problem with apartment building mortgages?

go to urbandigs.com and do a search for cmbs

Same thing would've happened with more high-end rental property, if their owners hadn't already co-op'd or condo'd them previously. Just off-hand, it did happen with the Apthorp and Peter Cooper/Stuyvesant Town.

the report is interesting in that it makes policy recommendations for expediting the foreclosure/transfer of property processes, largely in an effort to protect current tenants. it also has detailed discussion of how financing occurred, for idiots like me.

WOW this is scary!!! Socialism at its worst. Marvin Markus you should be ashamed of yourself for putting your name on this. Marty what the hell is wrong with you?
This is evil. This is code for let's steal buildings from people - they want to take buildings away from people before they default - what the hell are you talking about - doesn't an owner have a chance to fix his own problems before BIG BROTHER steps in and steals his buildings away. Then BIG BROTHER wants to only sell these to politically connected people - WTF -
I was a registered bidder on the 19 Bldg package in the Bronx. When these crooks (you call them politicians) convinced the GSE to not sell on the open market but to sell to someone hand picked by Schumer I couldn't believe it. No on has called me, so it's clear I won't even be considered. Why not call me? Don't I have a right to buy buildings? Don't I have the right to be the high bidder. Just because I don't contribute to your campaign doesn't mean I can't manage buildings.
THIS IS ALL BULLSHIT!!! Marty you disgust me - Et tu Brute?.
The truth is NYC apartment buildings are in better condition than THEY HAVE EVER BEEN. We need to ensure the current system is run correctly by competent people - that is all that is needed. Government stay away with your bullcrap we're going to give these buildings to "experienced" owners - it's clear this is all a ploy to take these buildings from the small guys and give them to the politically connected players. We won't have it! Stay away!!!

so, Jazzman, you know these people? What's the agenda?

Lucid - My agenda or there agenda?

Jazzman, as I'm sure you already know, this is nothing different than when Chucky Rangel's pals got a bunch of prime Harlem properties out of RTC which should have been put up for competitive big, and also several RTC auctions went not to the highest bidder, but somehow new criteria got added after the bidding was supposedly closed, in addition to bids being accepted after the bidding deadline and the high bid being known by insiders.

I agree with you that this puerile, self serving clap trap is a naked attempt to influence ??????? (I'm not actually sure who they are trying to influence) people to let them steal OPP.

But the reality is that the way you get "affordable housing" in Manhattan has rarely been that someone has built it, but more that someone has built overpriced housing, someone else was dumb enough to finance it, and then they lost it and someone who was able to pick up the pieces at numbers that allowed them to make it affordable did so (perhaps the best example I can think of is Tribeca Tower).

30 yrs - agreed - I think throughout the country it's often the second guy who makes the money. The developer of the project often is over budget (both time and money) - of course through the last couple of years the market has been so hot that even the idiots made money but reality is setting in.

I just think that allowing everyone to bid is what's best - not sure if you read Knakal's article in the NYO today but he says that every note they sell right now has 50 bidders. 50 "f"in bidders. Do we really need Marty and his gang of communists to come in and preemptively take over buildings? It's so disgusting.

Perhaps there is a shred of truth and they are indeed concerned about the well being of these tenants, but come on, the old days are over - 311 has changed the game. Again, NYC housing stock is in its best condition ever. If a building is falling into disrepair then DHCR, HPD, DOB, DEP, DOH, DOF (you get the idea) can all get involved and do get involved. Plus emergency repair comes and fixes all of the violations - the article even admits it. So what's the big problem? Make sure these agencies do their job and that's it. Stop telling banks who they can sell to - what prices they can sell for etc. That's why this all seems like such a scam to me - it's just not needed.

jazzman, very interesting to read your perspective. obviously i'm biased, living in a complex that has every likelihood of going under shortly. i'd like, as too many people know, to have more than one washer working for a building of 120 units.

i can see both sides,depending. i don't know if you get any bigger than TS, but i could definitely see your argument that they want to give the spoils to the next "best" and biggest landlord. and that sucks. because we've all learned that bigger is not necessarily better. i would point out however, that one of their solutions involves requiring foreclosure when foreclosure is actually warranted, ie no extend and pretend or delay and pray. i could still see how you might find that suspect, but it seems to me to be within banking authority to have totally bad loans dealt with and thus the property taken care of. and hopefully any and all capable bidders would be entertained.

some buildings that are in seriously "demerging" neighborhoods probably need some guidance. but not all, i totally agree.

