Modest façade yields modest returns.
John Thaler is best known for his tech-heavy hedge fund picks, but this morning he cashed out on a more old world investment: real estate. The JAT Capital manager just sold his condo combo at 450 East 83rd Street for $5.2 million, according to city records.
Mr. Thaler bought the two 17th-floor apartments at the Cielo in 2006 and 2009, for a combined total of almost $4.4 million. After an average of five years of ownership, his profit—exclusive of any taxes, fees or renovation costs—comes out to about $800,000, or an average return on his initial investment of about 3.4 percent per year.
While it beats inflation, this return pales in comparison to the gains—and losses—that Mr. Thaler has taken on his high-flying hedge fund. Down just 6 percent in 2008, a year that the major indices were pummeled with massive losses, Mr. Thaler made gains over the next three years—20 percent in 2009, 10 percent in 2010 and 17 percent in 2011.
But once the recession eased, Mr. Thaler’s magic seemed to wear off. Once up 30 percent, Mr. Thaler’s JAT Capital took a sharp nose dive in mid-2012, falling 20 percent at one point, torpedoed by a bad bet on Tempur-Pedic and misguided pessimism on Weight Watchers, Sears and the Chinese search engine Alibaba.com. While 3.4 percent may have been a paltry return compared to the torrential pace at which he accumulated value during the recession, this modest Upper East Side return was likely a welcome respite from the losses he’s taken more recently.
The 3,500-square foot spread spans two corner units at this anodyne tower, built in 2006. At one point Mr. Thaler wanted significantly more for the unit: according to the New York Post, he was trying for $6.4 million at the beginning of 2012. His Brown Harris Stevens brokers, Drew Glick and Richard Ferrari, seem to have brought Mr. Thaler’s ambitions back down to earth, though, relisting the unit for a more reasonable $5.45 million at the end of last year.
Gerald Walker (we’re guessing not the 25-year-old Chicago-born rapper) and his wife, Laura, are the buyers. As for Mr. Thaler, we don’t see any new purchases in city records. He may be renting, or he may have retreated back to his 11,000-square foot, seven-bedroom home in hedge fund heaven: Greenwich, Connecticut.