432 Park Avenue
432 Park Avenue is a residential skyscraper at 57th Street and Park Avenue in Midtown Manhattan, New York, overlooking Central Park. The tower was developed by CIM Group and Harry B. Macklowe and designed by Rafael Viñoly. It features 125 condominiums as well as amenities such as a private restaurant for residents. 432 Park Avenue sits on Billionaires' Row and has some of the most expensive residences in the city, with the median unit selling for tens of millions of dollars.
432 Park Avenue is located on the site of the former Drake Hotel, which was sold to Macklowe in 2006. The project faced delays for five years because of lack of financing as well as difficulties in acquiring the properties on the site. Construction plans were approved for 432 Park Avenue in 2011 and excavations began the next year. Sales within 432 Park Avenue were launched in 2013; the building topped-out in October 2014 and was officially completed in 2015. The structure includes seven 12-story-tall segments with residential units. Each segment is separated by a two-story-tall section without any windows or interior space, allowing wind gusts to pass through the building.
At the time of its completion, 432 Park Avenue was the third-tallest building in the United States and the tallest residential building in the world., it is the thirty-first tallest building in the world, sixth-tallest building in the United States, the fifth-tallest building in New York City, and the third-tallest residential building in the world.
History
Macklowe acquisition and financial crisis
The 21-story, 495-room Drake Hotel had been constructed in 1926 at the corner of Park Avenue and 56th Street. In January 2006, the hotel's owner, Host Hotels & Resorts, was intending to sell the property "in the mid-$400 million range", primarily marketing the site with the prospect of replacing the aging hotel with a mixed-use skyscraper. Developer Harry Macklowe purchased the Drake in 2006 for $418 million.Following his acquisition of the hotel, Macklowe paid French delicatessen company Fauchon $4 million to shorten the terms of their lease on the ground floor of the Drake Hotel and vacate in April 2007 instead of 2016. Shortly after the agreement was reached, Fauchon sued Macklowe in New York Supreme Court claiming that the developer was harassing the store to leave by blocking their entrance with scaffolding and threatening to cut off air conditioning and access to the hotel's bathrooms.
In April 2007, Macklowe purchased the Buccellati store at 46 East 57th Street for $47.5 million. This followed Macklowe's purchase of the Audemars Piguet store at 40 East 57th Street for $19.2 million, the Franck Muller store at 38 East 57th Street for $60 million, as well as 44 and 50 East 57th Street for $41 million. Following over 14 months of negotiations, Macklowe also had to pay Audemars Piguet $16.6 million to end their lease early and move across the street to 137 East 57th Street. The total cost of additional nearby parcels and air rights brought the acquisition cost to over $724 million and yielded a large L-shaped site between 56th and 57th Streets. In early 2007, Macklowe Properties secured a $543 million mortgage from Deutsche Bank on the site. Macklowe was said to be planning a 65-story Armani-branded tower that would consist of three stories of retail, offices until the 20th floor, topped by a 10-story hotel and 33 floors of residential space.
Additionally, Nordstrom had signed a letter of intent to open their first New York store, a flagship, at the building's base. Macklowe had been in contract to purchase the Turnbull & Asser storefront at 42 East 57th Street for $33 million but the company's owner executed a call option in the store's lease to allow him to buy the building for $31.5 million instead. Jacob & Co's founder Jacob Arabo also demanded $100 million for the store's building at 50 East 57th Street, a price Macklowe was unable to pay. These holdouts meant Macklowe was unable to connect the other buildings he owned on East 57th Street, depriving Nordstrom of the space needed for the store's ground floor entrance. Nordstrom also reportedly required a ceiling, which was not feasible at the site. This caused Nordstrom to back out of the deal and instead open their flagship in Central Park Tower several blocks west on 57th Street.
