‘Toxic’ lawsuit tanks sale prices at NYC ‘Billionaires’ Row’ luxury tower: report
A $1.5 billion luxury tower on Manhattan’s Billionaires’ Row whose residents have included the likes of Jennifer Lopez now has 18 units for sale as owners look to dump their apartments at a loss following lawsuits over alleged construction defects.
The building at 432 Park Avenue, once the tallest residential skyscraper in the Western hemisphere, has been beset by complaints from wealthy inhabitants about excessive noise, leaks, creaking walls, faulty elevators and surging repair costs.
Realtors are now declining to show their clients the vacant units in the 1,400-foot tall building due to uncertainty caused by a 2021 lawsuit filed by the condominium board against the developer.
“The truth is that we’ve been avoiding the building,” Nikki Field, a Manhattan-based realtor at Sotheby’s International Realty, told The Wall Street Journal.
Field said the “toxic” litigation is deterring her from the building.
“How can I advise my buyers to take that risk, and then expect them to work with me again if it goes bad?” she said.
A spokesperson for the sponsor who is tied to the developer told The Post that the lawsuit “has always been misguided” and that it was “creating a false narrative and inaccurately disparaging the building.”
“Three years of litigation have demonstrated that the complaint is full of falsehoods and hyperbole,” the sponsor told The Post.
The sponsor added that in recent months there have been “productive settlement discussions” that “were beginning to provide paths toward resolution for the benefit of all parties.”
The sponsor said that the settlement talks were interrupted after the board changed lawyers who “now appear to be more interested in pursuing claims that its own experts have stated have no merit.”
The Post has sought comment from the board.
The 96-floor building, whose construction was completed in 2015, boasts amenities such as a Michelin-star chef, a private dining terrace, a resident’s lounge, a swimming pool and whirlpool, a billiards room, a screening room, a children’s playroom, and a fitness center and spa.
But residents there have complained about loud, spooky noises caused by strong wind gusts at high altitudes that push air into garbage chutes, doorways and hallways.
The condo board filed suit three years ago against CIM Group and Macklowe Properties alleging that the design of the building had caused “horrible and obtrusive noise and vibrations.”
CIM and Macklowe denied the claims, saying that the 125-unit building was safe and that the condo board’s allegations were “vastly exaggerated.”
The lawsuit has been ongoing, producing at least 45 days of deposition testimony from 28 different witnesses as well as more than 4 million pages of documents, according to The Wall Street Journal.
Since the lawsuit was filed, owners have sold their properties at 432 Park at a loss while others have listed their units for sale. In many cases, they have slashed the asking price.
A three-bedroom apartment on the 50th floor which was bought by the owner for $18.93 million in 2016 is now on sale for $17.5 million, according to StreetEasy.
The owner of the apartment was seeking $20 million just a year ago. The new listing price of $17.5 million constitutes a reduction of 12.5%.
In 2017, the owner listed the apartment for $24.8 million, according to StreetEasy.
Of the 18 units that are for sale on StreetEasy, 14 of them had their prices cut at least once. The average listing discount was 13.2% off of the highest list price.
Thomas Peterffy, the billionaire financier, sold his 84th floor unit for $13.5 million — or 37% less than the $21.39 million he paid for it in 2016, according to property records cited by the Journal.
As of mid-May, there were 18 units for sale in the building — or 14% of the total 125 units.
Jonathan Miller of the real estate appraisal firm Miller Samuel said that the 14% figure is twice the typical number.
“That’s double the normal market share of listings that we usually see,” told the Journal. “That’s something to be concerned about.”
One of the last remaining developer-owned units in the building was sold for $12.4 million — 32% less than the original asking price of $18.25 million.
Fawaz Al Hokair, the Saudi mogul, owns the 8,200-square-foot penthouse. He bought it for $87.66 million in 2016.
In July 2021, he listed it for $169 million. The asking price has since been reduced to $105 million.
Price cuts at 432 Park run against the grain when it comes to Manhattan luxury real estate.
According to Miller, luxury condos in Manhattan have seen prices rise by 11.3% between early 2020 and the first quarter of this year.
In 2016, billionaire tequila mogul Juan Beckmann Vidal, who was in contract to buy a $46.25 million apartment on the 86th floor, filed suit after a “catastrophic water flood” caused damage to several units nearby.
Vidal demanded his $11.56 million deposit back, but was rebuffed by the developer. A year later, Vidal and the developer settled the lawsuit.
In 2018, Lopez and her then-boyfriend Alex Rodriguez bought a 4,000-square-foot unit for $15.3 million. A year later, they sold it for $17.5 million.
