More of New York City's middle-class tenants, their jobs gone, are falling behind on rent,

Don't feel bad. Given our experience as products of private schools, we totally expect tuition to go crazy because it is always the last thing parents will cut. It's understandable because we both loved our schools back in the day and would have been upset to have been pulled out. That's why I'm hesitant to pull the private school trigger - once you're there, it's hard to take your kids out.

I wonder when and if the sh*t is going to hit the fan as far as compensation for heads of schools & luxury amenities at private schools.

I have a long-term solution to the rent crunch for those who are up for it. A major reason rent is so high in NYC is racial segregation - OH, I know!! Obama won, you've got a brown friend, etc. - but when we talk about "good areas" and a "bad areas," let's be honest about most of what we mean. Your rent is so darned high because there are only so many predominantly white areas to be had. Are you still with me? If NY'ers woke up and said, "I don't care who lives next door to me, what matters is what I what I bring to my home and to the neighborhood," vast swaths of all five boroughs would become options and prices from Park Avenue to Bensonhurst would drop. Not only that, businesses that would have had no interest in these "bad areas" would realize how foolish they've been and come in. No, not in a year - please don't go unconscious and respond on that silly level. This crisis may be a great time to examine ALL our assumptions and what they've cost us. If you can open your mind a bit, you will find areas full of people who don't look like you that are safe, within reasonable commuting distance (no, not a 3 minute cab ride, but can you stand a 30 minute train ride with the NY Times on your lap?). Many of these areas have liveable, spacious, affordable housing stock. I hereby challenge those of us who are really ready to quit crying about housing costs to consider new possibilities.

Slavery was/is the original sin of the United States. We have been paying for, will keeping paying for it for untold generations.

Returning to a debate the other day further up this thread:

10022 - "Yes, because when rents start to decline, the amount of folks who CAN afford increases."
aboutready - "10022, not right now it wouldn't be. they can't even fill what they have with this population demand"

The Times scores this one for 10022.
http://www.nytimes.com/2009/05/10/realestate/10cov.html?_r=1

There is no fixed demand. It's just a matter of price. The latent preference to live in Manhattan is going to keep occupancy very high because following through on the desire becomes more feasible for more people as rents fall. It is interesting that the people profiled in the Times article aren't in the traditional high-earning NY occupations, which adds some color to the idea (that I am as guilty as anyone of espousing) that the Manhattan real estate market is all about Wall Street employment.

I was talking about eliminating RS, sidelinesitter, not tjust he Wall Street employment issue.

Even so, they can't fill them yet. Some people are returning from Brooklyn, I'm sure when Brooklyn prices crater, some people will think that a 1500 sf brownstone apartment in Brooklyn is preferable. But the rental inventory is massive right now (by NYC's standards, lol). There are quite a few massive rental buildings opening now or soon, too.

you'll also see alot of people moving to Atlanta, etc., to live with mom and dad, not because they want to, but because they have to. You can't discount the effects of unemployment, not just Wall Street's. But you are right, there is some basic equilibrium that will occur. That wouldn't happen, however, if you eliminated RS overnight.

From Brooklyn and Queens and Hoboken and Jersey City and... At a price, it fills up. Even when inventory is "massive" (a.k.a., "tiny" by the standards of any other market).

As to the RS issue, clearly it's a pure hypothetical because it isn't happening. But following the hypothetical argument, I completely disagree that there would not be a new equilibrium. It would take a year (and a messy year at that) as leases rolled over and market rates adjusted, but we'd be right back to a low single digits Manhattan vacancy rate. Market rate landlords would get killed in the new equilibrium but RS landlords would gladly push market rates down and still get a multiple of what they get today. If I have to rent my units out at $500/mo today, I'm happy to take $1,500 or $1,200 from a new tenant, even if in theory I could have got $2,500 in the free market a year ago. The RS landlords would make a new market in no time and tenants would flock to them.

"If NY'ers woke up and said, "I don't care who lives next door to me, what matters is what I what I bring to my home and to the neighborhood," vast swaths of all five boroughs would become options and prices from Park Avenue to Bensonhurst would drop."

That's the most naive thing I've ever read.

