What’s Next For the Plaza Condos?

NEW YORK CITY-After closing its doors in 2005 and converting into residential condominiums, things haven’t been easy for the Plaza. But earlier this week, The Wall Street Journal reported that two adjoining condos at the iconic building at 59^th Street and Fifth Avenue were sold for $19 million, signaling new activity at the site.

Tom Elliott, EVP of sales and marketing for developer El-Ad Properties, tells GlobeSt.com that the recent sale reinforces “enduring value” of the Plaza’s private residences, which start at $2.5 million. And from a macro view, Stuart Saft, global chair of real estate for international law firm Dewey & LeBoeuf, who serves as board attorney for the Plaza Condominium, tells GlobeSt.com that he predicts more transactions at this level inside the building, which includes 180 units of private residences and 152 units of hotel condominiums.

“It is more than just an investment and it is more than just a home,” Saft says, explaining that the overall softness in the luxury condo market is finally beginning to lift. “It’s also a very unique property.”

In the three or four years since the condominium closings occurred, the board has been working to improve the operation of the landmarked building by bringing in new staffing and investing in exterior and interior renovations, Saft says. Before El-Ad converted the building from hotel to residential usage, the developer invested $450 million in restorations and upgrades.

However, the WSJ article notes that the 100-year-old building faces competition from the 105-unit One Beacon Court at East 58^th Street and the 102-unit 15 Central Park West on the Upper West Side. But with the latest $19-million condo resales, Saft anticipates more volume.

“It’s difficult to compare a landmarked building with a reputation that goes back decades, with appearances regularly in movies and a building on which stories have been written, to two buildings that were constructed in the last decade, which are modern buildings, but don’t have the same panache as a landmark,” he says, explaining that in terms of buying, turnovers are happening slowly but surely. According to StreetEasy.com, 121 sales have been completed, 22 sales are active and six are in contract here. “This sale, although at a terrific price, is not where the pricing is going to stop,” Saft says. “It will continue going up because there are relatively few of these apartments available. As they become available, you will see higher and higher prices in order for people to get this level of quality.”