The Fifth Avenue Flip: Hilfiger Hawks Co-op for Twice the Price

Nobody blinked when actor Ben Stiller put the Franklin Street loft he bought earlier this year back on the market in April for $1.425 million ($500,000 more than he paid for it) without ever moving in. Flipping new condominiums is just part of the Monopoly board today.

But on May 1, when jeans designer Tommy Hilfiger slapped a $20 million price tag on the fourth-floor apartment he bought at 820 Fifth Avenue last June for $10 million, more than a few plucked eyebrows were raised. 820 Fifth, which houses 12 full-floor co-op apartments, has one of the most scrutinizing boards in the city–a lawyer screened even those who wanted a look at the apartment Mr. Hilfiger purchased. It is supposed to be no place for a fickle buyer or an investor.

That same day, Marc Ewing, the 30-year-old retired founder of the software company Red Hat Inc. who was approved by the co-op board of 1120 Fifth Avenue in December, put his 12-room apartment back on the market for $9.3 million. Like the others, he never touched the place after paying $7.9 million for the pied-à-terre .

“Buying an apartment now is like buying a piece of jewelry,” said one real estate broker. “If it doesn’t look just the way you want, or they don’t let you do the renovations you want or your plans are not what you thought they’d be, it’s easy to flip it. And people are flipping at huge profits, which is generally good for the building.”

This isn’t supposed to happen in Fifth Avenue co-ops, where iron-fisted boards weed out the socially and economically undesirable, looking for someone who’s “a good fit,” then honoring him or her with permission to be their neighbor. The apartments are supposed to already be the priciest by far in the city and approval to purchase one is not supposed to be met with a changed-my-mind reflex months later–or even worse, an oops-my-stock-is-falling emergency bailout. But the world is changing, the stock market is wobbling and Fifth Avenue–having now admitted young Internet upstarts and fashion designers offering gobs of money–is not invulnerable.

“The purpose of a co-operative is to create a stable neighborhood environment, so to that end no board looks favorably on someone flipping,” said another broker. “Especially if he’s doing it for financial gain.”

Brokers were shocked when Mr. Hilfiger, a favorite with suburban hip-hop kids, received approval from the notoriously fussy co-op board, presided over by socialite Jayne Wrightsman. Entree into No. 820 is so tightly guarded that one apartment, that of socialite Nancy Richardson, sat on the market for three years while a series of buyers were rejected. One of the problems was the restrictions on doing renovations, which some brokers say may have gotten in Mr. Hilfiger’s way, too, and convinced him to sell. Then there’s the fact that since January, stock in Tommy Hilfiger Corporation has fallen from $20.438 per share to a May 8 close of $7.5.

On the other hand, the residents of 820 Fifth can’t be too miffed that’s he’s raising the bar for apartments in the building to be priced at $20 million.

Mr. Ewing–who became a billionaire at the beginning of the year, around the time of his company’s stock split–and his wife Lisa Lee, underwent three months of scrutiny by the board of 1120 Fifth Avenue, home to Michael J. Fox and Tracy Pollan. The board was concerned that all their money was tied up in stocks–and perhaps that the couple would likely use the apartment as a pied-à-terre . That stock has tumbled from a high of $151.32 per share adjusted for the split to $23.875 at the end of trading on May 8.

When asked if the co-op board at 1120 Fifth Avenue was upset that Mr. Ewing’s apartment was back on the market, one broker said, “Not if he just lost $100 million. I’m sure the guy is still rich as hell, but maybe not rich enough to live in an $8-million apartment.” Then again, Mr. Ewing has a $7-million mansion in Chicago, where he spends most of his time and another home in Durham, N.C., where his company was started.

Said Patricia S. Burnham, president of P.S. Burnham Inc., “I don’t think that people go out and buy 12-room apartments just to flip them. Nobody goes to all that trouble unless they’ve had a change in lifestyle.”

