What's wrong with 823 Park?

Back in 2007 and 2008, buying at 823 Park Avenue seemed like the gold-standard of real estate investments. The newly-converted luxury condo on Park Avenue was a rare commodity in one of the city's most rarefied neighborhoods. How could an investment in one of its sprawling floor-throughs go wrong?

But in the years since, resales at the building have  failed to fetch more than the first wave of owners paid.

Maybe it's just not a $15 million kind of building.

Of course, buying at heady prices (more than $4,000 a square foot) right before a global recession isn't conducive to making good on one's investment. But now the trophy market is back, and sellers are still losing money.

Take the recent sale of a full-floor residence that belonged to Joseph Oughourlian and Jennifer A. Banks. The couple paid $13.82 million for the five-bedroom, 4.5-bath sponsor unit in January 2008. Earlier this month, they sold it at a considerable loss—for $12.9 million—to private equity honcho Thomas Uger, according to city records.

Considering the other places that Mr. Oughourlian might have parked his money before the recession (for example, with Madoff), a $1 million loss isn't the worst possible fate. But the couple had clearly hoped to do better when they listed the unit for $15 million with Corcoran's Charlie Attias in August.

What's more, Mr. Oughourlian's apartment isn't the only one at 823 Park that has given a less stellar performance the second time around.

There's also the 10th-floor apartment, which was purchased for $13.8 million back in 2008 and sold for a mere $13 million this fall. And the duplex that spans the second and first floors, purchased for $20 million by UBS exec Ramesh Singh in 2008. It's currently off-the-market, but was asking only $15 million last fall.

Like their neighbors, the Oughourlian Banks probably just miscalculated the market for lavish, 4,184-square-foot apartments with coffered ceilings, carved fireplaces, herringbone oak floors and mahogany-paneled libraries.

"That was the price we could get," Mr. Attias said when The Observer reached him on the phone.

Why such a low price?

He hesitated, then admitted that it might have something to do with the fact that the unit first sold before the recession."

It was, he added, a beautiful pre-war buliding, and beautiful pre-war buildings, particularly condo conversions, usually sell marvelously.

Just maybe not as marvelously as they did before the recession, when sinking a fat sum into a condo carried with it not only the promise of a place to live, but a potential jackpot.

kvelsey@observer.com

Consider Ramesh Singh, an executive at the huge Swiss-based bank UBS, who now has two huge Park Avenue apartments on the market—both listed at enormous discounts.

He’s spent years as the global head of mortgage-backed securities, the financial instrument that has more or less strangled the economy. Last month, after serious mortgage-related losses, UBS agreed to a multibillion-dollar government bailout.

In June, Mr. Singh and his wife, Farida Khan, reportedly paid $20 million for a 15-room, 7,234-square-foot duplex at 823 Park Avenue, a century-old building freshly remade into luxury condos. They had signed their contract in April 2007; and around that time they listed their old co-op on Park Avenue, a 4,225-square-foot sprawl at 860 Park, with Brown Harris Stevens’ Kathy Sloane. They asked $13.4 million, about twice what they themselves had paid in 2004 (when they sold off yet another Park Avenue co-op—a duplex at 941 Park).

This February the price tag at 860 Park went down to $12.75 million; a month later it was cut to $11.95 million; by this May the co-op cost $10,995,000; by the end of July it was off the market. Early last month, it came back on the market with Corcoran’s Carrie Chiang, asking just $9.5 million. It still hasn’t sold.

Meanwhile, in August, Mr. Singh put his new 15-room duplex at 823 Park Avenue on the market with Brown Harris Stevens’ Shirley A. Mueller and Paula Del Nunzio, asking $24.75 million. Floor plans show eight bedrooms; a bedroom-size reception room; a foyer; a gallery; a kitchen plus an “entertaining kitchen”; a terrace off the master bedroom suite; a massive living room; a library; and a dining room.

August’s $24.75 million asking price became $21.75 million in October. Then, last week, an amazing thing happened: The asking price came down to $19.95 million, less than what Mr. Singh and his wife paid just a few months ago.

It’s hard to imagine the place won’t sell soon, especially considering that they did work there—like extending the library’s mahogany paneling to the ceiling, according to the listing, or adding “‘art lifts’ so that a work of art drops to reveal a large flat-screen television.”

No brokers involved would comment for this story, and Mr. Singh did not return e-mails, but it’s likely that his plan is to live in the apartment that doesn’t sell.

mabelson@observer.com