As Desire for Pricey Apartments Wane, Developers Split Full-Floor Condos at 432 Park Ave. Into Two - Crain's


The developers of 432 Park Ave. have split full-floor apartments at the 1,396-foot tall tower in half in a move that may signal a slowdown in sales for $50 million-plus apartments. With several other high-profile condo projects underway, sales at 432 Park Ave. have been closely watched as a bellwether for the super high-end segment of the city’s residential real estate market. There is some concern that there aren't enough buyers who can afford apartments priced in the tens of millions of dollars—an increasingly common figure for the latest crop of ultra-luxury condos.

In what could be a concerning sign for upcoming projects, 432 Park Ave.'s developers, CIM and Harry Macklowe, have cut five full-floor apartments on floors 91-95 of the tower into two: sized 4,400 square feet and 3,600 square feet. The smaller units have asking prices of $40.25 million and $39.75 million, respectively. The move comes as the sale of the palatial pads have slowed.

That's far bit less than the asking price for full-floor units. One full-floor apartment remains available at the property—an 8,000 square-foot unit on the 88th floor. The developers are asking $76.5 million for that apartment.

Richard Wallgren, an executive vice president at Macklowe Properties who is leading sales and marketing at 432 Park Ave., said the decision was made on a bet there will be more buyers willing to bite at that price point.

So far, more than 70% of 432 Park’s 106 units are in contract to be sold, with prices ranging from $7 million for a handful of one-bedrooms all the way up to $95 million for the spire’s 8,000-square-foot penthouse, which sits on the 96th floor. Closings for the apartments will begin either by the end of the month or in December depending on when the developers receive a temporary certificate of occupancy from the city.

Both the penthouse and the building’s one-bedrooms are among the collection of apartments of varying sizes in the tower that are in contract and scheduled to begin closing. The closings for the existing units in contract will likely run though the end of January. The building, which has been under construction since 2011, is set to be completed in mid-2016. The sales figures have made the $1 billion project a success, Wallgren said.

In a recent interview on the tower’s 38th floor, in an unsold 4,000-square-foot model apartment built to showcase the finishes that buyers can opt to request  the developers install, Wallgren shared with Crain's more information on the type of buyers the project has attracted. Wallgren estimated the average age of buyers to be about 55 and said several will use their apartment as their primary address and will even raise families there.

About 65% are American and within that group about half are New Yorkers, he said. The other half are from California and there is one buyer from Chicago. The remaining 35% of buyers are foreigners from a host of countries, including Turkey, Saudi Arabia, China, Russia, Greece and Brazil.

“We have local New Yorkers that will raise toddlers here and young children who go to private schools on the Upper East Side,” Wallgren said.

Even though a completed apartment sale will trigger deed filings cataloged by the city, it will still be difficult for the general public to determine the actual identity of buyers because most tend to purchase their units using limited liability companies.

“Because our prices start at $17 million, nearly everyone is well known,” Wallgren said, referencing the cheapest still-available unit at 432 Park. “They own banks and telephone companies and conglomerates that control trillions of dollars of assets.”

Several of the buyers are also purchasing units for their hired help. In fact, staff suites at 432 Park Ave. have sold so briskly that CIM and Macklowe converted an additional floor, the 34th, into  studio-sized apartments. That floor will join 28 and 29, which have already been reserved for the suites.

“We have had people buy multiple staff suites because they travel with a cook, or a driver, or an assistant,” Wallgren said.