Newsflash: affluent people choose to live amongst other affluent people not because of the color of their skin, but because by and large, the less-affluent people live like pigs and "bring" nothing to the neighborhood except noise and filth. Why? Because the less-affluent people, by and large, aren't looking to "bring" anything to the neighborhood -- they are of the "take" mentality, with no regard for their neighbors.

Ohhh Matt,
I think you just jumped, sober and all, right onto the third rail, stayed there, and smiled.

the next 24 hours should be fun..gotta go walk across the park, where all the clean people live on the UES...good luck..and peace..

I'm sorry, but I'm tired of all this PC crap. Let's call a spade a spade and tell the TRUTH.

perhaps you can help us out by giving us a greater understanding of what less affluent means?

you are the same guy who lives in the 1,700 square foot one bedroom with maintenance of less than $500?

Yes, that's right! How good of you to remember!

I was being diplomatic. "Less affluent" meaning either on the public dole, or making considerably less (legally) than the median income.

"but because by and large, the less-affluent people live like pigs and "bring" nothing to the neighborhood except noise and filth. Why? Because the less-affluent people, by and large, aren't looking to "bring" anything to the neighborhood -- they are of the "take" mentality, with no regard for their neighbors."

and

"Let's call a spade a spade and tell the TRUTH."

Are you intentionally trying to be a troll. I dont think this adds anything to the discussion.

who needs Rufus?

No. I am intentionally responding to a racist comment made by Jiwhit, who alleged that affluent white people "choose" not to live near brown people simply because of the color of their skin.

Try to pay attention, please.

trading one form of discrimination for another is not progress. P09, it's post brunch hour, sober isn't a given.

i live amongst RS tenants, many of them elderly and on fixed incomes. i'm pretty sure the reason this place looks like shit right now is Tishman's fault, but i'll make sure to hurl some invective at those that don't seem so affluent just in case it's their fault.

Ah. Typical blame-the-landlord mentality. Let me guess, you've never run a building before?

Right now one out of five washing machines works in my building, last year it was usually four. The grass is about 8" high, hasn't been mowed in ages.

Unless you think grandpa Joe next door ought to get off his ass and mow the lawn and fix the washers, then yes I'd say you should blame the landlord.

Well, let me enlighten you about running buildings that are filled with renters whose government-mandated, artificially-low rents don't cover ever-increasing building operating expenses: stuff doesn't get done because there's no money to do it.

No, stuff doesn't get done here because Tishman paid a shitload more than the place was worth, and can't afford it. That was their stupidity.

So you usually this abrasive on an internet list? I still dont get it.

Aboutready, at least SOMEONE stepped up to the plate and bought the place. There aren't many buyers with pockets deep enough to support a building that's chronically in the red. The hope for larger diversified buyers is that they can shoulder the expenses, shore up the finances, and gradually improve the building and bring it back to profitability. Often it works. Sometimes it doesn't. But would you prefer the city take over the building and turn it into a "project"?

Um, Matt, take your foot out of your mouth for a second: the renters put together a very nice bid package that was deemed too low compared to the overinflated bubble price that Tishman paid. They can't shoulder the expenses and are in a world of hurt. What could have been a good, stable cooperative is instead disintegrating because the twits at Tishman paid "market" price and got in over their heads. I would guess that the city will wind up bailing them out sooner or later.

Who "deemed" the price too low? Clearly, the renters couldn't afford to buy the building, either. And if a corporation like Tishman can't shoulder the expenses, what makes you think a bunch of rent-stabilized seniors could?

Is NYCMatt the same as nyc10022 / EddieWilson?

No. Trust me. I'm an original poster. Thanks for the welcome, though.

Matt, let's take this down a notch. I don't think we're talking about the same thing here. Tishman bought PCV/Stuy Town from Met Life. If they hadn't, Met Life wouldn't have made the billions that they did, but they would have had enough money to continue operations in a reasonable manner. It wasn't in the red, in the slightest. It was well maintained. It wasn't a cash cow, but they certainly were doing well enough to convince TS that the revenue stream going forward would cover around $5.5 billion in debt.

