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I am in contract to purchase an apartment at 15 Madison Square North and was shocked to learn that the latest operating budget shows a 25% increase from previous estimates and the sponsor has just listed the bottom 8 commercial use floors for sale.
Is such a large increase in the operating budget usual for a building that is being converted? Is anyone aware if the sponsor having financial difficulties and being forced to sell the bottom 8 floors in bulk? If a sponsor goes bankrupt and a new conversion building is not complete, who us responsible to finish the work?
I looked at buying an apt at 15 MSN a couple years back, and even then, I thought that the common charges were too low in this building and were poised to skyrocket. It's not uncommon for operating budgets to increase in pre-construction condos, especially since a few years can elapse between the time the offering plan comes out (in this case, 2006) and when the building is completed, and in the intervening years, budgets can change dramatically (almost always to the upside) and especially with developers who have every incentive to pitch a low monthly number.
The other thing that worried me about 15 MSN was the second issue you raised. The prices that 15 MSN has been charging for their apartments - 1500-2000/sf - seem to be relics of a bygone age, esp with condos now around $1k/sf or less. It worried me that the developer seemed very inflexible on this, indicating to me that they overpaid for the building, and had to charge these prices in order to repay their construction loan.
Given the massive downturn in the market, it is probable that the developer may not be able to sell the rest of the apartments and defaults on the construction loan. In that instance, the bank takes ownership of the apartments and will probably try to auction them off (maybe even in bulk) to recoup their loan. I'm not a legal expert, but I also think that under this scenario, as a condo owner, you'd also be responsible for the additional CC+taxes on the unsold apartments. So you're true monthlies may increase much more than 25%.
I do not mean to be alarmist, but these were the issues that dissuaded me from buying at 15 MSN. Other experts here at Streeteasy can chime in on whether my reasoning was correct.
if a developer default it might be a "material change" which would give you a way out of the contract. (It is one of the reason that banks are not so quick to call the loan), Consult your lawyer and the offering plan.
the developer is nuts- firstly, 225 fifth now has a 2000 sq ft park facing unit on the market at 3.195m, which is cheaper than the schedule a pricing the buyer paid when he went into contract in 2005--- 15msn is way overpriced- it is a good building, but 40% retail space is a lot- frannie n freddie loans dont qualify there, and while most ppl buying take jumbo loans anyway- right now u can essentially borrow 729k under them and then heloc of 250k, making it possible to mortgage $1m at under 5 percent if u qualify.. bc of the retail space u cant do that there..
thank you for the advice and good point regarding 225 fifth avenue. the sponsor and agents at 15 madison square north seem to be telling us "half truths" and we are getting very concerned about closing on the apartment. our lawyers have read in detail the offering plan and the most alarming issues are the ovestatement of ceiling heights, square footage and now that the budget is 25% higher than previous estimates. We also hear from current owners that there are major issues with the plumbing, hot water and that the wood floors are cupping in the apartments. We wonder if these are normal growing pains in newly converted buildings or if this is something we should be considered with.
frederic12 my attorney recommended that I hire an architect to officially measure the ceiling heights and square footage. did you hire an architect? if so, I would appreciate a recommendation.
take a look at this - it's another post on your building. i have been following the mad square park area closely. love the area during the day.
the sponsor there is completely unrealistic.. the increase being 25% higher is not abnormal- all new buildings market themselves as very low monthies and then its common to go up.. i just think again, biggest comp is the listings at 225 fifth (the realistic ones like 9L and PHA- both are under schedule A pricing) and then half those listings are broker owned units for customers that say they base their pricing on 15madison squarenorth
also- looking at the building- i know it sold out in 2 phases- but if u look at the F line.. they had 9F close at over 3M,, but the other F lines, 11 and 12, closed at 2.5M range.. if 9f hadnt closed so high, the pricing you would be comparing to would be 2.5M, which was peak market pricing.. and the F line that closed over 3M still closed in a diff market to now..
that is a good point. what do your realistically think 10F is worth in this market? 10F is listed at 3.35M.
schedule A pricing was 2.5M and that was 2006.. the fact that 225 Fifth is back to 2005 pricing.. prob worth no more than 2.15M
offering low doesnt hurt.. the 9F comp is really whats messing it up having that closed at 3M but every other new development is accepting much lower than ask- this one will too.. just not there yet- if 9F didnt close at 3M.. you'd be looking at 11 and 12 F and thinking bc it closed at 2.5M you want a 30% discount from that.. which puts you even under $2m (which i do think is too low for the building)
also, while this is not the best comp- 325 fifth, which was a new building that had incredible flips in the first year is now back to pricing low and nothing is moving there- area is much diff, but building has amazing views and tax abatement, gym w pool, etc.. high ceilings.. price points are back to 2004.. building that have higher monthly costs like 225 and 15 e 26th should essentially trade even less..
