Extell’s Central Park Tower Faces Flooded Luxury Market
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The developer responsible for kicking off Billionaires' Row in New York City is facing a whole new reality with his latest high-end condominium offering.
Gary Barnett's Central Park Tower topped out in August, and the chairman of Extell Development said he has been forced to offer discounts at the supertall, which is the Western Hemisphere's tallest residential building.
"It’s not booming, they are not flying out the shelves like One57 did,” Barnett told Bloomberg Television. “Six or seven years ago we were the only game in town. There is certainly much more competition, there is more supply.”
Central Park Tower has 179 units that come to a total value of $4B, per Bloomberg, the most expensive condo project in the U.S. A five-bedroom is on the market for $63M and a two-bedroom is asking $6.9M. Barnett did not reveal how many units had found buyers.
“We still see very good foreign demand from all over Asia, and from and all over the rest of the world,” he said of the market, saying that he believes pricing at the building matches the current market, though that doesn’t mean the developer will not have to discount “a little bit.”
“The slowdown people talk about in New York City is not demand driven," he said. "It’s supply driven.”
The city’s high-end residential market has been flooded with product in recent years, and developers have offered incentives and cut prices in order to push deals through.
However, Barnett noted the prices at Central Park Tower are actually around 15% lower than Vornado’s 220 Central Park South, where the world's priciest condo, a $238M penthouse, sold earlier this year. The developers of an 88-story condo tower in Lower Manhattan have faced foreclosure proceedings as they try to pay back their lenders.
At One Manhattan Square, Extell’s development on the Lower East Side, the developer offered incentives late last year in order to move product. Central Park Tower — which houses a flagship Nordstrom on the lower level — is being built with a $900M construction loan from JPMorgan Chase, which matures in 2021.