The New York headquarters of troubled insurer American International Group (AIG) is being converted into luxury condominiums and the irony is not missed by many in the industry. The offices of a company credited with aiding the housing collapse is soon to be converted into just that.
In a research note, Fox-Pitt Kelton real estate analyst Robert Stevenson calculates the profitability of the transaction for developer Young Woo.
Woo bought the building from AIG in May for $150 million, which is a per-square-foot cost of $105. Woo plans to sell the units for $2,000 a square foot, a price that Stevenson says is unrealistic.
But even if the sales price is half that—$1,000 a square foot—Woo would make a profit of $500-a-square-foot per unit or an average of $600,000 on each condo.
Source: The Wall Street Journal
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