Chelsea Stratus Price Cuts

woah, furball came up.

just shy of $1MM for an 8th Floor??

Its just the beginning as I'm hearing not every one of those "in contract" units will be closing on its original terms. Many of the lenders are either not around, or have changed their terms on the buyers. No more 10% down, etc.

They have closed on very few units thus far.

And they will enjoy fine service from LCOR & Bellmarc after they close.

noted the disparity of floor in the building and cost for the same line apt. spot checked a few and seems like those who got in on later releases got better deals per sqrt ft. so implicit reduction in cost

mmm33, I know that LCOR doesnt have a ton of experince in manhattan. Is there something else to know about them?

Still twice the price of the many rental buildings across the street - Chelsea Archstone, Chelsea Vanguard.

Still overpriced.

nah, we've been through this, you're comparing it to worse apts and doing the calculations in a very biased manner. probably overpriced but not nearly 2x.

alex123. the reason that very few units have closed is because the building received tco's only 3 weeks ago, and only up to the 12th floor.

There are only 8 units left in the Stratus, most of them on the top floors in the 2 to 4 million range, and only 2 left on the low-floors as of a week ago. Developer is cutting prices to get rid of the remaining units. They need to close the sales office soon.

i have a question for lupus1. Where did you see that there were different prices, and how did you now when they actually went to contract? Is it already on property shark or acris?

sorry, i can't spell. i have a question for lupus1. Where did you see that there were different prices, and how did you know when they actually went to contract? Is it already on property shark or acris?

Alex-I can tell you all about them, if you want to communicate via private e-mail. Still not going public on them

skippy, followed the building since initial offer. not totally accurate because i dont believe the building has closed yet so just relying on what i saw over the year with regards to updates per streeteasy. there are a few outliers where i saw higher floors in the same line for cheaper, which i thought was strange. i could be wrong, interested to see when the data does go on acris.

any take on haw many people in the building will flip?

ccdevi: "nah, we've been through this, you're comparing it to worse apts and doing the calculations in a very biased manner. probably overpriced but not nearly 2x."

a) untrue. go to vanguardchelsea.com, for instance, archstone chelsea.

b) property prices are determined not by what goes into them, but by what you get out of them: shelter. In these cases yes, stratus has nicer kitchens and juliette balconies. Worth twice the price?

nah.

mmm33, what is your email address?

stevejhx, I agree with you that units are still over priced, but this could turn into a "Charleston situation" (another LCOR development) pretty quickly, so its worth watching anyway.

what's the latest with the Charleston? Those units seem to be going in a firesale, but at that location I don't think they will ever be a good investment.

Alex- Use this, nyc_mom_75@yahoo.com Will get back to you in the evening (put streeteasy in subject). Stratus was a hit compared to charleston (most of the plans and amenities are almost identical), at Charleston the last few are going cheap, so were the first few

Like this at the Charleston?

Price History

10/04/2006 Listed in StreetEasy with Elliman at $1,610,000
10/31/2006 Price decreased to $1,475,000
01/29/2007 Price increased to $1,530,000
12/06/2007 Price decreased to $1,350,000
05/15/2008 Price decreased to $1,295,000
05/22/2008 Price decreased to $1,195,000

Stratus is in a better neighborhood, but not worth twice the price of the rentals across the street.

Personally, I wouldn't step out onto a balcony anywhere above the 6th floor, so they're useless to me.

That apartment is on the second floor facing the street with tunnel traffic. Don't expect to see the same level of price cut elsewhere.

what price cuts are you expecting to see at the stratus? the building is almost sold out. there are very few apartments left. i think its wishful thinking

I just picked on at random, didn't even look at it.

whoever buys 30b will get it less than anyone in the same line 6 floors below.

lupus1, I agree completely on 30B

ekartash, unfortunately you will probably expect at least a 10% drop in price on resale. these seem to be the discounts applied by the developer. depending on the amount of flipping that goes on ( which i am not sure on) then you could see some more.

as someone mentioned above, the financial situation has changed somewhat since the initial offer of CS. If i remember 40% of this building was taken up within a week or two, then slow selling till where we are now. the strong part of this building which stands out from others in chelsea ( or used to ) is that is has a great view. i say used to because i seen some nice buildings going up along the highline. the cons are that is an average building on 6th avenue. like many that surround it - the demand for these has basically dried up. but not a bad move if you got finance and expect to hold for a while.

stevejhx: Personally, I wouldn't step out onto a balcony anywhere above the 6th floor, so they're useless to me.