I think Tishman is getting ready to walk away when their interest reserve payments run out, which is soon. It would have been far better for the tenants, and Tishman, had Tishman never paid the grossly inflated price that they did for the complex. Our buildings likely will be taken over soon (although probably by a bank), the process may become quite grisly (although we have decent legal representation, so it might not be so gruesome). My only point, which I offerred which a touch of sarcasm, is that this has not been an "affluent" community, but it has been one that has worked, and has taken pride in its neighborhood. Now, go have a glass of wine.

Actually, the renters bid was way over value, in hindsight. It wasn't that far off of Tishman's. Also, remember, MetLife was given the property years ago for free. I doubt they had much, if any, involuntary debt load from this.

"Grossly inflated price" or not, it's the price that both buyer and seller agreed upon. Why do you suppose MetLife was looking to unload the complex in the first place?

Quite often, what appears to be a "well maintained" building isn't as healthy as you thought, once you look at the whole picture, including financials.

Matt, yes it was the price, but so what. It was stupid, at the height of the bubble. Which is why MetLife was looking to sell it, because it was a bubble and they could get alot for it. With $5.5 billion at stake, you sure as hell ought to have some decent due diligence done.

matt--lets try and follow your logic. if tishman pays so much money for the complex that they can't afford to maintain it and meet the debt service, that's who's fault? according to you everyone but tishman. met life sold it because the price being offered was higher (in their estimation) than the ongoing amounts that could get by keeping the building. looks like it turned out they were right. still don't understand how that's the renter's fault.

Aboutready, it's so easy to look BACK and criticize people for buying at the "height" of the bubble. Many thought 2001 was the "height" of the bubble. Then came 2002. Then 2003. Then 2004. Surely, many thought, in 2005 the bubble would burst. But it didn't. 2006. Then 2007. We can't really say we didn't see 2008 coming, but let's get real here -- hindsight is 20/20, and it's a bit unfair to criticize the plays of others when you yourself weren't even in the game.

Well, you only have my word for it, but I tried to run some per apartment revenue numbers, using the info available, just as a guesstimate. I thought at the time, as I still think now, that Tishman was out of their fucking minds and MetLife had just scored the deal of the century. You work for Tishman or something? Otherwise you weren't in the game either. If so, could you call someone about the washers?

I'm not privy to Metlife's analysis of this, but perhaps they were aware that we were in the grip of a real estate bubble and $5.5 billion to unload a property they'd received for free seemed like too good a deal to pass up. Tishman was the greater fool.

Aboutready, if I remember correctly the rents were never going to cover the $5.5b price tag, which is why TS went on a witch hunt to evict the rent stabilized tenants?

My only point is that the tenant owners would have had a lot more incentive to maintain the property than Tishman would.

MetLife generally does do well in unloading stuff opportunely. PCV/ST in 2006, the office buildings in 2005, etc.

hold on here....so, tishman spent $5.5 billion to cut back on lawn mowing to make a few dollars? that was their investment theory. that's how the raised all the money to do this deal?

no, the thing went sour and rather than living up to their obligations (which, lets face it, isn't in vogue these days) they've decided to pinch pennies and screw the people who live there.

and apologists like our friend matt blame it all on the damn poor people who expect to get basic services. perfect.

Columbia, I didn't realize we were talking specifically about Stuyvesant Town/Peter Cooper Village. I don't know their financials, but as someone who does run a building, has run other buildings in the past (and knows many other landlords), I can tell you that unless you're looking directly at the books, you have no idea how "well" a building is being run. And in the vast majority of cases, it's extremely difficult to meet expenses in a building with a high percentage of rent-stabilized tenants, let alone make a profit.

evnyc, not even close. the numbers required that 6-10% (it's historically closer to 3% in most RS buildings, and these tenants are setting longevity records) of the units exit the RS program yearly, and grossly underestimated renovation costs.

the tenants should be grateful they were unable to purchase. that doesn't help those harrassed out, but going forward it will be better for them if the place goes through bankruptcy. once it's done, that is.

