A number of super-rich New Yorkers are leaving one of the Big Apple’s most luxurious skyscrapers amid allegations the building doesn’t live up to its high-value billing.
432 Park Avenue, a 1,396-foot tower on Manhattan’s Billionaires’ Row, is facing an ongoing lawsuit from its condominium board over alleged faulty elevators, leaking plumbing and noise issues.
Real estate brokers told the Wall Street Journal that the lawsuit may be playing a role in a number of uber-wealthy residents looking to leave, even if it means taking a multi-million-dollar loss.
Realtor Nikki Field, a luxury agent for Sotheby’s International Realty, told the outlet: ‘The truth is that we’ve been avoiding the building.’
432 Park Avenue, a 1,396-foot tower on Manhattan’s Billionaires’ Row, has seen a number of uber-rich residents take losses to sell their apartments
When it opened sales in 2013, the luxury skyscraper attracted famous residents including singer Jennifer Lopez
The lavish skyscraper made waves in the New York City real estate world when it first opened sales in 2013, and for a short time it was the tallest residential building in the Western Hemisphere.
It attracted a number of famous faces and moguls looking to live in the status symbol, including singer Jennifer Lopez and Saudi retail and real-estate magnate Fawaz Al Hokair, who bought the penthouse in 2016 for $87.66 million.
But residents reportedly complained of a number of issues after moving in, including rumors that high-altitude apartments would sway and creak over the city below.
Field said that she hasn’t taken any potential buyers to the tower due to the alleged issues, as she questioned: ‘How can I advise my buyers to take that risk, and then expect them to work with me again if it goes bad?’
One potential buyer, billionaire tequila mogul Juan Beckmann Vidal, made headlines in 2021 when he was in contract for a $46.25million apartment on the 86th floor in 2016 when a ‘catastrophic water flood’ caused major damage to units on the 83rd, 84th, 85th, and 86th floors.
The lawsuit was filed that year, and has since seen 28 different witnesses give at least 45 days of deposition testimony, creating a reported 4 million pages of court documents.
The skyscraper’s developers denied the allegations to the Wall Street Journal and said the claims were ‘an effort to wrest unwarranted payments.’
The building’s sponsor CIM Group added in a statement that the lawsuit created a ‘false narrative’ and was ‘inaccurately disparaging.’ The company did not immediately respond to a request for further comment from DailyMail.com.
Among those who have taken a loss to sell their apartments is billionaire financier Thomas Peterffy (pictured), who sold his 84th floor home for $13.5 million, almost $8 million less than the $21.39 million he paid for it in 2016
The view from Jennifer Lopez’s former home, which she bought in 2018 for $15.3 million before selling a year later for $17.5 million
Amenities in the tower’s multi-million-dollar apartments include private pools, gyms, and a residents-only Michelin Star restaurant
Among those who have taken a loss to sell their apartments is billionaire financier Thomas Peterffy, who sold his 84th floor home for $13.5 million, almost $8 million less than the $21.39 million he paid for it in 2016.
An unnamed owner of a 50th floor, three-bedroom apartment recently put their unit on the market for $17.5 million, despite paying $18.93 million for it in 2016.
Another home was also recently bought directly from the developer for $12.3 million, almost a third less than its original listing of $18.25 million.
The penthouse is also up for grabs, with Hokair currently asking for $105 million after he previously put it on the market for $169 million in 2021. He bought it in 2016 for $87.66 million.
And since the lawsuit became public in 2021, 11 apartments have been sold from the building, which on average sold for 3.7 percent less than their original sale prices.
Among the units that were publicly listed, they sold for a staggering 27.4 percent less than their highest asking price, the WSJ found through property records.
In that time, prices in Manhattan’s luxury real estate market rose by 11.3 percent from the first quarter of 2020 to the first quarter of 2024, potentially telling over the impact the lawsuit had on 432 Park Avenue’s fortunes.
There are currently 18 apartments for sale through the building, leaving it 14 percent vacant while owners would typically see that number in the single figures.
‘That’s double the normal market share of listings that we usually see,’ warned Jonathan Miller of realty firm Miller Samuel, adding that number is ‘something to be concerned about.’
The building is still among the most lavish in the Big Apple, with Gaëlle Pereira Benchetrit (pictured) and her husband, media executive Yossi Benchetrit, recently splashing $70.5 million for a second unit in the building
The Benchetrits sold their lower-level apartment (pictured) for $30.5 million so they could move to a higher, larger unit – a sign that realtors say shows that 432 Park Avenue still has clout
While 432 Park Avenue has seen some residents flee, realtors say it still has significant pull in the Big Apple real estate market.
One particular sale that made waves was in the spring of 2022, when media executive Yossi Benchetrit and his wife Gaëlle Pereira Benchetrit snapped up a much sought after 82nd floor apartment.
The couple paid a staggering $70.5 million for their main home, alongside two smaller units for their staffers – after the unit was originally on the market for $90 million.
They are selling their lower-floor apartment for $30.5 million, as realtor Shari Scharfer Rollins said the lavish building reeled them in.
‘They just couldn’t leave 432,’ she told the WSJ. ‘When you’re outside the building, you can poopoo it…but when you walk in, there’s magic.’
The supertall skyscraper raised eyebrows when its design was unveiled over a decade ago
In a statement to DailyMail.com, CIM Group and the building’s sponsor slammed the lawsuit as ‘misguided.’
‘The Board’s lawsuit, filed in September 2021, has always been misguided, creating a false narrative and inaccurately disparaging the building,’ the statement read.
‘Three years of litigation have demonstrated that the complaint is full of falsehoods and hyperbole. That said, in recent months, the parties have engaged in productive settlement discussions, including a meeting in March 2024 attended by more than two dozen attorneys, principals, and consultants.
‘These settlement talks were beginning to provide paths forward toward resolution for the benefit of all parties, most of all the 432 Park Unit Owners.
‘Unfortunately, these settlement talks have ceased since the Board’s recent change in counsel. While Sponsor has tried to maintain the momentum from early 2024, the Board and its counsel now appear to be more interested in pursuing claims that its own experts have stated have no merit.
‘The Board’s effort to extract monies to which it is not entitled continues to drive substantial litigation costs for all parties, and further harms the 432 Park Unit Owners by perpetuating a false narrative about the building that can only destroy value. In reality, 432 Park is Manhattan’s premier residence, the result of hiring a world-renowned architect, best-in-class builder, and innovative and experienced engineers.
‘It delivers the finest level of service, world-class amenities, and state-of-the-art technology, and is an iconic addition to the New York skyline.
‘Sponsor believes that the Board and its attorneys misunderstand Sponsor’s obligations and that its lack of understanding is doing a terrible disservice to 432 Park and all its stakeholders.’
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Read more at DailyMail.co.uk