Posted by Leonard Steinberg on November 18th, 2011

Last night I attended the auction of a park facing apartment at the Grand Madison located at 225 Fifth Avenue once owned by an ex Credit Suisse employee whose new home is a lot less elegant….

The 9th floor, approximately 1,600+sf apartment featuring 2 bedrooms and substantial south-facing frontage (about 50ft)onto Madison Square Park was auctioned off fully furnished with a significant B+O system included. Behind the (rather dirty) windows was an impressive view featuring the Flatiron building and other New York landmarks. The winning bid was $ 2,75million, almost $ 500,000.00 below the most recent sale of an identical apartment above this……but throw in the 6% buyers premium, the transfer taxes and some money needed to renovate the apartment and you are over $ 3million. Not the best price I thought, but then it is an auction and real estate auctions have proven to usually give buyers a good discount in New York. But then, a bank ruled this sale, so what do they care, right?

The bad news is I feel strongly a thorough, regular market sale would probably have produced a higher price. The good news is the price is far from being a bargain and the (at least 2 dozen) bidders hoping to buy this place for under $ 2,5million were disappointed….more importantly, the volume of bidders proves that Manhattan real estate has an automatic safety net of vulture buyers with deep pockets built in to prevent massive  pricing declines. That’s great news.