432 Park Avenue may be the tallest residential building in the western hemisphere and home to the most expensive apartment closing this year, but throughout 2016, the tower’s ultra-luxury condos were selling at an average discount of 10 percent, according to an analysis by appraiser Miller Samuel Inc. for Bloomberg. And a recent transaction saw an even greater price cut; Lewis Sanders, founder and CEO of Sanders Capital and former CEO of AllianceBernstein, bought an 88th floor penthouse for $60.9 million, 20 percent less than its $76.5 asking price.
Sanders’ transaction is one of nine at 432 Park that closed at a discount this year. In June, a 73rd floor unit went into contract for $30.1 million, 11 percent less than its asking price. The following month, an 82nd floor spread received a 14 percent markdown when it closed for $18.6 million. And in September, the full-floor penthouse on the 96th floor sold for $87.7 million; though this was the year’s most expensive condo sale, it was still much less than its $95 million initial ask. Price chops are taking effect at nearby Billionaires’ Row buildings, too. For example, a 65th floor condo at Extell’s One57 sold in October for $21.6 million, a whopping 24 percent discount.
The discounted prices are on trend with a perceived glut in super-high-end condos that coincides with declining investor interest. Bloomberg references a September report from Corcoran Sunshine Marketing Group that says 3,500 newly built units will list this year, more than half of which are priced at $2,400+ per square foot, deeming them luxury. To attract interest, developers are not only offering discounts, but covering buyers’ transfer taxes and fees (as was the case was Sanders’ buy). According to Miller, “Every building is implementing some some sort of negotiability. It’s a sharp change from peak new development in 2014, when there wasn’t that opportunity for buyers.”
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