While some incredibly pricey homes have been facing bankruptcy auction and foreclosure, Manhattan’s multi-million dollar apartments have been attracting billionaire buyers. So is the case at the Upper East Side cooperative tower, 740 Park Avenue, where a combination of two duplex units asking $60 million has found a moneyed taker.
The luxury property is actually two apartments side-by-side belonging to one owner and selling to one buyer. As a joint sale, it will be the City’s top four most expensive sales ever and once it’s finalized, it will be the second-highest transaction year-to-date in the United States.
Michael Gross, who has written a book about the high-end building, first reported the deal indicating that the full $60 million asking price had been obtained.
Forbes has heard the same figure from reliable sources familiar with the deal. But the Wall Street Journal reports the accepted offer may actually be less than that — at $52 million. Executives at the luxury real estate firm representing the pricey pads, declined to confirm any details in the contract.
If it sells for $52 million or if it sells for $60 million, either way, it will be the highest Manhattan sale for a co-op ever. It will be a record, says Jonathan Miller, chief executive of Miller Samuel, a real estate appraisal firm based in the City.
Since the co-op market is the highest priced and the largest in the Big Apple — co-ops account for 70 percent of all residential properties in the area, it will also be the highest price ever paid for a co-op across the nation.
The high-rolling buyer’s identity is not yet known but those familiar with the deal says it’s someone local. Unlike the uber-rich trophy home hunter from Russia, taking a cue from Dmitry Rybolovlev, he plunked down $88 million on a condominium for his daughter in January.
You usually don’t see foreigners buying in co-op buildings because the co-op board is in first position, and it’s harder to go after someone if they aren’t based in the United States, notes Miller.
In other words, since co-op units actually represent ownership shares of the building overall, potential buyers must disclose all of their stateside assets, which must be substantial, for co-op board approval.
If a buyer were to get approved and then fall upon dire straits, the board further reserves the right to exercise legal options over those property shares before other creditors. So if the owner lives abroad, that becomes practically impossible to do. Further since a sale hinges on co-op board approval, in a posh building like 740 Park Avenue, co-ops usually attract only local buyers.
Since the property is an all-cash building, the sale will be in cold, hard cash.
But the board will also want to determine whether the potential buyer can afford to pay an additional $412,000 in annual maintenance fees, and on a more implicit level, whether they will get along well with the other rich and famous residents of the building who include fashion mogul Vera Wang, Estee Lauder billionaire Ronald Lauder, and Blackstone billionaire Stephen Schwarzman.
Board denial is not uncommon either: the notoriously persnickety board reportedly blocked billionaire investor Nelson Peltz and late actress Joan Crawford from buying in the building.