In October 2007, the New York City Department of Buildings issued demolition permits for the site; at the time, the demolition cost was estimated at $6 million, or roughly. During the financial crisis of 2007–2008, Macklowe defaulted on the Deutsche Bank loan which was due in November 2007. In October 2007, Harry Macklowe personally repaid $156.3 million of Macklowe Property's debt on the site, bringing his personal investment in the project to over $250 million. The repayment included $38 million of mezzanine loans with a 15% interest rate that were held by Vornado Realty Trust. In May 2008, hotelier Kirk Kerkorian and investment company Dubai World reportedly considered purchasing the site for $200 million in addition to assuming the existing debt on the property.
The bank sued in August 2008 to begin foreclosure on the loan and take control of the development site. Deutsche Bank had divided the loan into 21 tranches and sold much of the debt to ten different investors including Highland Capital Management and Sorin Capital Management, earning tens of millions of dollars in fees. The bank retained just $12 million of the loan on its own balance sheet. During the height of the recession in November 2008, one of the investors, iStar Financial, was unable to find any buyers for its $224 million tranche of the debt for $160 million, representing just over 71 cents on the dollar. Initially, over 20 bidders were believed to be interested including Apollo Global Management, The Related Companies, and Silverstein Properties. Only a half-dozen bidders eventually offered between $100 million and roughly $130 million, or 45 and 58 cents on the dollar respectively.
Paul Manafort and CMZ Ventures
In late 2007, Joseph Sitt, founder of Thor Equities, introduced Macklowe to an investment firm named CMZ Ventures. The letters "CMZ" represented Arthur G. Cohen, a New York real estate developer; Paul Manafort, a former lobbyist, political consultant, and lawyer; and Brad Zackson, a frequent partner of Manafort and Fred Trump.In 2008, CMZ Ventures agreed to pay $850 million for the development site which would fully pay off the Deutsche Bank loan and represent a small profit on top of Macklowe's total acquisition price. In fact, the purchase price was higher even than the appraised value of $780 million, a premium of over 10% which was unheard of for development site purchases. The partners wanted to build a 65-story building with a Bulgari-branded luxury hotel, condominiums, a private club, and a vertical mall. In late 2008, Dmytro Firtash, a Ukrainian natural gas oligarch and alleged associate of Russian organized crime, agreed to fund $112 million in equity and paid Manafort a deposit of $25 million. The deposit was wired from a Raiffeisen Zentralbank account that U.S. officials alleged was a front for Russian organized crime "boss of bosses" Semion Mogilevich. Manafort had met Firtash while consulting for the pro-Russia Party of Regions, at the time the ruling political party in Ukraine. French fund Inovalis also agreed to arrange another $500 million of equity for the project from various backers. Ultimately, the bid fell apart when CMZ could not arrange the necessary financing.
In 2011, the former pro-European Union prime minister of Ukraine, Yulia Tymoshenko, alleged in the United States District Court for the Southern District of New York that Firtash violated the Racketeer Influenced and Corrupt Organizations Act. Specifically, Tymoshenko stated that Firtash had used CMZ as a front organization for funds that he skimmed unlawfully from RosUkrEnergo, the natural gas company that he jointly controlled with Russian state-owned enterprise Gazprom. Tymoshenko also alleged that Firtash planned to use the money for political purposes, rather than as a real-estate investment; specifically, she claimed that the money would go to help her opponent, Victor Yanukovych, a pro-Russia politician who became Ukraine's president in 2010.
Another CMZ Ventures investor was Oleg Deripaska, a sanctioned Russian oligarch and leader of the world's second-largest aluminum company Rusal. Deripaska agreed to invest $56 million into 432 Park Avenue through an investment fund named Pericles which was managed by Rick Gates, a Manafort partner who has since pleaded guilty to conspiracy against the United States and making false statements in the investigation into Russian interference in the 2016 United States elections.
