Why did New York City’s best-groomed real estate sit so pretty this year while the country sank into a grotesque housing crisis? How did a Fifth Avenue apartment that needs work go to contract for $46 million, higher than any New York co-op ever? And how did our mayor pay $41 million for the Madison Avenue gallery next door to the mansion he bought one year earlier for $45 million?
Prim top agents like Mary Rutherfurd, one of the three listing brokers for that $46 million co-op at 1060 Fifth Avenue, say that their rich clients are getting hugely richer, and that the supply of trophy real estate is nil. But then there is their other explanation for last year’s gargantuan sales: The brokers themselves, a tiny caste that calmly guides perfectly proper buyers into superfluously huge, scrupulous real estate.
“At this level, it’s all corporate,” said her colleague John Burger, another 1060 Fifth listing broker. “There’s no drama.” So when that deal closes this month, he and Ms. Rutherfurd will be breaking the co-op record they themselves set: She listed the late billionaire Laurance Rockefeller’s triplex at 834 Fifth Avenue, which his billionaire client Rupert Murdoch bought for $44 million in 2005.
This is how they did it: For that first listing, Ms. Rutherfurd asked for references from anyone who wanted to see the place. “We just needed to know something about them personally, professionally and financially before they came in,” she said.
“Keep in mind that all of these great buildings,” Mr. Burger explained, “each and every one of them is a private club.” So would-be buyers had to face the brokers’ own mini co-op board: “They had to present, shall we say, credentials,” he said. “They had to be pre-qualified.”
These brokers are members of the club, too: Ms. Rutherfurd, a grandmother, lives on Fifth Avenue and summers on Fishers Island.
But things were different with the deal that broke 834 Fifth’s record. Mr. Burger said 1060 Fifth Avenue, where the billionaire George Soros paid his ex-wife $24 million two years ago to keep their duplex, doesn’t have one of the co-op boards that demand buyers be familiar.
So the problem in this month’s deal came from the apartment itself: The seller, a writer named Georgia Shreve, had owned an uncombined 13th-floor space and the penthouse above. (For both deals—834 Fifth and 1060 Fifth—the brokers declined to use names or give details about the pricing.) Ms. Shreve told The Observer last month it had been five years since the board turned down her intricate plans to combine the apartments into a proper duplex.
According to a source, that opposition came down “to one individual, the head of the board.” But the board came around after discovering that the co-op’s posh 1929 architect, J.E.R. Carpenter, was in favor of duplex penthouses. Plus, the composition of the board changed since Ms. Shreve’s renovations rejection.
That meant a potential buyer named Scott Bommer, a young hedge-fund executive, had to be not only willing to pay $46 million, just $2 million below the asking price, for an unassembled duplex, but also had to make an unofficial pitch for combining the units. Mr. Bommer succeeded.
AT CONDOS AND townhouses, where there aren’t such boards to reckon with, brokers can have subtler roadblocks to massive deals. Another Brown Harris Stevens managing director, Paula Del Nunzio, listed the architect Emilio Ambasz’s mansion at 8 East 62nd Street, which had gone on and off the market since 2000.
“In a certain sense it was a broker’s nightmare,” she said, “because every time we got a really high offer, the seller would react by raising the price: ‘Oh that’s great! I think we could get more.’ It was like Janus, the god of two faces. On the one hand it was exceedingly difficult, but exceedingly beneficial.”
Madonna was one of the failed bidders—she reportedly offered around $26 million—but the real estate investor Keith Rubenstein ended up paying $35 million, the most recent asking price. That’s still $18 million less than the $53 million townhouse record, set by Ms. Del Nunzio—who lists “riding Polish Arabians” as an interest on her broker bio.