West 57th Street, along the southern end of Central Park, is often referred to as “Billionaires’ Row”. Among the lineup of luxury residential buildings that grace the street, two of the most revolutionary were built by Gary Barnett’s Extell Development Company, and both are in the news this week.
Extell has a history of pushing the envelope when it comes both to luxury and price, as can be seen in One57. This building currently holds the record for most expensive full-floor unit sold in New York, at $100.5 million. Unfortunately, One57 finds itself in the news due to another record it recently broke: the city’s largest residential foreclosure. Apartment 79, a penthouse that sold for $50.9 million, will be up for auction on July 19 by Luxembourg’s bank, Banque Havilland SA, after the purchaser One57 79, Inc. defaulted on a $35.3 million loan. This is the second foreclosure at One57 this month. Indeed, the two foreclosures at One57 are the only two in Billionaires’ Row history. Experts see this as a sign of the changing market. The U.S. Treasury Department has stepped up monitoring of high-end purchases to detect and deter money laundering schemes and other illegal practices. Furthermore, China is increasing regulations on capital outflow, and Brexit has caused financial insecurity in various parts of the world. All of this together reduces the demand for super-luxury residences such as these, for better or worse.
In this most recent foreclosure, at least, Extell may have come out ahead in the long run. The Real Deal has just learned the identity of the person behind One57 79, Inc.: Nigerian oil baron and international money-launderer Kolawole Aluko. Aluko is currently on the run from Nigerian authorities on board his 213-foot yacht, somewhere out at sea.
Elsewhere on Billionaires’ Row, construction is underway on Central Park Tower, which is set to be the second-tallest tower in the United States at 1,550 feet (the first-tallest, of course, being the Freedom Tower at 1,776 feet). Barnett came under scrutiny when he announced his plans for this building. Some critics doubted he could raise adequate funds, others questioned the wisdom of this venture in the current market. Indeed, due to funding constraints and various other problems, plans for this building had to be reworked several times. However, Extell defied all speculation, and now the building is under construction.
Designs for Central Park Tower were drawn up by Adrian Smith + Gordon Gill Architecture, the company currently working on the Jeddah Tower in Saudi Arabia, which will be the world’s tallest building upon completion in 2020. Funding for Central Park Tower is coming from many sources: $168 million from EB-5 visas, (which we have discussed in this blog previously), $300 million from Shanghai Municipal Investment and $426 million from Nordstrom, which will occupy the first seven floors of retail space. Most recently, and to the surprise of many real estate insiders, Extell obtained a loan of $900 million from JPMorgan Chase. A full sellout of the building’s 179 apartments is expected to bring in over $4 billion, making this the most expensive residential building in New York City history – another record.