When 432 Park Avenue opens in New York later this year it will be the tallest condominium building in the US. At 1,396ft and with 96 storeys, the slender tower in Midtown Manhattan will be 146ft higher than the Empire State Building and the tallest residential building in the western hemisphere, its developer says.
Despite its record-setting elevation and $1.3bn construction cost, the most eye-popping feature of the 104-unit development, designed by Rafael Viñoly, is likely to be the price. Those apartments that are still available start at $16.95m, while full-floor units with 100 sq ft windows and views of Central Park cost as much as $82.5m. The building has already surpassed $1bn in sales, including a signed contract for a duplex penthouse priced at $95m.
“There’s a new and very expensive market evolving in Midtown that surpasses anything we’ve seen before,” says Steve Rutter, head of Stribling’s new development division. “Very wealthy buyers are investing more than ever in Manhattan real estate and we really shouldn’t expect to see prices weaken anytime soon.”
432 Park Avenue joins an expanding group of new condominium developments under construction in Midtown, an area of Manhattan running south of Central Park for about 25 blocks, as ultra-high-end construction booms in the district. At present, more than 22 permits for new developments — with more than 3,900 new units — are planned in the zip codes that make up Midtown, according to New York City’s department of buildings. The influx of new projects includes at least a half-dozen skyscrapers that will crane above the lower end of the park.
The cluster of new towers is not only altering the city’s skyline but also reshaping the market for top-tier real estate in a city long accustomed to stratospheric prices. Over the past year, bolstered by wealthy foreign buyers, Midtown real estate has commanded some of the highest prices ever paid for property in New York City.
At One57, a new 75-storey condominium at 157 West 57th Street, a duplex penthouse spanning the top two floors of the building sold in December for $100.5m, a record sum for Manhattan. A few months earlier, a 13,500 sq ft duplex on the 75th and 76th floors sold for $90m. Similar price tags are being recorded at new towers across Midtown, fuelling even more ambitious projects.
At 520 Park Avenue, a 51-storey limestone tower under construction near East 60th Street, home prices start at $16.2m but rise to $130m for a triplex penthouse, a record asking price for a New York apartment. Each of the tower’s 31 residences, designed by Robert AM Stern, dean of the Yale School of Architecture, will have its own lift landing, the developer says.
The construction boom comes amid a strengthening Manhattan property market. In 2014, buoyed by the sales of upmarket apartments in new developments, the real estate market surpassed its 2008 peak. The average sales price hit a record $1.718m last year, according to appraisal firm Miller Samuel. The median apartment price was $940,000.
“The appetite for luxury living in Midtown hasn’t waned and the higher prices reflect that,” says Melanie Lazenby, an estate agent at Douglas Elliman. She says that although property prices have reached record levels, Manhattan still remains less expensive than other global cities such as London and Hong Kong. “But at the end of the day, having a Manhattan address is still very appealing to the world’s wealthy and they’ll usually pay a premium to get one,” says Lazenby. “Money is here and money wants to be here.”
Despite the high-profile sales, the flood of new condominiums to Midtown and the strengthening US dollar abroad could slow sales at the very top end of the market, says property appraiser Jonathan Miller.
“You have a lot of new properties coming online this year all catering to the same sliver of market,” says Miller, who estimates that foreign buyers account for about 15 per cent of total Manhattan sales and roughly 30 per cent of upmarket condominium purchases. “That creates competition at the very high-end at a time when a rising dollar will make property more expensive for foreign buyers.”
Some of that softening is already beginning to show. The number of sales of Manhattan homes priced at $5m or more dropped 21.3 per cent in the fourth quarter of 2014 compared with the third quarter, according to CoreLogic DataQuick, a real estate information services firm. The pace of sales fell 14.7 per cent in the fourth quarter of 2014 compared with the same period in 2013.
“The supply side of this market is certainly concerning,” says Robert Dankner, president of Prime Manhattan Residential. “You may see the price increase trajectory slow down as even wealthy buyers scrutinise more closely the prices they’re being asked to pay.”
The residential skyscraper boom also represents a race to be the tallest among the new crop of super-tall, super-thin, super-expensive buildings. While 432 Park Avenue has staked its claim to be the highest, it will be surpassed by the Nordstrom tower — a 1,500ft building at 225 West 57th Street that is due to be completed in 2018. Several new projects under construction follow close behind, including a Jean Nouvel-designed tower set to rise more than 1,000ft on West 53rd Street and a development called 111 West 57th Street that will stand at more than 1,300ft.
“It sounds clichéd, but with a dearth of available land in Manhattan, developers really have no place else to go but up,” says Jeannie Woodbrey, senior sales associate at One57. “And the higher they go, the more desirable they become.”
Main photograph: CIM Group & Macklowe Properties
● The number of Manhattan condominium buildings in which apartments have sold for more than $15m now stands at 72, up from 33 in 2009, according to CityRealty
● New York reported a record dollar volume in the fourth quarter of 2014 with about $5.4bn in closed deals
● Real estate commission in Manhattan is typically 6 per cent of the sale price
What you can buy for . . .
$5m A two-bedroom, 2,000 sq ft apartment with three bathrooms
$10m A three-bedroom, 3,100 sq ft duplex with three full bathrooms
$15m A 6,000 sq ft penthouse with five bedrooms overlooking Central Park