MetLife kicked some ass in this deal. But they are the only ones who won. Not surprisingly, CALPERS lost out here too.

but matt, tishman got the books, and then chose to buy. I realized you weren't aware of the building, which is why I elaborated. I wasn't generalizing about all landlords and situations. this was just a nice example of a relatively (plenty of lawyers, etc. living here) non-affluent group in a well-maintained environment. and it was made possible when MetLife was given huge concessions to build it. they were NOT going broke here. they saw the opportunity and took it. NWT is correct. If MetLife wanted to sell me something, I would run.

aboutready,

Had to chime in on the washing machine issue: I'm an owner. (Some) Tenants often overloaded the dryers, causing them to break, so we had to keep repairing the dryers. We put up signs asking them not to overload dryers & that non-working dryer inconveniences all Ts. Well, (some) Ts continued to overload dryer, I got sick of constant repairs & disregard for my request to not overload, so I closed the laundry room for about 1 year. Now, there's no laundry room for any one. I think I'll reopen soon because maybe they learned their lesson: don't overload the dryers.

Re: Tishman & StuyTown, I agree: they purchased at a stupid bubble price.

No, Columbia.

I blame it on people who "expect" to get basic services for less than what they're paying.

I sympathize with people on "fixed" incomes (last time I checked with my employer, my salary was "fixed" too), but you get what you pay for. If the per-unit cost of running and maintaining your apartment costs your landlord $1200/month and you're only paying $850, don't expect much in return.

Dwell, thanks for chiming in on the laundry room issue.

My building is having a similar problem. In particular, people not emptying out the lint traps. Believe it or not, it's a fire hazard. One of the dryers DID catch on fire. And even after the fire and subsequent notices posted to PLEASE empty out the lint traps after your load, people still ignore them.

Is it stupidity? Carelessness?

Tenants, please enlighten us.

dwell, I know. but it's happening here because they replaced the washing machines with ones with much less capacity. one washing machine for 120 apartments. if you call, they tell you someone will be there in a few days. then I had to laugh because they increased the prices. i would be happy to pay the increased prices, unlike some here, but I can't because I can't get a machine. i'm sending the laundry out now, but it feels like they are winning here.

it's not that I have no sympathy for landlords, generally. i understand the economics of all this. i was really responding to the notion that the less affluent don't give a rats about their home environment.

I've got a bunch of RS/RC Ts paying betwn $400-$800 for 1 bedrooms & some of these Ts have country houses, some in Columbia County. I lose $ on these people & they've got country houses!! These Ts are on a fixed income: they have to arrange their income to cover both the NYC apt & the country house!

and if that per unit cost amount happens to include a huge amount of debt service, because you (the owner) freely chose to purchase the building at an inflated price---tough shit to the tenant. right? and if that per unit cost amount happens to include more fuel because you refuse (or claim you can't) make the necessary capital investment for a more efficient heating system, tough shit again. right?

lets face it, the game of being a landlord in manhattan is generally about trying to get away with the least amount of service possible because up until recently you could charge a fortune no matter what and all of your so called competitors were doing the exact same thing.

Aboutready: Check out some rentals up in Harlem and Washington Heights. Observe the common areas, and how "well" the tenants take "care" of them. Then head downtown, into let's say Chelsea, and check out those rental buildings. Compare.

In both my observation and my own experience, the "less affluent" generally do NOT give a rat's ass about their home environment. There are exceptions, of course, on both sides. But the rule remains the same.

matt, tishman knew of their obligations and of the RS population when they bought.

Columbia, like it or not, real estate is a BUSINESS, not a charity. And like it or not, as long as you're a RENTER, you are living in someone else's building, subject to their rules and rates. Don't like it? Leave.

Yes, it's difficult for landlords to make a profit when there are a lot of rent-stabilized tenants living there. But rent stab leases are disappearing, priced out of the market, and I've lived in buildings where 80+ year-old grandmothers were living in slum conditions. I'm talking no plaster on the ceilings, leaks, gaping holes in the floors. The landlords KNEW they were buying buildings with rent stab tenants, so I have zero sympathy for them if they can't figure out ahead of time that they're not going to be able to make a profit.

AR- that just makes me hope that after bankruptcy the tenants can possibly offer to buy the complex. We looked at it an it seemed to be turning into an NYU dorm; been there, done that, and it would be nice to think that there's a place we could eventually go in this city and not live in a closet. And that includes Brooklyn.