Ms. Burnham was planning to show both Mr. Hilfiger’s and Mr. Ewing’s apartments to a couple with children during the week of March 8. Meanwhile, another broker said Mr. Hilfiger had accepted an offer for his place and was waiting to sign a contract to make the deal.

UPPER EAST SIDE

FIT FOR MANHATTAN ROYALTY: PRINCE PAVLOS AND MARIE-CHANTAL ANNOINT 78TH STREET TOWNHOUSE FOR $7.5 MILLION

After shopping for almost a year, Crown Princess Marie-Chantal, 31, and her husband, the Crown Prince Pavlos of Greece, 32, spent about $7.5 million on a five-story townhouse at 154 East 78th Street on May 5.

“It’s a great single family house,” said Jed Garfield, managing partner of Leslie J. Garfield and Company realty, of the 78th Street mansion which is being sold by Robert Fribourg of the Fribourg Continental Grain Company family. “It’s in great shape–you can take your bags and move on in.”

The Princess is the daughter of Chantal and Robert Miller, who sold his duty-free business to Bernard Arnault in 1998. She is the middle Miller sister: Pia, the oldest, is married to Christopher Getty; Alexandra, the youngest, is the wife of Alexander von Furstenberg. The Prince is the son of the former King Constantine and Queen Anne Marie of Greece. He is a hedge-fund manager, and she works for various philanthropic organizations including the New York City Ballet. Their fairy-tale life started with their wedding at London’s Cathedral of Saint Sophia in July 1995. They are expecting their third child.

Mr. Garfield said the couple was outbid on two other houses before they signed a contract to purchase the 6,000-square-foot Georgian townhouse on 78th Street. It has a dining room with a fireplace and a south-facing garden designed by Madison Cox on the first floor, and a library with a fireplace and a wet bar on the second floor. A master bedroom suite with two bathrooms, a steam shower and a south-facing terrace occupies the third floor and two children’s bedrooms–one with a fireplace–are on the fourth floor. The fifth-floor features two additional bedrooms, one bathroom and two terraces. There’s also a finished basement with an office. Real estate taxes on the house, between Lexington and Third avenues, are $22,500.

Mr. Fribourg, who bought the house in 1997 for $2.6 million, put it on the market in mid-April. Brokers said the current owner had elegantly decorated and renovated the house and upgraded all wiring, plumbing, air conditioning, heating, windows and staircases. Mr. Fribourg’s broker, Patricia Warburg Cliff, of Douglas Elliman, would not confirm the deal, which is expected to close in a few months. “I’m not at liberty to discuss it,” she said.

According to real estate sources, the Prince and Princess also seriously considered buying 16 East 76th Street, a 7,300-square-foot townhouse that the Italian government bought in 1991–for $4.8 million from designer Calvin Klein–to house its ambassador. Mr. Klein bought it from the Gucci family. Marilyn Corradini of Stribling & Associates realty, who is representing the Italians said the four-bedroom house is still “being very selectively shown,” for just under $10 million.

The Prince and Princess didn’t reply to a request for comment.

106 East 85th Street

Two-bed, one-bath, 1,100-square-foot co-op.

Asking: $675,000. Selling: $670,000.

Charges: $1,091; 40 percent tax-deductible.

Time on the market: four months.

ANOTHER RENT-CONTROLLED PAD BITES THE DUST A retired producer of television commercials had spent four years in Colorado taking care of her ailing parents, when last year she let her nephew crash at her rent-controlled apartment on East 75th Street. After her parents passed away, she came back to an eviction notice. According to the seller, her landlord had used a private detective to try to prove that she was living elsewhere and had illegally sublet the apartment in order to reclaim it. “I got this call out in Denver that I was supposed to call Bette Davis about a medical refund,” she said. “I knew it wasn’t about a medical refund, because my landlord had done this before. They can get the address of the phone number you are calling from, that’s how they got Dad’s address.” The landlords rescinded the eviction notice and brought forward an offer to buy her out. “I was out of there,” she said. She bought this penthouse in a 1916 building from a couple of Swedes who were represented by Jeff Bua of Bellmarc Brokerage Ltd. Why? “Twenty-five windows, the nicest doormen I’ve ever met and the washer and dryer,” she said. “I wear the same clothes everyday.”

