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The four horsemen that crushed RE in the UES...thank you developers for completing projects when supply is at its greatest and demand is at its weakest. Septmeber is gonna be ugly. Morning!
a little further south, but you can't forget Laurel, or Mirival. laurel is a poster-child for failure.
good morning to you too, marco.
so popular they've closed 35 units in nine months.
The Laurel offers immediate occupancy. Move in today and enjoy coming home to The Laurel, Manhattan’s most popular Upper East Side condominium.
The Laurel is a new 31 story condominium with 129 residences realized by visionary developers Izak Senbahar and Simon Elias and designed by award-winning architects Costas Kondylis and Brian Callahan. The Laurel features studio to four bedroom residences which seamlessly integrate state-of-the-art design with a vast array of thoughtful amenities for the healthiest approach to living. The quality of materials and attention to detail is apparent in every facet of its design, from the Indiana limestone and glass facade to the LEED-certified construction. Each residence is precisely calibrated to take advantage of everything modern city life offers, from the appliance-rich kitchens and pristine architectural baths, to the stunning uptown panoramas that unfurl from every window.
So what will happen? Does anyone foresee drastically lower prices at these developments to match what the market will bear?
don't forget the isis:
"Designed with today’s sophisticated New York family in mind..."
definitely going lower
I'd propose Azure, Lucida, Laurel and Georgica as the real four horsemen. Related continues to make progress at the Brompton and is about 60% closed, with closing only having started recently on some of the higher floors, so there should be more to come. Hard to see a great outcome for the developer there, but the chances of a complete train wreck have significantly diminished.
To AR's point, Laurel is stuck at ~30% closed over an even longer period than the Brompton has taken to close 60% and looks nearly dead in the water. That seems close to the definition of a train wreck already.
Lucida has started to close at or very close to list. It will be interesting to see how many of the closings Extell will be able to push through with the high end buyer base there. I predict significant ugliness, but who knows?
Georgica and Azure are dead meat. An inferior and a very inferior location, respectively, not even complete and no signed contracts to speak of. These ones are going to generate some lawyers' fees before they're done.
Honorable mention to the Isis, as MuayThai points out. Better location than Georgica and Azure but even further behind in construction and just way too late to the game. I don't see how the train wreck will be avoided here.
To kiz's question, I foresee dramatically lower prices at the three dead meat places. Maybe after the construction lenders foreclose and sell the REO to a vulture investor. Laurel something similar, although location may help cushion how far down is down relative to the ones further north. Lucida is a bit murkier - it seems like it has to end badly for Extell, but the question is how badly. Some high end buyers will suck it up and close at the agreed prices (some already have) and if others walk at least the deposit (10% 15% 20%? - anyone know?) absorbs the first slice of the price adjustment. A Laurel-like or Rushmore-like pattern of spotty closing while the developer/construction lender/contracted buyers/market generally engage in hand-to-hand combat with no clear outcome for a while, but ultimately a bad result, seems plausible. As for Brompton, Related may eventually slash prices to move the last units, but I don't think it will be very soon or for a very large portion of the building in the end. The drastically lower prices at the Brompton will come if anyone is forced into an early (next couple to few years) resale. The mark-to-market will be more for the buyer's account than Related's. That's how I see it anyway.
sidelinesitter, how many units are in the Brompton again? was it 193? they've closed about 100, if you count combined units. not great, but not awful. seems similar to 170 EEA, another high-end project i didn't have much hope for. will probably take a couple of years to clear all inventory. it took the Cielo forever (lesser location, i'll grant you, much less prestige), and it started sales ages ago, at much lower price levels. i just don't see where the demand is going to come for the larger, very expensive condo units at this time, though.
what a difference it made for related to be able to start closings earlier. the fact that it is a much nicer looking building couldn't have hurt, either. the lucida is extremely jarring. another neighborhood where the horsemen are galloping is Chelsea.
ACRIS is up to 88 closings totaling 108 units out of something like 193 total. I have not confirmed the 193 number, but it isn't far off. So they're up to about 56% closed and nearly $200mm in proceeds, which has to take the edge off the pain for Related. Most of the closings on the 15th floor and higher have been over the summer and it appears that these were simply not available when lower floor closings started back in Feb, which is a partial explanation for the lag. I was planning on doing an update on one of the Brompton threads in a month or so once we see whether they keep getting high floor closings across the line after Labor Day.