Aboutready: "tishman knew of their obligations and of the RS population when they bought."

You know this for a fact how?

i can't defend RS because i don't believe in it....but for every story about the movie star with the $400 9 bedroom RS place, there are honest people in non RS rentals getting the least amount of service the landlord can get away with.

question to dwell--when you acquired your property, did you know about the RS/RC tenants? i assume that you did and that they are yet another unfortunate cost of doing business in NY.

" i was really responding to the notion that the less affluent don't give a rats about their home environment."

aboutready: I agree with ya there. I think caring about the building is not related to affluence, rather, it's attitude. No doubt, poorer people can keep a clean, well maintained apt just as a wealthier T can & some wealthier Ts can be slobs. But, I would not want to own an elevator blding in a poorer area because often the kids play in the elevator & break it & that is a big repair bill.

matt- i cannot believe that you are in the real estate business in NYC and don't know the story about tishman and PC/ST. do a google search...bottom line was that they were counting on booting the RS tenants after they bought; of course, they ran into a major legal problem. whatever one thinks about RS, it is the law and like any other law is subject to being changed not just ignored.

evnyc, how do you think those "slum conditions" came about in the first place for those grandmothers? Yes, buyers know they're buying into RS buildings, but they hope they can turn the building around and restore it to profitability -- that's the idea of any real estate venture. Why would ANYONE buy a building they know they would always be losing money on? And why do you suppose the original owners were so eager to sell? Because they were losing money on it! It's simple mathematics: there isn't enough revenue to offset expenses, so the place goes to pot. What do you expect?

Columbia, I know the STORY, I just don't know (or care to know, frankly) the details.

some people are pigs and don't care about their actions and their consequences for other people -- I think this cuts across all ethnic and financial groups. lets start with some of our wonderful politicians and their friends on wall street.

if they didn't they should fire their attorneys. please. a $5.5 billion deal and, once again I ask you, no due diligence? they are a highly sophisticated (although in this case foolish) investor. i will agree that the lawsuit might have been unforseen, but they were going to go under here before that.

evnyc, I do think it may be the bankruptcy court's best solution. it's not a dorm yet, but it's getting there. my building is quite pleasant, maybe 10% college kids, and nice ones. I'll take them if I must to get the opportunity to chat with the old birds. They're great.

matt--you know the story but not the details? i've got to remember that line the next time i find myself out on a limb.

matt, if you don't care to know the details, why do you keep quizzing me on them?

"Why would ANYONE buy a building they know they would always be losing money on? " because most owners don't actually lose money but they sure like to use it as an excuse to shave every nickel they can.

"lets face it, the game of being a landlord in manhattan is generally about trying to get away with the least amount of service possible because up until recently you could charge a fortune no matter what and all of your so called competitors were doing the exact same thing."

cc: are you a commie??! RE is a business. Would you say that about a restauranteur? Serve cheap, crap food & charge a bundle? Is that how you see the world? I have pride of ownership & a conscience, my life objective isn't to rip people off. But, RE Taxes have risen way high since the purchase of the bld & as a biz, I have to make a profit.

The worse blds to live in are public housing, where there's no profit incentive. Often, nothing works, they're full of roaches, mice & ya get mugged in the halls.

This is an old argument in which Ls are painted as greedy capitalists & I won't engage.

Bottom line for me is that Tishman's purchase of Stuytown was dumb & crazy and don't overload the dryer!!!!!!!

Because the younger Speyer has a big ego and wanted to own it? Like Ken Lewis had to have Merrill?

Which is their prerogative, since it's THEIR building. Again, if you as a tenant don't like it, you can leave.

Yes Matt, tenants leaving. How's that working out for TS?

there you go with the damn details again. lets keep to the story please.

NYCMatt
18 minutes ago
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Aboutready: Check out some rentals up in Harlem and Washington Heights. Observe the common areas, and how "well" the tenants take "care" of them. Then head downtown, into let's say Chelsea, and check out those rental buildings. Compare.

In both my observation and my own experience, the "less affluent" generally do NOT give a rat's ass about their home environment. There are exceptions, of course, on both sides. But the rule remains the same.

