Calling Streeteasy /missing recorded sales

Those doormen must be really bored.

They probably have potential renters looking at 15 or so rental listings to keep them busy and I am sure Extel is only providing bare minimum staffing level with many amenities still to be open.

At what point after closing do you have a legitimate beef if amenities haven't opened yet so the Sponsor can save money?

Ask the early buyers of Sheffield 57.

Well in this case, there are likely waiving common charges so that people do not complain and adjusting the language to reflect this in closing.

Ali,
How hard is it to add 7 to your floor number?

There are more than 60 units worth $100mm closed as per property shark. Many of them still show up in contract. Come on Streeteasy.

3 months into closings and they've only closed like 7.5% of the building?
And it looks like half of them got listed as rental units?

The last I remember hearing about projected sellout price was a few years ago when it was lowered from approximately $2.1 billion to $1.9 billion, but I'm sure that doesn't account for the common charge rebates. Also the last I had heard was the projected cost was going to be $1.4 billion.
And as far as I know Extel has not made good on its promise to replace Pathmark with an "affordable" supermarket.
Anyone have more current info?

Plus recent claims of EB-5 fraud:
https://therealdeal.com/2019/06/03/extells-former-eb-5-regional-center-director-says-shes-victim-of-fraud-in-65m-lawsuit/

I think next 3-6 months will be very telling as the developer always expected to finish the interiors in stages - guessing that is true for most developments of this size. By that time, I would think they have closed on whatever is in contract currently. The number still in contract as per Streeteasy (170 or so) is actually much less as the developer continues to show many units which have closed still in contract to show the development in better light.

I wonder if Extell is going to try and get away with not making full common charge payments for all the units to the condominium entity? It's got to be up close to $1 million/month. Plus they are probably paying another $5 million/month in debt service (anyone know what the actual number is?).
If they end up having selling costs of $200 million (including the huge common charge rebates they are giving) deducted from the projected $1.9 billion sellout, and end up with an extra $100 million carrying costs above the $1.4 estimated cost to build, they may find their profit margin disappear if they have to start offering discounts to get the remaining units sold.

I do not think anyone has any doubt about this project losing money. Question is how much? I do not know the equity amount but loss will be at least $100mm.

I think they still make a lot of money, based on the high price

How? They have not sold much. Any one can make up high asking prices.

Their silence on how many units have actually sold makes me think it's a shockingly low number.

It is not just silence but attempt to mislead the market by keeping the sold units in contract. It does seem like the current in contract or sold units are appx $300mm as many of more expensive units in contract have not closed yet. We will know in the next 6 months. At least they have closed $100mm which the Streeteasy does not show.

But that's little more than 5% of the projected sellout. I'm not sure it's them "keeping the sold units in contract." Doesn't SE scrape ACRIS for "Sale verified by closing records" information? If so, why is SE missing so many when PropertyShark is catching them?
Also have to wonder what the "no longer available" units represent.
If they have sold less than 300 units in the 3 years it's been in the market, can they hang on another 5 years to sell out?

My guess is that the selling broker has to change the listing status to “sold” or “not available” in OLR or some other system feeding Streeteasy for the listing not to show as “in contract”. However, not sure why Streeteasy does not pick up recorded sales. Perhaps the building has more than one address and the Streeteasy is not linking these addresses.

I'm pretty sure at one point we looked at land and building costs and calculated that there was no way they couldn't make a pile of money here. Were we that far off on the calculations or have things changed that much?

I am agreeing with you. At least $100mm loss to equity. I am sure Extel will still make money due to development fees.

FYI – based on the recent report issued by Extell to TASE, to the date of May 30, they indicate 61 units were already handed over.

(They note this figure doesn’t include other signed contracts that were not yet delivered)

Property shark now shows 79 worth $120mm sold. Streeteasy still not showing much.

Is $120mm sold a surprising good number? Does it indicate the second hype starts here?

Not a good number but there are many still in contract which may close before year-end.

How many is many?

Good question. Many will be at least 50 percent if not 60 percent sold as they still have time (perhaps 1 year) before all apartments are completed. My guess is 20 percent sold or in contract.

I think low rates have thrown them a life line. See if they can move another 100. Guessing once the existing contracts close, they will discount more.

I wonder how long after they finish construction do their construction loans come due.

Hi 30yrs,

Per your item on construction loan due date - based on their recent TASE report, they seem to be in control and not in any real problem (per my understanding…) .
There is a significant construction loan (currently around 540M$) that is due in 2 months – August 30 - that can be extended by 1 year and an extra 1 year if needed.
However, Extell mentions that they plan to refinance this loan and convert it into an inventory loan type.

The closings are now showing up.

This is interesting:
https://streeteasy.com/sale/1356466
Shown as closed 6/25/2019 for $4,057,869
But also listed as in contract asking $4,277,000.

I'm sure that's some sort of clerical error but if they are closing on units on the 66th floor there can't be many units which are in contract but haven't closed yet simply because they haven't gotten up to finishing units on that high a floor yet.

Also, if you were a current holder of mezzanine debt here, as far as them replacing the construction loan with an inventory loan, would you make a claim that your financing was senior to that?
If you were a lender that Extell was coming to for an inventory loan, would you worry that the current mezzanine debt could be deemed senior to yours?

I think Extel is keeping many units which have closed in “contract” on purpose. That way they can claim that they have 100 closed and 170 still in contract.

Since they could easily do 3 closings a day if they wanted to, they could have 300 closings by now if they had the contracts. At this point I think the safest assumption is that they don't have a hell of a lot of contracts that haven't closed already. If that's the case and they have less than 200 sold out of 800 after 3 years on the market (and less than 100 sold since March 2017 when they announced their first 100 contracts) I don't think the current course is going to result in anything good. Even if they do have 110 sold and 173 in contract where are they going with that?