CIM Group investment
In January 2010, developer CIM Group agreed to pay $305 million for the complete development site including 434 Park Avenue and 38, 40, 44 and 50 East 57th Street while keeping Macklowe involved as a partner. The investment by CIM allowed Macklowe to repay the senior-most tranche 90 cents on the dollar while the junior-most tranches were completely wiped out. At the time, the site was considered one of New York's most valuable due to its location between East 56th and 57th Streets on the west side of Park Avenue. Citigroup's private banking arm raised an additional $415 million in equity for the project from high-net-worth individuals who invested $1 million to $5 million each. Another $100 million in equity came from CIM's existing institutional investor clients. Following the investment, CIM continued to expand the development site, purchasing 46 East 57th Street for $42.5 million in January 2011.CIM and Macklowe were sued by Franck Muller in September 2010 after the company tried to evict the watch retailer from their space at 38 East 57th Street that Macklowe had purchased several years earlier for over $60 million. The building was master-leased to a real estate investment company, Sovereign Partners, who in turn had subleased the ground floor and mezzanine space to Franck Muller until 2018. CIM and Macklowe had purchased that master lease for $5.35 million in November 2008, making a CIM-owned company Franck Muller's new landlord. Subsequently, CIM and Macklowe had the building reappraised by Cushman & Wakefield who determined that the fair market rent for the space was $1.4 million per year, higher than the rent initially agreed to by Sovereign Partners. However, the CIM-owned company that had purchased Sovereign Partner's lease failed to pay this increased rent, leading to an event of default under the lease and allowing CIM and Macklowe to begin the eviction process. Franck Muller objected, claiming that CIM was essentially choosing not to pay itself the increased rent and manufacturing an excuse to evict the CIM-owned master lessee and in turn Frank Muller, the sublessee. In October, a New York Supreme Court ordered the case be determined through arbitration instead.
The developers received a $30 million mortgage from Pacific Northwestern Bank on the site in early April 2011. Later that month, CIM filed dummy permits for a 5-story office building in order to begin excavation work on the site and by the following month had hired Rafael Viñoly to design the new tower. Macklowe, speaking at a real estate conference in New York, claimed the building would be "monumental" and a "capstone" to his career. In October, plans were revealed for a tall condominium tower on the site using the address 432 Park Avenue. Previously, CIM had reportedly considered using the building's lower floors as a luxury hotel similar to nearby One57 and spoken to operators including Mandarin Oriental Hotel Group, Taj Hotels, and One&Only Resorts. The next month, CIM purchased Turnbull & Asser's storefront at 42 East 57th Street for $32.4 million and concurrently sold the nearby 50 East 57th Street to the clothier for $31.5 million, allowing CIM to expand their development site and Turnbull & Asser to remain on the same block. In December 2011, LVMH reportedly considered investing in the site for an expansion of the company's "Cheval Blanc" luxury hotel chain, creating a campus with the company's nearby LVMH Tower.
Construction
Excavation for the building's foundations began in early 2012. In March, CIM filed plans for the full building, revealing its 82-story, height. The New York City Department of Buildings issued the construction permit two months later. By September 2012, the building's concrete foundation had been completed and the tower crane had been installed. The building passed street level by the end of the year. As construction progressed, 432 Park's developers raised asking prices for the building's units several times. A brochure in June 2012 indicated that units would cost, but that rate had increased to by September 2012. By March 2013, asking prices had reached.The project's second crane was installed in early 2012. In October 2012, the development also received $400 million in construction financing from hedge fund The Children's Investment Fund Management. The construction loan carried a low loan-to-value ratio of under 40% but an unusually high interest rate of over 10% per year. However, the loan was also nonrecourse meaning that the lender could not go after CIM or Macklowe's other assets if they defaulted on the construction loan.
Construction was temporarily halted in February 2013 after crews damaged a neighboring building and the Department of Buildings gave the project several safety violations. Though work resumed within the month, a worker was injured in an on-site construction accident that March, when a piece of wood dropped from the fifth floor. In mid-2013, developers filed a revision to the plan to add another floor. This was achieved by converting the formerly double-height 95th floor into two separate stories of standard height.
