"The New York Post" reports that "As many as 25 apartments in the world-famous Plaza are back on the market, with many owners struggling to sell their units in the problem-plagued building." The paper quotes a real estate agent as saying, "It's overwhelming. That's more than 50% of the residences that are for sale. I've never seen it happen before."
Yitzhak Tshuva owns the Plaza through Elad Properties LLC.
"The New York Post" says that relisted prices for condos at the Plaza range from $1.8 million to $50 million. Rent ranges from $5,800 a month to $75,000.
Elad told "Globes" in response, "The Plaza apartments are the most luxurious properties now available in New York. We're talking about the only property of its kind that meets the new global standard for luxury residences. Elad has sold 181 of the 182 apartments at unprecedented prices. The apartments were sold to sophisticated buyers, tycoons, and people with good taste who know how to appreciate the uniqueness of the property they bought. If one of the apartment owners has decided to sell, for any reason, that has nothing to do with Elad or the offers to sell given to buyers when they purchased the apartments."
Elad added, "As for single apartments that are now up for sale as new properties, we know that the asking price is substantially higher than the original sale price. The price of apartments at the Plaza in New York is not affected by the sale of apartments by their original owners and the value of the properties is unaffected, and even enhanced."
Last week, "The Wall Street Journal" reported that Russian billionaire Andrey Vavilov filed a lawsuit against Elad with the New York State Supreme Court. Vavilov is alleging fraud regarding the penthouses he bought at the Plaza for $53.5 million. He is seeking the refund of his $10.7 million deposit, plus $20 million in damages.
Vavilov, a Russian deputy finance minister under President Boris Yeltsin, alleges that Elad engaged in bait and switch, and made "unilateral and impermissible design changes", including lower ceilings, smaller windows, and smaller rooms than presented.
Elad attorney, Jay Neveloff, told "The Wall Street Journal" in response, "Its meritless allegations are aimed at camouflaging the purchaser's failure to meet his legal obligations to close" the purchase.
An opinion piece in "The Wall Street Journal" said that the lawsuit against Elad was an example of the high profile legal actions being taken across the US by luxury homebuyers who are forced to sell properties because of collapsing real estate values for properties they have bought or committed to buying. The paper believes that while the New York luxury condo market appears to be immune from the general housing crisis in the US, there are now signs that this is no longer the case.
Tshuva bought the Plaza for $675 million in 2004 and invested an additional $500 million in renovations.
Published by Globes [online], Israel business news - www.globes-online.com - on September 14, 2008
© Copyright of Globes Publisher Itonut (1983) Ltd. 2008