This is just the "broken windows" theory that Giuliani offered. People respond to their environment. If a poor person is a resident of a nice building, they'll treat it accordingly. The 80/20 buildings are a great example. This complaint by NYCMatt is classist.

NYCMatt
16 minutes ago
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Columbia, like it or not, real estate is a BUSINESS, not a charity. And like it or not, as long as you're a RENTER, you are living in someone else's building, subject to their rules and rates. Don't like it? Leave.

That is true, except that the rent stabilized and rent control tenants in Sty/PC have certain rights that have been granted them by the lawmakers of the State of NY.

If you are a voter in NYS and don't like it, then work to change it. But tenants aren't doing anything wrong by getting the full benefit of their rights including contractual rights with the landlord and legal rights that are allowed by the State.

Somebody sent in the reserves. Awesome.

NYCMatt
15 minutes ago
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Aboutready: "tishman knew of their obligations and of the RS population when they bought."
You know this for a fact how?

Honestly, this retort by NYCMatt is absurd. Are you suggesting that someone spending $5.5 billion didn't or couldn't do their homework? Are you suggesting that the Tishman family, one of the biggest names in NYC real estate is actually naive?
I don't think the burden of proof here is on Aboutready.

NYCMatt
11 minutes ago
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evnyc, how do you think those "slum conditions" came about in the first place for those grandmothers? Yes, buyers know they're buying into RS buildings, but they hope they can turn the building around and restore it to profitability -- that's the idea of any real estate venture. Why would ANYONE buy a building they know they would always be losing money on? And why do you suppose the original owners were so eager to sell? Because they were losing money on it! It's simple mathematics: there isn't enough revenue to offset expenses, so the place goes to pot. What do you expect?

There's a difference between losing money on operations and losing money on debt service, that is, the cost of buying the property. This could have been wildly profitable for Met Life given that the buildings had been long paid for. But when someone pays $5.5 billion, it is hard to cover the expensive cost of the purchase.

dwell
27 minutes ago
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aboutready,

Had to chime in on the washing machine issue: I'm an owner. (Some) Tenants often overloaded the dryers, causing them to break, so we had to keep repairing the dryers. We put up signs asking them not to overload dryers & that non-working dryer inconveniences all Ts. Well, (some) Ts continued to overload dryer, I got sick of constant repairs & disregard for my request to not overload, so I closed the laundry room for about 1 year. Now, there's no laundry room for any one. I think I'll reopen soon because maybe they learned their lesson: don't overload the dryers.

That is a smart business decision. Presumably you charge for doing laundry, and this is not included in the rental rates. If this doesn't make money for you, including accounting for repair, shut it down. Same as a hotel does when they decide having a restaurant or having 24 hour room service isn't economical. They shut it down.

NYCMatt
34 minutes ago
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Dwell, thanks for chiming in on the laundry room issue.

My building is having a similar problem. In particular, people not emptying out the lint traps. Believe it or not, it's a fire hazard. One of the dryers DID catch on fire. And even after the fire and subsequent notices posted to PLEASE empty out the lint traps after your load, people still ignore them.

Is it stupidity? Carelessness?

Tenants, please enlighten us.

I don't clean out my lint traps, nor do I vacuum the common areas. If the landlord doesn't want to provide a properly-maintained laundry room because it is too expensive to do so, it can shut it down.

NYCMatt, you make some good points, but lots of big RE guys really f*d up during the last bubble: Macklow, Tishman, Apthorp, Solow, Swig. On the other hand, I am a capitalist & I disagree with the commie mantra. Yet, on another hand, the middleclass is integral to democracy, so we need to preserve them. What we need is balance & rational thinking.

NYCMatt
about 1 hour ago
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Aboutready, it's so easy to look BACK and criticize people for buying at the "height" of the bubble. Many thought 2001 was the "height" of the bubble. Then came 2002. Then 2003. Then 2004. Surely, many thought, in 2005 the bubble would burst. But it didn't. 2006. Then 2007. We can't really say we didn't see 2008 coming, but let's get real here -- hindsight is 20/20, and it's a bit unfair to criticize the plays of others when you yourself weren't even in the game.