I was thinking that 170 EEA compared more to the Lucida that the Brompton. Not so much because of timing (where I agree that the Brompton is the better comparison and the Lucida is in its own world of hurt) but because of absolute price level and apartment size. The Brompton is expensive, but the Lucida and 170 EEA are something else again, and both are more concentated in large layout units than is the Brompton. The typical Lucida and 170 EEA unit is a multi-mullion dollar proposition, while the Brompton has many of those but also many sub-$1mm and $1mm-ish units on the lower and mid floors. Agree on the jarring, unappealing aesthetics of the Lucida, by the way.
Come now, dont forget about the Manhattan House
Manhattan House! I wouldn't group them with the others. They are clearly in "THEIR OWN PRIVATE IDAHO"
gcondo - good point. It is a bit out of my frame of reference (as was the Laurel until AR pointed it out) because I live in the 80s. Manhattan House has the distinction of hitting the wall all by itself even before the Lehman/market blow-up last September, so in that sense it was even more of a herald of doom than the others. It has also been good for some entertaining litigation and PR wars, which is a nice touch.
mmm but lets talk about poster children for failure!
lucida aggressively marketing "luxury rentals"--see today's ny observer
i try not to think of manhattan house, images of dolly fill my mind.
$623 million. 82 recorded sales, average price slightly over $1.8 million.
sidelinesitter, i just posted a cielo comp on the UES comp thread. quite interesting.
ubottom, no link? gcondo, it's morbidly fascinating. a guilty pleasure.
i, for one, don't feel the slightest guilt about that pleasure. morbid fascination i will admit to.
i know one of the 12 people who closed in the Lucida. nice family.
check out the alexander, they're double counting sold units. innocently, i'm sure.
re: alexander. not sure I follow double counting of sales. there have been no sales. building is still under construction.
sidelinesitter, nothing has closed. still the alexander had a 70% sold banner up a few months ago. i agree, a real sale is one that has showed up on ACRIS, but for lending purposes and marketing the developers of course count number of units in contract. and i've been seeing a LOT of unethical efforts to make it seem like more are in contract than there actually are.
units are listed both as in contract and down below as sold. units are listed as 2A1 and 2A. here combined units are listed as 16AB, 16A and 16B, which inflate the numbers of units that seem to be potentially accounted for.
Maybe we could agree on the seven signs of apocalypse instead of the four horsemen?
Miraval has sold around 80 of 400 Units since late 2007. 9 of them in 2009. Only 1 sale in the past 5 months, and the three befor that were all under $1M. So they still have 300 units ready to come on line, but only about 60 listed in street easy.
aboutready--would you be willing to identify any specific apocalyptic horsemen in the Chelsea area, in your opinion; really curious about some of the expensive condo buidings there . . . thanks!
toast, miraval "only" paid $363 million for that pile of excrement they called opportunity. only 83 recorded sales at an average of $1.388.
princetonbabe, we should probably start threads per neighborhood. kind of like the comps idea. i'll have a look and report back.
the "down below" listings are not listed as sold, they are units previously listed but taken off the market, which is why they are in the "Previous Listings," not "Recorded Sales" down below. Some were later relisted, which is why those ones show up a second time as active listings or in contract up above. The developer is not presenting the previous listings as sold, SE is presenting them as previously listed.
On the listing of individual units and the potential combination separately, I think the optics actually go the other way from what you suggest, in that it will tend to shows more listings at any one time, which will not strengthen the developer's hand. On the specific case of 16A/B/AB, it looks as if they offered it either way and got a contract (or so they claim) as a combination, at which point they withdrew the individual listings for the two units. Nothing obviously nefarious there.
Also, some of the optics here are SE-driven. I have discovered in trying to get SE support to match up listing and sales entries in other buildings that SE's system does not permit multiple listings to be matched to a single sale or contract. I think the cleanest presentation would be for the listings for 16A and 16B to show that they entered contract as 16AB, and then for any resulting closing to show the same. SE's software does not support this. Once there is a listing, there is a listing and if the deal does not close as listed then that listing goes down as a 'previous listing' that they do not connect to the actual closing. See PH2C and PH2D at the Brompton as an example - these were offered individually but closed as a combination without ever having been listed as such (at least on SE). SE activity for this building shows two 'previous listings' and notes in their listing history that they were sold, but cannot, because of SE design limitations, link them to the 'recorded sale' for PH2CD, which in turn has no associated previous listing.
