If you own on the UWS.....

Not sure if this works..
Extell may be selling below market much the same way as a someone who needs to sell right away(real estate is not a liquid investment) or via auction. Also Rushmore has issues related to the building only being half sold, near projects and a bad school district.
You may be right Apt23, just playing devils advocate on this one.

11A has a more immediate problem.

9A is on the market for $100 K less and appears to be in significantly better condition.

also, i would be amongst those that would never live on riverside blvd. take the walk to civilization from there between december and march and see what you think.

Has the value of the average apt on the UWS dropped by 20% bcs Extell dropped prices 20% to 1440/psf? Nope. I'll get worried when Extell hits $1k/sqft. BTW, there are very few properties on the UWS that I would have paid more than $1k/ft for, even at the height of the market, and even in "minty" mint condition.

You compared a new condo, whose taxes will be sky high in 10 years, on a low floor, with a raised highway, Vs. a pre-war co-op, 40 blocks north, where the highway is on the ground, and taxes are low. And these are alike because?

Following on Columbia's post, 13A sold for more than $500k less in March. But 9A is commanding me to buy it: "the only thing to do with this gorgeous home is to move in and be dazzled by its beauty and its light and views".

-raising hand-

the answer is "substitution?"

Your point is interesting. Clearly, Extell has had trouble getting market prices right. If it was pricing at $1500/sqft 4 years ago, would they have sold out? How does having a large inventory of condos that are on the market (but haven't reached market clearing prices) affect the rest of the market (in as far as they are both "luxury" properties on the West Side)?

Picture this scenario. Extell lowers to $900/sqft, I'm pretty sure they will do deals at this level. How much does that shrink the overall supply of buyers for the 2br+ luxury product on the West Side, or does can the market absorb all the product if the price is low enough. I didn't major in economics, so someone enlighten me on this.

NYC10023: There are apts at the Rushmore that are closing around $1300. Don't know how long it will take but I think $1000 psf is doable at the Rushmore before they are finished.

PMG: Was just trying to find river views since that is the attraction to both these apts. I was looking to buy in the area of 300 Riverside so I knew about the apt. If I researched I could have done better but I am supposed to be working. Writers block sent me to SE.

CC: I, too would never live on the blvd, . But for space, views, and the right price even I might consider it. My husband loves the park and bike path there. But the cost of a limo and driver to get to the subway might dissuade me.

precisely.

views are terrific and have certainly persuaded some.

but as far as what i would call the living in manhattan experience, the location is awful and somewhat worse the lower down you are.

Forget where Rushmore is located. The economics of the situation are interesting. If nothing horrible has happened in Manhattan (dirty bomb, apocalyptic collapse), if someone put 100 apts for sale on the UWS (Riverside Blvd or not) at 500/sqft, they'll be gone tomorrow. Temporarily, that'll depress prices for other product on the UWS but not for long, because IMO, there are enough buyers who'll appear to sop up the excess at 500/sqft. Pretty sure that'll also happen at 900/sqft. Perversely, if you price at 1500/sqft, it may depress prices across the UWS because that inventory won't clear so fast.

i was with you till the last sentence. at the lower prices, it is a once in a lifetime opportunity like finding money in the street.

? You don't agree that there are insufficient buyers at the 1500/sqft level on the West Side to absorb the inventory? And that at some price point, people compare the 2? Is your point that the 2 things are completely different?

NYC10023: My supposition is this:

IStar Financial is about to go bankrupt. They are seriously compromised in their RE holdings. They took over One Madison and are in involved in Trump Soho. Their florida holdings are another nightmare. I think there must be vulture funds forming right now to offer firesale prices for blocks of apts in One Madison. Is a court really going to turn down a lowball offer (hats off to W67 if it comes in at $500psf) on One Madison when there are creditors? No, this is Miami lite. If vulture funds do make an offer -- all luxury buying interest will be sucked up to that part of town.

Plus Extell has to be sold out of Rushmore soon. They can't be holding too many luxury apts when it comes time to market the Carnegie Hall project -- and they seem to have big bets on that project. The Carnegie is such a strange partnership -- an orthodox Jew and the Royal family of Abu dhabi? I'm sure Extell would like all their businesses running smoothly by the time that one comes to market. So if I were interested in the Rushmore, I would view this new price drop as a starting point.

w67, in my experience, very few buyers consider these two options true substitutes. Yes, they are technically Manhattan shelter, and they both have river views. But people usually want new with modern layouts and larger windows, or they want character. Very few people are indifferent to these two choices. And as much as I would like for you to benefit from a fire sale at Rushmore, young people and certain other groups I won't name, seem to prefer new construction, and are willing to pay a premium for it.

