Price keeps rising for New York's best apartments

One broker puts `trophy property' threshold at $20 million

November 12, 2003|By Nadine Brozan | Nadine Brozan,NEW YORK TIMES NEWS SERVICE

NEW YORK -- There was a time when Kirk Henckels, director of private brokerage for the tony firm of Stribling & Associates, would refer to an apartment on the market for $10 million as "a trophy property."

"Now I just call it a $10 million property," Henckels remarked. The term trophy does not enter his vocabulary until the asking price hits $20 million.

The boundary between ultra-high luxury prices and routine high prices depends, of course, on who's drawing the line and from what vantage point. But by and large, brokers, developers and appraisers agree that it lies somewhere north of $10 million.

"It used to be that you would walk into a $10 million property and it would be like seeing someone wearing a 25-carat engagement ring," said Michele Kleier, president of Gumley Haft Kleier. "Now you look at something at $10 million and say, `Where do I start gutting?' and `How many more millions do I have to put in?' `'

The `Wow' factor

Jonathan Miller, president of Miller Samuel, a firm that appraises about 5,000 properties a year, also sets the bar higher. "I think that $10 million is not high enough for the `Wow' factor," he said. "It's probably more like $12 million to $15 million."

There is "wow," and there is "Wow!" To Henckels, " `wow' with a small `w' is $10 million to $20 million while capital `W' `Wow' is over $20 million."

Wherever "wow" rests, it was certainly uttered more than once when word spread about a $45 million transaction -- the highest ever recorded in Manhattan -- in the AOL Time Warner Center on Columbus Circle. The purchase of a gargantuan (12,000 square feet) loft assembled by combining one entire floor and part of another there remains breathtaking, even for movie stars and corporate tycoons. The buyer was David Martinez, a London financier who made his fortune buying the debt of nations and companies.

He remains in a class by himself. As Stephen Kotler, executive vice president of Douglas Elliman, put it, "There is no rash of $45 million buyers."

If there were, they might find some latitude on asking prices, which slipped in the upper reaches last fall, Miller said. But that was due more to overpricing, he said, than to real decline. "List prices were being set as if the market were continuing to see double-digit increases," he said.

A good inventory

There is a good inventory of properties for people able to bid $10 million or more. Kotler conducted an informal online survey of $10 million-plus apartments last week.

Above that cutoff, he said: "Our database shows there are 144 available apartments, with an average asking price of $16,286,000 for an average of $2,680 per square foot. The average square footage of these units is 6,100."

Some specialists believe that price per square foot is a more sensitive barometer of high-end luxury than absolute price. "At $1,000 per square foot, you get something very nice; $1,500, something extravagant; and $2,000-plus, hotel-quality service, concierges, parking, five-star restaurants with catering and usually premium addresses with views," said Bret Bobo, senior vice president of sales and marketing for the Athena Group, a development firm.

So what can buyers crossing the $10 million-and-up threshold expect to get that they would not for a single-digit million?

"Five million dollars or $6 million can buy you a great location, a terrific apartment, a beautiful home, but they are not palaces," said Hall F. Willkie, president of Brown Harris Stevens Residential Sales. "It's like the difference between buying a Mercedes versus a Rolls-Royce."

In general, Kleier said: "What you're getting is more space, larger rooms, higher ceilings and views. If you're buying at Trump World Tower or the AOL Time Warner building and you're spending that kind of money, you won't buy on the 15th floor but on the 70th. ... If you are buying in a prewar co-op, you will be getting something that will never be built again, an Old World building with snob appeal."

3 essential factors

No matter how unusual any particular residence may be, real estate specialists agree that there are three essential factors in catapulting a property into the megamillion range: location, size and view.

The way those factors balance one another is different for stately old co-ops (for which location, and all that it implies, is paramount) than they are for glamorous new condos (views are essential). For town houses, width -- more than 20 feet -- dominates all other considerations.

The most expensive -- and exclusive -- buildings sit on Fifth and Park avenues from 59th to 96th Streets. Although there are certainly other neighborhoods and streets with prestige, like Sutton and Beekman Places, Central Park South, Central Park West and Gramercy Park, none command quite the same cachet.

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