million. You can see my reasoning in my prior note (above) but anyone paying more than $2.4 million for this place will end up losing $ when they eventually sell it. Combine a crappy/mediocre building + a mediocre apt + $8,600/month maint +taxes gets you an apt needing a BIG discount.
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Ethan, While the cc+taxes are high per square ft (call it 2400 sq ft counting outdoor space at 50 percent; $3.5 per sq ft), comparable penthouses will be typically $2.75 if not $3 per sq ft cc+taxes for a condo. $2.5 per square ft is now normal for a good location manhattan condo due to tax increases.
See this one for example. Not even a penthouse not taxes alone are $2 per sq ft.
https://streeteasy.com/building/21-east-12-street-new_york/9c?context%5Bcontroller%5D=%23%3CBuildingController%3A0x00005570efccc580%3E&context%5Bcurrent_user%5D=1004028&hide_if_empty=true§ion=sales
300, with all due respect, these 2 apts are apples and oranges. The 21 East 12th apt is a beautiful, brand new, full service building with taxes that are, as expected for all new condos, high. Even with high taxes, buyers will emerge for this type of high-end apt/building. Having said that, the combined maint+taxes are still 20-25% lower than 108 5th, which is a crappy, built in '86 condo that is not a full service, not to mention high-end, building. And no sane person will ever pay $2,000 per sq ft for a mediocre at best building that has monthly carrying costs of $8,600, irrespective of it technically being a "Penthouse". This apt will only sell once this way above what it should be carrying costs are factored into the apt price, which is another way of saying that the selling price needs a BIG discount to $2,000 per sq ft. I stand by my $2.4 million selling price.
Never a good sign, this unit is also available to rent for $13,000 per month which by my math shows a basic return of 1.4%.
Ethan, I am not commenting on the price. Just that average condo maintenance plus taxes for even 1980s vintage pent house is $2.5 per sq ft in good areas of Manhattan. New ones are $3.
The 1st of many-to-come price reductions began today, only 9 days after this place hit the market. Price was decreased $300,000 to $3.5 million. You can see my reasoning in my prior note (above) but anyone paying more than $2.4 million for this place will end up losing $ when they eventually sell it. Combine a crappy/mediocre building + a mediocre apt + $8,600/month maint +taxes gets you an apt needing a BIG discount.