Final sponsor unit at 550 Vanderbilt, Penthouse East, now listed for $4.75M, 5% below previous price, 18% below offering price.
As I wrote last May, with all but one of the 278 units (which include a super's apartment) finally sold, the developers of 17-story 550 Vanderbilt (B11), the only condo building so far in the Atlantic Yards/Pacific Park project, finally put Penthouse East back up for sale.
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| From StreetEasy |
Last month, as shown in the screenshot at right, the price was lowered to $4,750,000, a 4.9% cut from the previous listing and an 18.2% reduction from the original price.
The unit was built by Greenland Forest City Partners, with Greenland USA having a 70% share in the building. Later, after the joint venture built three towers, Greenland bought out all but 5% of original developer Forest City Ratner's interest in the remaining project going forward.
Looking at the number
A sale for $4,750,000, not counting transaction expenses, would yield $3,325,000 for Greenland USA and $1,425,000 for the remnant of Forest City, now part of Brookfield Asset Management. Pre-sales for the 278-unit building (with one super's unit) began in June 2015, for an anticipated 2017 opening.
The sell-through in the June 2015 Offering Plan was $388,570,000, so this unit, at the offering place, would've been nearly 1.5% of the total.
A huge tax break
Monthly taxes, highlighted in the above screenshot (in the bottom left corner), are initially estimated at $94. (That number might be adjusted upward to account for the years since the building's 2017 opening.)
The 421-a tax break was expanded for this building thanks to a questionable, if legal, maneuver.
According to the excerpt below from the Offering Plan, owners of PHE--first in the list of three penthouses at the bottom of the list--would have had to pay $3,585.38/month and $43,024.55/year without the initial 15-year tax abatement, as shown in the red column.
Instead, as shown in the pink column to the left, that 15-year abatement lowered taxes to $2,674.11/month and $32,089.29/year. That's a 25.4% annual discount. But that was too little.
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| 2015 Offering Plan--initial abatement |
As I reported in 2017 for City Limits, the developers were somehow able to pair this building with the distant--separated by two parcels--535 Carlton "100% affordable" building into a single affordable project, thus gaining a more significant 25-year tax break.
As shown in the excerpt below from the September 2021 document, the extended tax break meant PHE was estimated to pay just $94.19/month, and $1,130.28/year.
That's an enormous discount: 97.4% off the estimated annual $43,024.55/year without any abatement, and 96.4% off the initial abatement of $32,089.29/year. That significantly lowers the cost of ownership.
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| September 2021 estimate |
550 Vanderbilt is the first residential building to open in Pacific Park Brooklyn, the revolutionary new Frank Gehry designed 22-acre project coming to Prospect Heights. Through the masterful vision of COOKFOX, 550 Vanderbilt offers the inaugural opportunity to live and own in New York’s newest park. With 350,000 square feet dedicated entirely to park space, children’s play areas, open lawns, basketball courts, dog runs, and more, this is unlike any living experience New York has ever seen.
That is not close to true, on several counts, as I previously wrote.
The first residential building to open was 461 Dean Street (B2), a rental building, in November/December 2016. The first closings at 550 Vanderbilt didn't surface until March 2017, and that preceded move-ins.
Gehry is responsible for the master plan, but he did not, of course, end up designing any of the buildings.
"New York's newest park"? Well, the full 8 acres of open space, especially the section bordering 550 Vanderbilt to the north, won't exist until the project is finished, and that requires covering two blocks of the railyard.
There's been only incremental progress, on that southeast block. So stay tuned to see if "Pacific Park" ever happens.
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