SOURCE:
NEW YORK TIMESURL:
http://www.nytimes.com/2016/07/12/realestate/luxury/slow-times-on-billionaires-row-as-the-8-digit-boom-fizzles.htmlBy MICHELLE HIGGINS
New York City’s ultraluxury real estate frenzy — with its sky-piercing condominium towers and $100 million price tags — has finally come to an end.
Even with every conceivable amenity, the eight- and nine-digit prices attached to trophy homes with helicopter views and high-end finishes never bore much relation to actual value. Rather, a class of superrich investors primarily drove the market, choosing high-priced real estate as their asset of choice, because it was less volatile than other investments and they could use shell companies to hide their identities.
But today a four-year construction boom aimed at buyers willing to spend $10 million or more has flooded the top of the market just as global market turmoil has caused wealthy investors to pull back and the federal government has moved to scrutinize some all-cash transactions.
A view of Central Park and Midtown Manhattan from an apartment on the 45th floor of 157 West 57th Street. The developer, Extell Development Company, spent about $1 million redecorating the apartment, which is on the market for about $20 millionIt’s not just the volatility of financial markets that has big spenders sitting on their wallets. Other global trends that have put the lid on high-end spending include China’s tightened restrictions on capital outflows, uncertainty surrounding Britain’s decision to leave the European Union, lower oil prices curbing wealth in the Middle East, and tax increases and other measures that have driven up property transaction costs in some countries.
As the volume of sales at the uppermost level has dwindled, some sellers have made drastic price cuts and some projects have been delayed.
Developers of the skyscraper planned for 111 West 57th Street said they would postpone marketing materials and events for condominiums in the building, some priced as high as $57 million, until next year.
At 432 Park Avenue, the tallest residential tower in the Western Hemisphere, full-floor apartments originally listed for $78 million to $85 million have been split in two and priced at approximately $40 million each.
In and around West 57th Street, known as Billionaires’ Row, “it’s not just slow — it’s come to a complete halt,” said Dolly Lenz, a broker to the superrich. She attributed the lack of activity along the Midtown corridor to oversupply, little differentiation among glassy ultraluxury units and peak pricing. “That’s a death knell,” she said.
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