The Sport of Tycoons

This article by Alexei Barrionuevo appeared in the online edition of The New York Times. It looks back at the luxury real estate sales of 2012.

IT was a year of record-high sales for luxury real estate. But 2012 will also enter the books for its chart-topping listings, as sellers sought to ride the wave of irrational exuberance for trophy properties.  

In Manhattan, it all began in March with the record sale of a penthouse at 15 Central Park West for $88 million by the former chairman of Citigroup, Sanford I. Weill, to the daughter of a Russian billionaire. Then the casino king Steve Wynn paid $70 million for a 14-room duplex at 50 Central Park South. Mystery buyers signed contracts for a pair of duplexes at One57, a Midtown tower still under construction, for at least $90 million apiece. 

The copycats soon followed. New York, while seeming to set the tone, was not alone. High-end markets in cities across the country, including Miami and Chicago, caught the fever, producing record sales prices in 2012, and affixing record price tags to houses and apartments. 

Yet for all the hype, at year’s end most of the biggest listings still remain on the market. In Manhattan, sellers of properties of $50 million or more have been stubborn about reducing prices, while in other parts of the country, brokers have begun to drop prices rather than lose out on the billionaire-buying wave. 

Still for sale is the $100 million penthouse at CitySpire at 150 West 56th Street. So, too, is the $95 million full-floor co-op at the Sherry-Netherland hotel at 781 Fifth Avenue. The 9,800-square-foot penthouse at the Mark hotel that was on the market for most of 2012? It’s still available for $60 million. 

“You had some records being set,” said Jonathan J. Miller, the president of Miller Samuel, a real estate appraiser, “and then that created a chain reaction of copycats who were hoping to piggyback onto that phenomenon.” 

The blast of sales at One57 — where billionaires in 2012 scooped up full-floor apartments with unobstructed views of Central Park for about $50 million apiece (or about $8,000 per square foot) — seemed to embolden owners of other would-be trophy properties to expect as much or more on resale.

One that was apparently pulled off the market was a duplex penthouse at 50 Central Park South that had been listed in August for $95 million by Halstead Property. 

For Miami, 2012 was also a year of record sales. An Italian buyer paid $25 million for a penthouse on South Beach, while a Russian bought a 10-bedroom house at Indian Creek Village for $47 million. Those sales inspired agents to go for broke on other properties. A six-bedroom penthouse in South Beach owned by the New York developer Ian Bruce Eichner has been listed for $39 million for several months. 

The biggest Miami trophy of all is Casa Casuarina, the former mansion of the fashion designer Gianni Versace, who was shot to death in 1997 as he opened the gate of the 23,462-square-foot house. Owned now by the telecom mogul Peter Loftin, it went on the market for $125 million in June — and was at that time one of the two most expensive residential listings in the country, according to Forbes. The house has 10 bedrooms, 11 baths, and a 54-foot mosaic-tile pool lined with 24-karat gold, and it sits on Ocean Drive in the heart of the South Beach scene. 

Jill Eber, a Coldwell Banker broker who is listing the house with her partner, Jill Hertzberg, said there had been “serious interest” from around the world. But with nobody biting at $125 million, “the Jills,” as they are known, lowered the asking price to $100 million in November. “We really wanted to open it up and have the price right for the winter season,” Ms. Eber said. “We have been seeing numbers like we have never seen before in Miami.” 

While Casa Casuarina has come down toward earth somewhat, an apartment in Chicago soars above all others. An 89th-floor penthouse at Trump International Hotel and Tower, at about 1,200 feet above the ground, it is the tallest residence in North America, and perhaps in the world, said Chezi Rafaeli of Coldwell Banker, the listing broker. The $32 million price tag makes it the highest-priced apartment in the Midwest, brokers say. 

“You feel as if you can go out of your window and walk on the clouds,” Mr. Rafaeli said of the 14,250-square-foot spread, which has seven bedrooms.

Sellers seemed eager to try to break records in 2012. Leroy Schecter, the steel magnate, decided to list two apartments on the 35th floor of the tower at 15 Central Park West as one combined unit for $95 million, or more than $15,800 a square foot. The finished product will have a little less than 6,000 square feet; it has no outdoor space. Mr. Schecter jumped in just a few days after two other Manhattan listings topped $90 million. 

“After CitySpire, 50 Central Park South came on for $95 million,” said Emily Beare, the Core broker who has the listing, “and his feeling was that 15 Central Park West was a far superior building to either of those buildings.”  

Whether it is or not, Mr. Schecter went against the advice of Ms. Beare, who felt they should keep the apartment off the market until the combination was completed, which is expected to be in January. But, she said, Mr. Schecter wanted to list it “on the off chance that there is that person that has the vision and wants to come in and do their own thing.” 

No such buyer emerged. “All the people I had in there wanted a finished product,” Ms. Beare said.

Have sellers’ expectations become unrealistic? Some appraisers, especially in Manhattan, certainly think so. Mr. Weill’s $88 million sales price, at $13,000 a square foot, was already considered a market anomaly, Mr. Miller said. A number of prominent people in the New York real estate community feel that without price reductions, properties like the penthouse at CitySpire are likely to remain on the market for a good while longer. 

For all the expectations unrealized by sellers in the combustible air of 2012, the trophy penthouse at 15 Central Park West that lighted the first match appears to be barely used by its owner, Ekaterina Rybolovleva, the daughter of the potash fertilizer billionaire Dmitry Rybolovlev, according to one person who visited the apartment recently. 

Aside from the bed in the master bedroom, there are a few dresses in dry-cleaning bags hanging in one of the large walk-in closets and a few simple pieces of furniture in the library, the visitor said. The walls of the apartment, with its wraparound terrace and expansive view of Central Park, remain undecorated.

“It’s a crash pad,” the visitor concluded. 

A lawyer for Mr. Rybolovlev explained in March that complications stemming from the divorce case of Ms. Rybolovleva’s parents might make the expense of a major renovation project unpalatable to the trust that bought the penthouse with her as its beneficiary.

“Real estate is irrational and emotional,” said Ms. Beare, in trying to sum up 2012, including why Mr. Schecter is asking nearly $3,000 more per square foot than Ms. Rybolovleva’s place sold for. “You can’t look at real estate in rational terms.”

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