Some real-estate moguls are really innumerate

h/t Eschaton

and so are reporters:

The Center City high-rise condo market may be soft these days, but Residences at Ritz-Carlton developer Craig Spencer won’t let it get the better of his bottom line.

“I turned down a $1.3 million all-cash sale from a buyer who wanted me to cut the price by $50,000,” Spencer said yesterday as he showed a visitor the 8,000-square-foot unfinished penthouse at the top of the 43-story, 270-unit building at 15th Street and South Penn Square.

Now let’s do the math. Say, for example, that this guy is paying 10% on his construction loan, and it actually cost him $500K to build that $1.3-mil unit. For every month he refuses to sell, he’s out about $4200 in actual costs, and he’s also out (conservatively) the $3K a month or so that he could get investing that $800,000 profit somewhere else. And that’s before the cost of lighting, cooling, cleaning and so forth for the apartment in question. So if it takes him an extra six months to sell the unit, he has indeed let his ego get the better of his bottom line. And his cost could well be higher…

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