905 West End Avenue

well,that would be Louise Phllips-Forbes of Halstead (yep married into the Forbest money). A broker is a broker is a broker.

The floor plans and renderings look nice but I haven't seen the building. It's in a great area, though. My feeling is that there will be huge price cuts here because they were way overpriced before the market mess. They've announced some piddling price cuts in the last few months and now they're offering a gimmicky owner financing scheme at a low rate but with only a 7(???) year term. Holdover RC/RS tenants could explain the developer holding fast to high pricing.

I've seen it. Not awful, just dull. For a market that was hungry for inventory, this conversion made sense. Now? Not so much.

Agreed that these are totally overpriced for what they are. Also, my recollection is that some recent conversions in the area are not trading well for their new owners.

I was told in no uncertain terms by Phillips-Forbes that the financing deal being offered was only open till the end of October, and that there were contracts out on "almost all" the apartments. Spin, spin, spin. It will be interesting to see whether this conversion actually occurs.

Unless they are giving these apartments away for free, there is no reason any thinking person would buy now. In a few months, this seller's back is going to be against the wall as the market continues to tank (think zero bonus season) and time runs out to make a go of this conversion in the Spring. I have heard stories from this same developer's other projects that they lie through their teeth. This sham about being sold out sounds like part of the same game. I'm not falling for it.

They just lowered the starting asking prices over the weekend. Who is the developer and what other conversions have they done?

Samson Management. Over 6000 apts owned and managed - many on UWS. Recent projects include 220 w 93, which appears to be a successful pre-war renovation. Be objective and compare/contrast what the developer is offering here - the cost, buidling/location, quality of renovation, financing, etc. There is a great deal of nonsense posted here for some reason.

I think there is decent value if you are looking to buy/live in for 3-5 years. I think it's obvious that prices are coming down and may settle closer to $950-$1000/sq ft in better buildings in this area; but to think you can buy for less than $900/sq ft right now is wishful thinking in my book.

And finally, if you think brokers are NOT motivated to get you to buy and do so relatively quickly then you are as naive as you appear. What value are comments that tell everyone what they already know?

Comps, construction/building quality, location compare favorably for this project given recent price drops and financing offer. Call and ask re: actual terms of financing deal rather than take comments posted here at face value. 30 yr amortization with a bullet payment in yr 7. Ever hear of refinancing?? I visited recently and am becoming more and more intrigued.

UWS1313: I think the key difference between 220 West 93rd and 905 West End is timing. One building went to market at the top of the Manhattan bubble; the other went to market just when things started to get ugly. Even at 220, I think Samson is stuck with a few apartments because they wouldn't/couldn't adjust prices when the market turned.

As for the financing offer: yes, we've heard of refinancing. Some of us have also heard of 7/1 ARMs, which is basically what this deal is - except with the long-term rate and credit risk shifted to the borrower because of the balloon and the absence of any caps. With a normal 7/1 ARM, I can refinance if I want to. With the balloon, I'll refinance because I HAVE to. In the near term, the rate is nice, but it doesn't justify overpaying for an apartment.

I admit, though, it's an attractive deal for somebody who loves the building and has a great relationship with a very rich, very ill relative.

What does stuck mean in the context of your remarks? By my estimate, Samson sold 20 units at as you call them "bubble prices." Do you have any idea if Samson took on debt, at what rate, or are you just assuming that they are distressed and must sell now at any price? In other words, if you are a sponsor would you just mark everything down and sell regardless of your financial strength or lack thereof? Having worked with developers/sponsors for many years, the best ones have survived recessions and the best will survive this downturn.

In the context of your 7/1 ARM statement - find me a bank that will lend 90%! Most now asking for 25% condo downpayments. A pretty good trade-off to have to refi in 7 yrs or less and have plenty of cash in this environment. Plus, G_d forbid the market rebounds over the next 7 years, your potential return is much higher at a much lower carrying cost. Specifically, 4.875% vs jumbo 7/1 ARM market rates in the 6.5% to 7.5%!

I want to post and have reasonable discussions but it appears that everyone thinks the world is ending tonight and that sponsors are going to go out of business tomorrow. Of course, the secondary market may demonstrate that trait as I think many Wall St types are going to become distressed sellers in 2-3 months. Let's use some reason vs. acting like the world is about to end. My view - a 1 year recession that will be more severe than the last 2 and Manhattan RE prices drop 20-30%. BTW, that same forecast is available from any cabdriver out there.

Oh as far as your rich relative comment - Wall St paid out $312 billion in bonuses over the past 5 years. That rich relative is a helluva alot poorer today but not bust thanks to the TARP. There will be some bonuses paid this year - $10-20 billion+, and there still are a number of hedge funds, much fewer I admit, making billions in profits. Maybe those guys are going to move to Des Moines, Iowa?

Be opportunistic, be creative and be aggressive.