None of this is to suggest that developers wouldn't try any trick to con potential buyers, as of course we know they would and in fact are doing, but in the specific case of the Alexander, at least as it shows up on SE, I think you are seeing ghosts. The 70% sold banner is another matter. I'll take the 'under' on 70%.
"The 70% sold banner is another matter. I'll take the 'under' on 70%."
Remember, that in broker-speak, they could have meant 70% of all currently available units or something like that...
Trust no one. lol.. so true.
"Miraval has sold around 80 of 400 Units since late 2007. 9 of them in 2009. Only 1 sale in the past 5 months, and the three befor that were all under $1M. So they still have 300 units ready to come on line, but only about 60 listed in street easy."
Wow. I am so clueless. I live less than 20 blocks from this thing and have never heard of it. There are white elephants everywhere. Two observations:
1) this slow pace of dealing with reality may be a preview of the process of developers/banks working their way out of a lot of these new condos/conversions that got caught in the downturn. Only a sale per month in 2009? Can you say denial?
2) 400 units minus 80 sales minus 60 listings = 260 units of shadow inventory IN ONE BUILDING. It looks as if there are some combinations that would get the 260 number down on a post-conversion basis, and I don't know about the status of pre-conversion tenants who did not buy. If many of them stay as renters, then this is in substance a partial conversion with partial rental and the shadow sale inventory could be much smaller. I just don't know how the deal works.
re miraval, I dont think those numbers are correct.
Brompton to me is above the others in the sales game. If nothing else, the Robert Stern cache (helps to be the 15 CPW guy) and the building is just better. Laurel locations stinks, lucidia is ugly, georgica is retarded and wraps around a tenement, just doesn't look that high end. Miraval was just too ambitious. Too big, too far over, too much going on. Brompton isn't the best building in the world, but I think its an easier sell relative to the seriously problmatic ones.
Part of the challenge is, prime UES just didn't have many building spots. Brompton had to take down a building thats been ready to go for like 20 years.
Of course, it did sort of start this rush.
luxury rental advertising section only in ny observer print edition
lucida is totally wrong design for carnegie hill--pseudo prewar is what sells up there
agreed that the shadow inv is astounding why you drill down a bit
thanks ubottom. i later figured that out. not so quick in the morning. when doing a search i came upon something interesting, though, the sales team at corcoran has a 170 EEA rental listing. it might be someone who bought, but maybe not.
check out the attempts at resales in the Cielo, which i'm actually not certain has sold all of its original units. there is at least one combo that looks like it still belongs to the sponsor.
> lucida is totally wrong design for carnegie hill--pseudo prewar is what sells up there
Agreed 100%. Brompton did it right, prewar fans can claim they almost got it. Stern did same thing with Chatham, which appreciated like CRAZY.
Lucidia looks like something that would be ugly even in the east village.
lucida should have gone up across from one jackson. they could have reflected off of each other, possibly melting the tires of the automobiles driving up the private driveway.
What do you guys think the psf should be on these units?
Considering you can get stuff in central UES blocks for $750-800 now, I figure $1k psf sounds about right for most of these, with newness and amenities and such. Add in $100-200 for Brompton. Add in another $200 for major views.
If the declines continue, expect those estimates to go down as well.
The Alexander is a real tradegy for the developer as they could have finished that building 18-24 months ago already and would have likely sold out. But they damaged foundations belonging to neighboring buildings and as a result were mired in legal and stop work orders. It is a real shame because they acquired and took down lovely townhouses to build that, which I imagine were not cheap to begin with. I am sorry but there is no way that they were 70% sold when that sign went up. I chuckled inside when I first saw it. I would imagine this to be a 10% down building (I doubt they had the clout to ask for 20%) so I don't see how this won't become at least 50% rental or in some form of distress.
Miraval - what the hell was that about. If you have ever seen the old Macklowe rental units you would know that this is not a prime building to convert to condos. Here you have this massive "rental designed tower" next to one of the most architectual and powerful large rental buildings - Solow. Why the hell would you pay $1M + $2000 in carrying costs when you can just walk to One East River Place (Solow), and drop $3000 for first month rent and $3000 for security. Because of Miraval Spa? I don't think so. Do these buyers even know that Solows laundry room is on the 50th floor with panoramic views and that the entire top two floors are devoted to amenities, including a glass enclosed pool? Have they seen the waterfall, small park, private driveway, and the wripples in the water as you make that left toward the elevator bank? Do you know why he had to dedicate 2 floors to amenities - because the location is very far. It is far far far. So unless you are getting something beyond wow and I mean direct river/bridge views, people don't spend big bucks there. Full Stop. Not to mention that Solow and The Belaire, both clocking about 50 stories, obscure the Miraval views. So this is by far the upper east sides poster child for disaster and the one that stands out the most in my mind.
