By Harry Dent
What do you think of these apples?
More than a year ago I suggested that the most expensive new listing on South Central Park – Billionaire’s Row – was going to be listed at $250 million.
At the time, that seemed outrageous. I mean, compared to the new outrageous record sales in that area of just over $100 million, it was like people had lost their minds.
Well, this just happened…
Ken Griffin, the Texas billionaire who’s worth around $10 billion, just bought those two combined penthouse apartments at 220 South Central Park for a whopping $238 million!
He didn’t get much bargaining power over that $250 million asking price.
That works out to nearly $10,000 a sq. ft!
This is a case of people having more money than sense!
Here’s a photo, but note that Ken’s new purchase isn’t the tallest building (it’s the top of number 8)…
The thing is, it’s all about location and view.
At 953 feet up, Ken’s new penthouse is high enough to get spectacular views; even better than those visible from 1,396 feet 432 Park (number 1). Incidentally, J-Rod and J-Lo just sold a penthouse at 432 Park.
Ken’s new neighbors include boring hedge fund managers and exciting rock stars like Sting.
They call this Billionaire’s Row for a reason.
Only people boasting 10 figure bank accounts or more can afford these prices, which range from $8,000 to $10,000 per sq. ft. The most expensive condo ever sold cost near $14,000 a sq. ft.! The most expensive house was bought by Barry Rosenstein in the Hamptons for a cool $137 million.
Ken Griffin also just bought a London home for $122 million. So, he’s ponied up $360 million in the last year.
The most expensive condo sold in the world was of course in Hong Kong the most overvalued city, which went for $361 million…
So, who’s the dumbest money in real estate?
I’ll tell you. It’s the richest people in the world. They don’t think real estate will ever go down, especially not in places like Manhattan, London, Singapore, Sydney, or Hong Kong.
Like I said: more money than sense!
History prove these uber-rich people dead wrong!
Manhattan real estate crashed 61% in the great Depression. That’s the most of any major cities in the U.S. And it took 25 years to get back to break even.
During that same period, everyday households only lost 26% of their real estate value and were back to break even in seven years.
These uber-rich people don’t realize that they’re the ones that lose the most when a major bubble like this one crashes. It stands to reason. They own the most financial assets that deleverage the fastest, including these stupid-ass-overvalued condos!
$238 million for a 24,000 sq. ft. box in the air compared to a massive ranch house and hundreds of acres in Georgia or Montana for a few million?
With levels of stupidity this high, these people deserve to lose a ton when the wheels come off!
High-end real estate is already slowing and coming down in Manhattan and many other super-over-priced cities.
This is the last gasp for billionaires that can’t find anywhere else to park their super-bubble profits. It’s the last desperate attempt of the stupid-rich in emerging countries, from China to Russia to the Middle East, to launder their money out of their corrupt and non-democratic countries.
I think Ken could see the value of his $238 million condo drop to as low as $50 million to $90 million several years from now…
Poor little rich boy.
Incidentally, the dumb money in stocks right now are corporations using near-free money to buy back their own stocks at record valuations. (I talked about this in my email to Boom & Bust subscribers this morning… showed them how useless Trump’s tax cuts turned out to be.)
At the heads of these corporations are those same uber-rich people who are throwing good money into the real estate inferno. They’re the new dumb money in a QE-overstimulated world of “markets on crack.”
Congratulations, you lucky douchebags!
Harry
Follow me on Twitter @harrydentjr