UWS1313 says "be opportunistic, be creative and be aggressive"

That is EXACTLY what Samson is being. The smart buyer would be taking a pass on short term seller financing on a long term asset in these troubled times.

UWS1313: I don't recall predicting the end of the world. I did say - and I stand by it - that 905 WEA is a throughly bland offering, best suited to an overheated, inventory-starved market. I will add that whoever decided to use a cave-like, rear-facing, low-floor six as the first show apartment might want to take a few night classes in marketing, unless the target buyer is a family of four vampires.

With regard to 220 West 93rd, I simply meant that Samson sold a lot of units in 2006-2007, then appears to have hit a wall in early 2008, with two or three apartments left in inventory. I have no inside information about the sponsor or the building; the point is simply that those apartments remain unsold, and that sales at 220 stopped right around the time the market as a whole froze up.

It seems a reasonable inference that the main thing Samson did right at 220 West 93rd was time the offering well; and the main thing Samson did wrong at 905 WEA was time the offering poorly. I bring this up only in response to your post, which raised 220 West 93rd as an example of "a successful pre-war renovation" by the same sponsor. Successful it may have been, but I think that success was largely a function of circumstances that no longer apply, so it may not tell us much about the quality of the product, the integrity and reliability of the sponsor, or how the same players might conduct themselves on another project, under very different market conditions.

You express great enthusiasm about the financing offer at 905 WEA. All I can say is that it wouldn't sway me as a buyer one way or another; and judging by the continued slow pace of contract signings at 905, most prospective buyers feel the same way. The sponsor has spent a lot of money promoting that offer, apparently without much success. But perhaps there are several loan applications pending, and the sponsor financing will turn out to have been a brilliant move.

West81st,

Your articulate reply is appreciated. However, I want to understand if you, like others on this discussion thread are 905 WEA residents posing as potential buyers who make nonsensical hit and run remarks in the hope that the project does not succeed for obvious reasons.

Let me breakdown some of your arguments:

1) Do the 2-3 apts in inventory out of 23 at 220 W 93 suggest that Samson's development was a success or a failure? Based on your comments that market participants/forces determine success or failure, I think you are contradicting yourself. A substantial % of the apts at 220 W 93 sold at market prices and that suggests to me that the product was well received by the market. 220 and 99.9% of the developments out there are experiencing the same slowdown and contraction in pricing, so I fail to see what you are trying to say. Have you been to 220 W 93, know anyone who has bought there? I am guessing NO. The type of doubt you cast seems spurious and prejudiced.

2) The financing does not sway you, and it seems not to sway others. Fair enough, but the game is not over yet. Your remark is analogous to saying the game is over at halftime because one team has not scored enough points to win yet. I think the financing has merit for the reasons I articulated. Other factors such as falling prices, uptown location, uncertainty surrounding the Plan's effectiveness are definitely influencing potential buyers, but I argue that the financing definitely is a plus not a minus in that decision process.

3) The model is dark, bland and poorly chosen. Your opinion is valid but it is just that - your opinion on one floorplan. I'd ask if you went and saw the other floor plans like I did. Furthermore, what do you compare the model to - 15 CPW? I'd suggest that the 905 units compare favorably to others such as those at Shares of NY, 55 W 95, that I went to see and priced. I concluded that you are paying a premium at 55 W 95 for the location and the plan being declared effective. The larger apts/layouts were dark at 55 W 95 and the appliances were inferior. Nonetheless, people bought into this building at well over $1000/sq ft.

4) The Sponsor has and continues to spend alot of money on advertising. First, what is alot of money? To a sponsor who spent over $45 million on the building, I applaud the creative offering and the aggressive promotion of that offering in this environment. Aggressive, yes - costly? Aggressive promotion does not suggest as you do that the plan will or has already failed. Only time will tell.

I'm not trying to sway you as a buyer. However, I would appreciate a more objective, level and balanced discussion.

UWS1313: I have no dog in this fight, and the success or failure of this offering won't affect me at all. I don't even particularly dislike the product. It disappointed me, because I love the neighborhood and the building type, but there's nothing conspicuously terrible about 905, just as there's nothing notably great about it. Maybe 905 will appeal to buyers who MUST have a pre-war condo, and who, for one reason or another, want to buy with 10% down. That's not me, and in these gloomy times, I don't think it describes lot of people. The relative safety of a co-op is looking pretty good right now.

With regard to your other points:

1) I only mentioned 220 West 93rd because you did. From your perspective, it helps to establish the sponsor's bona fides. From my point of view, it just shows that Samson can sell ordinary product in a roaring market. What is there about 220 that should impress a potential buyer at 905?

2) I agree - the jury is out on the sponsor financing. No secret what the sponsor is trying to do: use their financial resources to position 905 as the last 10%-down pre-war condo in a 25%-down world. Reasonable strategy, but I don't think it will work until the prices come down.

