[iheartthed]

Originally Posted by Crawford

If there's a recession, there will be a temporary pause, but "market reality" says that Billionaires Row is the most expensive stretch of urban real estate on the planet, and that isn't likely to change, so this is likely the very beginning of the superskinny trend, at least along that corridor.

There are roughly a dozen assemblages in the corridor held by major developers. Durst, Solow, Barnett, Vornado, Macklowe, Related (basically the first rank of Manhattan developers) all have assemblages. They aren't spending upwards of a billion on painstakingly complex, decade-long land assemblages for the hell of it.

These super expensive condos are having a lot of trouble. That's actually an understatement. Billionaire's Row is one of the worst performing areas for condo sales in the entire city of New York. They are struggling in what may be the best environment for the very high net worth people that we've seen since before the Great Depression. If there is a recession soon, we might see some of these super high-end condo developers go bankrupt as a result.

The super-tall One57 tower, completed in 2014 and considered the forerunner of Billionaires’ Row, a once largely commercial corridor around 57th Street in Midtown, remains about 20 percent unsold, with 27 of roughly 132 multimillion-dollar apartments still held by the developer, according to Jonathan J. Miller, the president of Miller Samuel Real Estate Appraisers & Consultants.

“That’s mind-blowing,” Mr. Miller said, because the building actually began marketing eight years ago, in 2011, and a typical building might sell out in two to three years in a balanced market.

In an analysis of seven luxury towers on and around Billionaires’ Row, including pending sales, almost 40 percent of units remain unsold, Mr. Miller said. Another competitor, Central Park Tower, set to become the tallest and, by some measures, the most expensive residential building in New York, has not released any sales data.

By Mr. Miller’s count, which includes buildings that are still under construction, there are over 9,000 unsold new units in Manhattan. (His estimate includes so-called “shadow inventory,” which developers strategically do not list for sale to hold off for a stronger market.) At the current pace of sales, it would take nine years to sell them — a daunting timeline that could be reduced if sales were to accelerate, but there are few reasons to expect such a surge in the short term, he said.

https://www.nytimes.com/2019/09/13/r...-new-york.html

I suspect a lot of the fundamentals behind developers catering to the ultra high-end market in Manhattan was based on shady money from overseas. After the 2016 election, the Obama admin slapped a bunch of sanctions on Russian oligarchs that effectively froze them out of the U.S. financial system, and Russian oligarchs were also a key demo for ultra high-end Manhattan real estate. There was also a lot of increased scrutiny on shady money filtering in from other parts of the world as well. This is probably a big reason why the current president, himself a Manhattan real estate developer, is so eager to roll back Obama era Russian sanctions.