13 East 75th Street

Six-story, 6,500 square-foot townhouse.

Asking: $7.95 million. Selling: $7.4 million.

Time on the market: two months.

CASTLE-OWNING BRIT WANTS TO MANUFACTURE MANHATTAN DREAM HOUSES A year and a half ago, when a wealthy Englishman was moving to the city, he couldn’t decide between this townhouse and one at 63 East 66th Street, so he bought both: this one for $4.85 million, the other for $3.75 million. “He figured he’d redo both and then decide which one he liked better,” said his broker, Richard Steinberg of Ashforth Warburg Associates. He added a sixth-floor greenhouse to this one, while gutting and totally rebuilding the other. Now, he’s chosen neither: he’s heading for Boston and selling both houses. This one was bought by a Wall Street fellow and his attorney wife after Raquelle Lynne of Doulgas Elliman showed them around it. According to Mr. Steinberg, the house had been decorated by Eric Cohler for the seller, who only lived there for two months. “I don’t even think the buyers are going to paint,” he said. The townhouse on 66th Street, just two doors down from the Andy Warhol museum, went to a Dutch firm specializing in Japanese art, Kadotakai Oriental Art, for $7.25 million; the company will use it to show its collection. As for the Englishman, who is now in possession of just a castle in Spain and two more in England, he was so impressed with his real estate prowess that he has decided to continue to buy and sell homes in New York through a new company, to be called Premiere Properties of Manhattan.

UPPER WEST SIDE

440 West End Avenue

Two-bedroom, 1.5 baths, approximately 1,100 square-foot co-op.

Asking: $479,000. Selling: $470,000.

Charges: $744; 40 percent tax-deductible.

Time on the market: one month.

FIRST, THE DOG RUN; THEN, THE CO-OP MEETING “That’s when panic set in,” said Marc Goodman, a broker with the Corcoran Group about the day he received a call from the board of this co-op requesting that they meet the buyer’s dog. Said Natasha Sinkov of Douglas Elliman, who was representing the seller: “I was told that the dogs are at the board’s discretion.” Uh-oh. “The dog is adorable,” Mr. Goodman said. “But anyone or any animal is bound to get nervous and excited when presented in such a stressful situation.” The buyers discussed giving the dog a sedative before the meeting, but opted instead for a nice long walk immediately before the interview. It was their first go-round with a co-op board and they were counting on getting the apartment with beamed ceilings and old moldings. They had already written a letter of reference for the pooch. It went something like, “The dog is so lovable that when friends invite them over, they request them to bring the dog as well.” Lucky for the sellers, the dog was pacified by the work out and the sale was final on March 10.

GRAMERCY

136 East 16th Street

Five-story, seven-bed, seven-bath townhouse.

Asking: $3.2 million. Selling: $2.875 million.

Time on the market: nine months.

GALLERY OWNER WINS WITH LOW BID The price of this townhouse between Third Avenue and Irving Place was reduced by $600,000 about six months ago when an art dealer–who’d been looking for a place for twice that long in order to escape her Upper East Side rent–came upon it. “She liked the grandeur of the house,” said her broker, Lydia Rosengarten of Leslie J. Garfield & Co. about the 11,000-square-foot, 27-foot-wide house that was built in 1850, was once home to Stanford White’s Cabinet Maker and was being sold by an estate. In June or so, she’ll move into one of the fifth-floor studios for about a year while she renovates the 4,500-square-foot duplex on the first two floors. Two tenants–one in a rent stabilized apartment on the third floor and one on the fourth floor–are staying put. She may also combine the two fifth floor units; she may rent them or not. But no matter, she has the garden all to herself.