May 20, 2013--Serious Square Footage

Just as I was getting comfortable with the cost of things in New York City--$1.50 Dannon yogurts and having to pay more than $500 a month to garage our car--in the Sunday New York Times real estate section, in the "Big Ticket" column, I read about "the most expensive residential sale of the week"--

At 320 West 12th Street (three blocks from us) in a former nursing home that was converted to luxury condominiums, a penthouse apartment sold for $29,783,812.50.

The seven-bedroom, eight-bath condo was created by combining apartment No. 9, a four-bedroom, three-and-a-half-bath duplex, originally listed for $19.5 million, with  No. 7, a $10.5 million 3,200-square-foot unit below it, for a total of 8,500 square feet spread over three floors.

While I was wondering why anyone would want seven bedrooms in New York City, much less eight baths, I couldn't figure out how they got to the final selling price--$29,783,812.50. Especially the 50 cents part.

How did the negotiating go, I couldn't help myself from thinking--

"So let me see, you're asking $19.5 million for No. 9 and $10.5 for No. 7. By my calculations, if I bought the both of them, you'd be asking an even $30 million. Do I have that right?" 

"Yes, you do." 

"OK then. Will you take $29,783,812.50 for the two of them? The 50 cents should demonstrate that I'm literally counting every penny and that this is thus a serious offer." 

The broker would think about it for a moment, rubbing his chin and running the numbers, and then would say, "I guess you have me over a barrel. It's a deal! 

And then he would ask, "Will that be all cash?"

According to the Times, the broker commented, "I think the buyer [who remains anonymous, having bought the place via a LLC] saw this rare opportunity to aggregate serious square footage."

Speaking of square footage, if you are really serious about your square footage, on the front page of the first section of the same New York Times there was a piece about the construction on Park Avenue of a building, which when completed, will be 84 stories and thus the tallest residential building in the entire Western Hemisphere.

If you have the money, the penthouse can be yours for $95 million. For this you will get your six bedrooms and your seven baths. And, if you read books, it includes a library. If you don't, it can be converted into a closet. Plus, for one of your housekeepers, for an additional $3.9 million you can have a studio apartment and for your wine, a storage place for only $300,000 more.

Of course it won't hurt if you're a Russian oligarch or a Persian Gulf prince.

The developer behind this project is Harry B. Macklowe, who tore down the charming Drake Hotel to lay his hands on the land for this behemoth. Prior to that, he was a legend in the real estate community for tearing down, without proper permits, in the middle of the night, a row of historic midtown townhouses and a welfare hotel so he could build his eponymous eyesore, the Macklowe Hotel.

In case you're wondering about his bottom lines, it is estimated that the overall cost of the Park Avenue project will run to $1.25 billion and when all the condos are sold--and they appear to be selling like hotcakes--it will fetch at least $3.0 billion, yielding $2.75 billion in profit for Macklowe. A nice payday.

If these numbers daunt you and you are not an Arab sheik but would like to rub elbows with some real ones, you can buy a 351 square-foot studio in Macklowe House (or whatever it will be called) for $1.59 million. But do not be expecting much of a view--these holes-in-the-walls are located on the first few floors and overlook a bus stop and taxi stand.

Macklowe is reportedly very impressed with himself. When talking about his ultimate project, he mused, "This is the building of the 21st century the way the Empire State Building was the building of the 20th century."

One can only hope that King Kong is paying attention.