aboutready - I'm not a diehard reader of SE so I'm not aware of other conversations you've had. But if you've got 1 washer for 120 units and you're rent stabilized then call DHCR. File a reduction in services complaint (there is a protocol you need to follow including notifying the landlord of the issue via certified mail). Call 311 and they will walk you through it. You can not only get a rent freeze but you can also get a rent reduction. The laws are so tenant friendly here. Landlords can't get away with anything anymore. With the money you'd save from a rent freeze you could pay someone to do your laundry.
The tenant "hardships" that are discussed by groups like Marty and the Communists are overblown. Have you seen Rivington on 135th? It's the poster child of what low income housing should look like. Have you seen low income housing in ANY major city in the world that was better. I haven't - not in Shanghai, Hong Kong, Seoul, Ho Chi Min, Tokyo, Rio, Mexico City, LA, San Fran, etc. Granted I haven't been everywhere in the world but please these people scream as if the tenants at Sty Town and Rivington are going through some sort of hell (or at least that there headed that way). It's just a red herring to get buildings on the cheap for well connected cronies. And yes I do believe this is part of a calculated master plan. There are ZERO good reasons why that 19 building auction didn't go off. ZERO.

jazzman, i'd suspect i'd love to sit down with you over some fine drinks. i don't agree, and i don't disagree. but i'm paying slightly over $4000 for my apartment right now in PCV, which isn't great shakes for the market although i really like my apartment, and i could certainly expect a few f'ng washing machines for the rent. here and now. you can get an equivalent apartment easy these days for $4500.

but i live in pcv, as a market rate tenant, not RS, and have for the past five years, mostly because i acutally like it (you'd be amazed at how often one needs to announce that). if you think things aren't iffy here, on many levels, you'd be wrong. and do you think the RS tenants don't call 311 incessantly? and still things don't get done?

aboutready,

As a market rate renter your leverage is the dollars it costs them to re-rent your apartment - it costs them at least $10,000 if you move (depending on how close to 1st you are).

Consider asking for a rent credit. I'd even tell them that every time there aren't any washers that your going to send out your laundry and send in the bill with your $4,000 monthly payment (less the cost of your laundry bills). You've got some leverage. You need to understand though that things break - my tenant's all forget that. When I grew up in my mom's house the boiler went out during the winter the washing machine broke, the fridge either froze my food solid or couldn't keep it cold, the windows let in a draft etc. Things break so be reasonable. I will tell you that the tenants who are nice and forgiving with me are MUCH MORE likely to get rent credits from me. The dicks get zero. They can hire an attorney and deal with my attorneys. My rule is if they raise their voice at me or my employees that the only way they're getting anything from me is if the judge tells me I have to give it. And generally market rate renters who are dicks don't get lease renewals.

As an aside - the J51 ruling won't affect me at all, but it would be a complete travesty of justice if TS doesn't win that case. They did what everyone was told to do. The program doesn't pencil if you can't deregulate units so no one would have ever used it. It's just too bad it wasn't written more clearly, but certainly the intentions of the policy were to allow destabilization.

It wouldn't be the first time LL's got screwed over a J-51/RS ruling: it already happened when it was ruled that if a LL didn't include a rider that notified the tenant that when his J-51 expired, so did the tenant's RS status, that the tenant would retain RS status, even though LL's were never told they had to include such riders when the law was put into place.

The problem will be because of the hindrances placed on speedy foreclosure. What happens (as always historically) is that when a LL realizes they property is gone, they keep making collections and stop making payments, to see what they can milk on the way out to recoup some of their losses. if foreclosures happened in one day, the damage would be minimal. But the longer you go in that mode, the more get get deterioration of the property. So, the issues they bring up can be real, but the solution isn't selling to a select group, because the problems occur BEFORE THEY GET CONTROL, not because it got sold to the wrong new owner. So where they are correct is that properties which are under water do have some degree of likelihood of the problems they describe, their solution of "sell everything to us" is, well... what you point out.

As I'm sure AR will agree, the vast majority of the issues where she lives arise out of the current owners knowing they are going to lose the property, so even though they have the money to fix things in their fund, they aren't going to spent it on repairs and maintenance because they know they are losing the property anyway. If ST/PVC got sold tomorrow at a price which was realistic to a new investor/operator, most of the problems there would probably get sorted out within a few months. but the longer TS wheezes it's death rattle while holding on tight to the project, the worse things will get and the longer it will take to fix them when ownership does change hands.

So what I'm also saying is that 19 building auction not going off will be the single biggest reason that the tenants will suffer more, not the other way around as they are pretending.

I bet we know eachother with maybe 1 degree of separation.

30yrs - "I bet we know eachother with maybe 1 degree of separation." Even though we in NY deal with a lot of real estate it's always surprising how small of a group we are. Doubt you've ever heard of me though - I'm one of the younger principals in the rent stabilized industry. This is my first foreclosure cycle.

Per the above - your point about the long foreclosure process is true -but that's a problem with our court system not a real estate problem. They need to fix the court system not confiscate buildings from people. Just like it shouldn't take me 12 months to evict a nonpaying, unemployed tenant it shouldn't take more than 2 months to take a building from a non-performing landlord. I preach that if tenant's default they should be gone and in the same vein I think that If a landlord defaults then he's gone. Both get a fair trial, but fair trials need not take more than 3 months.

You know we're agreed on that one (hey it took me 7 years to get a defaulted owner out of a Coop)