Bill Ackman’s $90 million ‘One57’ Luxury Apartment Flip Slowing Down With Increased Empty Apartments Around It

Bill Ackman is an American Hedge fund manager, who is the founder and CEO of Pershing Square Capital Management. Ackman’s firm had a very successful 2014 with more than 25% returns in first half of the year. He is well known for some bold decisions like the investment in Allergan, Inc. (NYSE:AGN), betting on Valeant Pharmaceuticals Intl Inc (NYSE:VRX) to take over Allergan and effect a surge in Allergan’s stock, which turned out as he planned and returned big. In another bizarre move he is planning to flip a condominium in Manhattan, on which Ackman and a group of investors have invested $90 million. CNBC’s Frank Robert reported about this on CNBC.

Robert reported that Bill Ackman and a group of investors bought a penthouse, ‘one57’ in midtown Manhattan for $90 million almost a year ago. ‘one57’ is a 1000 ft tall luxury tower, which Ackman claims in a NY times interview to be ‘Monalisa of Apartments’. Ackman made his intentions clear that he and his family are not planning to relocate from their current residence at The Beresford. But he plans on flipping the 13,500 sq.foot apartment to gain some profits.

“Someday someone will want it and they will let me know,” Robert quoted Ackman’s comment about the apartment.

Robert mentioned that the problem with ‘one57’ is that there are many other such luxury apartments propping up in Manhattan ready to go on sale. So he thinks that the ‘one57’ demand might start falling down due to other similar apartments around. He pointed at filed loan documents which showed that only two ‘one57’ units were sold in first half of 2014. He mentioned that at this rate it might take another 6 years to sell it completely.

Robert mentioned that there are half a dozen similar luxury towers, very similar to ‘one57’ coming up in Manhattan, which target the wealthy overseas customers. But the weaker economic growth around the world is slowing the sales of these apartments. He added that Manhattan Luxury development prices fell by 8% in Q3 with inventory doubling compared to the previous year.

Robert mentioned Extell Development Company’s President, Gary Barnett’s comments that the increasing competition slows down the sales at ‘one57’. Robert added that the empty apartments may make it difficult for Bill Ackman to complete a $100 million flip.

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