3) I've stated repeatedly on Streeteasy that the value at 905 is likely better on the higher floors. When I visited, that low-floor cave was the only unit available for viewing. Like they say, you only get one chance to make a first impression. Hence my remark about poor marketing. Maybe those early open houses were rushed because the market was turning, and brighter apartments became viewable shortly thereafter. In any event, I wasn't going to make a repeat visit to find out.

4) My reaction to the recent ad campaign - which puts the financing front and center - is mostly "Is that all you've got?" Maybe the ad budget is high, maybe it's low. Either way, I think it calls attention to the generic nature of the product by stressing something as peripheral as mortgage terms. Attractive financing is a nice differentiator, but when it's your main selling point, I think you're going the way of GM.

West81st I don't know who you are but you make some solid points.

I don't know this project but I toured 220 W 93rd so I have some basis for opinion. The financing angle is irresponsible because it assumes that prices will appreciate so that you meet 75% LTV, or the financing environment improves dramatically, in order to refinance when the 7 years are up. Samson is willing to offer the financing. Why not? What do they care if they have to foreclose in 7 years? At least they will have collected 10% and the carrying costs for 7 years.

UWS1313 I don't know you either, but clearly you have an axe to grind on this project. If I'm right, try to be less transparent.

West81st, thanks for the clarification. But the co-op vs condo argument is a much bigger one than my fingers are ready for at this point. I admit there are risks to 905 WEA, but I do not agree it is a dull bland offering in comparison to others out there. I visited 905 just last week and had a much different impression. I think the building has great bones and the bathrooms and kitchens are top rate. Much work still to be done. One closing anti co-op argument, I refuse to allow someone to tell me who I can sell or rent to if they qualify for financing. Co-ops in NYC are the last bastion of legalized discrimination and prejudice.

PMG, what are you talking about? 220 W 93 is not part of the financing package Samson are currently offering. Foreclosure in 7 years?? I am not following you. Plan over 7 years, pay down/save your principal 2.5%/yr if you think 25% is here to stay and then re-fi. If you cannot plan that way, do not pursue the financing.

The world's leading car company has a HUGE ad campaign called saved by ZERO. Why would Toyota focus on that?

I think the folks behind Toyota know what they are doing in this economic climate!

UWS1313: The analogy between condos and Toyota cars (or any other market-share-driven consumer durable) is so flawed that I'll just let it go, in the hope that it was tongue-in-cheek.

Getting back to the product itself, I find it interesting that you consider the comparison to other bulk offerings - such as the PSoNY units - to be an important yardstick. I agree that the Samson buildings are nicer than PSoNY's, and I also think they are nicer than most of the other recent UWS conversions - e.g. 817 WEA, Sabrina, Avonova, ParkColumbus - which I consider truly awful. I can also see why Samson would view those buildings as key competitors, and as benchmarks.

From the buyer's perspective, however, those buildings represent a tiny fraction of the available options. For most buyers, the advantages of buying from a sponsor rather than an owner-occupant are a relatively minor consideration. So, like it or not, Samson is competing with a much wider pool of resales, and a much more diverse pool of sellers. In a market where a reasonably nice classic six at 755 WEA is asking around $1.3MM (and might go for significantly less), the official prices at 905 WEA seem unrealistic for an offering that may fail altogether. Maybe those prices are just a starting point for negotiation. If that's the case, fine. But if Samson needs to sell those apartments for something close to the current list, it's going to be a long, slow battle.

Lastly, I wonder about the degree to which the sponsor financing was a response to the reluctance of banks to lend - on any terms - in a building with so few sold units.

755 WEA at 1.395 million and like many others will indeed go for much less. However, it has a teeny 3rd bed room -- really 2br + maid's
Sabrina and Avonova are also as unattractive as 905 WEA. Sabrina has been coming down in prices but mainly for really ugly unfinished units
905 WEA is grossly overpriced and they will be forced to correct as will the others
The only question is how long it will take them to get there

Despite UW1313's accusations I am not a tennant at 905 trying to influence the buildings success or otherwise (although I do wonder about UWS1313's identy and motivation given their vehement posting about this property). I was merely remarking that these seemed overpriced compared to a lot of comparables in the area (West81st does a good job of pointing some of these out). 2 sales in over 200 days of continuous marketing, despite lots of advertising (even a NYT article referencing the property) and a financing packaging that is definitely a plus (hard to see how this would be a negative), would tend to support the contention that these are overpriced.
Regarding bank financing (see West81st's question above), I believe that most, if not all, lenders have stopped lending to conversions in which 50% or more of the apartments have not been sold.

here's an obvious hint - negotiate the price.

UWS1313, do you think all the people who have been through in the past 200+ days haven't tried?

UWS1313: OK... $1.6MM cash for #111.

that's silly.

You said negotiate... so let's negotiate. What's your counter?

I am enjoying MNF too much.

Clearly, UWS1313 isn't from Buffalo.

