With New York real estate inventory reaching a six-year low, sellers — and their crafty brokers — are trying new strategies to gain an edge on the market. And the latest trend among the highest-end apartments has the potential for serious returns. Let’s call it “crowd-selling” — sellers working with neighbors to sell next-door or adjacent units in a single deal — and it’s sweeping across Manhattan.
Crowd-selling’s most ambitious — if not audacious — example has to be a current sale at The Residences at The Ritz-Carlton New York, Battery Park.
Here, Ryan Serhant of Nest Seekers got three adjoining apartments from a pair of owners to come together into one massive listing on the 39th and 40th floors. The result will be a penthouse-duplex with 15,434 square feet inside with space for 12 bedrooms and 15 bathrooms (depending on final configuration) and 2,193 square feet of terraces. The asking price: $118.5 million. Like most crowd-sales, the units are being sold jointly — though they’re not yet physically combined.
That figure is currently the highest for any NYC apartment on the market. Yet, according to Serhant, it’s actually “well-priced … compared to what’s coming to the market.”
As he sees it, comparable mega-units such as penthouses at the forthcoming Woolworth Building or the Four Seasons Private Residences at 30 Park Place are to be priced at roughly $10,000 to $12,000 per square foot. Serhant’s condo comes in at $7,677 per square foot. Even after adding in $1,500-per-square foot in renovation/combo costs, the final tab is still below the nearby competition. Serhant says offers for the three-in-one unit have come in.
On the Upper East Side, another crowd-sale listing is pairing scale and price to lure buyers. The seller is candy entrepreneur Mark Tarnofsky, who owns the 4,400-square-foot duplex at 157 E. 84th St. with 14-foot ceilings and a 19-foot patio. The home had been on and off the market for years, but no one bit.
So Tarnofsky hired a new broker — Douglas Elliman’s Yair Tavivian of the Tavivian Sporn Team, who had an idea.
They knocked on the neighbor’s door to see if he wanted to jointly sell the apartments as one massive unit. And in doing so, the two sellers elevated the listing to one of the largest on the UES. At 8,600 square feet and with high-end amenities, the combined, 60-foot-long apartment is city living in a suburban-sized space. It’s now on the market for $13.5 million — around $1,569 a square foot — well below what plenty of luxury condos are going for. Tarnofsky is confident the combined unit will appeal to families frustrated by the lack of large UES apartments.
“This kind of square footage is hard to find in the area,” he says. “The apartment has amazing potential, but we need to find a buyer who gets this vision.”
Over the past few years, Tavivian’s team has become experts at crowd-selling.
“You have to be creative in this market,” he says. They currently have three other crowd-sales, including one at 59 Fourth Ave., whose combined 3,000 square feet with barrel-vaulted ceilings is being offered by two sellers for $5.25 million.
Then there’s 3 Gramercy Park West, where a large two-bedroom unit with 13-foot ceilings is being offered with an adjoining smaller garden apartment for a total price of $6.195 million. Stribling has the listing, which directly faces the park.
People have been combining apartments with neighbors for generations, says luxe broker Dolly Lenz, who currently represents a four-unit crowd-sold listing at The Mondrian on East 54th Street. But she attributes the rise of high-end crowd-selling to a lack of large apartments. “This version of combo-selling luxury apartments is fairly new,” she says, especially downtown, where family-sized apartments are also extremely rare.
New, and — at its highest-end — still untested. Indeed, in the case of that Battery Park City listing, many observers find Serhant’s pricing optimistic, if not downright aggressive — particularly when 15 CPW (currently Manhattan’s priciest building) is averaging just $6,288 per square foot, according to a report this week from CityRealty. What’s more, historically, apartments in Battery Park City have traded at much lower prices since land there is land-leased (which means the buildings do not own the earth beneath them). In fact, the highest-priced area residence sold for $11.7 million earlier this year — a five-bedroom, 3,513-square-foot penthouse at The Residences at The Ritz-Carlton, the very building where Serhant’s mega-condo is currently on offer.
You have to be creative in this market.
- Douglas Elliman’s Yair Tavivian
“This crowd-selling is driven by brokers convincing sellers that the whole is worth more than the sum of the parts,” says one broker, who asked not to be named. “Maybe it will work, maybe it won’t, but I’ll be surprised if they get those very high asking prices.”
Gregory Heym, chief economist at Terra Holdings, agrees. “I think a lot of people are reading about record closing prices for these larger units and they get excited about the opportunity of selling with their neighbors,” he says.
But the keys to competition are top amenities and stellar views. “If you are thinking of combo-ing and you have good views and services, it might be worth considering,” Heym says.
Luckily for Serhant’s Ritz-Carlton Residences sale, the potential unit has plenty of both.
Meanwhile, in TriBeCa, an owner at 101 Warren also saw the potential value of crowd-selling.
His broker knew that the mirror-image duplex next door had been sitting on the market for more than a year. So she approached the other broker and worked out a crowd-selling deal: A joint 3,300-square-foot unit with 458 feet of outdoor space priced at $7 million.
“As soon as I put the unit on the market as a combo, we got an offer; it wasn’t accepted, but we’re getting a lot more interest,” says Laura Cao at Douglas Elliman, who says the final unit could boast up to six bedrooms.
Although Warren Street is being marketed as one combo sale, buyers do have the option of nabbing the condos individually. In many crowd-sales, however, the buyers must take both units, and the agents have a finite time to seal the deal.
Makes sense — though not always cents.
Architect Lee F. Mindel, FAIA, of Shelton, Mindel & Associates, a veteran of high-end Manhattan combos, cautions crowd-selling buyers to do their due diligence. Study the co-op or condo’s by-laws and Landmarks regulations, he advises, lest their dreams of building the ultimate home be crushed.
“There are wet-over-wet rules, and dry-over-dry rules, and moving a fireplace is impossible in a flat-slab structure,” he says. And since buyers are putting together two (or more) full apartments, they will undoubtedly find duplicates — kitchens, master bedrooms — and that may be costly to reconfigure.
Nonetheless, Mindel says that investing in (and renovating) a couple of older, contiguous apartments can often be a better deal than buying a big condo at a splashy new building.
Still, industry vets like Lenz remain skeptical about crowd-selling’s shelf life. She believes that the upcoming arrival of condo projects like 551 W. 21st St. and 443 Greenwich St. — which feature many four-plus-bedroom layouts — could cool the crowd-selling market.
“It’s really more of a hope and a prayer,” says Lenz. “Brokers are trying to create what is missing in the market immediately, versus waiting 18 months for those new builds.”