$88 Million. That’s the price at which Sandy Weill, the former president of Citibank, listed his luxury penthouse at 15 Central Park West last month. While such an astronomical price during the slowest sales season of the year might seem foolish, after a mere 3 weeks it looks like he’s found a buyer. This has raised more than a few eyebrows, especially since the previous sales record at 15 CPW was $10 million. This luxury condo building isn’t the only one in Columbus Circle - the small area on West 59th Street between Midtown West and the Upper West Side - that gives us reason to be hopeful. Just across the way, a penthouse at the Time Warner Center Condominium just sold for $6,335 PPSQ. And penthouses at the landmark One57, due to open in 2013, are currently listed at prices upwards of $90 million. Here at New Construction Manhattan, we’ve observed all of the ups and downs of the luxury sales market in Manhattan, but nothing gives us more reason to be hopeful than Columbus Circle.
The popularity of this ultra-exclusive enclave is only going to increase with the construction of One57. Located on 157 West 57th Street, One57 will reach 90-stories tall upon completion, so it has been generating publicity for a few years now, and after a long wait it’s generating sales too. And not just any sales, either. The price per square foot (PPSQ) for the most expensive luxury condos at One57: $1,351 for 1-bedrooms; $2,289 for 2-bedrooms; $4,483 for 3-bedrooms; $6,240 for 4-bedrooms; and $13,544 for penthouses. Keep in mind that in the third quarter of 2011 the average condo sold for $1,200 PPSQ and the average luxury condo in Manhattan sold for around $2,000. In this regard, buyers of 1- and 2-bedroom luxury condos won’t find One57 too expensive, but the same can’t be said for condos with 3 or more bedrooms.
If these numbers don't quite make sense in the context of a rocky stock market, a slow Manhattan sales market, a painfully slow American economy, and a debt crisis that threatens to destabilize all of Europe, then consider who's buying. Global elites may love Manhattan, but they really love Columbus Circle. Since being converted from a hotel to a condominium, 15CPW has attracted global elites from every field: Celebrities, leaders of industry, international business titans, and athletes all call it home. The current net worth of residents of 15CPW - the most expensive building ever sold - is estimated to be in the neighborhood of $50 billion. Gary Barnett, President of Extell Development Company, is betting that the popularity of 15CPW among this affluent class will extend to nearby One57.
The average luxury condo at One57 costs $21 million. That average pricetag exceeds anything in Manhattan except 15CPW, fittingly enough. Who can afford these luxury condos? People whose net worth exceeds $50 million, for starters. These are the people Barnett is looking for, and there are no shortage of them. America and China have over 4,500 people who belong to this ultra-wealthy class, and Brazil, India, and Russia each have around 1,500 of such people. From an international perspective, the number of the ultra-wealthy in Europe, Latin America, Asia, and the Middle East is growing steadily, and as a result the extreme top of the residential market is stronger than ever.
Barnett has good reason to believe that One57 will be successful; through November, Manhattan buyers signed 529 contracts for $4 million or more in 2011. The threat of a downturn in the world economy might actually help sales at One57 too: Luxury condos are seens as safe investments in market downturns because they hold their value better than the market as a whole. So while besides factors such as the scarcity of Manhattan condo inventory and the dearth of new luxury development in Manhattan (especially for larger projects) have helped, the success of One57 and Columbus Circles is directly attributable to their popularity among the top of the top of the world's elite.