Prestige addresses on sale as market losers sell up
Sunday 14 May 2000
Clothes designer for the suburban hip-hop crew, Tommy Hilfiger, is selling his Fifth Avenue apartment for $20m, more than double what he paid for it last June, after his wealth collapsed along with his company's share price.
Hilfiger's stock price was $41 last summer when he bought the apartment for $10m. Since then, the shares have been on a roller-coaster ride south, hitting rock bottom last week to sit at just over $7, a loss of over $1bn.
The fashion designer is not the only property owner to be hit by falling share prices. Marc Ewing, the 30-year-old founder of Red Hat, the Linux technology group, is selling his 12-room apartment, at 1120 Fifth Avenue, which he bought last December for $9m.
The share price in his hot new operating system company went from $150 after the firm's flotation to $23 this week, as the shares were hit by the Nasdaq technology sell-off.
And movie producer and Planet Hollywood co-founder Keith Barish sold his two apartments on Central Park West for $6.5m to Calvin Klein just before the famous eatery filed for bankruptcy.
Fifth Avenue, Park Lane and Central Park West are all trophy addresses. Manhattan co-op boards rigorously scrutinise new owners to see whether they will fit in with the community who live in the building, and even those wanting to view Hilfiger's apartment will have to go through a screening process, said one estate agent for the building at 820 Fifth Avenue.
This can be a problem for owners who want to sell quickly, as the buyer has not only to come up with the cash but also to be a suitable neighbour. But the turbulent stock market has brought a new breed of billionaires, many from internet start-ups, who would formerly have been weeded out as socially undesirable.
Normally the old, crusty world of Manhattan's co-op boards would turn up their noses at noisy young entrepreneurs who look good on paper one day and lose millions the next. However, the likes of Mr Hilfiger and Mr Ewing are pushing the price of Fifth Avenue apartments higher, which is good news for other owners who are watching the price tags rise on their own property.
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