Seriously, though: Is $700/sq.ft cash really any sillier than the $1550/sq.ft. asking price? How many apartments near 104th and West End have EVER fetched a price like that, even at the top of the market? Madeleine L'Engle's apartment at the Clebourne might have come close, if you factor in the cost of the necessary renovations. Otherwise, I think the best of this neighborhood (direct RSD river views excluded) topped out under $1300.

The sponsor units of 230 RSD condo @95th St traded in July 2008 in a bulk sale. The apartments with expiring leases seemed to trade at $700/sq.ft. and the RS and RC apartments traded for less. It appears the buyer is going to renovate the vacated units cheaply for rental with a imputed cap rate of 8%. Why should an individual pay a large premium over this price for 905 WEA?

Hi West81st,

Please explain what you mean by this:

"The relative safety of a co-op is looking pretty good right now."

Thanks

PMG, check your figures again!! Get a STREET EASY insider account and you'll discover that the closings at 230 RSD over the last 12 months ranged from approx $1100/sq ft to approx $1300/ sq ft. Why do you feign a voice of authority when you are actually misconstruing the facts? The last sale recorded - a 402 sq ft studio - closed on 10/28/08 at $480,000 or $1194/sq ft.

As far as current listings - 15D a 1300 sq ft 2 BR is offered at $1.695 or $1300/sq ft. That is after a $255K price drop.

dwell: A good coop board can do a lot of things to enhance stability, including management of "concentration risk". With the local economy - and finance in particular - heading for hard times, an established coop where the Board has done a good job of vetting and diversification figures to weather the storm better than a partial condo conversion with a narrow base of owner-occupants who may be concentraed in finance, and whose main qualification is their ability to put 10% down.

There are no guarantees, of course. I'm just talking about relative risk.

UWS1313, I suggest that you diversify your information sources: check PropertyShark or ACRIS for more complete info. As much as I like Streeteasy, it didn't capture the last bulk sale at 230 RSD:

http://outside.in/Manhattan_NY/tags/alexico%20group
"Alexico buys half of Brack's UWS conversion for $41M"

And a sampling of transactions per PropertyShark:
Condo unit 9H 230 Riverside LLC 6/30/2008 $475,000 774 $613
Condo unit 9J 230 Riverside LLC 6/30/2008 $150,000 402 $373
Condo unit 9K 230 Riverside LLC 6/30/2008 $475,000 675 $703
Condo unit 9L 230 Riverside LLC 6/30/2008 $268,000 852 $314

As I said, the higher prices paid per sq.ft. of $613 and $703 are vacant apartments that I toured with a broker for rent on Monday. The same broker held an open house in the building on two other units last Sunday. The lower prices paid of $373 and $314 per sq.ft. represent occupied units.

in the context of any building, co-op or condo, it is critical to examine the financial condition of the building/sponsor. it is fair to assume that an established co-op should be in stable financial condition. it is also fair to assume that an established condo is in good financial shape. many condo boards are adopting financial standards similar to those of established co-ops so the lines are blurring. then again there are co-ops with huge mortgages and similarly condos. tough to generalize without FACTS and real FIGURES.

i think more developed condos represent as diverse a cross section of nyc in terms of types of job, age and ethnic groups, maybe more so than co-ops. i challenge anyone to show me a co-op that is as "diverse" as NYC is.

New condos/sponsor controlled condos definitely are riskier and one should examine the plan very closely and consult your attorney. Once again ask what the finances of the building and the sponsor are as well. believe it or not some sponsor developments do not carry a great deal of debt! do your homework....

PMG, then you are comparing apples to oranges.

230 RSD is a recent neighborhood conversion of a prewar apartment building. That is the only reason I mentioned it.

I have no reason to believe that the conversion sponsor, Brack Capital, was selling in bulk in distress. Perhaps, they came to the decision that high end renovation of the units for sale was going to be too slow to be profitable. Like I said the bulk buyer has shifted direction of the building. Although it is technically a condo, a great many of the apartments are held by Alexico Group and vacant units are now getting a lower grade renovation for rental.

230 RSD is a recent neighborhood conversion of a prewar apartment building. That is the only reason I mentioned it.

I have no reason to believe that the conversion sponsor, Brack Capital, was selling in bulk in distress. Perhaps, they came to the decision that high end renovation of the units for sale was going to be too slow to be profitable. Like I said the bulk buyer has shifted direction of the building. Although it is technically a condo, a great many of the apartments are held by Alexico Group and vacant units are now getting a lower grade renovation for rental.

But you compare a bulk sale of low end rentals to a high end condo conversion? Why?

Because it was a high end conversion before the bulk sale. The sponsor of the high end conversion obviously bailed. Don't you think that is relevant?

UWS1313 You said that the price per sq.ft. of 230 RSD units (orig. converted) was $1200 to $1300. The sponsor installed high end appliances, Miehl Subzero etc. You also said I was wrong in reported the prices of the bulk sale, but never admitted that you stand corrected. If this apparent change of direction can happen this year, who is to say that Samson Management will sell out its buildings? How many units do they still hold at 220 W 93rd? Would you like to pay full price like 55% of the buyers at 230 RSD did, then find that nearly half your building will remain a rental?

