Trophy $50M penthouse sold for 60% discount

Investor Wes Edens, co-owner of the Milwaukee Bucks, just scored a $30 million discount on a designer penthouse.

Edens, a co-founder of Fortress Investment Group, paid $20 million for a West Chelsea penthouse designed by the late starchitect Zaha Hadid.

The 6,853-square-foot pad in the curvaceous building overlooking the High Line at 520 W. 28th St. was originally asking $50 million. Edens paid $20.2 million, according to city records.

That’s a steep 60% discount. While real estate has taken a hit since COVID-19 emerged, residential units will still move if priced properly, said Donna Olshan, who first noted the penthouse was in contract in her weekly Olshan Luxury Market Report.

The sale “doesn’t say anything about market weakness because $50 million was a fantasy price based on a market that didn’t exist,” Olshan said.

“It wasn’t realistic,” she added. “Once the property was priced right, it moved. This isn’t rocket science. Every property will sell if priced appropriately and discounted.”

Five years after the Related Companies launched sales, the building has yet to sell out. It appears as if only 24 of the 40 units have sold and closed. That could change, brokers say, if the discounts continue.

Edens’ new residence is a five-bedroom, seven-bathroom home with its own sculptural staircase and outdoor space. Building amenities include the city’s only private IMAX theater.

And even at 60% off, Edens’ penthouse still sold for around $3,000 per square foot.

“By anybody’s calculation, that’s a decent day in our market. So hats off to [Related], they got it done,” Olshan said, adding that West Chelsea is an area not known for eye-popping prices. “In and of itself it is a very good result for the building,” Olshan said.

And higher priced units — condos, co-ops and townhouses — often have higher priced discounts.

“This is a submarket,” Olshan said. “The luxury market is a collection of submarkets, and they don’t all track the same. Once you get to these big apartments with large prices, you expect a bigger discount because the pool of buyers is very small,and you are going through a period of price discovery — trying to figure out what it is worth.”

Indeed, there were only 14 contracts signed for all residences asking $20 million or more so far this year, compared to 35 properties asking $20 million and above during the same period, January to September, of 2019, Olshan said. She added that, last week, there were 21 contracts signed for properties asking $4 million or more — the highest number since the pandemic hit in March.

Real estate appraiser Jonathan Miller, whose latest market report comes out with Douglas Elliman on Friday, Oct. 2, agreed.

According to Miller, there were 105 condos and co-ops that sold for $20 million and above from January to September 2019, compared to only 64 that sold during the same time period this year.

“This is a housing market that has been showing more strength in new signed contract activity below the $2 million dollar threshold since the lockdown ended. But we are seeing the higher end slowly awaken with three new signed contracts in September above the $20 million threshold. Buyers are taking advantage of more accurate pricing right now,” Miller said.

Edens’ deal, Olshan said, shows “that there are buyers out there, but they need a meaningful discount.”

“This is a great landscape for buyers,” she added. “New Yorkers are coming off the bench and betting on the home team.”

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