by Wolf Richter, Wolf Street:
Not all is well at this glamorous piece of real estate.
The iconic mixed-use 58-story Trump Tower, on 721 Fifth Avenue, in Midtown Manhattan, with top-dollar retailers such as Tiffany’s nearby, was the ultimate in condo living when it was built in 1983. Now it’s even more iconic as President Elect Donald Trump holds court there, among enormous security measures and the daily flow of potentates, moguls, Big Oil CEOs, the occasional Silicon Valley wunderkind, billionaires, Goldman Sachs folks, and the like.
But not all is well at this piece of glamorous real estate.
Of its 238 apartments – located on the top 38 floors, including nine duplex and triplex penthouses on the top nine floors – 11 are actively listed for sale, according to CityRealty, and another 12 are listed for rent. Asking prices and asking rents have been slashed to get the units to move, and it’s not working very well.
The table below shows the 11 apartment listed for sale. Three of them consist of two units that have been combined: 42BC, 58CD and 37D/38D. Five sellers have cut their asking prices, with reductions ranging from -7.8% to -26.8%. And note for how long they’ve been on the market (right column), in a market that isn’t exactly ideal:
For some units, asking prices have been cut more than once. For example, 37D/38D, with 2,184 sq ft, was originally listed over a year ago, in August 2015, for $6.9 million, according to StreetEasy. In February 2016, the asking price was cut to $6.5 million, in June 2016 to $6.2 million, and in October 2016 to $5.995 million for a total reduction of 13.1%. And still no takers.
The potential buyer can expect to pay common charges of $3,620 per month and taxes of $3,328 per month, according to StreetEasy. This would come on top of the mortgage. At current asking price, with 10% down, financed with a 30-year fixed rate mortgage at 4.2%, the monthly payment would be $26,400. So that would amount to monthly outlays of $33,348. But the views are nice.
Unit 32H was first listed for sale in January 2016 for $2.999 million. In March, the asking price was slashed to $2.5 million, and in May it was slashed to $2.195 million, in total 26.8% in reductions, and still no takers.
And there is a lot of competition. Zillow lists 6,330 apartments for sale in Manhattan alone. And the trend has not been the friend recently. Trulia figured that the median selling price of New York City apartments dropped 4.1% from a year ago, as sales volume has withered:
There are another 12 apartments for rent at Trump Tower, including one with two original units combined (34EF). In the table below by CityRealty, note the reductions in asking rents, ranging from -1.7% to -11.8%. These are just asking rents and do not include any concessions:
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