The Real.Est List
The Haggle: A new sponsor and a big discount on a new condo
This week we go behind the negotiations of a three-bedroom midtown condo, that sold for $5.3 million, almost $2 million less than the asking price.*
The sponsor’s agent was Young Moon of New York Residence Inc. The buyer didn’t have a broker, but a friend who recenly bought an apartment from Moon helped out, Moon said.
The building, known as the Centurion, at 33 West 56th Street, was designed by Chinese-American starchitect I.M. Pei.
Unfortunately for the developers, when the building opened in 2008, they had trouble selling apartments.
A new sponsor, Bayrock Group, took over for Stillman Developers.
This particular apartment, unit 15A, has 20-foot-ceilings and stunning views. It was originally put on the market in 2008 for $8.7 million. When the new sponsor took over, the asking price fell to $7.25 million.
There are only 14 units left out of a total of 48.
On the market: May 2008 (listed at $8.7 million)
New York Residence Inc. took over the listing: November 2011
Initial offer made: December 8, 2011
Contract signed: December 22, 2011
Closing date: January 24, 2012
HOW THE DEAL WENT DOWN
The buyer was a businessman from South America.
A friend of his had already bought an apartment in the Centurion from Moon, so he helped broker the deal.
The first offer was $5 million, or $2.25m below ask.
"I was dumbfounded," Moon said. The sponsor counteroffered $5.5 million, taking into account that the buyer would pay in cash and it was the end of the year.
The buyer counteroffered with $5.15 million, the sponsor responded with $5.35 million, saying that was the very bottom, and the buyer came back with $5.25 million.
Eventually, they both "got tired of negotiating and agreed at $5.3 million," Moon said.
The buyer paid in cash.
Firstly, it's interesting to see that the sponsor's "very bottom" wasn't, in fact, the lowest they were willing to go. The apartment was the best deal in the building so far, according to Moon.
Moon: "The fact that the building was taken over by a second sponsor who was able to get it for a lower price meant apartments were already starting out with a lower price than when the building originally went on the market.
'The fact that the buyer paid in cash helped, too. Also, we only have 14 apartments to go, and at the end of the sales, sponsors are going to give better deals.The risk of discounting the apartments isn’t as high for the sponsor, because it won't devalue the price of the other apartments. It was also the end of the year, and everyone wants to end the year on a good note. And it was the holiday season -- things like that do affect people."
*The asking price was $7.25 million, according to Moon, not $6.3 million as reported on StreetEasy.
The Haggle explores the anatomy of a recently closed New York City apartment sale, so that when the time comes to buy or sell, you’ll have a better idea of what to expect. Got a deal to dissect? Send us an email!