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Can you name a developer that walked away from a project after closings started?

Started by Splot
over 16 years ago
Posts: 35
Member since: Apr 2009
Discussion about
Thinking of purchasing a condo in a building that's just under 50% sold (and closings have started). Weighing the benefit (very attractive price) vs. risks. What I see as the greatest risk is the developer walking away from building and cutting losses rather than dealing with unsold units, and current owners having to pick up maintenance for building short term until lender sells units. What's difficult is getting a pulse on developer's financial stability and likelihood of walking. Anyone know of this situation happening, or could provide insighst as to likelihood of it happening.
Response by Riversider
over 16 years ago
Posts: 13572
Member since: Apr 2009

You already asked this...

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Response by Downtownster
over 16 years ago
Posts: 140
Member since: Mar 2009

Splot - where are you looking to buy again? What do you consider a "very attractive" price? The biggest downtown example of this is 225 Rector, where the developer actually went bankrupt. Here's our write-up about that story with links to Curbed:

http://downtowny.blogspot.com/2009/04/andrew-cuomo-stops-bothering-aig-long.html

-DT

http://downtowny.blogspot.com

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Response by Splot
over 16 years ago
Posts: 35
Member since: Apr 2009

Riversider, I was looking for specific examples this time. Downtownster, thanks, very helpful!

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Response by NWT
over 16 years ago
Posts: 6643
Member since: Sep 2008

The money's burning a hole in your pocket, eh?

If there's any question that the purchase is going to turn out to be a mess, why do it?

If you buy in an established building, the worst that can happen is the value continues to go down and you end up paying more over the term you own the thing.

If you buy in a new development that's not rock-solid -- and none of them are -- then you take the above-mentioned risk, plus the chance to pay lawyers to litigate with the developer, the developer's lender, and so on.

Then again, if the money came easy to you, then go for it.

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