Eighteen units in a $1.5 billion luxury tower on Manhattan’s Billionaire’s Row that’s been home to celebrities like Jennifer Lopez are now for sale as the owners try to sell the apartments at a loss following a lawsuit alleging construction defects.
Once the tallest residential high-rise in the Western Hemisphere, 432 Park Avenue has been plagued by complaints from wealthy residents about excessive noise, water leaks, creaking walls, malfunctioning elevators and spiraling repair costs.
Real estate agents are currently refusing to show clients available 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, we’ve been avoiding the building,” said Nikki Field, a Manhattan-based real estate agent with Sotheby’s International Realty. He told The Wall Street Journal.
Field said the “harmful” lawsuits are keeping her away from the building.
“How can I advise buyers to take that risk and then expect them to do business with me again if it doesn’t work out?” she says.
A spokesman for the sponsor, who has ties to the developer, told The Washington Post that the lawsuit has been “consistently misguided” and “creates a false narrative and inaccurately denigrates the building.”
“Three years of litigation have revealed that the complaint is filled with falsehoods and exaggerations,” Sponser told The Washington Post.
The proponents added that “constructive settlement discussions” have taken place in recent months and that “a path towards a solution that benefits all parties is beginning to emerge.”
The sponsor said settlement talks had been halted when the committee changed lawyers, but that its lawyers “now appear to be interested in pursuing claims that the committee’s experts have said are without merit.”
The Post has reached out to the commission for comment.
Completed in 2015, the 96-story building features amenities such as a Michelin-starred chef, private dining terraces, a residents’ lounge, a swimming pool and Jacuzzi, a billiards room, a screening room, a children’s playroom, and a fitness center and spa.
But residents have complained that strong winds at high altitudes blow air into trash dumps, doorways and hallways, creating a loud, eerie noise.
The condominium association filed a lawsuit against CIM Group and McCraw Properties three years ago, alleging that the building’s design caused “serious and nuisance noise and vibrations.”
CIM and McCraw have denied the allegations, saying the 125-unit building is safe and that the condo board’s claims are “grossly exaggerated.”
The litigation is ongoing and has involved at least 45 days of depositions from 28 witnesses and more than 4 million pages of documents. According to the Wall Street Journal.
Since the lawsuit was filed, 432 Park’s owners have sold their properties at a loss, while other owners have put their properties up for sale, often at significantly reduced asking prices.
A three-bedroom apartment on the 50th floor, purchased by owner-occupier in 2016 for $18.93 million, is now on the market for $17.5 million. According to StreetEasy.
The apartment’s owners were asking $20 million just a year ago, and the new asking price of $17.5 million represents a 12.5% reduction.
In 2017, the owners put the apartment on the market for $24.8 million, according to StreetEasy.
Of the 18 homes listed for sale on StreetEasy, 14 have had at least one price reduction, with the average reduction being 13.2% off the highest list price.
Billionaire financier Thomas Peterffy sold the 84th-floor unit for $13.5 million, 37% less than the $21.39 million he paid in 2016, according to property records cited by The Wall Street Journal.
As of mid-May, the building had 18 units for sale, or 14 percent of the 125 units.
Jonathan Miller of real estate appraisal firm Miller Samuel said the 14 percent figure was double what is typical.
“That’s double the normal market share for the properties we typically see,” he told The Wall Street Journal. “And that’s cause for concern.”
One of the building’s last remaining developer-owned units sold for $12.4 million, 32 percent below the original asking price of $18.25 million.
Saudi Arabian tycoon Fawaz Al Hokair owns the 8,200-square-foot penthouse, which he purchased in 2016 for $87.66 million.
In July 2021, he put it up for sale for $169 million. The asking price has since been lowered to $105 million.
When it comes to luxury Manhattan real estate, 432 Park’s price drop defies conventional wisdom.
Prices for luxury apartments in Manhattan rose 11.3% between the start of 2020 and the first quarter of this year, according to Miller.
In 2016, tequila billionaire Juan Beckman Vidal, who was under contract to buy a $46.25 million apartment on the 86th floor, filed a lawsuit alleging “catastrophic flooding” that damaged several nearby units.
Vidal demanded his $11.56 million deposit back, but the developer refused. A year later, Vidal and the developer settled the lawsuit.
Lopez and her then-boyfriend, Alex Rodriguez, bought the 4,000-square-foot property for $15.3 million in 2018. A year later, they sold it for $17.5 million.
