Rushmore Open house

Nothing is moving in this area, unless its priced aggressively(1000 per square foot or under). Extell is biding their time and will attempt to close on as many contracts as possible from the base of customers who have put down deposits. After that they will decide to either do a bulk sale of units or rent out their inventory as sell what the market will bear.

"attempt" to close is the key word. many headwinds in that - lenders not making loans to the building, equity already wiped out by the market decline, rental prices dropping like a brick - makes all the sense in the world to walk. plus, buyers have had sufficient time to divorce emotions from downpayment.

Extell may say "but buyers are under contract!" - well, a contract isn't worth anything if it is under water...

I think it is pretty clear that people should walk away from their deposits on the Rushmore.

1. This apartments are worth about $1,000 per square foot today with the possibility of going lower.
2. There are lots of apartments for sale on Riverside Blvd (The Heritage, The Avery, 220, 200) and prices will come down since these apartments are not moving.
3. Look south of the Rushmore - here comes even more supply...not to mention 200 WEA and the new building going up on 10th and 66th.
4. The Rushmore is not zoned for PS 199 as promised - unless you can afford private school families will find this a major negative.
5. Why would you pay top dollar for a building that is going to be not owner occupied but largely a rental? What's the resale value of this type of building?
6. How long will Extell pay common charges on unsold apartments? What will happen tp common charges if Extell defaults and 30% of the building is sold?
7. Losing 15% sucks (I'm in this boat) but closing sucks more - be thankful Extell isn't negotiating it makes the decision to walk and talk your lumps easy (if they discount you 20-25% you still have most of the problems above).

nyalman - All points are good. It's a terrible situation we are all in and I agree with you on walking away. Extell is not giving us any reason to close other than the risk of losing our deposit, which many of us have already made our peace with. Even so, there is a group of buyers that have gathered to discuss the issue, if you are interested in joining the group, email rushmoreresidents@gmail.com

A few reasons why Rushmore can trade at a small premium to the neighborhood.
1) 10 Year Abatement where clock has not started yet
2) Lower assessed Real Estate Taxes than 70th Street properties.
3) Units are furnished a lot more in line with current tastes
4) Market always prefers new and pays up for it

Families in Rushmore will not be attending public school. Get Real! Also if Extell had financial difficulties there would be many corporations who would scoop up their stake on the cheap. Sponsor risk is not overly high in this building.

Extell will have financial difficulties if it doesn't close enough units to pay back its construction loan. My understanding is that the clock starts ticking from the first closing. Anyone here knowledgeable about what is the grace period for payment of construction loans?

Other thing about Rushmore that gives it a (+) vs. the others is that it was marketed as the most-luxury new development on riverside vs avery, trump, 200wea, all that stuff.. If it is true, it should definitely trade at a premium.

That is the way they have market it - but I am under-whelmed with the actual product. 240 RSB is much better (material, details, etc.)

The outside of the building looks awesome. A nice addition to the boulevard.

240 has an important location advantage. One long block closer to B'way, and its station is express rather than local.

NWT - agreed, the location at 240 is much better and gets around the super block issue, where as down by 64th street, although it also clears the superblock, there is nothing south of it.

The building does look very nice from the outside. But the interior isn't as luxurious as the Heritage.

Streeteasyfan, the clock starts clicking as soon as you close on the loan.

In my view , this is the future( Rushmore is the new 3 Lincoln center. History doesn't repeat but it sure rhymes......
http://www.rosenyc.com/RoseCorporate/cs_3lincolncenter.asp

Rushmore is certainly a great addition and once the weather starts warming up you will realize why you loved the area and building; the husdon river is incrediable.
Extell will surive and eventually thrive. You should work with one another not fight.
Also, just relax, the whole world is NOT falling apart.. In the best of times people always overreact and the same is true for the challenging times.. Enjoy your home already and your lives... man oh man

As of two weeks ago, the Rushmore said it had closed on 11 units, 10 of which show up on Streeteasy. Anyone have any information as to when more are scheduled to close. Also, nyalman -- when, approximately, is your unit expected to close? Same with Streeteasyfan -- Has anyone on the board actually walked away? Does anyone know anyone who has walked, as opposed to (1) intending to walk and (2) cannot close because of dire personal financial problem?

The units that closed were mostly one bedrooms or the buyers went to great lenghts for financing. Extell is probably waiting it out, and/or working on some type of creative financing solution. There's no sense in pushing a closing date if you know your buyer has no access to credit.

StreetsNYCD, the area is nice, but there are already 5 other condo buildings with about 200 units for sale among them(that's assuming you prefer to buy. In this market, it clearly makes more sense to rent if you are running a pure economic analysis). The Rushmore has sold only ~60% in over 2 1/2 years which was mostly a bull RE market(Sales office lies about this number and says it's higher). Assume conservatively that 1/3 of that are investors. Those buyers are gone. Do you think they will sell the remaining 40% in this market when it took 2 1/2 years to sell that many to real buyers in a bull market?? This tells you one of two things: either a) the sales office is totally incompetent or b) the units were overpriced to begin with. The risks to buying/closing are ENORMOUS. In addition to general market risk (ALL impartial research predicts 40-50% decline in NY) the risks specific to the building are even bigger. They will have to drastically cut prices to move the rest of units. Not to mention those that won't/can't close to begin with, you will be living in an empty building and risking HUGE assessments should the building need more money because no one lives there to pay maintenance.

BTW, the advance GPD was -6.1% in Q1, likely to be revised down as all advance numbers have been recently. The world isn't coming to an end, but it has changed. The sooner RE brokers such as yourself accept this and take your lumps, the sooner things will get better. Listen to your boss Pam Liebman when she recommends pricing an apt 30% lower than previous sale.

mlwest - Last I heard they expected to close my apartment (in one of the towers) late summer or early fall.

A number of buildings went up on the upper west side in the late 80's early 90's, The Coronado & Millenium buildings come to mind. Sponsor retained a number of buildings and rented them out. Only in the case of 3 Lincoln did the banks take over. In the cases cited the purchases were not harmed.

The late 80's early 90's weren't at the tail end of a massive 10+ year run up in ppsf for real estate. NYC was also much different back then with 2,000 plus murders a year and high crime rates (followed by a massive fall in crime rates - which I am sure supported a recovery in property values - no such "tailwind" today). 1991-1993 was also a blip compared to the dislocation occuring in NYC's economy today. To equate this time period to now is ridiculous.

The 1980's were a big bull market in Manhattan. The big difference today is the real estate decline is National. Does anyone know how the building is appraising? Are the banks validating the offering price?