Steve's afraid of heights. How amusing. I mean, LMAO

lupus1, how is demand dried up if the building is more than 95% sold and many of them went in contract this year. There have been some price reductions, but still higher than the original prices. There were 10 price amendments during the first 2 weeks of sale last year. Also, this is the only high-rise condo in the area right now. The others are rental towers along 6th ave. Highline is a totally different area, and the prices are much higher.

how can someone buy in 30b for less than someone 6 floors below ( less than the original price ) these things are cookie cutter - you pay for height - how come more recently it costs less. 10% less.

masterd, "in contract" as reported by brokers doesnt mean "95% sold". What good are the "10 price amendments" if the same unit can be had cheaper form the developer today...

"Steve's afraid of heights. How amusing. I mean, LMAO"

Verain, I am glad to admit, I HATE HEIGHTS. No problemo.

More seriously, however, is that you think the "A" in EBITDA stands for "amortization of intangibles," when intangibles are depreciated.

LMAO.

Or any of the other financial faux paux's - such as financial leverage = mortgage leverage, when the one implies income, and the other implies expense, is laughable.

Like I said before, the developer is trying to get rid of the remaining units so they can close down shop. At that height and direction (south), 6 floors higher doesn't make much of a difference. If the price drops below what someone paid for 19B or below, then I agree with you.

Its so easy to tweak Steve, almost as fun as Whack a Mole.
Of course, Steve being incorrect is icing on the cake.

Yes, intangibles are amortized.

EBITDA as an earnings measure does not reflect anything related to amortization (paydown) of debt.

whoever got 22B (330 days on the market ) won the jackpot, managed to get in 10k cheaper that 15B. also 21B got a 100k discount but still paid 100k more than 22B. lets say it costs 15k to go up a floor, some of these people are getting screwed left right centre.

22B was listed last year and may have been in contract prior to the last price amendements. Some of these listings were posted or updated on streeteasy long after they went in contract. 21B and 15B both went in contract later. I do agree that I wouldn't be happy about the price reduction in 30B if I were a buyer on the B-line.

But that doesn't imply that every buyer at the stratus will expect 10% drop in value.

lets not forget 10B who paid 1.6m for the glory back in feb last year.

it is not a good signal when the developer potentially sells the next property at 10% below asking and below comparables. this tells me something about the building if i were to walk in there tomorrow.

lets not forget that "in contract" prices you see on streeteasy are not the actual sales closing prices. financings fall through and people walk, as we have seen in many instances.

also, if the building has 199 units built and only 186 are listed...where are the other 13? still "not released by the developer"? holding out for 69th amendment 15% down?

finally, completion date for the units on upper floors has been pushed back to November...some of these folks might have an out ...

lupus1, 10B was in contract this year. It was one of the last 2bedroom units to go in contract.
alex123, I have information on the exact number in contract from the developer a week ago. It's around 195. The building has 203 units. I don't rely on the streeteasy listings. Closings just started 2 weeks ago as they originally promised, so November for the top floors is not unreasonable. Agree that "in-contract" prices are not necessarily the final prices. We will see when the sales data come in.

i stand corrected on 10b.

any takes on how many will flip? will we have another charleston?

I think less than you would think. Several people I know buying there are planning to live in it for at least 3 to 5 years. There will certainly be flippers, but I don't think it will be another charleston. The developer doesn't have much remaining inventory, only 3 units below 2M. Chaleston flippers had to compete with the developer who had many units left in the mid-range. Then again, if alot of buyers fail to get a mortgage and have to forfeit their deposits, then you'll see more inventory coming back to market. But I don't think it's the case since they've been very busy with closings for the past 2 weeks. Wait and see.

lupus1, I think many will flip, but for a small loss. Nothing has closed yet...and even if only 5-10% of folks "in contract" cant close that would add incremental 10 - 20 units on top of another 8 currently listed. That can be significant enough to put some pressure on prices.

Also, if a unit that is simiar or better htan yours offered 10% down ...plus lets not forget another 5% of transfer taxes and closing fees...you are already taking a 15% hit if you flip.

Renting might be an option but there is quite of few choices in Chelsea currently...and the AIDS cliinc at the entrance clearly wont help.

yet another listing falling out of "contract":

http://www.streeteasy.com/nyc/sale/84901-condo-101-west-24th-street-chelsea-new-york

yet more listings go into "contract":
http://www.streeteasy.com/nyc/sale/217396-condo-101-west-24th-street-chelsea-manhattan
http://www.streeteasy.com/nyc/sale/194215-condo-101-west-24th-street-chelsea-manhattan

Truly, this building will have dozens of rentals when it is completed. Especially on lower floors - people went into contract early looking for a bargain as an investment.

