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TonyNYC May 11, 2016 3:44 PM

Today's Wall St Journal Article... Look's like the Boom in the High end Condo market is coming to end here! It was incredible while it lasted.. 432 Park, 520 Park, 157 W 57, 220CPS, Nordstroms n Moma Towers..

I guess the big projects going forward after this historic time here in NYC will be commercial buildings.



Luxury Condo Boom Is Ending in Manhattan


Demand for luxury units slows amid unprecedented supply; One57 condo sales dwindle
Sales at One57 tower in midtown Manhattan, center, have slowed to a trickle, with about 20 of the original 94 condos still unsold. Sales at One57 tower in midtown Manhattan, center, have slowed to a trickle, with about 20 of the original 94 condos still unsold. he 1,004-foot Manhattan condominium tower known as One57 was the envy of the real-estate market as it was being constructed in recent years, garnering interest from so many wealthy buyers that it sparked a boom by developers betting demand for luxury apartments would keep climbing to the skies.

It didn’t.

Instead, sales at One57 have slowed to a trickle, with about 20 of the original 94 condos still unsold. Builder Extell Development in March reduced its projected sellout value of the tower at 157 W. 57th St. to $2.56 billion, a markdown of $162 million from its 2013 projections, according to securities documents filed on the Tel Aviv Stock Exchange.

Demand in Manhattan’s super-high-end condo market has dried up amid global economic jitters, just as the market has been flooded with unprecedented supply. It is a potent recipe for a bear market in a sector that has reshaped the peaks of the Manhattan skyline in recent years.

The slowdown appears confined to this rarefied segment of New York’s condo market; demand remains strong and supply more limited for more moderately priced units. But it is a scenario also playing out in other super high-end markets that subsist on billionaires’ spare cash. Prices have fallen, for example, in London’s luxury property market, the high-end art sector and even the classic car market.

‘There’s a lot of stuff that is chasing what happened three years ago or four years ago when there was a boom. They’re late to the party and the party is ending.’
—Gary Barnett

While Extell likely will end up just fine—One57’s projected sellout value is still nearly $1 billion more than its costs—there is far more concern about the dozens of high-price projects that started afterward and have sold far fewer of their units.

“There’s a lot of stuff that is chasing what happened three years ago or four years ago when there was a boom,” said Gary Barnett, Extell’s founder. “They’re late to the party and the party is ending. ”

Mr. Barnett isn’t running for the hills. He called the state of the high-end market a “temporary imbalance” that would be absorbed in a few years.
Property Report

But others are more fearful. Already, two high-profile projects—a conversion of the upper floors of the Sony Building and a new tower on Central Park South—have been scrapped or shelved, while lenders have turned off the spigot, market experts said. Last month, the developers of a modernist 900-foot-high tower on East 58th Street filed for bankruptcy protection to forestall a foreclosure after they were unable to obtain long-term financing needed to move the project forward.

“We’ve been doing a lot of consulting for Wall Street firms that funded this development boom and woke up on Jan. 1 seeing competition across the skyline and are noticeably concerned,” said Jonathan Miller, an appraiser and president of Miller Samuel Inc.

Quantifying the tumult in the sector is difficult because many developers don’t report sales. Pipeline data often don’t include pricing.

But developers said there are several hundred to a few thousand units being constructed or planned now under the assumption they will command at least $3,500 a square foot. That translates to roughly $5 million for a two-bedroom unit, considered a benchmark of the ultra-high-end market.

Just in the blocks around One57, a tower being built next to the Museum of Modern Art has about 140 luxury apartments including a $70 million penthouse. Another slim tower at 520 Park Ave. with 33 units has an average unit price of $38 million.

Down the street from One57 is one of the slenderest buildings ever to be built on earth—111 W. 57th St.—with 60 units planned. It is to rise past 1,400 feet, well above the Empire State Building’s 1,250 feet, tapering to just over 2,000 square feet for the top residential floor. Another very slim 900-foot tower is just getting started in lower Manhattan by developer Michael Shvo and his partners, financed in part with money from Chinese investors seeking green
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scalziand May 11, 2016 3:52 PM

The rental market is getting a bit soft too, but hopefully it's just a sign that pent up demand is finally starting to be sated, and prices can slowly decline.

http://www.zerohedge.com/news/2016-0...ts-bottom-line

Crawford May 11, 2016 4:10 PM

Quote:

Originally Posted by TonyNYC (Post 7437872)

I guess the big projects going forward after this historic time here in NYC will be commercial buildings.

The residential market is doing quite well. Better than the commercial market. There are probably 10x as many 700+ ft. residential towers planned as opposed to commercial towers. And I doubt another commercial tower is ever built along the 57th street corridor.

The takeaway is don't take news articles at face value, because they base their conclusions on quarterly sales figures, which are highly variable. In three months the WSJ will write the same article, except talking about a incredible boom. Six months from now they'll talk about a bust.