Sure, but your original proposition was if (and I assume how much) this would depress prices across the UWS for "luxury" product?

My reply had to do with the pricing level at the Rushmore. If truly, earth-shatteringly low, then (perversely) no effect. If higher, then yes, I suppose at some point, people compare an upper RSD apt to a lower RSB apt.

i am confused. i definitely agree that there aren't enough buyers at $1,500. But that's because of the perception that that price point is too high. Don't follow how that depresses prices.

Because then the inventory lingers on the market for a long time at those price levels and they are trying to fish from the same (and stagnant) pool of buyers for the rest of UWS. If you price low, then the inventory is gone.

Wouldn't this have more of an effect on pricing in Hoboken? I mean, isn't Riverside Blvd closer to New Jersey than it is to 300 Riverside Drive?

Does it start with and "A" end in "sian" and they come from places like Japan, Korea, China? NO WAY. You mean they buy Luis Vutton, but eat Ramen? You mean, 20 extended family members all pool their funds to buy 1 gold encrusted TRUMP tower unit? while all the time eating RAMEN? Please go on... I never understood that either, but outward appearances is old school, but still plenty of adherents.

apt23, yes istar is toast.

nyc10023, here is the deal w/ nyc re. It is not like there are $1MM plus salary families that are living in rentals in manhattan right now. me thinks, all the "players" that can, have bought or left or are in rentals, where the rental ppl make up the smallest %. So mkt, goes to $900sq ft, I think the pool of buyers actually able to and wanting $2MM 3bdrms on 64th and WEA are few and far....

One other thing, NYC is finance, and all the ancillary support for finance. that includes, Re borkers, attorneys, small business owners etc. Finance is and will continue to shrink. It is a decreasing leverage game in finance, less leverage, less profit, less comps. There are NO other profession that one can make $500K easily and consistently as a 30yo. And I don't care how big your bonus, but if your cubemate/office mate is GONE... your financial penis gets shrinkage....

So adjust 900/sqft to 500/sqft. Whatever level you think gets the inventory absorbed.

You price 80RSB at 2000/sqft - doesn't seem to have an effect on apts in more desirable locations closing
at 1500/sqft (take the prewar condo product at the Admaston). Price at 1400/sqft - does it have an effect,
as apt23 says, because people start comparing 300RSD to 80RSB? Or does it not, because as cc-printer are saying, different product.

My point remains, if you price very low, 500/sqft, whatever - no effect.

w67 I wasn't judging the two groups. I'm not young, nor particularly superstitious, which is what I meant, but I've always lived in housing built during my lifetime, so that's what 'feels' like home.

As for the Asian-Russian buyers at the Trump-y buildings, take a look at ACRIS trails.

NJ buyer buys at 200RSB, pre-construction, 400/sqft, sells for 600/sqft, gets hooked.
Does the same at 220RSB, 240RSB, so far so good (less happy about 240).

Not too sorry for 'em if they get fingers burned at 80RSB, somehow.

Some of the apts in Rushmore have color/material combination more pleasing to most buyers. Also the apt on the 8th floor may have a blocked view that the 10th floor does not(making up floors, but the problem is real). Bottom line, two similar apts seperated by two floors can have very different market values. It's an odd building view wise, and the finishes do not satisfy all buyers equally.

Riversider: I think your above point about schools would hold sway with buyers. But at a certain price point for some good space and top of the line closets, kitchens and bathrooms, you will compromise all your aesthetics. Some will not want RSB but at some price point they will. Certainly, the 39 sellers at 120 RSB are less wealthy today.

I wonder why, after 2 years of offering discounts, they dropped list prices now. Marketing against Aldyn? Or have lenders taken over? It has been about 4 years since they began construction. Construction loans are often 3 years, with 1 yr extension. Barnett has finally been forced to admit he can't sell all his condos.

Didn't you just answer your own question?

They're long units in two next door meetings. First ten floors of Aldyn even though part of the offering plan are being done as rentals "for now", probably more will be rented. Aldyn was done in an environment of lower building costs and lower end finishes, so that building will be just fine, but Rushmore was high cost and is taking longer to sell than developer anticipated. Expect them to lower prices and preferably from sponsor standpoint offer extras to move units, but ..... in tranches. I would not expect a whole sale 20% price cut across the building. In other words less desirable units get bigger discounts and they continue to test the market. Also they can't under-cut Aldyn which is not as high end.

I thought Aldyn was originally supposed to be higher end than Rushmore(aside from the rental portion)? At least sold at a higher price point. Larger units in the river facing tower. Who would buy in a building that is half rental. There will be board issues and disputes over the common spaces and budget for years.