Also in March, sales officially launched from an office at the nearby General Motors Building, with units being listed at between $20 million to $82.5 million apiece. At the time, the developers claimed more than a third of the building's units were already under contract. To assist with marketing, Macklowe spent $1 million on a four-minute film that would air exclusively in the sales center. The film, directed by Danny Forster and filmed at Silvercup Studios, follows a young woman leaving her English country house in a 1957 Rolls-Royce and taking a Learjet to her new home at 432 Park Avenue. The film also featured famed French high-wire artist Philippe Petit dangling from a helicopter, music by Cass Elliot, references to Mies van der Rohe’s Barcelona Pavilion and the Pantheon, and depictions of King Kong, Le Corbusier, Al Capone, and Anna May Wong.
432 Park Avenue passed the mark in June 2014. The topping out ceremony was held on October 10, 2014, signifying that the building had reached its maximum height. 432 Park Avenue was nearly completed in January 2015 when work was temporarily halted again after another construction accident. In November 2015, Macklowe added a team from brokerage Douglas Elliman to supplement the developer's internal sales team tasked with selling the tower's units. By early 2016, several websites reported that 432 Park had been officially completed on December 23, 2015.
Post-opening
In June 2016, Macklowe Properties agreed to pay $411.1 million to acquire the building's retail component from CIM. Several months later, it was announced that boutique watch store Richard Mille would occupy part of the ground-floor retail space. The, two-story store opened in October 2018. At the time, Richard Mille was the only retail tenant. Two months later, auction house Phillips signed a contract for retail space, consisting of at the base of the building, as well as underground, with plans to move into the space in May 2020. By the end of 2018, John Barrett also agreed to open a salon on the building's second floor and boutique perfumery Amaffi leased on the ground floor. Joanne Podell, broker for Cushman & Wakefield, stated in 2019 that she had to promise lower rents in order to attract retail tenants.In 2016, Linda Macklowe filed for divorce from Harry Macklowe. As part of the divorce proceedings, she filed a lawsuit in September 2017 claiming that Harry illegally shrunk a condo on the building's 78th floor that Linda had agreed to purchase for $14.4 million. The couple initially agreed to purchase "his and hers" condominiums on the 78th floor in 2013, with Linda occupying the smaller "A" unit and Harry purchasing the larger "B" unit. After paying a deposit of $2.2 million, Linda claimed that the developers delayed closing four times and shrunk her unit from to, giving the additional space to Harry's neighboring "B" unit. The divorce court judge ordered the tower's developers to give Linda until December 21, 2017, to decide whether to purchase the downsized unit. Linda instead chose to remain at the couple's penthouse in the nearby Plaza Hotel and dropped her lawsuit over the unit's shrinkage in exchange for the return of her $2.2 million deposit.
The divorce trial also revealed that Macklowe earned just $2.5 million from his investment in 432 Park Avenue and held only a $15.7 million equity stake in the retail portion of the development. Following his subsequent marriage to Patricia Landeau, Macklowe installed a portrait of the couple taken by Studio Harcourt on the northwest corner of the tower's retail space in March 2019. The wedding's 200-person reception took place on the building's 78th floor in a condo that was turned into a temporary ballroom.
The building hosted an event for theater director Robert Wilson's Watermill Center as part of the Park Avenue Armory's "Armory Week" of art sales in January 2018. The event, attended by Macklowe, Zac Posen, and Claude Grunitzky, made headlines for employing multiple nude performers in a departure from the more classically focused events of Armory Week which centered on 18th and 19th century art.
Design
The design of the structure was conceived by architect Rafael Viñoly, who was inspired by a trash can designed in 1905 by Austrian designer Josef Hoffmann. The metal trash can's grid-like pattern is replicated in the tower's facade. The tower has 85 occupiable stories, which consist of a mezzanine and 84 numbered floors. Above the base, each story has an area of. The tower is divided into six groups of 12 floors by five double-height mechanical spaces which are unenclosed to reduce the tower's wind load. The floor numbering system includes mechanical levels located near the bottom of the tower, and as a result, the top story is numbered as the 96th. The facade features a regular grid of apertures, giving each occupiable floor six windows on each face, and each double-height mechanical area with twelve openings per face.The interiors are designed by Deborah Berke and the firm Bentel & Bentel, which also designed Eleven Madison Park and the Gramercy Tavern. Berke's design brief was simply “no set budget, make it look fantastic”.
