Developer of tall towers Extell has announced that they're scaling back condo prices at their 80-story Lower East Side project One Manhattan Square, which they've been shopping around to buyers in China, Malaysia, and Singapore to some success.
Extell principal Gary Barnett told TRD that the move shouldn't be seen as pricechop, and rather as a tweak that reflects a slowdown in New York City's high-end market in the luxury tier. "This is a market leading move," real estate consultant Jonathan Miller says, explaining that the apartments Extell is now rolling back asks on were priced nearly two years ago under different market conditions.
Miller explains that Extell's move to lower prices creates instant equity for early buyers in the project, which will put pressure on the condos in a slowing market. According to Miller, the move is meant to "create some sense of urgency to entice future buyers to purchase before the next price increase." Barnett confirmed as much with TRD, "We priced it where we wanted to start and we think we’ll raise prices from where we’re starting now."
Condos in the development have yet to come on the market in the States, but Barnett said last October that majority of the development's 800 apartments will ask between $1 million and $3 million. TRD reports that of the 80-story tower's two $13 million penthouses, one is in contract.
The high-profile building's moderate pricing reflects an international demand for investment properties or pied-a-terres in New York City. "It's hard to find something which is a good value and that more people can afford," Barnett said when One Manhattan Square's pricing was first revealed.
The pricing rollback comes alongside news of slowing sales in the city's uber-luxury housing stock (which Extell has no small part in.) Condos in the city's inaugural residential supertall, 432 Park Avenue, have been divided into smaller, less pricey units to spur sales. Extell relisted some One57 condos as rentals to cast a wider net. Vornado CEO Steven Roth declined to comment on the status of sales of 220 Central Park South during the company's Q4 earnings call last week, noting that "[t]he market is slowing. It’s slowing for everybody. It’s slowing a little bit less for us, but of course it’s slowing for us as well."