Does anyone have any facts and figures around the financial health of Samson Management? I understand from posts above that they own a lot of apartments, but that doesn't tell me if they are in a precarious financial position or very conservatively levered. They are not publicly traded as far as I know. Why continue with a selling campaign now versus waiting for the market to recover somewhat?

In other words, the comparison might be an apple orchard vs. an orange grove now. But the orange grove used to be an apple orchard, until the owner ripped out the trees and sold the land to an orange grower because the market for apples was tanking.

I think the 230 RSD sponsor did what he/she had to do with the bulk sale for his/her finances. If I am a buyer of one the converted condos I am obviously pissed off that the conversion did not proceed as expected, but that is a risk I took in buying into a partial conversion. but if i plan to live in 230 rsd for a while, love my apt, the view, the neighborhood and the renovation i think i can get past that feeling. why dwell on the fact that the market has corrected and the building will continue to have a high % of renters? what can you do? life is just too short to be that neurotic.

You make a good point that 905 is squarely in that position - make that part of decision of the price you negotiate. to sound totally and utterly obvious if the price doesn't reflect that risk - walk away.

faust, do what everyone else does who wants to know more about a building/sponsor, get a copy of the plan and do your homework.

UWS1313: With all the risks and problems that you've acknowledged, I come back to my previous question: Why is $700 per sq.ft. a sillier number for 905 WEA than the sponsor's current ask? Because it's below Samson's cost basis? So what? If they're as strong as you say, they can afford to cut their losses if they decide a quick exit is the best strategy.

Samson's circumstances apparently enable them to hold out for something approaching $1550 psf. If so, good luck to them. But I think my number is much closer to a risk-adjusted fair-market price than theirs is. Time will tell, I guess.

UWS1313: I asked about the sponsor not the building itself. My understanding (looking at ACRIS) is that the building itself has no secured mortgage (good news for any buyer). However, as far as I know, plans don't detail the financial position of the sponsor eg how much debt they have at the corporate level, how much needs to be refinanced in the short term etc. Please correct me if I am wrong, but this is my experience with plans. Is there any other way to ascertain details around Samson, or is this just a black hole of information that a buyer would have to a risk on?

my experience tells me that each building has its own LLC. thus, the condo owners are not liable for the sponsor's indebtedness, just the LLC's.

W81, I happen to agree with you that I don't think Samson will get $1550/sq ft. The invisible hand will do its best here, but I think they have the patience and the financial strength to hold out for something more than $700.

UWS1313: I agree that condo's are not generally liable for the sponsor's liabilities. But if a sponsor were to be financially stressed, might they not resort to the type of sales that the former owners of 230 RSD conducted? Those types of sales are not good for early purchasers. So again, since you seem to know so much about this conversion, is there any way to get a good picture of Samson's financial standing?

But isn't the ultimate question here whether this is even a viable and marketable condo? Financially and practically, not legally. Even if they sell the minimum 15% required, you still face being in a condo where 85% of the building is a rental, where it may never be more than 50% sold and so even 5 or 7 years down the tracks, owners still won't be able to refinance. Even in good markets, lenders want a 50% sold building, right? And regardless of Samson's financing, isn't it safer to spread the risks and rewards of ownership with 50 other unit owners rather than one 800-pound possibly financially stressed gorilla. Half this building has been vacant with no rent roll for more than a year after all.

marketwatcher - another purveyor of deception. where do get off suggesting that half of the bldg is vacant with no rent roll? that is not true and you should be ashamed of yourself for lying.

fact: 52 apts at 905 wea, 12 on the market with 2 of the 12 in contract.
fact: the 40 apts not on the mkt are a mix of rc/rs and mkt rent units currently oocupied
fact: little or NO debt on 905 wea llc
fact: samson owns/manages over 6000 apts in nyc.

there are risks at 905 for condo purchasers in this environment. but, what are those risks?

anyone who has a clue care to guess?

buying at the top?

UWS1313, in the spirit of facts and figures: You keep asserting that Samson is financially stable. Can you give me any facts and figures regarding their capital structure. While it may be impressive to some that they own/manage over 6000 apartments, without knowing how levered they we have no idea of their true stability. A financially stressed sponsor is bad news for any attempted conversion. Also regarding the 40 apartments currently not listed for sale, I was informed that some of them are empty, certainly not the majority but at least a few.

getting long term financing for an under 50% sold building?

firstly as we all know you can negotiate the price, and secondly i challenge you to find me a better financing alternative. you refuse to acknowledge that as the potential buyer's leverage.

how about we bet $100,000 that within 7 years the building is not only declared effective, but more than 50% CONVERTED? samson bet $46M in cash on a non-eviction plan on that so i'm comfortable wagering considerably less.

faust, all i know is the addresses of a few of samson's buildings and the approx # of units they have successfully converted and currently own/manage (in the plan doc). park ave, fifth ave, madison ave, tribeca, uws, etc. as a private company it is difficult to ascertain the exact info you are looking for. worth asking the broker?

