Dead Cat Bounce?

David Goldsmith

All Powerful Moderator
Staff member
The unit came on the market for $115 million in 2013 and over the next 8 years the price was lowered multiple times. Finally it came down to $29.5 million, had multiple bidders, and sold for $30.5 million in a deal that closed Friday.

So did it sell because of how hot the market is or did it sell because the price came down 74%?
 

David Goldsmith

All Powerful Moderator
Staff member
Another ultra-luxury price chop and sale.

240 Centre Street Penthouse
Listed in 2016 for $35 million.

Last ask in 2021 $11.5 million.

Sold June 2021 $10 million.
 

David Goldsmith

All Powerful Moderator
Staff member
Meanwhile, real estate investor Barry Skolnick’s three-bedroom duplex at 188 East 64th Street finally found a buyer after nine years on and off the market. The penthouse first hit the market in 2012, and at one point seeking about $13 million.

Skolnick, who is also a car collector, gallerist and ammunition maker, reportedly invested $5 million to renovate the unit, which resurfaced on the market in January asking $10 million with Compass’ Philip Scheinfeld.

The buyer, represented by Julia Boland of the Corcoran Group, is from out of town. Sources said the final sales price was just north of $9 million.
 

inonada

Well-known member
How much do you think Stevie Cohen spent on the renovation? Original price was $26M, not the $24M quoted in the RealDeal article. At 9000 sq ft, I imagine $5-10M. Possibly at the higher end, as I don’t see Charles Gwathmey getting out of bed to work on a budget.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
The unit came on the market for $115 million in 2013 and over the next 8 years the price was lowered multiple times. Finally it came down to $29.5 million, had multiple bidders, and sold for $30.5 million in a deal that closed Friday.

So did it sell because of how hot the market is or did it sell because the price came down 74%?
Ill go with the 74% haircut
 

inonada

Well-known member
I think it's a bit of both, with "hot" meaning "not dead ala 2020 (no transactions), just fizzling price-wise like the years before". At a $34M ask in late 2019, this was within striking distance of the eventual $30.5M sale.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
After 5 years and a $30M => $25M price chop, top floor at 30 Park Place finds a lowball buyer at $18.5M:

amazing how that works
How much do you think Stevie Cohen spent on the renovation? Original price was $26M, not the $24M quoted in the RealDeal article. At 9000 sq ft, I imagine $5-10M. Possibly at the higher end, as I don’t see Charles Gwathmey getting out of bed to work on a budget.
I always wondered about high end renovations and a diminishing return, ie, a 5-7M reno, will a buyer pay that amount in full? or at some point do we reach a threshold of a diminishing return? An example would be with a smaller unit, say a 1200sft 2Bed, what if the owner puts 1M into the reno? I would argue that anything past 500K or so may not get back full value? Think of things like high end closets, sound wiring, smart home, automated blinds, stuff like this?
 

inonada

Well-known member
I'm pretty sure Stevie paid his $5M-10M reno w/o giving a rat's ass about making his money back. Sure, he's a trader at heart and it'd be nice to have had $80M win on this trade. But really, if he's gonna spend time there he wants it done up the way he likes it.

In terms of a getting your money back for a renovation like this, it's tough to say on a reno that is 15 years old. Some people like playing designer, some just want to focus on their day job, so the buyer always ends up being a "day job" person. The question is what lasts on a reno like this, to people who want to focus on their day job:
  • High-end closets last. I've seen too many high-end apts with the cheapest possible closets installed by the developer, with the understanding that any owner would instantly install their own preference of a fancy closet. Except the owner never did, and you're looking at comically cheap closets in super high-end apts.
  • Fancy walls, ceilings, etc. (like this apt has) are always taste-specific, and tastes can change. So the underlying quality is there, but there's a discount for changing tastes.
  • Wiring and smart homes always gets dated. Ethernet cables -- sure run them if you have opened the walls -- but no one needs them anymore, really, with modern WiFi. Speakers & cabling are useless, IMO. The speakers always suck audio-wise. As do the cables (which are fine for the sucky speakers, but not for good ones). Technology like AirPlay2 is a much better solution to syncrhonized audio from multiple speakers than Crestron or whatever other horrendous systems I've seen installed, which are flaky & buggy. And when anything goes wrong, you gotta call a tech to come next week and charge $1000 to reboot the system, tell you to buy a new one, or some such silliness.
  • Smart home lighting suffers similarly, but not as bad. The Lutron systems become dated, the bulbs become dated, etc. In my new apt, I've put WiFi (i.e., direct to phone) LED bulbs with full flicker-free dimming & color temperature control wherever I could. LED bulbs from a few years ago couldn't do any of that, but that's what you would have gotten. Go further back, and you would have had better light-quality bulbs (incandescent, halogen) but with a totally dated control system.
  • Automated blinds are always in style. They're expensive, they break, etc. But dealing with 5000 sq ft of windows via manual blinds/curtains is a chore.
Obviously, not all this translates to a typical 1200 sq ft apt. E.g., you only have 500 sq ft of windows, totally manageable manually. And the desire for "more space" can outweigh the desire for "nicer space". At 9000 sq ft, few people would want to skimp on "nicer space" in favor of "more space".
 