173 figure is appx 120 once you adjust for listings which have already closed but still showing in contract.

you mean they double counted?

You mean Extel. If so, they would want people looking at the data to double count.

It seems Extel is no longer showing many (not sure it is all) listing which closed already in contract.

then what's the number now?

$400mm closed sales + in contract assuming 5 percent off the listing price as sale price.

The current situation in China/HK is not helping this project which still has $1.2 plus to be sold.

$1.2bn

Over 3 years on the market and only 1/4 sold, and a big chunk (80 units) of that was in the first 6 months before the NY sales office opened.

Based on the high percentage of what has been sold showing up as rental listings, if they keep going at this rate will anyone be able to finance purchases?

Looks very promising, already 25% sold at this price level

Not really. Look at 91 Leonard. They have not started to close and 80 percent is in contract as per their claim. That should be the number (sold plus in contract) or close to it (say at least 50-60 percent) when a project has started closings and expects pace of contract signing to pick up when the closings start.

How much do you think it's costing them to carry 600 units plus 24.5% of the building's expenses for the retained commercial units?

Re:91 Leonard, they have been on the market for a year less.

why 91 Leonard sells so well? that means the market is extremely hot?

I think 91 Leonard hit upon the combo of hotel amenities and acceptable layouts (as opposed to, say, 25 Barclay, which has amazing amenities, but many of the layouts are constrained by the pre-existing floorplates).

ali r.
upstairs realty

91 Leonard is priced right as are most toll brother developments. It is not the best location within Tribeca but the prices reflects that.

Agreed, 91 Leonard is not the best location in Tribeca, but definitely better location than One Manhattan. Though if I had to choose between 91 Leonard or 108 Leonard, I would definitely go with 108. Price is slightly more psf, monthlies are around the same. But so far the conversion looks tight and the finish quality looks/feels superior to Toll Brothers.

I think Extell is going to continue struggling for years on One Manhattan. I wonder what price point would make it attractive for an owner occupier to purchase.

how much is 91 Leonard selling for per sqft?

Wide range if you check on Streeteasy.

Rock, 108 Leonard not Tribeca and block has a completely different feel. Building is much nicer. Huge price drop off the moment you cross Broadway to the East - just the way buyers look at it.

Not disagreeing with you about locations 91 vs 108. My point was simply if I had to pick between 91 and 108, I would pick 108 due to the superior build out.

108 is indeed very nice - both building and finishes.

the market is so hot, the price is HIGH

At this point it looks like there have been 169 closings. Even taken at face value that there are another 70 in contract that's 239 total out of 815 units (less than 30%).

A little more as some have been sold but not recorded. $440 mm sold or in contract. Less than 30% for sure assuming a reduced expected sell out of $1.5bn.

The 169 is 159 recorded plus 10 listed as sold but not recorded yet.

Looks like 108 Leonard is about to start closings.
https://cooperator.com/article/tribeca-condo-108-leonard-announces-immediate-occupancy/full

Looks like they've resorted to rentals now. They have this new "rent-to-own" program where you can rent for a year and if you decide to purchase, the rent you paid for the year will be applied to your purchase price.

https://commercialobserver.com/2019/08/blackstone-to-lend-692m-to-extell-for-one-manhattan-square/

7 full months of closings as of today. Still have not broken 200 units sold and closed.

Now Extell has announced a "rent to own" program at OMS:
https://therealdeal.com/2019/09/25/rent-now-buy-later-at-extells-one-manhattan-square/

What signal is that sending to buyers?

If I were to a potential buyer, I like it as I can try renting first in this area and then decide.

And I like it as Extel as they can then take a block of rented apartments and sell to a pension fund with 3-3.5 percent current yield as taxes are abated.

And anyone who is thinking of straight buying now knows this is going to be close to zero percent owner occupancy building.

It is a large very full service building. Renters and buyers can be happy together. It is not that buyers will all know each other in such a large building. I am sure Extel has sorted out bank financing.

From what I can tell appx $490mm sold or in contract 10/08. 08/30 figure estimate $450mm. So some inventory is indeed being sold.

Closing records show 57 closings in June, 25 in July, 35 in August, and 11 in September. Considering there are still over 600 units left (75%) and that both the common charge rebate ended at the beginning of July (which would seem to coincide with the drop-off in closings) and that now you can rent and have 100% get credited towards a potential future purchase, I'm not sure how to spin a rosey outlook here.

My best guess is that you can get concessions for new contracts signed and perhaps re-negotiate your contract for the expired concessions.

BTW when I was at the building for the opening party for Linecity.com I was fairly underwhelmed by the amenities space currently available which was largely a lot of open, windowless basement space with a few very small rooms off to the sides for pool, etc. I hope it's a lot more impressive when they finish it.

Here's what buying in this building is like:

You buy unit 54C for $4,009,744 and put it on the market for rent asking $12,000/month (net effective rent).

But Extell has 34C on for $10,000 and 59E for $9,996 (net effective rent) both with condo fees waived and tenant's broker paid.

How are you going to compete?

PS Number closed sales for October = 18. Doesn't look like sales are accelerating at all.

Does anyone know how many Extel has rented out so far?

Update on closings:
240 total
September 2019 (corrected) 16
October 2019 20
November 2019 13

Update:
According to Property Shark there were a total of 248 closings in 2019.

So far this year there have been 21 closings.

With 815 units total this leaves 546 units left.

Is this turning into a rental building with barely more than 1/3 sold and less than 20% owner occupied?

I don’t think so: renters prefer to be in buildings where they are welcome rather than berated. This is the opening line on all their rental listings:

- All respectable offers will be reviewed

Good news is that the line doesn’t appear on the sale listings, which I take to mean that there they are happy to review unrespectable offers.