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Sun 17 May 2009 04:00 AM

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Manhattan Financial District apartments get deepest price cuts

Apartment prices in Manhattan's Financial District feel the heat of the financial meltdown.

Manhattan Financial District apartments get deepest price cuts
The Financial District suffered the deepest price cuts in Manhattan in the first quarter as securities firms shed more than 180,000 jobs in the Americas.
Manhattan Financial District apartments get deepest price cuts
Financial District’s property prices are down; a 1,500 sq ft, two-bedroom condo, listed in June ’06 at $2.55m, is now being offered at $1.85m.

Real-estate broker Ronnie Diamonde expected the three-bedroom apartment in New York’s Financial District, listed in August for $1.64m and seen by 145 potential buyers, to sell in eight weeks.The condominium in the triangular-shaped Cocoa Exchange building was reduced twice by a total of 21 percent over four months to $1.3m, according to Streeteasy.com, a service that tracks New York real estate prices. A buyer will probably sign a contract this week for even less, said Diamonde, of the Corcoran Group, who has three other listings in the building.

The Financial District suffered the deepest price cuts in Manhattan in the first quarter as securities firms shed more than 180,000 jobs in the Americas.

The area was less about infrastructure and was more like, ‘Don’t you want to live in this cool building because it has a cool name?’

Manhattan apartment sales fell 48 percent from a year earlier, real-estate appraiser Miller Samuel Inc said. Sellers lowered prices on almost a third of condo or co-op listings by an average of 11 percent in the Financial District, according to Streeteasy.

Downtown has been “disproportionately impacted by the layoffs and contraction of the financial-services sector”, said Jonathan Miller, president of New York-based Miller Samuel.

In TriBeCa, the site of converted warehouses and the TriBeCa Film Festival, 24 percent of advertised apartments were discounted by an average of 11 percent, Streeteasy said. The deepest cut in the area is at 39 Worth Street, which is listed at $5.99m, a 40 percent discount, Streeteasy noted.

Sellers in SoHo, home to shops including Prada and Morgane Le Fay, lowered 27 percent of listings by an average of almost 11 percent in the first quarter.

Spurred by tax breaks, developers moved into the Financial District after the 2001 attacks on the World Trade Centre.

Property prices climbed as developers bought office buildings and converted them into upscale condominiums.

“The Financial District was definitely an emerging neighbourhood,” said Sofia Kim, vice president of research at Streeteasy. “People were being priced out of TriBeCa, but wanted to stay in the school district.”

Then the recession hit and investment banking profits vanished amid more than $1.3 trillion in global writedowns and credit market losses tied to the collapse of the US mortgage market.

Wall Street bonuses dropped 44 percent last year, according to New York State Comptroller Thomas DiNapoli.

“In any sort of a downturn, the neighbourhoods that suffer first and fastest are the emerging areas,” Kim said.

Five of the area’s 10 biggest price reductions are at the Cipriani Club Residences at 55 Wall Street, where markdowns ranged from 21 percent to 27 percent as of this week, according to Streeteasy.Prices were whittled at 18 of the building’s apartments in the first quarter. That number now stands at 27.

The dwellings are attached to a restaurant, party and concert space. Amenities include a wine vault, a movie screening room with velvet recliners, a barber shop and free muffins and croissants delivered daily to residents’ doors.

A 1,500 sq ft, two-bedroom condo, listed in June 2006 at $2.55m, is now being advertised for $1.85m.

Steven Witkoff, co-developer of the project, didn’t return calls for comment.

“That area was less about infrastructure and was more like, ‘Don’t you want to live in this cool building because it has a cool name?’” said Kathy Braddock, a partner at real estate consultant Braddock & Purcell.

At 15 Broad Street, in a building known as Downtown by Philippe Starck, Jacky Teplitzky, broker and managing director at Prudential Douglas Elliman Real Estate, gave up a listing after deciding that she couldn’t sell the apartment.

“I’m good at what I do, but I’m not a magician,” Teplitzky said in an interview. “There were no showings, no nothing. Inventory was mounting and mounting and mounting.”

There are 45 apartments for sale in the building, according to Streeteasy.

Kelly MacDonell, 34, an executive at Aeropostale Inc, and Todd Watkins, 40, considered moving from the Upper West Side to the Financial District.

They abandoned plans to buy in a new building on the Upper East Side when the builder failed to finish it on time.

On a Sunday tour of open houses in early April, the couple’s concerns about a “dead at night” neighbourhood vanished as they passed tourists snapping photos of the New York Stock Exchange and sipping beer at the outdoor cafes of Stone Street.

They toured a two-room, 15th-floor condo at the Cocoa Exchange, on the market since October and discounted 10 percent to $439,000. They liked that the building was finished and occupied. They didn’t like the apartment’s size — 370 square feet — and decided not to buy.

“I’m pretty brutal in my offers, anyway,” Watkins said.

The owner took the unit off the market five days later even after accepting a bid in the “low fours”, Diamonde said, adding: “He was tired of people low-balling.”This article is courtesy of Bloomberg.

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