Cadillac Hotel condo being listed for $4.9 Million

[Lowell]

Thinking about moving downtown? Here's your chance to do it in comfort.

Penthouse 2905, a three-story structure, covers the 29th, 30th and 31st floors of the hotel and comes at a $4.9 million price tag.

The penthouse officially will be on the market on April 13, said Jerome Huez, president of real estate network Berkshire Hathaway HomeServices/The Loft Warehouse.

The 5,143-square-foot property includes three bedrooms and three bathrooms with guest rooms on the 29th and 30th floors and master suite on the 31st floor.

The property also includes two parking spaces and entertainment spaces. Home Owner Association fees are $2,961 monthly as of 2018, property taxes at $1,229 annually.

https://freep-mi.newsmemory.com/publ...reid=1dc2e5f04

Can those property tax numbers be accurate?

[SammyS]

Without NEZ and homesteaded, taxes should be ~$100k/year....but that doesn’t sound right either.

[Bigdd]

So REALLY tall ceilings, and the master bedroom is 2 stories up?

So if I forget my phone or wallet on the night-stand, or notice that I have a scuff on my shoe,. I get to run up and down the equivalent of 3 flights of stairs?

SUCH luxury !

WITH homestead, [[but without NEZ),.. you're probably looking
at $170,400 a year in prop tax,
Plus $35,500 a year in association dues.

And if you financed it, you've got $23,200 a month in mortgage [[P&I),
or about $278,400 a year.

So grand total would be about $484,400 a year.




Of course you get the benefit of being in walking distance of Central Park and 5th Avenue,..... err,... uhhhh,...

[iheartthed]

So REALLY tall ceilings, and the master bedroom is 2 stories up?

So if I forget my phone or wallet on the night-stand, or notice that I have a scuff on my shoe,. I get to run up and down the equivalent of 3 flights of stairs?

Have your servant do it.

[poobert]

So if I forget my phone or wallet on the night-stand, or notice that I have a scuff on my shoe,. I get to run up and down the equivalent of 3 flights of stairs?

I don't think this is something you will have to worry about.

[401don]

So if I forget my phone or wallet on the night-stand, or notice that I have a scuff on my shoe,. I get to run up and down the equivalent of 3 flights of stairs?

Hence the access to the fitness center included in your $3,000 monthly fees.

[DTE]

Yes, at full price. The taxes would come to $170,000+ yr for homestead and $215,000 non homestead. Detroit real estate taxes are insane and not sustainable. At this price. I can buy the most expensive mansion in Grosse Pointe and spend almost $50K less in taxes and not have to send my kids to private school. These modest condos that are going up in the $500K-$600K range will have taxes of almost $2000 a month and that's before HOA fees and a mortgage. Why buy if you can rent for much cheaper? These kind of taxes are going to depress the market greatly.

[SammyS]

Yes, at full price. The taxes would come to $170,000+ yr for homestead and $215,000 non homestead. Detroit real estate taxes are insane and not sustainable. At this price. I can buy the most expensive mansion in Grosse Pointe and spend almost $50K less in taxes and not have to send my kids to private school. These modest condos that are going up in the $500K-$600K range will have taxes of almost $2000 a month and that's before HOA fees and a mortgage. Why buy if you can rent for much cheaper? These kind of taxes are going to depress the market greatly.

Renting the same place will likely cost you more if the owner wants to break even on the expense.

[iheartthed]

Yes, at full price. The taxes would come to $170,000+ yr for homestead and $215,000 non homestead. Detroit real estate taxes are insane and not sustainable. At this price. I can buy the most expensive mansion in Grosse Pointe and spend almost $50K less in taxes and not have to send my kids to private school. These modest condos that are going up in the $500K-$600K range will have taxes of almost $2000 a month and that's before HOA fees and a mortgage. Why buy if you can rent for much cheaper? These kind of taxes are going to depress the market greatly.

Blame the state for outlawing other forms of taxation.

[SammyS]

Blame the state for outlawing other forms of taxation.

Taxes, auto insurance and schools. First two should be a sinch

[swingline]

This is one of the B/C units that was marketed for many years at approximately $1 million as an unfinished white box. No paint, no interior doors, no finished floors. Don't know what it sold for but likely something around $1 million. The current owner, a physician, bought it in 2016 and has finished it to some pretty high standards, much higher than the just above builders-grade that most of the Book Cadillac's finished units got.

