Down in the far part of Midtown East, almost to the river, a new development site has gone on the market at 249-53 East 50th Street. The listing agent for this piece of property is Ariel Property Advisors, the investment property sales firm founded in 2002. It’s 44,000 square feet big with 55 feet of frontage between Second and Third Avenue, and while there are currently three four-story buildings already built, the property will be delivered vacant. The president of Ariel Property Advisors, Shimon Shkury, recommends building condos. He said luxury condos in this part of town are going for over $1,100 per square foot, and will continue to rise. And what is he asking for such a profitable piece of property? Nothing. There’s no price. Rather this land, which will one day be full of luxury condos for sale, is being sold for whatever you’ve got.
This kind of price-gaming isn’t unheard of. Realtors say it’s a new way of determining the market value of property in a fluctuating economy. Determining the value of property is not an exact science, and listing brokers sometimes worry that they’re pricing their property too low. By waiting for developers to bring prices to him, Shkury assumes the price the property ends up on will be the true market value. But by doing so he also assumes there will be enough interest so that Ariel Property Advisors can leverage against lowball offers. Which is probably why Shkury said "new construction has been extremely scarce in recent years and will ultimately result in a very supply-constrained Manhattan market by the time construction is completed on this site. Because of the offering size, scale, and a location that rarely comes to market, the site stands out as a premier Manhattan development opportunity."
That part of deep Midtown East is gorgeous, and marked by luxury Manhattan condos that go for high-end prices. Earlier this year the property was listed at $13.45 million, so expect the price to end up around there again. We expect some developer to buy it and build quaint little condo building that will sell for very high prices. But it will be interesting to see what results this kind of market experiment finds. And for any aspiring brokers out there, an industry insider suggested that the best way to get the best price is to call the listing broker, and ask what number he has in his head.