$625m conversion sale sets another city record.

One of the largest apartment complexes on the Upper East Side has been taken off the market, with Manchester Real Estate and O'Connor Capital Partners agreeing to pay $625 million for the 583-unit property.

At roughly $1 million per apartment, the price is the highest ever paid per unit for a residential building in Manhattan and shatters the previous record set by Equity Residential in June.

Equity paid $860 million, or $616,000 per apartment, for the three building Riverside South package from the Carlyle Group and Extell Development Company. The partners flipped the rental towers just two weeks after paying Donald Trump and his Chinese partners $1.8 billion for the 77-acre site on which they are situated. That prompted a lawsuit from Trump against his foreign partners, claiming they had underpriced the property.

According to New York sales brokers, the Manhattan House complex represents a great opportunity for a condominium conversion, as well as rent deregulation. Almost half of the units at the property are rent-stabilized, with prices of $1,800 a month. Once these units reach the $2,000 a month mark, the new owners will be able to go market rate.

"That's certainly an important aspect of the purchase," noted Guthrie Garvin, director of sales for the Upper East Side with Massey Knakal Realty Services, adding that "the sky is the limit in this market" when it comes to market rents.

Garvin conceded that the $625 million price tag was high, but said he believes the investment should pay for itself many times over.

"You have to think about what they are getting for it," he said. "They are certainly going to get through-the-roof condo prices in this market. It's a huge property that has huge potential on a number of different levels. The sales price is a projection of what these condos are going to sell for."

Jon Caplan, executive director in the New York Capital Markets Group at Cushman & Wakefield, said the property's unique history makes it well worth the price.

"It's architecturally significant. It has won awards and is pretty well known," said Caplan. "It's got large apartment units, balconies, gardens and valuable retail on the avenue. It's an extremely attractive property for condominium conversion and its quality location and history, as well as its large unit sizes, would command very strong prices."

Located at 200 E. 66th St., the Manhattan House takes up an entire block between Second and Third Avenues and is one of the first buildings in New York City to be constructed in the International style. Its features include a light facade, an H-plan contour, Bauhaus-style balconies and a glass lobby. In addition, the complex is one of only two residential block-through properties on the Upper East Side. In the past, the building has served as home to several famous people, including the film actress Grace Kelly.

The seller, New York Life Insurance, has reportedly received offers from a number of real estate investors, among them RFR Holdings and Yair Levy. Market rate rents in the complex reach up to $20,000 a month.

In an official statement, executives from New York Life said, "The combination of favorable capital market conditions and strong investor demand for quality, well located assets led to the decision to market the property."

The sale should be completed by the end of the year.