This article published in The New York Times, discusses how real estate developers have learned to be cautious in evaluating and purchasing properties due to the downturn. One of the most recent headline purchases was the Carlton House in New York which has been purchased for $164 million. Extell development company is in the process of remodeling the interior and exterior. The penthouse will be listed at $65 million. However, the most popular units of the 64 available are the 2 bedrooms listed at $4-5 million. Roughly 40% on the units are in contract currently and I see this as a good sign of economic recovery since these lavish and expensive units are being spoken for so quickly.
http://www.nytimes.com/2013/03/31/realestate/the-high-wire-act-called-conversion.html?_r=0&adxnnl=1&pagewanted=all&adxnnlx=1364584113-bxaXTYiD/4Ve429fBxOphg
1 comment:
Multi-family cap rates have been declining significantly the past few years, but it looks like Extell will be ok on this one. Because the apartments are a luxury style, I would be weary of connection between these high priced doors already in contract and a recovery. I would imagine that these high net worth owners were not affected by the recession to the extent that middle income earners were.
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