Pulled from the market? Developer looking to rent instead?

http://www.streeteasy.com/nyc/sale/159583-condo-101-west-24th-street-chelsea-new-york

or maybe it was sold?

I agree there will be a lot of flippers. I hear a lot of brokers bought in with flipping in mind. Guess we'll see!

There may be price cuts in this building, but prices are up quite fairly since the original offering plan - this is a rather significant new development in the market given size and location and the early believers are holding their own on it.

hearing from the sales office they are having trouble closing on a "few units" as some deposit checks have "bounced" ...more sizeable price cuts today on units that were "in contract":

http://www.streeteasy.com/nyc/sale/128817-condo-101-west-24th-street-chelsea-new-york

http://www.streeteasy.com/nyc/sale/217323-condo-101-west-24th-street-chelsea-manhattan

Where is DaBulls now that the Q2 figures are out?

Where is masterd "the developer doesn't have much remaining inventory"...."Don't expect to see the same level of price cut elsewhere"?

alex123, were these 2 listings ever in contract? Not according to streeteasy. Yes, these listings just had significant price reductions but still not at the same level as the Charleston listing for 2E, which by the way is in contract now. I'm not saying that there won't be more price cuts to come. I just haven't seen any evidence that LCOR has held back inventory or had a large number of contracts falling through at the Stratus. So far I only see 5A coming back to market and a resale by a broker owner. What is the level of inventory have you heard? As far as I know, more than 20% of the units have closed and more 10% are occupied.

15C went for $985 a few months ago.
14C is now up for $1.2

Am I getting this right?
10-15% cuts?
Wow.

Vanity high floor apartments get cut.
Basic studio, 1,2br apartments don't.
Check 15c vs 14c.

I am closing on an 'H' unit in the 20s shortly. Given all the comments about price cuts and their eagerness to close the sales office, do you think I have any leverage to push for a small price reduction before closing (e.g. it's worth it for you to give me $xxk off the price than try to find another buyer)?

Appreciate any advice you have.

MrCook, doubt it will work. They have your 10% and will let you just walk. But try anyway, maybe for some of the closing costs.

MrCook, I have not seen any price cuts at the stratus for units between 19th and 31st floors. The listing for 14C referenced above is a resale, not a sponsor sale.

by the way, both 14C and 15C went in contract at first or second amendment prices more than a year ago. The dates for the old stratus listings on streeteasy have been reset to 4/24/08 for some reason.

masterd, 36E was in contract and fell through - you can check with sales office if you'd like.

Many flippers realize that the market has changed and that its better to take a 10% loss and move on. My guess after talking to the sales office extensively is that at least a third of the units is in the hands of speculators.

also, 36E pricing still makes no sense ...350k more than a similar apartment 3 floors down?

alexq123,

"My guess after talking to the sales office extensively is that at least a third of the units is in the hands of speculators."

Wow, that is quite a high percentage. Higher than I would have though, although I have had no contact with the sales office.

There are no speculator in Manhattan. Didn't you get the message.

DCO what are you a moron? There are speculators in Manhattan and in every market, and always have been.

And generally speaking, speculation is a vital component of free markets.

Get a clue before you go telling people what to do.

TwoFacedLiar, you must be new, and not understand the beauty of subtlety.

dco is a Master.

However: "speculation is a vital component of free markets."

Free markets do quite well w/o speculators. Ask tulip bulbs.

I think TwoFacedLiar needs to learn some economics, particularly Hyman Minsky's principle and the all so famous "Minsky Moment" that current market sages including Bill gross at PIMCO endorse.

I'd highly recommend Google-ing Hyman Minsky TwoFacedLiar.

While speculation is undoubtedly a component of free markets, it is MOST DEFINITELY NOT a VITAL component.

It is, in fact, an inefficiency that introduces unsustainable and parabolic price appreciation that, according to history, ALWAYS results in a rapid and self-reinforcing deflationary cycle that many refer to as a "bust" or "pop".

tupip bulbs, who is that? A drag queen?

Without speculators, it would be difficult to have market hedges. There would also be less liquidity in markets.

