Billionaire Rupert Murdoch has decreased the asking price on the Manhattan penthouse he is trying to sell, cutting the price from $62 million to $38.5 million. This cut of nearly 40% means that Murdoch will be selling the penthouse at a loss.
Not Just a Market Problem
The current housing market is a struggle for everyone, from first-time middle-class buyers struggling with high mortgage rates and inflated prices to high-class real estate investors stuck with properties that no one wants to take a chance on. Billionaires aren’t immune from this effect, but Murdoch’s penthouse is an exceptional case that might have avoided this fate if it had found the right buyer.
Murdoch’s luxury penthouse is a 7,000-foot triplex with 20-foot ceilings, a nearly 600-square-foot terrace, and “massive art walls,” creating scarcity value that Murdoch might have expected to rise above the market. With a prime location at One Madison Avenue in Manhattan, the property is designed to attract only the most niche of buyers, much like it once attracted Murdoch himself.
“Ultra-luxury property sales are challenging due to the limited buyer pool at these price points,” says Noah Rosenblatt of UrbanDigs, a New York City real estate analytics company. “These unique trophy homes are more akin to the art market than the real estate market, with value determined mainly by a potential buyer’s perception.”
Finding the Right Buyer
Murdoch perceives the home quite highly. Purchasing the penthouse for $57.9 million in 2014, the media mogul—whose estimated net worth is almost $21 billion thanks to a business empire that includes Fox News, the Times of Lond, and the Wall Street Journal—set the price point at $62 million in the hopes of finding a buyer who saw the same market-defying value in the home.
“The revised price reflects current realities and is closer to where the market values the residence,” says Kyle Blackmon, who oversees luxury sales at Compass. “We will see this residence, and the buyer—who will likely be an art collector—will secure an exceptional value for this important and rare offering.”
The niche buyer for the property is unlikely to consider it a real estate investment, even if they consider it a home. “This is the equivalent of a Basquiat oil painting,” says Blackmon, “An asset that can’t be replicated in this location. Residences of this size and importance are selling for twice as much in several buildings in this city.”
How to Put a Price on Art
“Contrary to popular thinking, ultra-luxury listings are rarely overpriced,” says UrbanDigs’ Rosenblatt. “Astronomical listing prices serve to affirm the property’s luxury status and signal its availability, making the initial price a strategic tool rather than a straightforward market assessment—an invitation more than a statement.” According to this theory, Murdoch’s original price was more a flag of intent than an actual sale expectation. Rosenblatt said, “From the outside, it looks like the seller is chasing the market down… These price reductions are more aptly described as trying to achieve market fit.”
