New York's Plaza Has Had Real Estate Challenges

You’d think that buying real estate in New York City is a good investment — and, for the most part, it is. Data from Redfin, for instance, shows the median sale price of townhouses in NYC rising over the last five years. And even in the midst of a challenging real estate market, this year has brought some tales of significant profits made from real estate sales.

They just don’t seem to be happening at the Plaza.

A 2008 New York Times article by Christine Haughney explored the aftermath of the Plaza Hotel’s temporary closure beginning in 2005, when some of its space became condos. Even after it reopened and the condos found buyers, something seemed a bit off. “Buyers have closed on nearly 100 apartments,” wrote Haughney. “Yet for the most part, no one is home.”

More than a decade later, some of those who did buy condos in the Plaza are feeling some buyer’s remorse. That’s one of the big takeaways from Kim Velsey’s reporting at Curbed, which chronicles a number of Plaza condo residents who have sold their eight-figure homes for a loss. “For many,” Velsey writes, “owning an apartment at the fabled hotel has meant losing money or at best breaking even on resale.”

The Plaza has a great location, a storied history and plenty of money invested in its transformation. What went wrong? Velsey notes that part of it is the way that it reopened at around the same time as 15 Central Park West, which seems to have done much better in terms of investment status. Some of that, Velsey writes, has to do with the Plaza’s landmark status, which put some constraints on how it could be renovated.

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Another factor playing into the Plaza’s troubles is the way it lost the luxury condo version of new car smell shortly after it opened. “There are buildings that maintain their value, like the Robert A.M. Stern buildings,” one real estate broker told Curbed. “But most other buildings have their day and that’s it.”

It’s a surreal development in the second act of an iconic Manhattan building. Still, apparently it’s not the only piece of high-end real estate in the area having trouble.