Height and slenderness
When 432 Park Avenue officially topped out at, it became the second-tallest building in New York City after One World Trade Center and the fifteenth-tallest building in the world. By roof height, 432 Park is the tallest building in the city as of 2020, as it surpasses the rooftop of One World Trade Center. It surpassed 311 South Wacker as the tallest building in the world known only by its street address. The building is so tall, even compared to others in New York City, that its construction required approval from Federal Aviation Administration. Upon 432 Park's completion, media outlets said that it was the hundredth supertall skyscraper ever built., 432 Park Avenue is the sixth-tallest building in the United States, the fifth-tallest building in New York City, and the third-tallest residential building in the world when topped-out buildings are included.The tower sits in the middle of the block bounded by East 56th Street, Madison Avenue, East 57th Street, and Park Avenue. Its base is L-shaped, with an annex extending east to 56th Street and Park Avenue. The tower has a frontage of on Park Avenue, though its main entrance is on 56th Street. The building's -tall base covers most of the lot. The tower has floors that are arranged as a square with sides, giving each floor a usable area of. With a height-to-width ratio of 15:1, 432 Park has one of the greatest height-to-width ratios of any skyscraper in the world.
About a quarter of the building's floors are devoted to structural and mechanical equipment, which do not count toward total floor size. These floors were built under a zoning loophole used to make buildings taller without exceeding floor area ratio zoning limitations.
Apartments and amenities
The finalized plans called for 147 apartments in total: 122 luxury condominium units of one to six bedrooms between the 34th and 96th floors, and 25 studio units on the 28th and 29th floors. The 91st through 96th floors contain the penthouse units, whose layouts differ from those of the units on the floors below. The tower's condominium units feature -high ceilings. The smallest unit is a studio, while the largest unit is the, six-bedroom, seven-bath penthouse on the 96th floor, with its own library. A sample medium-sized unit, #35B, covers with three bedrooms and four-and-a-half baths, facing south and west with views of Central Park. Macklowe initially placed thick frames on some of the windows, as he wanted to highlight the views of Central Park, but some tenants removed these frames because they took up interior space.The building's amenities include ceilings, golf training facilities, and private dining and screening rooms. On the 12th floor is an private restaurant with a private terrace, which has been led by Michelin-starred chef Shaun Hergatt. The 12th through 16th floors comprise a "club unit" with a fitness center; a swimming complex with a pool, whirlpool, sauna, and steam room; private meeting rooms, including a 14-seat boardroom; and a library curated by Assouline Publishing.
Engineering
The structure of the tower is composed of a square, reinforced concrete core with walls, which the engineer, Silvian Marcus, describes as "like the backbone of a body." This core houses the elevator shafts and all the building's mechanical services. The outer "shell" is composed of a grid of -wide columns, as well as exterior horizontal spandrels of reinforced concrete that encloses the symmetric "basket grid" of window openings. The facade was poured in place from concrete, using white Portland cement that could withstand pressure of up to, and cast around pre-assembled full-floor cages of #20 rebars with articulated steel forms. The formed surface was left as the final finish without any added fascia. The distance between the core and the facade is on all sides.To support its thin orthogonal frame, 432 Park Avenue features larger columns at its base than on the upper floors. The columns are about deep at the bottom of the tower, narrowing to at the top. This layout maximizes the available interior space between the core and shell. The floor-to-floor height of each of the 85 occupied stories is, with -thick floor slabs. To dampen the acceleration from wind loads, upper floors have slabs up to thick to add more mass.
In another measure to reduce the potentially uncomfortable effects of swaying due to wind vortex loading on such a flexible tower, 432 Park is divided into seven segments, each with 12 occupied floors. Between each segment is a two-story-tall section without any windows or interior space, allowing wind gusts to pass through rather than around the building. These floors also contain modular mechanical services for the six floors above and below to reduce the number of ducts needed. To mitigate swaying even further, two tuned mass dampers are also located at the top of the tower, and several dampers are located in the outriggers of some of the mechanical floors.
