head scratching / penthouse at 6 East 1 St gets new price (as birthday present?)

a few things I know
I am going to express a lot of ignorance about developer pricing in this discussion of #5A at 6 East 1 Street, as there is much I don’t understand. But first, here is what I know (based on what I have been told): this penthouse unit is asking $6.9mm and $3,119/mo in a newly developed condo (Brick House Lofts), for “3,082 sq ft” of triplexed space with a huge terrace off the “middle” level and a roof terrace on top. I also know that it was first offered at $5.35mm 13 months ago, that they raised the price to an even $6mm in May, and just raised it again to $6.9mm.

Halstead’s Richard Orenstein also tells me (and you) this:

features grand-scale entertaining space with 12′ beamed ceilings, a wood-burning fireplace, enormous state-of-the-art chef’s kitchen, 3 bedrooms, 3.5 luxury baths + floor-to-ceiling glass doors which open onto magnificent outdoor space. The entire apartment is flooded with natural light exuding a Zen-like tranquility throughout.

I know from city records that the condo declaration was filed in January and the only sales in our system were #4A (“1,774 sq ft”, closed at $2.1mm, asking had always been $2.15mm) in June and #4B (“1,760 sq ft”, closed at $2.006mm, asking had always been $2.05mm) in July.

#5B is for sale, “1,900 sq ft” for $2.295mm, has pictures, and was also offered beginning 13 months ago, starting at $2.85mm. City records show four other residential units in the condo declaration, but I see no indication they have been offered for sale yet.

a few things I don’t know
But I don’t know what it looks like on the interior, as there are no pictures. And I read the floor plan as a duplex with roof terrace, rather than as a triplex, as I don’t see any living space on the upper level. Unless the space has not been completed, I don’t understand why there are no photos.

And I don’t understand the pricing strategy.

does developer want to sell?
If there is such a thing as Typical Developer Behavior, I thought that it involved setting original prices that generate sufficient profit (and perhaps a downside cushion), then selling to the first person willing to pay that price. In the absence of willing buyers, you drop the price (as happened with #5B, unsuccessfully so far) or accept a lower-than-asked price (as happened with both #4A and #4B). With many willing buyers, you raise the price. Then you take your money and put is elsewhere.

With #5A, they did not find a buyer at $5.35mm since before the condo declaration was filed. They did not find a buyer at $6mm beginning in May, after they had contracts for #4A and #4B. Yet they have raised the price again, to $6.9mm this week – a 15% increase over the last price and a nearly 30% increase over the original asking price.

What am I missing here??

© Sandy Mattingly 2007

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