2 real-estate investors dish on why they think NYC's Billionaires' Row is not a good investment - and which luxury building they would consider buying in
- Billionaires' Row in New York City is known for having some of the most expensive residential real estate in the world.
- The set of supertall luxury skyscrapers south of Central Park has attracted wealthy buyers including Michael Dell and hedge-fund billionaire Ken Griffin.
- But two full-time real-estate investors say Billionaires' Row is not a good investment due to the surplus of inventory and other economic factors.
- Richard and Monica Weinberg of the Terrace Tower Group told Business Insider the best investments are walkable neighborhoods with smaller streets where New Yorkers want to live, like NoHo, the West Village, Tribeca, and Chelsea.
- If they did ever buy in Midtown, they would consider buying in 220 Central Park South on Billionaires' Row, where Griffin bought a $238 million penthouse in January.
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Billionaires' Row in New York City, an area surrounding 57th Street south of Central Park, has some of the most expensive real estate in the world. And the set of several ultra-luxury skyscrapers sprouting up there has already seen record-setting sales.
In 2014, Dell Technologies founder and CEO Michael Dell spent about $100 million on a penthouse in the One57 tower. And in January 2019, billionaire hedge-fund manager Ken Griffin dropped $238 million on a spread at 220 Central Park South.
But as the US luxury real-estate market cools, the super-pricey Billionaires' Row condos may no longer hold the same appeal as investment properties.
Despite interest from superrich tech CEOs and hedge-fund managers, Billionaires' Row is not the best NYC neighborhood to invest in real estate, according to two full-time real-estate investors.
Richard and Monica Weinberg of the Terrace Tower Group in Australia started investing in New York City about a decade ago, focusing on properties in the $2 million to $15 million range.
"I believe the best neighborhoods, streets within, and property is where a New Yorker would want to live," Monica told Business Insider. "I prefer a hyper-local approach, concentrating on neighborhoods that have interesting histories and [are] well positioned to provide for current housing demand and capture future growth."
According to the Weinbergs, Billionaires' Row doesn't fit that bill.
"From my perspective, I do not believe Billionaires' Row would make for a good investment," Monica said.
In Midtown, where Billionaires' Row is located, there's too much "traffic, noise, hassle, and retail," she said. "Midtown is great if you're in the city for a short while, but if I were to live there, I would most likely prefer the west side of downtown. The streets are smaller with a village feel and little pedestrian traffic."
Billionaires' Row has a glut of super-pricey condos in a slowing luxury real-estate market.
The ritzy area is a "tough micro market" due to an influx of inventory and other economic factors, the Weinbergs said.
There certainly is a surplus of inventory on Billionaires' Row, where at least eight luxury towers - recently completed or to be finished in the next couple of years - are trying to sell similar ultra-prime real-estate at the same time in the same area. As Curbed New York recently reported, more than 40% of the pricey Billionaires' Row condos remain unsold, and some have been on the market for years, according to real-estate appraiser Jonathan Miller.
The luxury residential market in New York City is seeing a slowdown, as Crain's New York Business reported in October, with one contributing factor being that wealthy foreign buyers are less willing to drop millions on ultra-prime Manhattan real estate.
And on Billionaires' Row in particular, many condos have been selling at significant losses, The Real Deal recently reported.
The best investment neighborhoods are downtown, walkable neighborhoods like NoHo, the West Village, Tribeca, and Chelsea, according to the Weinbergs.
"My personal preference is for Noho, West Village, Tribeca, and Chelsea," Monica said. "Perry, West 12th and Leroy streets are also perfect examples. These areas have shown relative strength during times of weakness."
In those neighborhoods, the streets are smaller "with a village feel," she added.
If the Weinbergs ever choose a Midtown building to invest in, however, they would probably choose 220 Central Park South, where Griffin bought a $238 million penthouse.
"220, much like 15 Central Park West, has the best location directly across the park that I would prefer if living there," Monica said.
220 Central Park South remains Billionaires' Row's best-selling building, with an estimated 80% of its condos sold or in contract.