David Goldsmith

All Powerful Moderator
Staff member
Although at this point it has become somewhat irrational I am still always disappointed when people insist on buying "Prewar" apartments and then promptly go about removing anything "Prewar" about them from details to layouts.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I'm pretty sure Stevie paid his $5M-10M reno w/o giving a rat's ass about making his money back. Sure, he's a trader at heart and it'd be nice to have had $80M win on this trade. But really, if he's gonna spend time there he wants it done up the way he likes it.

In terms of a getting your money back for a renovation like this, it's tough to say on a reno that is 15 years old. Some people like playing designer, some just want to focus on their day job, so the buyer always ends up being a "day job" person. The question is what lasts on a reno like this, to people who want to focus on their day job:
  • High-end closets last. I've seen too many high-end apts with the cheapest possible closets installed by the developer, with the understanding that any owner would instantly install their own preference of a fancy closet. Except the owner never did, and you're looking at comically cheap closets in super high-end apts.
  • Fancy walls, ceilings, etc. (like this apt has) are always taste-specific, and tastes can change. So the underlying quality is there, but there's a discount for changing tastes.
  • Wiring and smart homes always gets dated. Ethernet cables -- sure run them if you have opened the walls -- but no one needs them anymore, really, with modern WiFi. Speakers & cabling are useless, IMO. The speakers always suck audio-wise. As do the cables (which are fine for the sucky speakers, but not for good ones). Technology like AirPlay2 is a much better solution to syncrhonized audio from multiple speakers than Crestron or whatever other horrendous systems I've seen installed, which are flaky & buggy. And when anything goes wrong, you gotta call a tech to come next week and charge $1000 to reboot the system, tell you to buy a new one, or some such silliness.
  • Smart home lighting suffers similarly, but not as bad. The Lutron systems become dated, the bulbs become dated, etc. In my new apt, I've put WiFi (i.e., direct to phone) LED bulbs with full flicker-free dimming & color temperature control wherever I could. LED bulbs from a few years ago couldn't do any of that, but that's what you would have gotten. Go further back, and you would have had better light-quality bulbs (incandescent, halogen) but with a totally dated control system.
  • Automated blinds are always in style. They're expensive, they break, etc. But dealing with 5000 sq ft of windows via manual blinds/curtains is a chore.
Obviously, not all this translates to a typical 1200 sq ft apt. E.g., you only have 500 sq ft of windows, totally manageable manually. And the desire for "more space" can outweigh the desire for "nicer space". At 9000 sq ft, few people would want to skimp on "nicer space" in favor of "more space".
Totally agree with Stevie boy, at that level of wealth, yea who gives a shit. Good points on each of the items mentioned, I guess I should give more weight to the high end closets, as I agree, 95% of closets even in lux buildings are not high end. I guess I just wondered how buyers and their bids valued this renovation vs its costs when bidding. I think its low compared to the location, the building, the space, the views, the bones, etc...good stuff
 

David Goldsmith

All Powerful Moderator
Staff member
Totally agree with Stevie boy, at that level of wealth, yea who gives a shit. Good points on each of the items mentioned, I guess I should give more weight to the high end closets, as I agree, 95% of closets even in lux buildings are not high end. I guess I just wondered how buyers and their bids valued this renovation vs its costs when bidding. I think its low compared to the location, the building, the space, the views, the bones, etc...good stuff
I haven't seen any recent report for apartments, but every one I have ever seen for houses across the country show no one ever recoups renovation costs. The best they ever do is something like 93% on replacing garage doors.
 

inonada

Well-known member
Totally agree with Stevie boy, at that level of wealth, yea who gives a shit. Good points on each of the items mentioned, I guess I should give more weight to the high end closets, as I agree, 95% of closets even in lux buildings are not high end. I guess I just wondered how buyers and their bids valued this renovation vs its costs when bidding. I think its low compared to the location, the building, the space, the views, the bones, etc...good stuff
I don’t think the price is low, that’s just where the market is for this type of apt. Note the unit listed a few floors up:


Higher ceilings, well-renovated. Sold for $17M in 2006 pre-renovation, asking $18.5M now with 100+ days on the market.

