Stephen G. Kliegerman
President of Development Marketing
By CRAIG KARMIN
An executive at a top-performing New York hedge fund is aiming to combine three recently purchased units at the Apthorp into one of Manhattan's largest single-floor apartments.
Jon Pollock, senior portfolio manager at Elliott Associates, closed earlier this month on his third ninth-floor apartment at the 102-year-old landmark building on the West Side, according to people familiar with the matter. Merged into one apartment, the three units would represent nearly 8,500 square feet, or about as much floor space as an entire 25-foot wide, five-story townhouse.
The purchase represents some rare good news for a storied property that has struggled to build sales momentum. Sales of only 20 condos in the 163-unit building have closed and prices for some have been around half the offering levels. Buyers have signed contracts for another 16 units but haven't closed.
Mr. Pollock paid nearly $14 million total for the three units, roughly half the $28 million asking price. He paid more than $2,000 per square foot for the third unit, which is the Apthorp's most expensive sale on a price-per-square-foot basis. All three units are in poor condition and will have to be or already have been gutted, according to people who have seen them.
Mr. Pollock declined to comment. His firm, Elliott Associates, is considered one of the better-performing hedge funds in the country, with more than $17 billion in assets. The fund was down only 3% in 2008, a year when many established funds had losses approaching 20% or more, and Elliott outperformed most of its peers last year with a 30% return.
Real-estate brokers said the Apthorp deal is a sign of strength in the high-end apartment market.
A 10,000-square-foot penthouse co-op apartment at the Mark may be the only currently listed property that offers a larger contiguous floor-plan, says Steve Kliegerman, executive director of development marketing for Halstead Property. "It also shows some confidence in the recent conversion of the Apthorp," he says.
The conversion of the Apthorp to condos from rental apartments has turned into a long-running real-estate saga. The property, which occupies a full block between Broadway and West End Avenue and West 78th and 79th streets, was built in 1908 by the Astor family for the city's elite. Famous for its grand courtyard and arched limestone entrance, the building has attracted a number of celebrity residents, including Al Pacino and Nora Ephron.
The Apthorp was sold near the peak of the market for $426 million, one of the highest prices ever paid for a rental building.
The New York attorney general's office in May accepted the Apthorp's plan to convert rentals to condominiums. In July, the Apthorp's developer, a group led by Africa Israel USA, and the primary lender, Anglo Irish Bank, restructured the debt on the property.
But the story continues: Last week, the office headed by Andrew Cuomo said it is gathering information about the agreement reached between Africa Israel and Anglo Irish to determine if the parties need to disclose it to potential buyers.
Under the arrangement that the attorney general is reviewing, Anglo Irish agreed that the developers would be able to use sales proceeds of up to $130 million toward the renovation and operation of the building. The parties also agreed to extend the loan for three years. The developers owe Anglo Irish $323 million for the mortgage loan.
The new agreement completed last month also contains provisions to protect the lender if the project runs into financial problems again. If the building has not met certain sales targets within three years, the developers would be in default and the lenders would be able to use an accelerated foreclosure process to take control of the unsold apartments.
—Jenny Strasburg contributed to this article.
Tuesday, August 24, 2010