The super-rich are using a new tactic to unload their multi-million dollar properties. Rather than putting a penthouse on the market for a measly $11 million, they’re combining these already-pricey properties into even more extravagant, luxury homes and selling them at huge multiples of what just one apartment would cost.
Yahoo Finance spoke with real estate broker and host of Bravo’s “Million Dollar Listing” Ryan Serhant, about this strategy and why a $118.5-million dollar specialized listing could be an easier sell than a standard penthouse in New York City.
Serhant says buyers at this level of high-end real estate want options. He currently has the exclusive listing for the most expensive penthouse in New York. It’s on the top two floors of the Ritz-Carlton in New York’s Battery Park neighborhood in lower Manhattan.
A mere $118.5 million will get you more than 15,000 square feet inside, plus another 2,200 square feet of private outdoor space. The listing combines not one, not two, but three penthouse apartments in the ultra-luxury building. The owners of one of the apartments, which would be listed at around $11 million on its own, bought a neighbor’s apartment and struck a deal with another neighbor to put all three on the market for more than $118.5 million.
If combined, the three separate penthouses could potentially create a space with 12 or more bedrooms, 15 bathrooms and at least three kitchens. But who needs to cook when you have the services of the global luxury brand, The Ritz-Carlton, just a couple of floors down at your beck and call.
So how is that eye-popping price tag more marketable than an individual apartment at a relatively cheaper price? The Nest Seekers International broker says, “You’re getting three homes which you can use separately... or you’re combining them into one massive home which might actually be one of the largest homes in NYC if created.”
Serhant says the clientele for such high-end properties like the idea of being able to customize their home into whatever suits their lifestyle. He says he’s seeing a lot of potential buyers already, from far-flung cities such as Moscow and Cape Town as well as closer to home in NYC and surrounding suburbs in Long Island and New Jersey.
Earlier this year, wealthy Egyptian businessman Nassef Sawiris, broke the record for the priciest co-op sale in New York City history when he paid $70 million for a penthouse on Fifth Avenue. Another record-breaking foreign purchase took place in 2011 – this one the highest price ever paid for a condo, when Russian magnate Dmitry Rybolovlev paid $88 million for former Citigroup Chairman Sandy Weill’s Central Park West apartment.
In his career, Serhant has seen his clients’ tastes run wild as wealthy people like to customize their homes and possessions. “I have people who have taken 747s and have spent two years to gut-renovate the interior of the airplane so it could be exactly the way they need it. Apartments are no different. You want to buy something that just doesn’t exist. So here’s the opportunity to create a bespoke home with views that are as far as Kansas and even South America.” Well, maybe not quite that far.
Watch Yahoo Finance this week for more from Serhant, including an insider’s look at the influx of foreign investors into the American real estate market. Some are using the apartments as homes, but others are using them as a place to park their cash.
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