There was a period when supply for this type of thing just wasn’t there. But at $3000-$4000 ppsf, developers be developing until the cows come home.
 

inonada

Well-known member
My favorite trajectory to follow for buildings from this era has been 15 CPW. When it started selling in 2005/2006, it was reasonably priced relative to what it costs to build.

But then people got cuckoo for cocoa puffs and started paying 2.5x the new dev price:


Look at those pics. $6K ppsf for that — really? It’s just not that nice, $6K ppsf can build / get you so much more. It’s as if people couldn’t imagine anyone being able to develop anything nice ever again. Or that the “prestige” would last forever, as if people wouldn’t want shinier, better things.

Nowadays, pricing has deteriorated to 1.5x. For example:


I suppose the “prestige” has brought it something: 1.5x pricing rather than 1.0x pricing from One Beacon Court, relative to 2006-ish. But I think that may continue to deteriorate, just like the 40% drop from 2.5x to 1.5x in the past decade.
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
I don’t think the price is low, that’s just where the market is for this type of apt. Note the unit listed a few floors up:


Higher ceilings, well-renovated. Sold for $17M in 2006 pre-renovation, asking $18.5M now with 100+ days on the market.

There was a period when supply for this type of thing just wasn’t there. But at $3000-$4000 ppsf, developers be developing until the cows come home.
"I don’t think the price is low, that’s just where the market is for this type of apt. Note the unit listed a few floors up:" -- sorry, meant in general here not specifically to this trade.

High ceilings, well renovated, always a nice 1-2 combo for reselling well assuming its in a top loc.

BTW, seeing a few very expensive CPS trades recently...




ultra lux resurgence in play?
 

Noah Rosenblatt

Talking Manhattan on UrbanDigs.com
Staff member
My favorite trajectory to follow for buildings from this era has been 15 CPW. When it started selling in 2005/2006, it was reasonably priced relative to what it costs to build.

But then people got cuckoo for cocoa puffs and started paying 2.5x the new dev price:


Look at those pics. $6K ppsf for that — really? It’s just not that nice, $6K ppsf can build / get you so much more. It’s as if people couldn’t imagine anyone being able to develop anything nice ever again. Or that the “prestige” would last forever, as if people wouldn’t want shinier, better things.

Nowadays, pricing has deteriorated to 1.5x. For example:


I suppose the “prestige” has brought it something: 1.5x pricing rather than 1.0x pricing from One Beacon Court, relative to 2006-ish. But I think that may continue to deteriorate, just like the 40% drop from 2.5x to 1.5x in the past decade.
HOLY SHIT! I told my buyer to buy this exact unit in 2008! https://streeteasy.com/building/15-central-park-west-new_york/3a - it was a wreck, and Im like reno this baby and your set! WOW, amazing to see it now. Ultimately my clients bought in Ariel West

triggered a crazy memory here! sorry to digress
 

David Goldsmith

All Powerful Moderator
Staff member
"I don’t think the price is low, that’s just where the market is for this type of apt. Note the unit listed a few floors up:" -- sorry, meant in general here not specifically to this trade.

High ceilings, well renovated, always a nice 1-2 combo for reselling well assuming its in a top loc.

BTW, seeing a few very expensive CPS trades recently...




ultra lux resurgence in play?
I think it's more that the two buildings share something:
Being known as the "it building" of a moment in time. Out of the box a good number of high profile buyers came on board. Most notably Sting in both buildings. We saw what happened when that wore off at Limestone Jesus. Will the same thing happen at the "curated" Chateau de Roth after he doesn't get to hand pick the buyers on resale? Only the future will tell.
 

inonada

Well-known member
"I don’t think the price is low, that’s just where the market is for this type of apt. Note the unit listed a few floors up:" -- sorry, meant in general here not specifically to this trade.

High ceilings, well renovated, always a nice 1-2 combo for reselling well assuming its in a top loc.

BTW, seeing a few very expensive CPS trades recently...




ultra lux resurgence in play?
It feels more like 15 CPW redux than anything more broad. Poor Stern has been typecast as an architect, so I think he will live out his final days building fancier versions of the same thing over and over. The same cast of buyers migrate to the newer one, because it’s significantly better and relative cheap to the older one they had bid up to something silly. The old building proceeds with a slow deflation.

Case in point, look at 15 CPW 3A. Developed for $2400 ppsf in the 2000’s, totally makes sense. Bid up to $6000 ppsf in 2010’s because of silliness. So developers say, “Hell, if people are paying that $6000 ppsf for THAT, I can make mint off of something nicer.” Enter 220 CPS, where #60 is developed for $8000 ppsf. Cast of buyers rotate out, dropping 15 CPW 3A to $3600 while bidding 220 CPS to $12000 ppsf.
 
Top