Singapore-based Alpha Investment Partners has agreed to buy out its partner’s stake in a luxury condo project in Manhattan’s Upper East Side just over three years after the joint venture began selling homes.
The private fund management division of Keppel Capital is purchasing Macklowe Properties shareholding of 200 East 59th Street for an undisclosed amount in a transaction that makes the Singapore firm the sole owner of the property some five years after teaming up with the New York developer to invest $70 million into the condo project, according to Keppel Capital representatives.
“We have discussed with our partner and agreed that Alpha Investment Partners is the best steward for this property,” a Keppel Capital spokesperson told Mingtiandi.
The move comes as the average sales price for Manhattan apartments fell 22 percent in the third quarter of this year, compared to the same period in 2018, the steepest decline since the 2008 financial crisis, according to a report by real estate consultants Miller Samuel.
$15.75M Penthouse Penthouse Remains Unsold
According to its promotional website, there are still seven units remaining unsold in the 35-storey tower at an average price of just over $6 million. Sales of the mostly one and two bedroom units in the CetraRuddy-designed building were launched in October 2016, according to local media accounts.
Located across the street from the Bloomingdale’s department store where 59th Street intersects Third Avenue and 13 minutes’ walk from the Central Park Zoo, the 132.7 metre (435 foot) tall tower contains 67 apartments across 99,848 square feet (9,276 square metres) of residential space, with another 18,000 square feet of retail.
The building’s proximity to the city’s zoo inspired a pre-sales launch commercial for the property last year featuring computer-generated zoo animals, including a tiger in a bowler hat, after Harry Macklowe, the founder of Macklowe Properties, had commented that the apartments were big enough to accommodate an elephant.
The cheapest unit remaining is a 182 square metre two bedroom apartment on the eighth floor with a 51 square metre terrace, which is listed at $3.8 million.
At the other end of the scale, a 475 square metre penthouse on the thirty-second floor with three bedrooms and a 110 square metre terrace also remains available at $15.75 million.
The property is a twenty minute walk from the Rockefeller Centre in the Midtown financial district, while the Lexington Avenue 63rd Street subway station is within five minutes’ walking distance. Hipster favourite Long Island City is one stop away on the subway.
Macklowe Selling Up After Divorce
Alpha Investment Partners entered the partnership with Macklowe Properties to build the project in July 2014, after Macklowe had paid $86.7 million for the site earlier that year, according to public records.
Harry Macklowe is divesting his stake in the project after a contentious divorce saw the 82 year-old real estate tycoon part with half of his fortune.
Followed closely by the New York tabloids, the protracted breakup made headlines eight months ago when Macklowe draped a 42-foot high poster of himself with his new wife on the facade of a property he owns on Park Avenue.
New York Home Prices Taking a Hit
Alpha’s buyout of Macklowe’s stake comes as Manhattan’s high-end condo market struggles through tough times. The chief executive of real estate company Douglas Elliman, Howard Lorber, said in a CNBC interview last month that a glut of apartments – particularly luxury – coming onto the market is causing a softening of prices across New York.
The average sales price for an apartment in New York City fell to $961,048 in the third quarter of 2019, an 8 percent drop from the $1 million average the year before, according to a third quarter report for brokerage Miller Samuel.
In the borough of Manhattan, the average sales price of apartments fell to $1.7 million in the third quarter, down from $2 million for the same period in 2018.
Alpha Ramps Up Resi Portfolio
Alpha Investment Partners, which operates as part of Singaporean conglomerate Keppel Corp, is deepening its investment in Manhattan at a time when most of its activity is focused on Asia.
Just a month ago, the fund manager entered into a joint venture to invest €1 billion ($1.1 billion) to acquire a Beijing commercial complex from D&J China.
The joint venture took an 85 percent stake in the six grade A office towers and two retail podiums that make up the complex, while the Warburg Pincus-backed developer retained 15 percent.
In April, the Korean branch of Alpha’s parent firm, Keppel Capital agreed to purchase a trio of office buildings in Seoul for KRW 430 billion ($370.5 million).
The acquisition was made through Alpha Asia Macro Trends Fund III (AAMTF III), which is managed by Alpha Investment Partners.