Not that actual anarchy has been loosed upon New York’s massively moneyed upper crusts, or that apartments with radiant-heat floors and en suite dressing rooms are quite falling apart yet, but the Manhattan luxury real estate market is looking bleaker, at least nervier, with every new hour. Will the center hold?
Consider Michael Novogratz’s meatpacking district loft. The former Goldman Sachs partner officially became a billionaire last February, when his Fortress Investment Group (famous for owning Michael Jackson’s massive personal debt) went public. A few months before then, Mr. Novogratz had assembled a $17.5 million sprawl in Tribeca, including a $12.25 million triplex he bought from Robert De Niro. While that space was renovated, he and his family passed the time in a 5,000-square-foot loft at 400 West 14th Street that had listed for $37,500 per month.
His first year there, Mr. Novogratz paid around $33,000 per month, reportedly a record for the meatpacking district. The price only went up the next year, listing broker Frances Katzen said this week, to the loft’s original $37,500 asking price.
Times were so good that the hedge fund executive’s family even made changes to the rental, the agent said. The landlord—named Steven Feldman, according to city records—was happy to oblige: An eat-in nook off the kitchen was walled up and became the library; a space off the living room was cordoned for the laundry; the media room joined the living room; the gym was turned into a children’s bedroom; a sauna basically became storage space; custom furniture (a white piano and a black velvet couch) was even commissioned.
“It’s become a real family space rather than a major crib, if you will,” Ms. Katzen said. As it happens, back before the hedge fund manager came, Mr. Feldman had gotten a rental offer from Will Smith, though he had wanted only six months. “My landlord,” she said, “had time to be choosy in a hot market.”
Now the hot market is gone and Mr. Novogratz is leaving West 14th Street. Ms. Katzen said he’s ready to move into his renovated Tribeca apartment, though she didn’t mention that Fortress’ stock is down, and it will not pay a dividend for the third quarter.
What about his old $37,500-per-month loft? It went on the market late last month for $29,000. “I sat down with my landlord three weeks ago and I said, ‘Look, guys’—and we sat around for quite a while—‘I’m happy to push for your numbers, but I don’t think it’s realistic,’” Ms. Katzen said. She went through stats for comparable sprawls, “and basically they’re all soft, all soft.”
Her new $29,000 asking rent is nearly 25 percent less than the loft had been fetching. “What possible gain does it have for me to maintain an arrogance,” she said, “that I can fetch a number in a market that’s clearly telling me it’s not going to happen?”