Projects not yet built are years away from sales so current market conditions, whether robust or slow, are largely irrelevant to any project pro formas.

tokilamockingbrd May 11, 2016 6:11 PM

one thing I have not seen considered by these "economist" is the fact with so many options going up people are simply in wait and see mode until all the options are near completion.

For instance, maybe the reason sales at One57 haves slowed has less to do with lack of demand and more to do with the fact that offerings that might be superior are rising at 220, Nordstrom Tower, and Steinway all in immediate proximity. As a buyer I want to make best choice possible especially if I am looking at this as an investment.

We wont really know the full depth of the market until most of these come on line. Which is why I am glad there is a pause in the market, it will create a point in time which people will be able to purchase a condo with all of the projected options on the table.

NYguy May 12, 2016 1:03 AM

Quote:

Originally Posted by TonyNYC (Post 7437872)
Today's Wall St Journal Article... Look's like the Boom in the High end Condo market is coming to end here! It was incredible while it lasted.. 432 Park, 520 Park, 157 W 57, 220CPS, Nordstroms n Moma Towers..

I guess the big projects going forward after this historic time here in NYC will be commercial buildings.



Tha's a common misconception people have, but it just isn't true.

In the article they are referencing the super high end market (or the billionaires as some like to put it). But that's only partially true. There is a slow down due to the pending volume in that market. But there is a whole class of residential supertalls that isn't in that market, and have no plans to be. Towers like 9 DeKalb in Brooklyn, and 45 Broad and 125 Greenwich dowtown. That article itself isn't shedding any "news". If you read about it, they've been talking about this for the past year or so. But it's geared toward a certain segment of the market. And there isn't really much in that market that hasn't already gotten underway.

Barnett has said that he doesn't need One57 level prices for this tower and I'm not even sure 53W53 is in it as much as some of the others. The units at 111 W 57 aren't going to be on the market for a while. So I'm really not sure about the doom and gloom tone of the article. But you'll be reading about record prices again before too long.

tokilamockingbrd May 12, 2016 2:57 AM

Quote:

Originally Posted by NYguy (Post 7438696)
Tha's a common misconception people have, but it just isn't true.

In the article they are referencing the super high end market (or the billionaires as some like to put it). But that's only partially true. There is a slow down due to the pending volume in that market. But there is a whole class of residential supertalls that isn't in that market, and have no plans to be. Towers like 9 DeKalb in Brooklyn, and 45 Broad and 125 Greenwich dowtown. That article itself isn't shedding any "news". If you read about it, they've been talking about this for the past year or so. But it's geared toward a certain segment of the market. And there isn't really much in that market that hasn't already gotten underway.

Barnett has said that he doesn't need One57 level prices for this tower and I'm not even sure 53W53 is in it as much as some of the others. The units at 111 W 57 aren't going to be on the market for a while. So I'm really not sure about the doom and gloom tone of the article. But you'll be reading about record prices again before too long.

don't forget the 850 and 920 footers going up by manhattan bridge.

We will not see any new skyscrapers back by condos selling exclusively 10-15mil+.

NYguy May 12, 2016 3:09 AM

Quote:

Originally Posted by tokilamockingbrd (Post 7438831)
We will not see any new skyscrapers back by condos selling exclusively 10-15mil+.

I don't know about that. This is still New York, and even in the bad times you get those prices. Just remember these things go in cycles, and it takes so long for these towers to get built (from foundation to opening) that things will be different by the time the towers just getting in and out of the ground are ready. There was a time when we didn't think we would ever see 30 Park or 56 Leonard get back in action, and look how fast that turned around.

Crawford May 12, 2016 11:32 AM

Quote:

Originally Posted by tokilamockingbrd (Post 7438831)
We will not see any new skyscrapers back by condos selling exclusively 10-15mil+.

No, we'll see lots of these buildings going forward. Why wouldn't we?

There are many hundreds of such condo/coop purchases every year in Manhattan, even in the slowest years.

gttx May 12, 2016 12:53 PM

Quote:

Originally Posted by Crawford (Post 7437934)
And I doubt another commercial tower is ever built along the 57th street corridor.

There is at least one on the drawing board, although it may or may not come to fruition :cool:

Crawford May 12, 2016 4:54 PM

Quote:

Originally Posted by gttx (Post 7439082)
There is at least one on the drawing board, although it may or may not come to fruition :cool:

Really? I'll take your word for it, but, to me, that would be extremely odd.

Unless you're talking about the office building going up on 56th between 6th and 7th. That tower is happening.

