Friday, January 6, 2012

$110 million penthouse a bargain?

Extell Development recently raised its asking price for the penthouse at One57 to $110 million.  Forbes reports that Extell's President calls it a bargain at $110 million.  Reason is that at 11,000 sqft, the penthouse at One57 equates to about $10,000 per sqft.  Note that the price of the average condominium in Manhattan in 4Q'2011 was $1,295 per sqft.  So how can $110 million be a bargain?

A $110 million apartment should be compared against the priciest properties and not the average property.

The recently sold penthouse at 15 Central Park West which sold for $88 million and had 6,744 sqft works out to $13,000 per sqft.  Russian composer Igor Krutoy paid $48 million for a 6,000 sqft apartment at The Plaza or about $8,000 per sqft.  The penthouse at Time Warner which is asking $60 million is about $13,700 per sqft.

Hence, when viewed with the priciest apartments above, $110 million for One57's penthouse does seem like a bargain especially considering it would be brand new when completed.

It's all about context, isn't it?

Wei Min Tan is Founder of Castle Avenue Partners focusing on luxury residential condominium property in  Manhattan, New York.  He caters to local and foreign buyers looking for primary residence, vacation home and investment property.  Wei Min most recently appeared on NBC's OpenHouse NYC show hunting for waterview property with a client.

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