Rushmore is the crown jewel. Besides older purchasers don't share amenities with a rental or go rock climbing and go bowling. Nice amenities but ones that appeal to younger buyers/renters.

Do younger buyers buy 4 b/4.5b for 4.5mm?

http://ny.curbed.com/archives/2010/09/20/the_aldyn_revealed_renderings_prices_fake_people_bad_dribbling.php

btw, Rushmore is crap compared to 240 and 220. Finishes are cheap and sq footage is overstated. Rooms are significantly smaller than 204/220, and kitchens don't have cabinets large enough for pots and pans.

oh wait...

did riversider get something wrong again?

Streeteasyaddict, it does feel as if square footage calculations are way too liberal in Rushmore, even more so @ Aldyn.

It seems that for the first time in 4 years since marketing began, they've finally priced the units close to market price. It's still not clear whether this was simply a change in marketing strategy (i.e., they will now do 2% off list instead of 15% off list) or a push to acutally get them sold (i.e., they still plan on doing another 5-10% off list). Given the listing discount buyers "expect" nowadays, and the volume of sales they've got to get through, it's likely the latter.

Then again, pricing strategy for this development has always been off. They've been at it for 4 years, and they had 2 years to get it done before the big panic. However, they've always been trying to get the marginal 10% from the marginal buyer instead of just moving the product within a tight timeframe. You know, the good ol' bubble saying of "it only takes one", except in this case it takes 289.

Extell's strategy to me has always been off. They shouldve followed tradition and priced the first tranche of apartments at a discount and generate enthusiasm before raising prices. As it stands with Rushmore they started high, and only manged bad press and ticked off the original buyers. To add insult to injury unlike Hudson Waterfront they've virtually assured no repeat buyers.

Interesting about Aldyn, haven't been in it. Clearly though they had to reposition the marketing, and they could only go down.

My take is the Aldyn was designed to minimize losses. I think they succeeded, but at the expense of upside. I think renters will be very happy, owners less so.

We'll see if it succeeds, to my knowledge the building is still empty. Anyone know of closings?

I wonder if the court's ruling on the AG's decision had any affect on their price drop. It should have been issued long ago. I wonder if it is being held for any political reason re: Cuomo till after the election. Doubtful but still it is strange it is taking so long.

More likely that the drop reflects the new apts at the ALdyn coming on to the market and the dismay of Carlyle.

streeteasy: they have not yet begun to market the apts at the Aldyn.

The concept which stands out most clearly to me is that the days of 'extend and pretend' MIGHT be coming to an end. The shadow inventory we all hear about, the stalled construction projects, the questionable conversions, banks collecting rent checks rather than sponsors, etc. There has been more than a few 'freaky' things going on in NYC real estate for 2-3 years now. Could this be the start of the unwind? Of just an isolated case of a developer getting rid of the weakest product they have in inventory?

nyc10023: I see the point. Pricing a volume of apts above the market will create paralysis among buyers rather than depressing prices outright. I also agree that pricing a volume of apartments @ $500/sq ft would do little other than to attract investors (30yrs_20 in REO...you out there?) and some lucky insiders (brokers, agents, etc....see 30 W 63rd).

So pricing in the 800-1000 range may be the most damaging. Too rich for investors, to cheap for other sellers to compete with.

I think getting more apartments to move in NYC is about psychology, not about price point. Prices did drop in 2009, but buyers were still few and far between (we paid $625/sq. ft. on the West Side, and just about everybody on this board told me I was crazy).

The Rushmore is shaped like a giant tuning fork, which creates the problem that buyers who are attracted to the river views often find themselves looking at the other tower as well. But it is a high-amenity building, and when psychology gets a little better, it will move (though I'd predict at a slight discount to $1440/sq. ft.).

ali r.
DG Neary Realty

do you see any linkage between psychology and unemployment? can people feel better without better (real) economic news? in other words, not the we're not getting worse news, but actual improvement with a roadmap to further gains?

The owners of 300 RSD 9A bought at the height of the market just before the crash. They've been trying to unload it ever since. They've lately put it back on the mkt with some cosmetic improvements (though why in the world they erected a full wall between the DR and LR is beyond me--should have kept with the original plan which would have preserved optimal openness and light/views). It's still priced too high; the new comp for the A line, like it or lump it, is 13A, which sold for $1.9 and change.

11A, IMO, has a much better kitchen situation, with the maid's having been busted out to create a large, open EIK. Though some might miss the extra bathroom and potential for a child's room/home office that the maid's room provided. Also priced too high.

The bottom line is that the A line, while having amazing views, lacks in closets, has an undesirable side-by-side bedroom situation and is simply too small for anyone with a growing family. Perfect for empty nesters or those without kids, but likely to get cramped very quickly if children are in the mix.