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Rejoice! The 1 Percent Are Getting Hammered

Midtown, Manhattan

1 Percent

Luxury condos on Billionaires Row and other neighborhoods are money losers.

Feb. 20, 2019

New York City real estate has always been an incubator of schadenfreude – joy in the suffering of others – especially when the others are the super-wealthy. Well, enjoy this: those luxury condos along Billionaires Row turn out to be a terrible investment. 

Roughly 16,000 apartments were bought and resold in New York from 2014 through 2018. Of those, the New York Post reports, only 7.7 percent sold at an outright loss. But a whopping 39 percent of the 66 luxury condos that were bought and resold in Midtown during this time lost money, according to a StreetEasy analysis of city Department of Finance records. In fact, across all neighborhoods, the city’s priciest properties saw losses. 

And the addresses of the biggest losers read like a who’s who of prestige properties, including 15 Central Park West, 432 Park Avenue (North America’s tallest residential tower), the Time Warner Center, and One57, which boasted New York City’s first $100 million home sale, which, given recent developments, barely qualifies as beer money. 

“One of the things that I struggle to wrap my head around is why people continue to park money in high-end New York real estate when it’s not a very lucrative asset class,” says Grant Long, senior economist at StreetEasy. “You just have to assume someone like Ken Griffin [who recently dropped a record-breaking $240 million on an apartment at 220 Central Park South] isn’t very interested in seeing his money back.” 

Of course, when you’re richer than God, a few hundred million here and there doesn’t merit much notice. Or as luxury broker Leonard Steinberg of Compass so eloquently puts it: “When you have billions, millions don’t matter as much. These are very rich people. This is a tiny fraction of their assets.”

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