Hedging, like insurance, is vital to markets because it is vital to producers and owners of assets. Therefore the other side of the trade, speculation, is also vital to markets. Hedging creates efficiency and therefore so does speculation and prevents bubbles and protects market participants.

Thanks MMAfia and stevejhx for adding yourselves to the list of market morons, just after DCO.

TwoFacedLiar, Thanks for adding yourself to the list of SE posters who would do well to spend a little more time in study hall schooling themselves in the historical literature on capitalist market economies and a little less time engaging in ad hominem attack. As the first item on your summer reading list, may I suggest Mike Dash's Tulipmania? You might learn something about the what happens when rational speculation morphs into irrational exuberance.

ok good, the only bad example that now 4 people have been able to put forth is about tulips. Yet just in today's world we have how many global markets covering equities, debt, commodities of every sort - perishable and non, real property across the world, ... ?

Speculation does not lead to irrationality.

TwoFacedLiar, it is not necessary to have speculators in order to have market hedging. An example would be a farmer who forward sells his crop (short the contract) vs. a processor/food company that is long the contract because it will eventually need the crop to manufacture its products.

The futures markets can exist, and have existed, for quite some time without the activity of speculators.

By the way cherryboy, what is your proposed alternative to free markets? Communism?

drg, absolutely wrong, and a complete misunderstanding of hedging and speculation.

TwoFacedLiar, please explain exactly how speculators are VITAL to free markets as you have posted.

If it is so VITAL to free markets, then please explain why the House just voted on June 26 to overwhelmingly (402 to 19) force the CFTC "to use all its authority, including the agency's emergency powers, to "curb immediately" the role of speculation in energy futures markets."?

http://uk.reuters.com/article/oilRpt/idUKN2638454220080626

And please don't post anything from people like Victor Niederhoffer or others like him in the same breadth of people like Hyman Minsky out of respect to the latter.

I'd like to hear your reason why the House just passed that bill to effectively CURB what you claim is so VITAL for free markets?

BTW TwoFacedLiar, before you attempt to question my credibility, I do work in the Hedge Fund industry where professional speculation is one of the greatest sources of alpha.

I am not saying that one cannot be profitable by participating in speculative investing practices and strategies. Once can be EXTREMELY profitable, at the expense of increased risk and volatility.

I am saying that I question your assertion that speculation in VITAL for free markets to function.

daisy2006511, get that SPAM outta here.

MrCook (or anyone else) - Any luck on renegotiating your purchase or getting developer/ broker to cover some of the closing costs?

Nope :(

fyi, there are only 2 sponsor units left at this time, both in the $2M range. There have been a few units defaulted as alex123 pointed out, but they've been snapped up by other buyers. There could be a few more to come, but if you don't jump on the opportunity or think the reduced prices are still too expensive, then it makes no difference to you.

am concerned - if as previously posted - that if there are really as much as 30% speculators what is going to happen to maintenance costs/building services if some of those start defaulting. even if we haircut that by 50% - 15% unoccupied units seems very high.

i bought about a year ago, and the question i'm asking now is would i buy again right now? and if not, do i think by waiting around a year or so when wall st folks are throwing themselves off ledges that i'll get a better deal somewhere? as much as 10% better? hmmm...

I thinkk as big a concern as problematic financials for the building's owners is the neighborhood itself. In a boom economy marginal areas become better sometimes, but in a stagnant, tentative, or down economic era, there just isn't going to be new investing and building and gentrification and upscaling of blah areas. The mid-upper 20's on 6th Avenue were never nice. They are grimy oold office buildings left over from the millinary (sp?) and fur and flower businesses that made the area home for a long time in generations gone by. Nothing about this area will help values of the new construction that went up there in the last 5 years. It is as kind of nowhere land and gritty as it ever was. Honestly, if one were to attempt to resell a unit at the Stratus, why on earth would anyone pay even MORE than the seller paid originally. This is a paradigm of the risks of buying into new condo construction in less than stellar areas in the past few years. I didn't get it, I don't get it, and I fear for the people who sunk all they had betting on the future value of these places. Let's not even get into expiring tax abatements and aging of the shiny finishes that were so nice when the units were new.

kylewest, i think you are right and wrong at the same time. Definitely if areas are marginal and the economy is not growing then marginal areas probably will not upgrade. That is a big risk. And yes above all the new buildings on 6th, the area is not the best. But what about the area just below (3-4 blocks) and both to the west and east. I would say...not so bad, actually damn good. And to live in a new building on a high floor with great views, i think that it might be a reasonable place to live and invest in. Also, considering that there is really no competition in the chelsea marketplace for someone who wants a new condo high rise with floor to ceiling glass is it low risk? Maybe because of Stratus, with the other new rentals in the hood, gentrification of that area will occur quicker. Am I crazy or just optimistic?

