The Big City's Big Change

The newest addition to New York City, The Setai Fifth Avenue is, according the Wall Street Journal, "hotel and condo at East 36th Street that's scheduled to open for hotel guests on Nov. 1" (The Wall Street Journal Online). Even though the building is adjacent to the Empire State Building, and located on the intersection of posh Fifth Avenuel; it is an area typically occupied by tourists. That is not necessarily negative, however, the chairman Davide Bizzi, of "Italy's Bizzi & Partners Development"- believe this is, "a location that should improve...[the Setai Fifth Avenue is]...helping with that" (The Wall Street Journal Online).

Thus, New York City brokers believe that the contracts between "$2,000 and $2,300" (The Wall Street Journal Online) a square foot is overpriced for what the land is worth. Prudential broker Douglas Elliman estimated the value to be "$1,600 a square foot" (The Wall Street Journal Online), and that would be the price that he would bring customers over to see the condos. This means that he feels a condominium that is 10,000 square feet should be around $16 million, not $20 to $23 million. However it does not matter what seems like a fair price, but what consumers are willing to pay. According to the article, of the 184 condominiums, " Nearly half the Setai's condos are in contract, most of them all-cash deals to overseas buyers..." (The Wall Street Journal Online). Even though, Bizzi & Partners Development might not be doing the ethical business contract, in the end they need to make a profit, to pay off the debt, and sell these condos.

First off, as previously mentioned, I am disgusted by the unethical behavior of overpricing these condominiums and likely the hotel rooms, and how it is allowed. This will change the area's atmosphere to make the everyday tourists not feel welcomed. Another problem I have is that, Bizzi and his executives assume this will do well. They assume that restaurants and shops will want top open up because this intricate building is located in an area that has not been taken over by the rich? I think that is absurd. What if there is another swine flu, and the foreigners decide to terminate their contracts? During the swine flu outbreak many foreigners feared coming to our country, and this could easily happen again. Then Bizzi will be stuck in a large amount of debt.

http://online.wsj.com/article/SB10001424052748703673604575550463496233810.html