You know about the ongoing litigations at NYC’s tallest residential tower, 432 Park. Residents claim that developer malfeasance has led to issues like noise, malfunctioning elevators, leaks, and more. Now, owners are selling their units at a loss, and the lawsuits continue. Katherine Clarke reports in The Wall Street Journal:
Since it became public, the litigation has had a tangible impact on sales activity and prices at 432 Park, according to people familiar with the building and a Wall Street Journal analysis of data from the real-estate listings website StreetEasy and the city’s Department of Finance. Some homeowners are now unloading their properties for a loss, while would-be sellers are cutting prices. Billionaire financier Thomas Peterffy, for example, recently sold his 84th floor unit at 432 Park for $13.5 million, some 37% less than the $21.39 million he paid for it in 2016, property records show. Peterffy declined to comment via a spokesperson.
Nikki Field, a Manhattan-based real-estate agent at Sotheby’s International Realty, said she won’t take buyers to 432 Park until the tower’s issues are resolved.
“The truth is that we’ve been avoiding the building,” she said, describing the litigation as “toxic.” “How can I advise my buyers to take that risk, and then expect them to work with me again if it goes bad?”
The sponsor of 432 Park, an entity controlled by Los Angeles-based CIM Group, said in a statement that the board’s lawsuit created “a false narrative” and was “inaccurately disparaging” of the building.
Listings by the Numbers
In the years since the lawsuit was filed, 432 Park has seen a flurry of listing activity. As of mid-May, there were 18 units for sale in the building, including one that is still owned by the sponsor, according to the real-estate listings website StreetEasy. That represents about 14% of the total units in the building, about twice the typical figure, according to appraiser Jonathan Miller of Miller Samuel.
“That’s double the normal market share of listings that we usually see,” Miller said. “That’s something to be concerned about.”
While the numbers don’t necessarily suggest a mass exodus, they do indicate that an abnormally high number of owners want out of the building.
Meanwhile, a number of those sellers are now asking less for their units than they originally paid for them. The owner of a three-bedroom apartment on the 50th floor has it on the market for $17.5 million, after paying $18.93 million for it in 2016, records show. The price has been cut by about 29% since it listed for $24.8 million in 2017, StreetEasy shows.
Of the 18 units on the market, 14 had undergone at least one price cut, according to StreetEasy. The average listing discount was 13.2% from the highest list price.
A contract was recently signed on one of the last remaining developer-owned units at the building. The unit was last priced at $12.4 million, 32% less than its original $18.25 million asking price.
The property’s penthouse, a roughly 8,200-square-foot, full-floor unit owned by Saudi retail and real-estate magnate Fawaz Al Hokair, has been on and off the market for years. Al Hokair bought it for $87.66 million in 2016, then put it on the market for $169 million in July 2021. It is now asking $105 million.
Action Line: Keep your eye on how the rich and famous residents of 432 Park handle their lawsuit against the property’s sponsor. And keep your eye on how many of them are ready to flee New York for one of Your Survival Guy’s 2024 Super States. Click here to subscribe to my free monthly Survive & Thrive letter.