I don't even know what this criticism means. Who should be blamed for paying a lot of money? For running a financial model that didn't work out? Making a bad bet doesn't equate to being a bad person, so a criticism of someone's morals or values or overall personal worth wouldn't be fair, but if a good bet is to be praised, why not a bad bet to be criticized?

"Is it stupidity? Carelessness?"

Yes, mbetc, it's both. They don't care, selfishness. It's true, 1 bad apple spoils it for everyone.

I agree. The landlord was stupid and careless ... i.e. grossly negligent not to have a properly maintained laundry room where a situation could easily arise that could create damage and a fire. The landlord should have thought about this more carefully.

re: the bubble, I used to have brokers call me almost everyday, offering me crazy $ for my prop. I didn't sell because I enjoy RE & the taxes are killer. Aprox 50% of the gain goes to fed, state & nyc taxes & closing costs, so, at the end of the day, I don't keep enough to justify the sale. And, had I walked away with $X million from the sale, what would I do with it, post bubble bust? Put it in the stock market? Buy another piece of RE at a bubble price? In a few years, my profit would be eroded.

I asked myself: why, who, how would someone pay a ridiculous price for my bld? Just didn't make sense to me. Now, I see, it was the bubble.

dwell, I agree with you entirely. their needs to be a working system that achieves balance. i don't even know if it is possible, but categorically blaming either landlords or tenants is foolish. it has historically been true that due to the low vacancy issues, some lls in NYC haven't felt overly compelled to provide what most would consider the basic necessities. But saying that the tenants should just leave if they don't like it is far too simplistic, and just saying that landlords are uninterested in their tenants is also lacking nuance.

my example was but an example.

mbetc: no soup (or laundry room) for you!

Anybody who's bought a rental building in the last 60-odd years has seen the rent-roll before they invested. They knew how many were RC/RS/market, the $, when leases were up, pending holdover litigation, etc. Those with any class who chose to overpay aren't whining about their tenants.

mbetc: hey dummy, it ain't gross neg.

My problem with the washer issue at PCV/ST is that there is no way in hell TS could rent these "luxury" rentals if they didn't offer laundry. They represent that there will be services, and that they will be competitive with Related, Glenwood, etc.

I pay market rate, btw, at least for now.

dwell
3 minutes ago
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mbetc: hey dummy, it ain't gross neg.

oh really, creating (and allowing to persist) an environment with high potential for a fire (wasn't that your issue) or other material damage isn't gross negligence?

NWT
6 minutes ago
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Anybody who's bought a rental building in the last 60-odd years has seen the rent-roll before they invested. They knew how many were RC/RS/market, the $, when leases were up, pending holdover litigation, etc. Those with any class who chose to overpay aren't whining about their tenants.

That's exactly right NWT.
Sometimes people get a bad bargain. But if they knew the facts and had ability to assess risk at the time they made the deal, they have no grounds to complain.

Notice how Tishman isn't pursuing a claim against Met Life. There's no fraud, deception, hidden facts, etc.

aboutready: thank you for your intelligent post. I hate when these conversations devolve into L vs T tit for tat. We are all in this together & we need one and other. It's like the ancient arab scholars translating the ancient greeks. We wouldn't have had the Renaissance without the arabs translating the greeks; OK, that's a big digression, but the point is that both sides are needed to create the whole. Kumbayya & I gotta go!!

dwell, i live for digressions and yours was a good one.

mbetc, i wouldn't be surprised to see a lawsuit involving the two in some way. not that that's proof of fraud, deception or the like. but there may be a claim involving contribution, all sorts of possibilities actually.

I'm sorry, what the heck does this mean:
dwell
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We are all in this together & we need one and other.

Time for 1 more: mbetc: doesn't surprise me that a misanthropist like you has no clue.

aboutready
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mbetc, i wouldn't be surprised to see a lawsuit involving the two in some way. not that that's proof of fraud, deception or the like. but there may be a claim involving contribution, all sorts of possibilities actually.

hmm?

mbetc, a typo. we need one another. i make the most awful errors. should proofread, but my posts are so verbose that if i took the time and care that I should the thread would be more disjointed than I already make it.

dwell
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Time for 1 more: mbetc: doesn't surprise me that a misanthropist like you has no clue.