keep in mind 11F and 12F probably went to contract PRE - peak pricing and in phase I. Phase I prices are typically 20% under market due to the fact the buyer is taking all the development risk, is buying off only a floorplan and considering the building being only a 'concept' at that point. So 9F has validated that current pricing is still comfortably $1300-$1500/sq ft for this building. Also, you must be mindful that comparing 225 Fifth to 15 E. 26th is apples and oranges. The finishes/ammenities in 15 E. 26th are clearly in a completely different league and the building is a much more "high end" residence, featuring several $10-$15mil units, ect.
sounds really "high end"
about 6 months ago
ccdevi: Unfortunatlely most of the same problems remain. There is no hot water early in the morning. The elevators break down constantly and still have no alarm/cameras. The security in the building is terrible. The "doorman" sit at a desk and won't even open the door for you. My punchlist is now 2 months old with little progress. There is signficant construction yet to be done in my unit. The quality of work in the apartments is really terrible. I am sad to say that buying this apt has turned into a huge problem. The developer's representative is simply dishonest. And the smaller details of the building have turned out to be simply average. There is no elegance you would expect from a building this expensive. No white glove door service, management is unaccomadating and negligent, ect.
and before you say those were growing pains in the apartment
1) did they put in new elevators?
2) did you have alarms and cameras in the building now
3) "terrible quality of workmanship" of an entire building does not go away
4) when you say "The finishes/ammenities in 15 E. 26th are clearly in a completely different league and the building is a much more "high end" residence" --- are you excluding the "the smaller details of the building have turned out to be simply average.?"
5) "no elegance?" wow. truly a different league - bush league...
I actually like the Grand Madison. Beautiful building and have been following it closely for a while. Havent been inside 15 Madison Square North so not sure about the comparison though. Im sure Park facing units there are beautiful as well.
the exterior of the grand madison is gorgeous. the interior is the problem. the walls or so thin many people have serious noise issues.
Hogger94 - I'm not here to sell you anything and quite frankly couldn't care less what you think of either building. My previous comments were all legitimate and valid consequences of living in a building that was at the time a construction zone and only 10% complete. Yes, the contruction zone I lived in lacked elegance. I was literally the first to move into the building. The construction is still not complete. However, it's over 90% complete and *most* of the qualities lacking when I first moved in have changed now that building is actually occupied. The building today is completely different than it was 6 months ago and will be different again in another 2 months. At this point, all the ammenities are now complete and the building has a great wine cellar, storage, gym, spa, sauna, ect. And the finishes are spectacular. Sub zero everything, Waterworks, Calcutta marble - this is really expensive and yes, high end, stuff that you wouldn't get in most buildings. Seems like you formed your own opinion and that's great - good for you!
Thank you Rajvaz. Glad things are better for you now, but you should know... my opinion of the building actually came from you and others from the below thread.
BTW, how did they finish up the terrible quality of workmanship and the smaller details of the building that turned out to be simply average? Did they take out a lot of the original work and replace with more elegant finishes/amenities that are now in a completely different league from the Grand Madison. Also, do you have security cameras yet?
FYI, did a search on all listings in streeteasy that have Subzero in the description = 751 listings
Search in Streeteasy of Waterworks in description = 376 listings
Search in Streeteasy of Calcutta in description = 58 listings
Search in Streeteasy of Cellar in description = 275 listings
Search in Streeteasy of Storage in description = 6,161 listings
Search in Streeteasy of Sauna in description = 555 listings
Your place is truly one of a kind!
Also, I know you're not trying to sell me anything..
Dont worry, I may actually pick one of these apts up after the kinks are settled and pricing is sub $1,000/sq foot. I do like the area though - except the homeless population kind of scares me at night.
Went to look at units here last week. While the F line layout was nice (great kitchen but way to small a L/R / D/R for a 3 bdr) the E line was simply awful. Rarely am I affirmatively turned off by an apartment in a new dev upon entry. Awkward layout and the kitchen was simply horrible. I think they would have had a hard time moving these units after pre-sales (floor plan for E looks a heck of a lot better than the real thing) at the peak of the market but now . . . forget it. Not even sure what price gets this building sold.
The D line is even worse!
One meager little window for the master bedroom is
unacceptable when you are charging more than $1400 psf...
strange, while I like the F line, I think the E line is a much better layout. Doesn't have the small LR/DR problem you mention, and of course it's 2nd and 3rd bedrooms have the huge windows with northern views/light while the F has the interior cavelike 2nd and 3rd brs. Sure the F has a much bigger kitchen and a bigger master bath, but I thought that was somewhat wasted space, I think the E uses its space very efficiently and the layout worked really well. To each their own.
The F line looks terrible on paper, but actually works much better in person.
The E line works great if you just get rid of the third bedroom -- though a 2000 sf 2 bedroom oughtta work well!
And as for D (or any unit with east facing windows), what IS the story about the building next door? While it seems impossible on such a narrow lot, it's not impossible to imagine what views you have being in serious "new building" jeopardy!