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Determining "luxury" prices not easy

October 19, 2011

At the top of the for-sale market for apartments in Manhattan, price is not an exact science.

During the current financial uncertainties, however, reports of very expensive sales have continued to amaze most observers. While overall averages have declined, some owners have apparently been able to reap substantial profits on their recent investment in a "grand" apartment.

The litany of "location, location, location" is not chanted very much anymore as Fifth Avenue has been challenged, dramatically, by upstarts on Central Park West and as the city has significantly "discovered" new and very popular and "chic" neighborhoods in midtown and NoLita, SoHo and TriBeCa.

While most observers can list the city's most "prestigious" buildings, at least from a sales perspective, traditional factors such as views, size, services and amenities, design, location and history no longer provide ball-park evaluations, or so it seems.

Take the five-bedroom, four-and-a-half bath, five-fireplace, six-terrace apartment of the late Brooke Astor, the philanthropist and widow of Vincent Astor, at 778 Park Avenue. She died in 2007 at the age of 105. The duplex was on the 15th and 16th floors of the 18-story building between 73rd and 74th Streets that had been designed by Rosario Candela in 1931.

When it was first listed in 2008, it was listed for $46 million.

Recent reports this month indicated it sold for only $21 million!

The sky, however, apparently did not fall.

While 778 Park Avenue certainly is regarded widely as a "distinguished" address, it was not entirely clad in limestone as is 927 Fifth Avenue at 74th Street. There, William Lie Zeckendorf had bought a five-bedroom apartment for a bit more than $29 million almost a year ago and sold it recently for $34.6 million to Scott Bommer, founder of SAB Capital.

In January, 2008, Mr. Bommer bought an apartment on the top two floors at 1060 Fifth Avenue at 87th Street for $46 million and sold in August, 2008 for $48.9 million.

Mr. Zeckendorf had sold his penthouse at the limestone-clad 15 Central Park West, where he was a co-developer, in December, 2010, for about $40 million, or about $10,000 a square foot, a price that was about four times what he originally paid for it. There are currently three "active" listings in the building and one unit on the 31st floor that had been listed for $28,750,000 recently went into contract.

Further down the avenue, Paul Allen, the co-founder of Microsoft was reported earlier this month to have paid about $25 million for the penthouse at 4 East 66th Street, a limestone-clad 12-story building with less ornate facades than 927 Fifth Avenue.

Mr. Allen previously had acquired the 18-room 11th floor apartment in the building in 1996 for $13.5 million. The 12th floor unit reported has fewer than 10 rooms but considerable terrace space.

To some, these sales might reflect brilliant marketing and extraordinary "opportunities," while to others they might indicate the fickleness of the top of the "luxury" market. The recent Third Quarter 2011 market report of Prudential Douglas Elliman Real estate prepared by Miller Samuel indicated that the average sales price of an apartment in its "luxury market matrix" declined 5.8 percent from the previous quarter and 3.4 percent from the same quarter the previous year.

One new listing this month is asking $45 million for a duplex, six-bedroom penthouse at 158 Mercer Street in SoHo that Jon Bon Jovi had purchased in 2007 for $24 million.


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