UWS1313: I'm sure you're right about the sold percentage seven years out, and I understand that you were responding to PMG's specific point. But I think the refinancing risks is more complex. At some point, a lot of the occupied sponsor units - maybe all - could be sold off to investors, who will bring a new set of credit risks with them. The vacant units may wind up as rentals too, because the sponsor either can't sell them for an acceptable price, or sells them to investors who rent them out. So the owner-occ percentage in the building could wind up very low, and there's no way to know how that may weigh on lending decisions in 2016.

I'd like to invite feedback on a more general observation about certain UWS conversions, though I'm not sure how well it applies to 905 WEA. It seems to me that conversion sponsors generally gravitate toward one of two fundamentally different strategies. Some (905 WEA, ParkColumbus, Avonova) invest time and money expelling as many tenants as possible, maximizing the vacant units that can be sold at market prices. Others (817 WEA, Sabrina) treat the tenants in residence, to some extent, as an established customer base and offer them deep discounts to entice them to buy early. I think the former type of sponsor gambled that prices would continue to soar. The latter group took a more conservative approach, and settled for a smaller profit margin. I think we're starting to see that approach vindicated, and it's possible that some of the more ambitious sponsors will change course. The problem they are likely to encounter, however, is that the easiest tenants to evict, deregulate or otherwise run out (those paying near-market rent or earning enough to be vulnerable to luxury decontrol) may also have been the ones who had the resources to buy. And now that many of those relatively affluent are gone, there's no reason for them to come back.

So Samson paid $46mm + 112k sq.ft = $410 psf. Vacant apartments are worth more. I agree with West81st, start the bidding at $700 psf.

Very simply, if you buy with a seven year loan you NEED to refinance or sell within seven years. You are not just betting that Samson sells 50%, but also that the value of the apartment doesn't decline. In fact if lending conditions don't go back to 90% LTV, then you are betting that the apartment appreciates considerably in order to refinance. How many people are willing take that risk today? IMO only those who perceive they are getting a bargain.

W81, imho it all boils down to the quality and character of the sponsor. as you've discussed here and elsewhere, it's more difficult to distinguish between the two during ebullient markets. as we settle into this recession and deflationary cycle, sponsors with deeper pockets, more experience and perhaps a little more heart will operate with more dignity and fairness towards both renters and owners. at the end of the day all sponsors want to make a profit, but the way some of the less savory sponsors get there is nothing short of distasteful.

btw, why did you include 905 wea with the 2 crummiest projects on the UWS? i have some insight as i saw contracts at both avonova and park columbus and wholeheartedly agree. re: 905 i respectfully dissent. can you prove me otherwise?

PMG, some people/those that would take the risk can actually payoff in 7 years.

most of those people don't want to live at W 104th St, in my experience.

PMG, let me ask you a simple and very fundamental question.

is $700/sq ft realistic given real/current market comps?

furthermore, have you ever gut renovated an apt and installed high end fixtures? generally costs $250-$400/sq ft. I did just that with the apt i just sold and it was worth every penny! at that price point you suggest, the sponsor is accepting a loss after all the transaction costs, legal fees, etc.

Sure you can pipe dream away that the sponsor will accept a low ball bid, but show me where that is happening? without any debt on the building why would they do that? and as mentioned, renting and waiting out the market is at the sponsor's and buyer's disposal. despite the fact that many who post believe there are no closings at $1000+/sq ft I can confirm that there are buyers still closing at over $1300/sq ft! i just closed on my apt on the uws at that price point!

nyc isn't exclusively a bunch of wall st folks waiting for bonuses (30% would be aggressive). there are actually still some people who have money and still want to live here and are willing to pay a market price to do so. the market sure as hell will slow down, but there still are people who want to live here and raise their families in bigger apts that carry a premium in $/sq ft cost. as i discussed earlier, i think there is value at or around $900-950.

UWS1313, I'm a bit biased because I bought a current apartment 10 years ago at $325 psf and my last apartment 20 years ago at $358 psf. I agree with you, however, that buying sub $1000 psf for a nicely renovated apartment would be perceived as a deal today.

Having admitted that, I believe that buying with the intention of renting, should cause you to bid less.

UWS1313 wrote: "btw, why did you include 905 wea with the 2 crummiest projects on the UWS? i have some insight as i saw contracts at both avonova and park columbus and wholeheartedly agree. re: 905 i respectfully dissent. can you prove me otherwise?"

