New York City’s High-End Co-op Market Slumps

Sales of co-ops that sold for $4 million or more plunged 26% last year

When Len Blavatnik, the billionaire investor, paid a record $77.5 million in 2015 for a duplex apartment at 834 Fifth Avenue, it seemed only logical that a bigger cooperative apartment a few floors down would command even more.

That huge apartment is still on the market nine months after it was listed. It is the home of the late John Gutfreund , former chief executive of Salomon Brothers Inc., and it went on the market last April for $120 million.

A sharp slowdown in co-op sales has hit the rarefied upper end of the market especially hard. Sales of all co-ops were down 12% in 2016 compared with 2015, while sales of co-ops that sold for $4 million or more were down about 26%, a Wall Street Journal analysis found.

The decline in activity has been so steep that many real-estate brokers are wondering whether luxury co-ops, with their rigid rules and complex financial reviews for buyers, are permanently losing ground to towering new condominium buildings offering cushy amenities and less-rigorous rules.

The biggest sale of 2016 was the fifth-floor apartment at 4 East 66th Street, on the corner of Fifth Avenue, which fetched $52 million. That was followed by a $35.3 million sale on the West Side at 101 Central Park West.

Luxury co-op sales have boomed in recent years, with the number of co-ops selling for $4 million or more setting a record in 2015. But sales of co-ops selling for $10 million or more have been dwindling since 2014, when 63 changed hands.

At 834 Fifth Avenue, a limestone building opposite the Central Park Zoo, the sellers in September cut the price of the sprawling 20-room apartment, with about 12,000 square feet of space, to $96 million. Mr. Henckels said he believed it was “worth every penny” at that reduced price, but it has yet to find a buyer.

Mary Ann Rothman, executive director of the Council of New York Cooperatives & Condominiums, said co-op boards aren’t likely to change dramatically to make it easier to buy and sell co-ops. “We want a shareholder who understands they are part of a community, and it should be a community they are prepared to contribute to,” she said. “Presumably they will stay there for a while.”

Source: The Wall Street Journal


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