Apollo Real Estate Trust Scales Back Expectations on Luxury NYC Tower


(Bloomberg) — Apollo Commercial Real Estate Finance Inc., a lender with debt tied to Manhattan’s 111 W. 57th St., wrote off a chunk of its loan and said it is dialing back expectations around how quickly units are sold at the luxury condo development on Billionaires’ Row.

“While there has been a modest pickup in foot traffic and buyer interest resulting in some active negotiations on a handful of units, the velocity of unit sales remains behind expectations,” Stuart Rothstein, chief executive officer of the Apollo trust, said on an earnings call with analysts on Tuesday. “We are still reasonably confident in what we’re seeing from a pricing perspective, and I think we’ve certainly dialed back expectations with respect to timing.”

Developers have struggled at times to fill some of the massive towers on Billionaires’ Row in Manhattan. Luxury residential sales in Manhattan were down nearly 40% in the second quarter from a year earlier, according to data from appraiser Miller Samuel Inc. and brokerage Douglas Elliman Real Estate. 

Corcoran Group, which is handling sales for 111 W. 57th St., said in a statement that the building is a “unique” offering with construction substantially complete and amenities finalized. 

“With a penthouse slated to close next week and several offers being negotiated, we’re seeing a lot of traffic to the building and the sponsor has been flexible to make more deals happen,” Pam Liebman, Corcoran’s CEO, said in the emailed statement. “Now that the market is starting to pickup, we’re well positioned to enter a strong fall selling season.”

The 111 W. 57th St. building has 60 residences and incorporates the original Steinway Hall building that was designed in 1925, as well as a newer tower. The skyscraper rises 1,428 feet (435 meters).

The Apollo trust said it wrote off the junior mezzanine B loan, resulting in an $82 million loss. 

Representatives for JDS Development Group and Property Markets Group, developers behind the building, didn’t immediately respond to requests seeking comment.

Shares of the Apollo trust dropped the most since the middle of March, falling roughly 10% to $10.60 at 3:23 p.m. in New York Tuesday. Rothstein said that the lender is confident in its reserves tied to the tower based on its estimates and conversations.

“We were certainly hopeful that there would be more velocity in terms of the number of units that would be signed,” Rothstein said on the call. 

–With assistance from Jennifer Epstein.

©2023 Bloomberg L.P.

Sign up to receive the best Underground art & real estate news in your inbox everyday.

We don’t spam! Read our privacy policy for more info.

This post was originally published on this site be sure to check out more of their content.