UWS1313: I didn't mean to suggest any sort of equivalence in morality or professionalism among the sponsors of those three projects or even to suggest a resmblance among the buildings. With regard to 905 WEA, I was drawing an inference - possibly mistaken - that the sponsor's STRATEGY was similar to the strategies pursued at ParkColumbus and Avonova. My basis for that inference was twofold: first, if the plan isn't yet effective, that suggests that insiders were not strongly courted to buy; and second, if faust's post above is correct (big assumption) and the sponsor is sitting on substantial inventory, it suggests that decontrol and eviction were pursued rather aggressively. If I'm wrong, so be it; I'm just trying to weave loose threads of evidence into a coherent tapestry.

I happen to agree that ParkColumbus and Avonova are crummy, but not because the sponsors tried to boot rental tenants; the way I see it, that's just business. Why do you single them out as the crummiest projects? Aren't 817 WEA and Sabrina fairly crummy too?

In spite of inquiries we made to the sponsor to buy our apartment at 905, our lease was not renewed and we were forced to leave. Too bad for greedy Samson. We were not the only ones in this situation.

...and third, PepeLopez says so. (Thanks, Pepe.)

inconclusive remarks by pepelopez...at the asking price did you make an "inquiry"? usually, insiders are given an opportunity to buy at a stated insider's price. i have not heard of a sponsor or seller accepting an "inquiry". did you accept or reject the insider price?

PMG, then you of all people would not want to see prices drop to $700/sq ft!!! if you own property why do you want/encourage/persuade potential buyers to bid $700 sq/ft!?

Sponsor was intent to empty building before red herring and before black book.

I'm rather analytical, and a realist, although I think my apartment is worth a premium :)

UWS1313: What was the insider discount?

Since apartments are usually offered to insiders as-is, the discount in a conversion like 905 WEA probably has to be around 20% just to represent rough parity in value with the black-book prices, which include renovations. 20% might even be a bit low, considering your statement that the renovation is worth $250-400 psf.

And when you have no mortgage, and no intention of selling, the current market value doesn't matter very much

Pepelopez: That approach would be in line with ParkColumbus and Avonova.

UWS1313: I don't mean to condemn the clear-em-out-before-converting strategy. As I said, it's just business. Are you saying that Samson assiduously courted tenants-in-residence as potential buyers, rather than trying to empty as many apartments as possible? The available evidence - most notably, the fact that the plan still isn't effective - tends to suggest otherwise.

W81, i have not been to 817 WEA, nor have i been to the Sabrina. the representations posted on the internet are enough to put me off.

the sponsors at the Avonova cut too many corners on the apt renovations as i inspected them - poor workmanship and construction as I saw it. the 1 yr delays in the common area renovation suggest to me that the sponsor did not have a sufficient capital fund pre-committed to the building when the plan was declared effective. that is a sure sign that the sponsor comes first, not the renovation of building.

ParkColumbus' sponsor has a poor reputation. my broker told me that one of their largest and most ambitious projects, the Sheffield, has been an absolute disaster for many buyers. plus the floorplans for the 3BR+ are awful as they allocate 30%+ to the bathrooms!

PMG i forgot to mention that i appreciate your candor.

pepelopez, thx for your insights.

pmg, w 104 is a MUCH nicer neighborhood than the mid to high 90's on the uws. spend a night out at one of the restaurants, pubs, jazz clubs in the immediate area. the beautifully renovated baseball and soccer fields at rvsde park are less than a 5 minute wlak away.

compare/contrast as i did to ariel towers. above premium prices, sq ft measurements include pro-rata share of hallway elevator area!!, and i did not like the neighborhood.

UWS1313: Ariel is on Broadway, which has a totally different vibe from WEA. Fairer comps in the high 90s would be buildings like 789, 800 and 801 WEA. You may consider 905 clearly superior to those buildings. I don't.

And IMO, Ariel is a pair of glass-box atrocities. So how it even enters a conversation about WEA pre-wars is puzzling.

w81, why not compare a pre-war to ariel? you create standards that you yourself defy as you compare pre-war and post-war, and compare bway to columbus to wea in earlier comments. i'm simply comparing one locale to another. one which i believe is inferior and has more expensive comps. pmg suggests that it is foolhearty to pay market prices at 104 and wea and i think it's just as foolhearty to psy above market prices in the w90's on bway. the point is that there is no accounting for this sort of pricing and preference, it's whatever the market will bear.

btw, 789, 800 and 801 are co-ops and i have an allergic reaction to co-ops. furthermore, despite all of your brilliant analysis you point out three buildings where there is 1 apt on the market, one small 600 sq ft unit. ?????

uws1313: Fair point. To compare on-market pre-war condos with on-market pre-war condos, the closest match to 905 in the immediate vicinity might be 815/817 WEA. Architecturally, the buildings are fairly similar. (817 is a twin of 801, the handsome coop next door.) The sponsor at 817 took the opposite approach from 905 WEA, though, closing lots of insider sales at around 50% of then-market prices. We'll see how it turns out. The common areas at 817 are still a mess, and the renovated sponsor units were done so poorly that some rooms are being reconfigured. But there are advantages there too, most notably an effective plan and a relatively high owner-occ percentage.

