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Habitat Magazine Business of Management 2021

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CO-OP/CONDO BUYERS

WHAT CO-OP/CONDO BUYERS NEED TO KNOW

Nearly Half of the Pricey Condos on Billionaires' Row Sit Empty

Midtown, Manhattan

Condo buyers, Billionaires' Row, COVID-19 pandemic, supply glut.
Aug. 9, 2021

In the mood for a little schadenfreude? Here you go: Billionaires’ Row, according to the New York Post, is a bust. Nearly half of the luxury units across seven buildings in the uber-exclusive Midtown Manhattan stretch — where apartments have sold for more than $100 million — sit empty and dark, according to a new study by the brokerage firm Serhant.

An analysis of recorded and known pending sales at the seven skyscrapers — 157 W. 57th St., 432 Park Ave., 111 W. 57th St., 53 W. 53rd St., 520 Park Ave., 217 W. 57th St. and 220 Central Park South — found that some 44% of the buildings' collective condos remain vacant. That translates to 341 of the buildings’ cumulative 772 units, according to the study.

Supply may have simply outpaced demand, said Serhant’s director of market intelligence, Garrett Derderian, with sales in the buildings all commencing within a period of less than seven years, spanning December 2011 through October 2018. “There is no question there is a glut of inventory, especially [among units valued] between $10 to $30 million, where most product on Billionaires’ Row is priced," Derderian says.

Donna Olshan, president of Olshan Realty and author of the Olshan Luxury Market Report, agrees. “There was just too much inventory built,” says Olshan, who was not involved in the drafting of Serhant’s study. “No one knows how deep the pool of buyers is for these properties. The developers raised money, made rosy projections, and built buildings, but they didn’t sell. They were overpriced, and in some buildings the only good views are very high up.”

Arguably the biggest loser in the crowded market, Olshan says, is one of the first buildings to launch sales, 157 West 57th St., where 11% or the units remain unsold – and resale prices have plummeted. “At the time it was constructed, One57 was the pinnacle of the ultra-luxury market, having created an entirely new asset class,” according to the Serhant study. “The average discount on a resale property from the prior sale price is 25.4%, indicating the building has not held its value in the way many initially believed it would.”

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