$51M Foreclosure Signals Bad News in Luxury Market

NYC penthouse is the second multi-million dollar unit to go into foreclosure this month
By Gina Carey,  Newser Staff
Posted Jun 26, 2017 4:26 PM CDT
$51M Foreclosure Signals Bad News in Luxury Market
ONE57, New York City's news landmark building.   (PRNewsFoto/Extell Development Company)

Billionaire’s Row is having some major first world problems. According to CNBC, the owner of Apartment 79, a full-floor penthouse that spans more than 6,000 square feet and overlooks Central Park, has defaulted on the nearly $51 million home. The luxury apartment at One57 tower, located in a part of midtown nicknamed Billionaire’s Row, went into foreclosure and is up for auction in July. “It’s probably the most expensive foreclosure we’ve ever seen in luxury development,” Donna Olshan, president of Olshan Realty Inc., tells Bloomberg. The mystery owner purchased the apartment anonymously in 2014 for $50.9 million, later taking out a $35 million loan in 2015 from Luxembourg bank Banque Havilland that was scheduled to be paid within one year. When the deadline passed, the bank forced a sale.

The owners of Apartment 79 aren’t the only ones having trouble keeping up with their multi-million dollar home payments. According to the New York Post, this is the second luxury apartment at One57 to default this month. The luxury high-rise still boasts the most expensive residential sale in Manhattan, a $100.5 million dollar condo. But experts believe the recent defaults may signal a downturn in the luxury real-estate world. Per CNBC, units are now selling for 20% cheaper than when One57 opened in 2014 as the high-end market saw new development sales dip 25% in the last quarter. A surplus of luxury properties combined with fewer overseas buyers are thought to be causing the downturn. (More luxury real estate stories.)

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