I went back to 905 WEA to get a first-hand look at progress there. I think most of the effort since summer has gone into renovating vacant units. There has been some demolition in the lobby, as was noted on another thread, but no notable restoration so far. The other common areas are in original condition. The building still looks like what it is: a shabby rental. Samson is eager to make enough sales to get the condo plan declared effective, and will discount prices deeply to do so. Whether those discounts will still apply later is anyone's guess. The much-discussed sponsor financing is mostly an attempt to make a virtue out of necessity: with so few apartments sold, few lenders are likely to approve a mortgage at 905.

Having revisited 905 WEA, I think the comparison to 817 WEA is completely apt. The buildings are very similar. The main difference, so far, is one of sponsor strategy. At 817, the tenants in residence were cultivated with very attractive pricing; many bought. At 905, that didn't happen. So far, the approach taken at 817 seems to be working better. But as uws1313 points out, Samson can afford to play a long game. The immediate danger is that the AG's clock runs out on the conversion plan.

905 WEA #32, a good-sized classic seven on the third floor, has been re-listed after a five-month hiatus. The new price is $2.1MM. That represents a $1.085MM reduction (34%) from the old price of $3.185MM.

http://www.streeteasy.com/nyc/sale/371469-condop-905-west-end-avenue-upper-west-side-new-york

Although I still wouldn't call 905 WEA a value leader, breaking the $1000/sq.ft. barrier on the asking price for a newly renovated classic seven is worth noting. Also, the price may still be negotiable.

West81st: thanks for the update on #32. Interesting to see the stated price differential between this other apartments in the 2 line for this building. Surely we will see the stated asking price come down for the other apartments soon?

All of the low-floor listings have now been slashed.
http://www.streeteasy.com/nyc/building/905-west-end-avenue-new_york

I think the sponsor's strategy, at this point, is to use the low-floor units as loss leaders to get the plan declared effective. They might also approach the rental tenants with a sweetened offer, if they haven't already done so. The problem in a situation like this is that most tenants who might have had the means/inclination to buy were already forced out.

Looks like West81st's bid at $700 might be a lot closer to reality than anybody had previously (seriously) thought.

It may have been intended as a joke, but I took the 700 bid seriously... it was the bulk sale price last spring for vacant apartments at 230 RSD just 10 blocks away. When financing dries up we could be looking at major price breaks. And this sponsor's financing offer may be the beginning of a trend. We may see all types of seller financing come 2010.

I don't think the financing offer is still there on 905 WEA - or if it is I don't see it in the listing description they way it was previously. Am I missing it somewhere?

http://www.halstead.com/detail.aspx?id=1581981

It's still splashed all over the 905WEA web site: http://www.905wea.com/contact.asp

Progress in lobby and with contracts. I went this weekend.

LISTINGS UNDER CONTRACT INCREASED 50% IN THE PAST THREE DAYS!!!

From two to three, that is. http://www.905wea.com/listings.htm

At this rate, 905 West End might not beat the AG's deadline. It's interesting that the new contract is on #122, not one of the low-floor loss leaders.

West 81st: this maybe a ignorant question, but when does the AG deadline expire and what are the consequences of crossing it?

Callidus: I think the sponsor has fifteen months from the date on which the AG accepts the Black Book to sell fifteen percent of the total units to bona fide buyers who state that they intend to reside there. If they miss the deadline (unlikely, but possible), the plan is void and they have to wait a year before trying again.

Callidus: In a non-eviction plan, I think the sponsor has fifteen months from the date on which the AG accepts the Black Book to sell fifteen percent of the total units to bona fide buyers who state that they intend to reside there. If they miss the deadline (unlikely, but possible), the plan is void and they have to wait a year before trying again.

WEst81st: Many thanks. You are the most valuable resource on these boards.

W 81 ST. What say you now?

I see five vacant units under contract, with eight to go. If my arithmetic is right, the sponsor needs a bare minimum of twelve contracts before trying to declare the plan effective. Thirteen or fourteen would be safer, to provide a cushion against possible challenges to the legitimacy of one or two buyers. It's a long way from five to twelve, but there may have also been progress with tenants in residence (insiders), who aren't visible. So Samson may already have enough sales to beat the deadline. Even if they don't have 15% yet, they can get there by continuing to cut prices to insiders, outsiders or some combination of the two.

As for whether 905 WEA is now an attractive option, it's hard to say without knowing the real prices. I still think $1.6MM for #111 would be a good deal - and it might be closer to what they'll eventually get than the laughable $3.55M ask.

Make a bid. Talk is cheap.

Oh... eek.

W 81st - are you ready to eat your hat?

btw, articulate BS is the same as the other variety. Refer to Annie Hall and Woody'd definition of Gym teacher.