Residents
As early as 2012, a dozen potential clients were described as being interested in occupying units at 432 Park, and by the next year, tenants had signed contracts for over a third of the units. The following year, that proportion had risen above 50%, with all of the tenants collectively paying an estimated $1 billion. By the end of 2015, close to 90% of the apartments had been sold, with almost half of those owned by a foreign citizen, "part of a global elite that collects residences like art." Many of the buyers were wealthy Chinese, though there were also numerous Brazilian and Russian clients. The German newspaper Der Spiegel estimated that the majority of the units would remain unoccupied for more than ten months a year.Notable residents include Lewis A. Sanders, Bennett LeBow, Ye Jianming, David Chu, Hely Nahmad, Jennifer Lopez, and Alex Rodriguez. Other wealthy residents include Bridgewater Associates executive Bob Prince and Douglas Elliman owner Howard Lorber.
Apartment selling prices
In 2016, 81 of the 104 units were sold at a median price of $18.4 million; by the following year, the remaining unsold units were put for sale at prices between $6.5 and $82 million. The first sale to be completed was that of apartment #35B, which was reported in January 2016 for $18.116 million, more than the $17.75 million asking price. Ten additional apartments were available at that time, ranging from $17.4 to $44.25 million.The median penthouse units were more expensive than the other units. Two penthouses labeled as being on the 91st floor were sold for $60 million in 2018 to Caryl Schechter, the wife of hedge-fund manager Israel Englander, while three penthouse units on the 92nd and 93rd floors were sold in 2017 for a combined $91 million. The 94th-floor penthouse was sold for $32.4 million in 2019, about 25% lower than the original asking price. The 95th-floor penthouse, originally listed for $82 million, was split in half in 2018 and the individual units were sold at $30 million. The top floor unit, labeled as the 96th floor, was listed at $95 million but actually sold to Saudi businessman Fawaz Alhokair for $88 million in 2016. The sale of all of the units was expected to bring in $3.1 billion in profit, the highest of any building in New York City.
Reception
The skyscraper has received mixed reviews from both professionals and the public. 432 Park's slenderness and simplicity have been the subject of both praise and criticism. For example, Jonathan Margolis of the Financial Times said, "I have become obsessed by the almost childlike simplicity of 432 Park Ave". Aaron Betsky of Architect magazine called 432 Park "a gridded tube abstracting and punctuating the more leaden masses of the lesser boxes around it", while James Gardner of The Real Deal said that "the sense of pure geometry, the almost polemical denial of scale, only enhances the sense of immensity." Conversely, the architecture critic for New York magazine, Justin Davidson, wrote that the building is nothing more than "stacked cubbyhole units" and questioned the creative value of the building. The fashion consultant Tim Gunn described the building as "just a thin column. It needs a little cap."Some critics have cited 432 Park Avenue as a representation of New York's increasing cost of living and ostentatious wealth. A critic for the Los Angeles Times called the skyscraper an "architectural emblem of rising inequality", while New York magazine called the building's units "fancy prisons for billionaires". 432 Park's association to wealth inequality was also remarked upon by the building's own architect, Viñoly, who commented that "There are only two markets, ultraluxury and subsidized housing." Even so, several residents of nearby buildings said that the influx of rich residents at 432 Park Avenue would increase the worth of their own properties.
Though Viñoly and Macklowe were friends, they often insulted each other over the various perceived flaws in the design. Viñoly called Macklowe "a truck driver with an education in aesthetics", while Macklowe said that Viñoly's supertall design was motivated by "penis envy" among the city's developers, who were vying to build the tallest structures. In 2016, Viñoly reportedly joked that the design had a "couple of screw-ups", such as Macklowe's window frames, the placement of the restrooms, and Berke's interior design; he later apologized for his comments.