Sunday, February 17, 2019
Oligarchs are losing millions on their luxury tower condos
Don’t believe the brochures. A Billionaire’s Row apartment can be a terrible investment.
“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,” said Grant Long, senior economist at StreetEasy, a New York listing platform.
“You just have to assume someone like
Ken Griffin [who recently dropped a record-breaking $250 million on an apartment at 220 Central Park South] isn’t very interested in seeing his money back. An apartment like that isn’t liquid.”
Roughly 16,000 apartments were bought and resold in New York from 2014 through 2018. Of those, 1,295 homes — 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 read like a who’s who of prestige properties, including 15 Central Park West, 432 Park (North America’s tallest residential tower), the Time Warner Center and One57 (which boasted New York City’s first $100 million home sale).
“In New York, real estate behaves like a luxury good,” Long said. “It’s like fancy cars and expensive handbags. It’s purchased to make a statement. But it’s also highly cyclical and subject to whims.”
This is going to come off nauseating considering the source and apologies to every reader of this blog and the rest of humanity, but talk about money in the wrong hands.