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House prices are falling… Where is the 300 billion boom in one apartment? Kang Young-yeon’s New York real estate story

‘220 Central Park South’ seen from the entrance of Central Park. New York = Reporter Kang Young-yeon

What is the most important thing when evaluating real estate? Experts call it ‘location’. So what is the second most important thing? ‘Location’. the third? It is also called ‘location’. The common opinion of real estate experts is that the importance of location cannot be emphasized enough.

New York, the economic and cultural center of the world, is called the capital of the world. It is no exaggeration to say that Manhattan is one of the best locations in the world for real estate. It is an irreplaceable area that is considered to be the most important of its location. I’m curious here. So, where is the best location in Manhattan?

A place that comes to mind when you think of New York. Right in front of Central Park. There are only a few buildings in Manhattan that have a view of Central Park before, and there will be very few in the future. What if you could see the Hudson River from here? It wouldn’t be any better. That’s why some of Manhattan’s most expensive skyscrapers are centered in Central Park.

Which of these is the most expensive? Based on the transactions concluded so far, it is ‘220 Central Park South’.

House prices are falling...

Located west of Central Park, these apartments are on the same street as Columbus Circle and Plaza Hotel. It is in perfect contact with Central Park, so it is rated as a good location.

220 Central Park South is a 79-story building with 116 apartments, most of which are duplex. Some say that several apartments are connected to make a larger house. (This may change the total number of apartments.) According to the Wall Street Journal (WSJ), the apartment includes a private dining room, sports club, library, basketball court, driving range, climbing area and swimming pool. (The reason I cannot write conclusively is that the real estate development company does not confirm the exact details, so foreign media are also reporting speculatively based on interviews with officials and aides. )

Construction of this building began in 2015, when Manhattan real estate was booming, and many contracts were signed at that time. According to foreign media, most of the high-priced transactions for this building were made within one year of the sale of the building in 2015. However, at the end of 2018, the Manhattan luxury apartment market suffered a downturn due to oversupply.

To combat this, the company has taken a different approach than the usual way of selling. Instead of attracting guests by showing off their home finishes, amenities, etc., it was a completely secret marketing campaign. The insides were not open to the public, and the CEO did not interview the media. There was no official website, and there was no money to go sightseeing. It has become an apartment that only people you know can live in, and an apartment that only recognized people can enter.

The strategy worked. In 2019, the WSJ reported that $55 million in apartments were sold in the building, stating that “the light is shining again on the luxury apartment market in Manhattan, New York, from a downturn.”

The names of the people who live here are not verified by company policy. One of the most famous people living here is billionaire Ken Griffin, a hedge fund manager. Griffin owns a $238 million penthouse at 220 Central Park South. At the time of the transaction in January 2019, it recorded the highest price for an apartment in the country. That record has yet to be broken.

It doesn’t come out well once you go in, so even the fact that you had a resale appears in the major foreign press. The first resale of 220 Central Park South took place in April 2021, according to the WSJ. At the time, the transaction amount was $33 million, a 23% increase from the price a year ago. It was a pretty good deal, but it may have been a sluggish business compared to the current price.

This is because the price is rising as time goes by, and new wealthy people are moving in one after another. Alibaba co-founder Joe Tsai bought a two-story apartment in the building for $157 million last year, according to CNBC. According to Miller Samuel, an American appraisal firm, three out of eight real estate transactions worth $50 million or more in Manhattan last year took place in this apartment.

Earlier this month, Daniel Ohh, founder and hedge fund manager of Ozzy Capital Management Group, sold a penthouse at 220 Central Park South for $190 million. It has nearly doubled from when it was purchased in 2019.

There was a forecast that real estate prices would plummet as more people are leaving Manhattan at the beginning of the pandemic, but it turned out to be false. According to CNBC, the Manhattan real estate market recorded an all-time boom last year. Real estate transactions amounted to $30 billion (about 35.895 trillion won), exceeding the pre-pandemic level. The number of real estate contracts also reached an all-time high of 16,000.

In particular, the market is recovering rapidly, starting with the ultra-high-end real estate market. New property inventories plummeted by a third in the fourth quarter, according to CNBC. In particular, homes with more than $10 million sold the fastest, and they found a new owner in 97 days when they appeared on the market.

Experts have analyzed that during the pandemic, individuals who made money from stocks, cryptocurrencies and more are heading to real estate. More than half of all properties sold in Manhattan last year were all cash, according to CNBC.

“The recovery in 2021 was much faster than many expected,” said Jonathan Miller, CEO of Miller Samuel. ” he predicted.

New York = Correspondent Youngyeon Kang yykang@hankyung.com

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