Penthouse A at 255 East 74th Street epitomizes the new Wall Street apartment: a sound, convenient investment with all the bells and whistles but none of the glitz. The 76-unit building was designed to cater to families—apartments of three bedrooms or more comprise three-fourths of the building. This is for the family-man banker who values time with his kids, as well as healthy margins.
The penthouse apartment, asking $11.75 million, speaks to the investment market rather than the celebrity or prestige market, said David Lowenfeld, one of its developers. “We don’t have any athletes or Page Six people in our building. Some people like that notoriety about an address, but our buyers are looking for a sound investment that provides comfort and convenience to their family.
“Our competition for a unit like this is really Park Avenue, Fifth Avenue and Central Park West. But the buyer is getting a comparable commodity for 20 to 30 percent less than the other options—once you include renovations and co-op fees. Wall Street businessmen like to buy here because it is both a good value and an ideal way to raise a family in Manhattan. It is a perfect home for the successful Wall Street banker with a family. They like it because their wives love the Equinox; and their kids love the play center and they don’t have to do any work to remodel it before moving in like you would with most of the older co-op buildings on Park and Fifth. You just bring in your personal decorator and put your key in the door.”
The Hit Factory, at 421 West 54th Street, is a glossy development in Clinton. In 2007, this might have looked to Wall Street as its main market, but these days, despite high bonus forecasts, bankers probably won’t be beating down the doors, says Warburg Realty broker Steven O. Goldschmidt, who has the listing for the $3.9 million penthouse: “The bonuses are not necessarily going to have an effect on markets like this.”
The historic building, which holds the claim to fame of recording artists from Barbara Streisand to Michael Jackson, boasts a lobby with 13-foot ceilings and honed granite floors; a common roof deck that resembles the Soho House without the pool; and a state-of-the-art fitness center.
But Mr. Goldschmidt is not looking to Wall Street for buyers. “This is a large showcase apartment, it’s not your discreet quiet nook. We are in an environment where people are playing down what they have rather than saying, ‘Gee, look what I got.’ We see the effects of that mentality with our place. It’s just too grand, too luxurious. We have also heard that the bonuses are not heavy in cash, but rather are mostly deferred compensation. We aren’t anticipating a major bump after bonus season like you might see in the more traditional, family-type apartments.
“Showcase apartments don’t get a lot of traffic right now, especially from Wall Streeters, because people want to play down their wealth rather than the other way around,” he added. “If there are bonuses in cash, I’m not sure people will spend them in a way we can oooh and ahhh at.”
Rejecting Gordon Gekko’s maxim, “Greed is good,” this season’s Wall Street buyer is more likely to be someone interested in real estate investment rather than the flexing of real estate muscle and the showcasing of success. And with good reason, of course: Although a recent state comptroller report pegged year-end payouts for the six largest Wall Street firms at up to $113 billion or more, it also noted that the recession-related crises like Lehman’s collapse “permanently changed the landscape” of Big Finance.
And that, in turn, has altered Big Real Estate.
“People are not flipping apartments anymore,” Mr. Goldschmidt said. “A young Wall Street guy knows that he is probably not going to see the market bounce back in the time he will be living there.”
The Hit Factory does feature many Gordon Gekko–ish amenities that the 2007 Wall Streeter may have succumbed to, such as a Sub-Zero wine refrigerator and a five-fixture master bathroom with a Kohler “tea for two” cast-iron soaking tub, frameless-glass–enclosed shower, and Halila limestone walls and tile flooring.
“Wall Streeters are not looking to buy in the high-profile monkey buildings right now,” Mr. Goldschmidt said. “The last thing they want to do is create more animosity toward them than there already is.”
Richard Lebow, the marketing chief at 255 East 74th Street, put it this way, referencing his family-friendly development. “People are looking very seriously at this type of property now. A year ago the interest was almost zero; lately, we have two to three viewings a week. Going into the holiday time, you don’t know what the velocity of traffic is going to be, but we are confident.”
Of course, there’s still the more traditional Master of the Universe pad out there.
Douglas Elliman broker Ilan Bracha has a $23 million listing on the second floor of the Hampshire House at 150 Central Park South. The space is currently used as an office but could be converted to residential or mixed-use. “This apartment is ideal for the finance man who wants to open his own high-end financial services office with Central Park views and a prestigious Central Park South address,” Elliman broker Lawrence Lee said.
The apartment does not allow financing at all—only cash.
“The bottom line is, people are still buying and people who have the money appreciate the product and still pay money for it.”
cmalle@observer.com
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