But I doubt 57th Street, with its more generous zoning, and potential park views, would make sense for a boxy office building, when you can get $8,000 a square foot for condos. Maybe some site that has restrictions, but not a site that will allow a soaring, skinny tower.

tokilamockingbrd May 12, 2016 5:32 PM

Quote:

Originally Posted by NYguy (Post 7438844)
I don't know about that. This is still New York, and even in the bad times you get those prices. Just remember these things go in cycles, and it takes so long for these towers to get built (from foundation to opening) that things will be different by the time the towers just getting in and out of the ground are ready. There was a time when we didn't think we would ever see 30 Park or 56 Leonard get back in action, and look how fast that turned around.

not talking about those expensive condos in general. Specifically talking about 432 Park, Nordstrom, 220, Steinway type projects.

CityGuy87 May 12, 2016 5:36 PM

Quote:

Originally Posted by NYguy (Post 7438844)
I don't know about that. This is still New York, and even in the bad times you get those prices. Just remember these things go in cycles, and it takes so long for these towers to get built (from foundation to opening) that things will be different by the time the towers just getting in and out of the ground are ready. There was a time when we didn't think we would ever see 30 Park or 56 Leonard get back in action, and look how fast that turned around.

Unlike 30 Park and 56 Leonard, this tower and the others in the area are proceeding with construction and not stalled at the foundation waiting for financing.

The only developments that are shelved (for the time being) are the ones at the Park Lane and the Rizzoli site but knowing the market cycles, it won't stay that way for too long.

That being said, seeing this tower, along with the others rise more or less simultaneously will definitely be a surreal sight :cheers:

gramsjdg May 12, 2016 8:26 PM

Well, If Extell has any concerns about selling all the units in this tower, they can always add an observation deck and 5 star restaurant... anything over 1465' (CN tower skypod) would give it the highest observation deck in the western hemisphere :haha:

(although I doubt it would make as much money as a penthouse condo at that elevation, and it would probably be the first unit to be sold... I can still dream, though)


Anybody have a guess on what the highest occupied floor/condo unit will be now that the parapet is likely 1569 feet? I would think it could be as high as 1485-1500 feet. This would represent a landmark of sorts in the history of North American skyscrapers as it will be the first increase in occupied floor height in 40 years; as Sears and the CN tower still hold those records by a significant margin...

chris08876 May 13, 2016 12:42 AM

Quote:

Originally Posted by gramsjdg (Post 7439761)
Well, If Extell has any concerns about selling all the units in this tower, they can always add an observation deck and 5 star restaurant... anything over 1465' (CN tower skypod) would give it the highest observation deck in the western hemisphere :haha:

Vanderbilt looks to have an observation deck, and a restaurant as well (think Windows of the World type). Could sit higher than the one at 1 WTC. Won't eclipse CN, but it's close enough. In the years to come, two new decks for the public will be added. 30 Hudson and Vanderbilt. I'd like to see one in DoBro. I doubt 9 Dekalb would have one. But maybe if some large office tower thats in the super tall range rises there, could be a possibility. Its great revenue. Also add the SI Ferris Wheel as a new form of observation.

CPT has the public portion, the store, but developers like to keep the public for the most part below the private units. Wouldn't add to the prestige to have tourists near the top. You must separate the proletariat from the bourgeoisie for an ultra luxury tower to work and garner the exclusive nature that it deserves.

Zapatan May 13, 2016 1:54 AM

Quote:

Originally Posted by chris08876 (Post 7440009)
Vanderbilt looks to have an observation deck, and a restaurant as well (think Windows of the World type). Could sit higher than the one at 1 WTC.

It might but keep in mind that a lot of Vanderbilt's top is empty space, the top of the roof is 1,394' meaning the highest occupied area probably in the ~1200+ range, right around where 1WTC's is.

It would be awesome if CPT had a public space over 200 feet higher than that though :)

punchydj May 13, 2016 12:32 PM

Hi guys!

There is the progress during the month of April.

Video Link


Thank you!!!

jbermingham123 May 13, 2016 3:57 PM

Quote:

Originally Posted by Crawford (Post 7439041)
There are many hundreds of such condo/coop purchases every year in Manhattan, even in the slowest years.

Well said. Everyone should keep this in mind. When you have bear markets in most places, sales grind to a halt and people lose a lot of money. In NYC though, a bear market just means that a condo can stay out on the market for more than an hour.

mrnyc May 15, 2016 2:57 PM

this morning

http://i1340.photobucket.com/albums/...psrpmtdnno.jpg

http://i1340.photobucket.com/albums/...psynhep5on.jpghttp://i1340.photobucket.com/albums/...psczwrmftp.jpg

http://i1340.photobucket.com/albums/...pscvklvubj.jpg

Vortex11 May 15, 2016 3:16 PM

Wow!! This looks really tall now! How many feet?

Submariner May 15, 2016 6:46 PM

Still shorter than 220 CPS, which as of this past Friday was approximately 60 crane riser-sections tall. However tall that is in feet is unknown to me.


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