Here’s the story behind our recent $10 Million closing at One Highline in Chelsea:

Developer HFZ buys a massive parcel at 18th and the West Side Highway in Chelsea for $870mm in 2015, a near-record at the time for vacant land. The plans come together for a Bjarke Ingals-designed building that was named XI, for its proximity to 11th avenue. Prices are floated out at $4000-5000 per square foot.

What happens next, though, is pretty racy, even for the real estate industry. HFZ’s collapse became tabloid fodder, as he lost control of uptown projects like the Astor, the Belnord, and ultimately, his Chelsea project, too. Even respectable rags covered the unfortunate situation. It was too juicy, and too cautionary a tale not to tell.

One could blame COVID, sure. But that’s too simplistic. And it lets the developer off the hook. It’s easy to be a monday-morning quarterback, I know, but the true reason was over-optimistic pricing. Even with every other thing working for them—Top architect, amazing design, gorgeous amenities, and the best views in Chelsea—the dollars and cents did them in. No one came, no one bought, and everyone noticed.

Early overpricing has been the kiss of death for lots of projects. Most are eventually resurrected, and I have followed them, even written about them, over the years. Here’s one example: The Selene at 53rd and Lexington, which started its life at a ridiculous $3000 per square foot, and settled into a much more plausible pricing structure in 2021. Sales have moved along. It’s a gorgeous building, after all.

Of course, depending on where you sit, the story of this building, that came to be known at One Highline, has a happy ending. In 2021-2022, a replacement developer, Witkoff steps in. New money, new cost basis, and new ideas. They reprice every single unit in the building. 20% price cuts generate sale after sale after sale.

Our buyer stepped in just as they were picking up momentum. We had seen every penthouse-style unit in the city by that point. And the views for the non-penthouse units, asking $3500-4000 per square foot, were as nice or nicer than anything else on offer in the city. It was an obvious choice. Over the past few months, the penthouse units in the building started selling in the $6000-7000 per square foot range, too. One Highline went on to be the most successful development of 2023.

A wise man once said “It’s smarter to be lucky than it’s lucky to be smart.” Unfortunately, it was more than bad luck that did in HFZ. It was a belief that the hockey stick, the up-and-to-the-right pricing of Manhattan condos, had no end in sight. Even having developed one of the most interesting and intriguing buildings now gracing the Manhattan skyline, HFZ learned about the limits of optimistic pricing projections the hard way.

That said, kudos to the One Highline sales team, who have done a remarkable job with a remarkable project. And congratulations to our buyer!