Regardless of how nice the apartment is, the ask on this listing seems kinda dumb. The listing price is probably double the owner's finished cost basis and she has only had the property for 2 years. Yes, the market is pretty strong and this is certainly a unique unit, but geez. At $960 per square foot, the listing price is at least double the current Detroit luxury condo market. The HOA fee is $2900/mo. The NEZ will expire in 5 years and then if properly assessed [[assuming a $4.9 million sale price), monthly property taxes will exceed $12,000. Do brokers take such listings [[and spend their time and money) simply hoping a sucker will come along and provide a windfall? At $4.9 million or any price remotely close, the listing seems destined to languish.

But the rich are different.

[SammyS]

^^
It was not too long ago when you could have bought an entire skyscraper for that price. In any case, the market speaks and we shall see how it goes. Will be a big win for Detroit if a buyer strikes even close to that number.

[iheartthed]

This is one of the B/C units that was marketed for many years at approximately $1 million as an unfinished white box. No paint, no interior doors, no finished floors. Don't know what it sold for but likely something around $1 million. The current owner, a physician, bought it in 2016 and has finished it to some pretty high standards, much higher than the just above builders-grade that most of the Book Cadillac's finished units got.

Regardless of how nice the apartment is, the ask on this listing seems kinda dumb. The listing price is probably double the owner's finished cost basis and she has only had the property for 2 years. Yes, the market is pretty strong and this is certainly a unique unit, but geez. At $960 per square foot, the listing price is at least double the current Detroit luxury condo market. The HOA fee is $2900/mo. The NEZ will expire in 5 years and then if properly assessed [[assuming a $4.9 million sale price), monthly property taxes will exceed $12,000. Do brokers take such listings [[and spend their time and money) simply hoping a sucker will come along and provide a windfall? At $4.9 million or any price remotely close, the listing seems destined to languish.

But the rich are different.

We may look back at this thread in a decade and think that this price was a steal...

[SammyS]

We may look back at this thread in a decade and think that this price was a steal...

We’re already doing that over a 5 year period where prices have shot up > 3 fold. I doubt we’ll see the same trajectory but 100% in another 5 years is not out of the question.

[Worldsgreatest]

They gave this penthouse an extremely awkward layout. I would not live in it but I hope it sells for a lot of money.

[DTE]

Renting the same place will likely cost you more if the owner wants to break even on the expense.

Not true. The rental value has nothing to do with what an owner needs to break even. The owner would need over $20,000 a month rent to break even assuming an all cash purchase. Not happening in the current rental market.

[SammyS]

Not true. The rental value has nothing to do with what an owner needs to break even. The owner would need over $20,000 a month rent to break even assuming an all cash purchase. Not happening in the current rental market.

Actually there is correlation between purchase price and rent, at least on paper. 1% rule for example? In this case, it would be $50k/month. Yes that sounds ridiculous but so does $4.9M. $20k/month may be reasonable for a high profile corporate executive dig wouldn’t you say?

PS. I think we both agree that property taxes are very much out of whack in Detroit. Something that I have personally mentioned many times on this forum. It’s definitely contributing to the double digit rent increases we've been seeing recently but it should not be the reason. Rents should be driven by supply vs. demand and not bureaucracy.

EDIT:
So I did a mortgage calculation on the following:
-Purchase price: $2M
-Downpayment: 20%
-Taxes: 87 mil [[non homesteaded)
-HOA : $3,000/ month
-30 year at current rates. Will be jumbo for sure so rates will be higher.


Looks like $20k/month is sustainable. Question is, will Detroit command this level of rent for this type of property.

[Lowell]

There's some great analysis on this thread. Back to the tax amount cited in the article "property taxes at $1,229 annually" I am wondering if that amount may be the current assessment, in that it sounds like from this discussion the property may not have been developed or occupied until recently and, therefore, amid all the NEZ and other benefits and the city's renowned laggardness, may never have been reassessed. Even then it sounds ridiculously low.

[Pam]

Lots of pics here:

https://www.freep.com/story/money/re...me/3269123002/