I have no clue about what? About an angry landlord?

Are you reconsidering your argument, so to close it out and save face you start to act all nice and hope people forget about your positions?

Who is the misanthropost? I suspect it is the one who shuts down his tenant's laundry service out of spite because he is too lazy to maintain it properly

History is full of examples of major players who knowingly overpayed for properties "buying on the come". let's face it: with 40% of Condo sales going to investors in the past few years, it's not just the big players doing it (and of those 40%, we all know most of them weren't looking to hold them long term, but flip them quick and buy 2 more). Look at Marty Raynes purchase of the Macarthur portfolio (along with Bernie Mendik and Equitable) back in 1985. He didn't crap out because the market took a dump in 1987: he got killed because he bought on the assumption prices would continue to rise at 25% per year. Prices didn't need to go down for him to die; even if they "only" went up 10% a year he would have been done in.

But I think people at PCV/ST should be looking at what's going on and looking at history as well, which has shown us that what happens is during the boom years "major" players who should know better make bad/overly risky plays (hmmmmm, is RE that much different than Wall St? Ask Bear Sterns?), and when it finally comes out the other end, that's what actually gets us "affordable housing" in good areas. Do you think all those people living in Classic 6's on West End Ave with rent stabilized rents of $1200 that the builder built those buildings as "affordable housing"? Of course not: they built them as "luxury apartments" and lost them when the rents couldn't support them, and the new buyers bought them at numbers where they could still make money.

A more recent example (which I think we are about to see a lot more of): Tribeca Tower (105 Duane). ?Dematus? built it as a Condo project at the top of the market, but overpriced the units for a location which (at that time) no one really considered "real Tribeca". So they didn't sell. Eventually, National Westminster foreclosed and a top notch management company (Related - side note, while I really hate all the buildings they build looks wise, everyone I know who lives in their buildings loves the way they run them* - see NB below -). They rented them up at very reasonable rents because they were able to due to the price they acquired the building at. In fact, I know more than on person who at the time WALKED AWAY FROM Coops they owned in problem buildings (like Turtle Bay Towers http://www.streeteasy.com/nyc/building/310-east-46-street-new_york) to rent in Tribeca Tower.

So where am I going with this? Sit tight, you PCV/ST renters: Tishman will be having their testicles removed in the not too distant future (as far as this property is concerned, anyway) and the lender will sell it in a new environment where the buyers of large residential properties are looking to make a profit on the current rent roll; and when that happens, things will improve immensely.

* one of the reasons Related runs buildings better is because they (at least at that time) were not a "NY Landlord". The problem with "NY Landlords" at that time was that almost all were used to running rent stabilized buildings where the goal was not to make tenants happy so they would stay as long as possible, but make them unhappy so they would make them leave as soon as possible (look at Tishman at PCV/ST). This is where Matt is right: the rent stabilization system makes the economics of running buildings such that you want as much turnover as possible. This is antithetical to "good housing". I have MUCH more to say about this, but it's a story for a different thread I think

You speak sense, 30yrs.

30 years, start the thread already.

I agree, in the end PCV/TS will be fine. Nothing to be done about the past (other than study it, as you say), but it would have been nice to have avoided the attempted purge that has been occurring. As a market renter I have not felt personally frightened, but many tenants have been unduly harrassed.

as i said earlier, i personally do not believe in RS or RC -- at least any more. among its other woes is that leads to precisely what you state that landlords want to do everything possible to drive these people out. but two wrongs....

as AR states, many have been harassed and frightened and of course not just at PC/ST. i would also agree that there are no easy answers but i tend to think that landlords do have the upper hand.

it's a thorny beast.

i accidentally wrote TS, instead of ST. funny but wrong.

NYT article on Bodini takeover of Raynes portfolio. Interestingly, the purchase price of the Lincoln Towers + some misc. buildings is close to the number that Tishman paid (with inflation, the MacArthur purchase was bigger).

http://www.nytimes.com/1993/06/13/realestate/perspectives-the-macarthur-portfolio-new-ownership-for-unsold-apartments.html?sec=&spon=

nyc10023: ironically, that's the article I briefly looked at to somewhat "fact check" my post.