Last bidder standing wins 1056 Fifth Avenue

The view from the 16th floor in the E line of 1056 Fifth Avenue.

In the impossibly, but gorgeously, ornate Surrogate’s Courthouse across from the Municipal Building in lower Manhattan, seven bidders competed against each other for Apartment 11E of 1056 Fifth Avenue Thursday.

Just why they bothered is a question to be considered below.  However, let’s first set the scene.

At a table so long that it seemed plucked from the banquet hall of a Medieval castle sat a half dozen city officials, including the public administrator.  High on the judge’s bench behind them was a clerk who ran the auction, which lasted approximately 45 minutes that were numbingly tedious for their lack of drama.

The seven publicity-shy hopefuls stood on the opposite side of the table, much like schoolchildren waiting to be chastised for a major infraction of their institution’s rules.  A couple of dozen interested parties arrayed themselves on rows of chairs in the cavernous chamber, which reeked of authority and, possibly, corrupted construction decades ago.

(I took pictures, unaware that it was against the courthouse rules, and was forced to erase them.  Sorry, but at least I avoided the arrest that otherwise seemed imminent by the court officer looming above me.)

The bidding started at $900,000 and crept up in $5,000 increments, then $1,000 increments, then $5,000, then $1,000, depending on the reticence of the attendees.

When the amount reached $1.012 million, the number of bidders dwindled to three, and the hushed competition among them inched along until the amount reached $1.136 million.

Then it was snail-paced duel between two opponents, casting sidelong glances at each other as they clumsily sought to outmaneuver the other.  In fact, one of them disconcertingly kept bidding against that individual’s own bid.  No one bothered to mention that.

Normally, I would not relate the races of the bidders, but it’s relevant here because the building’s board reputedly turns away prospective buyers if they are not white.  Whether true, it may be worth saying that the two left standing were of color, different colors.

When one of them, a black woman who was not identified, offered $1.153 million – a mere $1,000 above the previous bid – an Asian couple dropped out.  So, she was the last bidder standing.

Huh?  $1.153 million for a purchase that is questionable on more than one account?  The issues:

1. No contingency for financing was permitted;
2. The sale unit was part of the estate of one Anne Mogol, who died without heirs, thereby benefiting the city by leaving behind a physically deteriorated property;
3. Board approval is mandatory.

I gathered from another observer that the apartment is a wreck, having been empty for something like 15 years.  Given that the unit exceeds 1,250 square feet and has a vacant kitchen, the cost of renovations probably should come to around $300,000.

Add $300,000 to the winning bid, and the total comes to $1.453 million.  Now consider the two other E-line apartments, on higher floors.  Each is under contract, and the asking prices of $1.55 million and $1.595 million – never mind the undisclosed contract prices, which likely are lower – tell me the successful bidder should restrain herself from breaking out the champagne.  A bargain her purchase was not.

Moreover, I understand from the friendly observer that, unknown to me, there was another auction of the same apartment several months ago.  The winning bid was said to be $710,000, but the sale didn’t go through for some reason.

Then, the unit was to be auctioned a month ago with a minimum bid of $710,000.  But the public administrator unaccountably postponed the auction until yesterday, raising the minimum to $900,000.

If past is precedent, don’t be surprised if one of two things happens: Either the winning bidder will default or she will eventually put 11E on the market again at a price that guarantees it will linger and linger until she loses her proverbial shirt.

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Malcolm Carter
Licensed Associate Real Estate Broker
Senior Vice President
Charles Rutenberg Realty
127 E. 56th Street
New York, NY 10022

M: 347-886-0248
F: 347-438-3201

Malcolm@ServiceYouCanTrust.com
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