Manhattan House unlike Miraval had a shot. A small shot but in my mind a better chance than Miraval. Because primarily location. The issue here I reckon is that the developers were happy taking on a less risky project for a smaller return so they paid top dollar. Fast forward to a slower market, publicized disagreements between development partners, landlord tenant issues, and a slower market, this is going to be one mega failure. I am almost sure we will see the $5000 per month 1400 SF 2 Bedrooms here shortly.
The above 2 are going to be the upper east sides poster childs for failure. Brompton, Lucida, etc will have marginal success. Neither buyers nor developers will be happy. ISIS and Georgica need to be around $1100 avg psf to sell out. Otherwise conversion to rental is imminent. The location are ok, but not prime and the views are going to be marginal. That said, if they have the ability to move prices in that direction, they can do really well in what is otherwise a lousy market. Azure needs to price around $800 psf for a condop with a land lease in the 90s - and even that is high.
how are thinsg workin out now ? price chops
Azure advertised a "JANUARY NEW YEAR'S SALE" in the Sunday New York Times. Only two weeks, left folks! Hurry! . . .
Id like to solve the puzzle. What are the 4 developments most likely to default in 2010?
what about now?
The new developments are jokes. Only an idiot would buy into one right now. Prices should be 25% of what they are asking. Many of them will go belly up and the owners will be stuck holding the bill....it is foolish for anyone to buy NYC property right now, but particularly foolish to buy in one of these new developments.
Any news on Alexandra? Has anyone closed recently?
any more new miraval?
How about The Charles. Where is this building? At 1355 1st Avenue on East 72nd Street. SE shows sales, but I have yet to find the building. Is this building a PHANTOM?
another one of my oldies..well 3 out of 4 are successful during a pretty rough period. lets see where we are in another 2 years.
keep trying to pump up the market-
still headed south-- your posts wont help
Brompton proved a lot of people wrong and seems the Lucida is doing just fine given closings above $2k/ft. (those are grossly overstated sq.ft. too).
Azure will be interesting to continue watching....
Brooks2, I understand you absolutely loathe the possibility that anything positive (or stable for that matter) could happen to the Manhattan RE market. Explicame your comment of "still headed south" when there is practically no supply left and everyone on the board (even bulls) have been proven wrong by the sales in these buildings? (I'm speaking mainly of Brompton and Lucida at the moment)
Personal example?: Our best friends bought a 4BR bigh floor apartment in the Brompton for $4mm in 2010. I thought they had lost their minds...they just got an unsolicited offer for $4.75mmm. Yes, continues to defy logic...but it's happening.
I'll say it AGAIN like I always do. Flight to quality...
Brompton and Lucida seem to have a huge number of rentals which would clearly indicate lots of investor purchased units. Seems a bit high to me no?
Im just saying 2 years ago these places were vacant. now I walk by georgica at night and almost every light is on. there's more money out there than you think.
"I'll say it AGAIN like I always do. Flight to quality..."
this doesn't make sense to me. Flight to quality means buying a riskless asset like t-bills or short tsy notes. I don't consider RE a risk free asset(didn't it just drop 20% from 08'). It is a depreciating asset that is taxed.
if you think you need to put your $ in a risk free asset you must think the economy is slumping.. you still want to buy RE? good luck
the concept of flight to quality is applicable to any asset class.
any asset? or any quality asset?
again, I would not include a depreciating asset as quality.
I'm not talking about these buildings as investments, I'm talking about them as homes. Yes, you have many investors, but what these are mostly family buildings on this thread...2/3/4/5 bedroom apartments. People that purchase are buying what they think is tangible quality...so yes, flight to quality.
Granted, much of this is marketing and gimmic BS, which I must admit, Related is better at than most. So much of it is a perceived quality, but either way...it sells.
When you're spending $4mm on an apartment, you want to feel like you're living in a $1mm dollar apartment. There you go, in Manhattan, $4mm is the new $1mm!!!!