http://www.corcoran.com/property/listing.aspx?Region=NYC&listingid=1328043

not a good sign if correct.

the broker reused an old rental listing for a 2bed/2bath unit for a new 1bed/1bath. Give her a call if you're interested.

btw, the resale for 14C seems to be successful
http://www.streeteasy.com/nyc/sale/316480-condo-101-west-24th-street-chelsea-manhattan

any idea what 14 c went for, thought 1500 pr sqft was a bit of an ask

Kind of shocked that 14C would be in contract for $1.2 MM. Definitely seems high for this market.

thought this was interesting about the potential rescission right - don't know how applicable it would be here though. Anyone with a legal background have a comment on that? Also, hearing from multiple brokers that deposits are being forfeited here...am surprised listings aren't popping up. maybe the developer is trying to work with some of these people?
http://realestateqa.blogs.nytimes.com/2008/07/04/a-new-condominium-isnt-ready-on-time/

All the closings seem to be on schedule. 32nd floor condos are closing early next month, and 35+ floor condos are closing late next month.
Have any of the condos been appraised recently by the lenders?

I'm scheduled to close in Oct, 37th floor.

Just be careful with LCOR regarding the punchlists and how they run the show.Keep copies of all the documentation and read the "New York Condominium Act" for your own benefit. They close faster than others but do leave the owner with a huge punchlist.Not so happy with them at Charleston, building is great but LCOR sucks. They are taking forever to finish punch lists, they are breaking laws by allocating a HUGE common terrace to the building Super, they do not want to leave the control of the condo board after selling off the building entirely.

mmm33, which common area is being taken for use by the Super? Unfortunately the control of the condo board is in the hands of the Sponsor, LCOR, for 5 years as per the offering statement. Not a good thing.

300SqFt terrace in Charleston. They will have to give that back to residents because per the NY Condo Act no common element can be taken away from residents

mmm33, is the 300sqft terrace connected to the super's unit and is it not documented in the offering plan? what legal actions if any are you and other residents taking to reclaim the common area?

csn, which offering document were you refering to when you mentioned the 5 years of condo board control by the sponsor, the charleston, chelsea stratus, or both?

masterd, it was in the Charleston "the fifth anniversary of the first closing of title to a residential unit" and would not be surprised if it was in the Chelsea Stratus also.

Stratus/Charleston docs should be similar-all appliances are same, layouts are similar etc and same morons from LCOR are managing the building, same legal team, same managing agent....
There is a common element terrace which is classified as "Outdoor Recreation" in front of the gym. Super's unit does not come with any terrace per the offering memorandum. LCOR has decided to give half of the common terrace to the Super by putting a partition in the middle of the terrace. It took me a while to find the "law" and am complaining to the NY Attorney General's office. LCOR was sent a memo by residents expressing concern and they refuse to give the terrace back to the residents. The super also gets a 2BR, plus being new cons plenty of opportunity to make side cash. On top of all this the super claims the terrace was part of his contract(he does not have an employment cointract of any sort) when the residents asked him to leave the terrace

The Chelsea Stratus offering plan states "not later than 30 days following the second anniversary of the First Closing..." I'm surprised that it's different for the Charleston. LCOR has also sold the retail space of the Stratus last month, so they would have no vested interest in the building after the last closing this year. I wonder if they even want to control the board for up to 2 years.

The super's unit described in the Chelsea Stratus offering plan is a 2bed/2bath unit with a terrace area of 323 sqft on the third floor. The terrace is partitioned from the common garden and is consistent with the terrace layouts in the adjacent units. Again, I'm surprised that the Charleston document is different. But I do agree that it's too generous for a super's unit.

They want to keep control of board for various reasons-they do not want residents to form an association and get organized. Charleston is all sold out, every sale has been closed and commercial units are sold.Historically there have been numerous instances of residents filing lawsuits against sponsor after getting control of board.Typically residents want to get the building inspected in detail by an engineering firm . But again LCOR is just managing the development and every part of construction was outsourced, so not sure why they want control. Maybe they have nothing better to do in this RE market

In Charleston Super's Unit does not come with a terrace.

Charleston ... people who buy in that area deserve what they get