crappy rental yields

This one is asking $3M (a hair above where it sold in 2015) with $5300 in monthlies:

https://streeteasy.com/building/551-west-21st-street-new_york/sale/1468457

Asking rent is $8400:

https://streeteasy.com/building/551-west-21st-street-new_york/rental/3064995

Works out to about a 1.25% annual yield.

Just to play Devil's Advocate shouldn't you go based of what the last actual sale was rather than what something couldn't sell for?

We're hearing how the low end of the market is super hot right now. With this most likely to be first time buyers and the rental market crashing, would you think them more likely to be doing rent vs buy comparisons?

The low end is super hot? Sez who?

Brokers.
https://youtu.be/JS_181oTSD8

Of course if you look at the actual numbers for Manhattan listings asking under $1 million for the past month, number of contracts signed is down about 20% from same time period in 2019, while the number of new listings has increased 150% for that same time period.

>> Just to play Devil's Advocate shouldn't you go based of what the last actual sale was rather than what something couldn't sell for?

I’m happy to play the game both ways.

Bought at the end of 2017 for $11.725M, current monthlies ~$10K:

https://streeteasy.com/sale/1270059

For rent at $29K:

https://streeteasy.com/building/212-5-avenue-new_york/12a

A yield of 1.9% if they get that rent. Most likely will end up at 1.0-1.5% when they don't.

I'll go behind the scenes on this one, for Keith's benefit in terms of who's buying this stuff. Note that it was put on the market for rent at $32K shortly after closing and rented a couple of months later in 2018:

https://streeteasy.com/rental/2284226

Purchase was by LLC whose address in NJ is a home owned by a former Bollywood actress, VP of TeleBrands "As Seen on TV" infomercial company, and wife of founder of said company. A search on her name shows other real estate investment endeavors. For example, here's a history of a PH in South Beach...

Attempted sale at $20M at the end of 2015 / start of 2016:

https://therealdeal.com/miami/2015/12/02/poonam-khubani-re-lists-her-w-south-beach-penthouse-for-19-9m/

A drop to $18M a year later ("As a savvy real estate investor, she’s ready to capture the property’s appreciation in value since its purchase."):

https://www.mansionglobal.com/articles/bollywood-actress-relists-miami-beach-double-penthouse-for-17-89-million-47052

By early 2018, at $14M:

https://nypost.com/2018/01/24/bollywood-star-tries-again-to-sell-south-beach-penthouse/

And now at $11.75M:

https://www.elliman.com/florida/sales/detail/510-l-532-72_a10791082

Actually, it seems attempts to sell began in 2014:

>> Built in 2009 as a W hotel-condo hybrid, this is the third time Mrs. P has offered the unit for sale. In 2014, it was listed with Coldwell Banker’s William P.D. Pierce at $19.9 million for six months. In 2015, it was relisted with Jeff Miller and Mark Zilbert of Brown Harris Stevens | Zilbert again for $19.9 million, and now it is being offered for $17.89 million.

Do you think the fact that someone was shot dead a couple of months ago practically on the doorstep of 212 5th Ave would deter the type of person who might be thinking of spending $30k rent there?

If it's good enough for Bezos, it's good enough for me. At $20K, that is.

Bought in 2018 post-construction at $8.8M:

https://streeteasy.com/sale/1260044

Current monthlies around $10K:

https://streeteasy.com/building/madison-square-park-tower/44a

Could be yours to rent for $22K or less:

https://streeteasy.com/building/madison-square-park-tower/46a

Works out to a yield of 1.6% or less.

At the price point of these homes you reference nada, I would much prefer to buy a white box and design it myself(or I should say with my designer). These finishes are very disappointing as I find most are.

I know this is a bit off the topic, but couldn't help myself.

On another random note regarding the Stephen Ross interview, I thought of a book I read many years ago called the 'mismeasure of man', Stephen Jay Gould. that along with the later book by Jared diamond; guns germs and steel makes for an interesting read.

Keith Burkhardt
TBG

Perhaps. I’m but a simple renter, so I prefer finished apts over white boxes. Were I a buyer, I’d still take finished apts over white boxes: not worth my time to play designer, I’d rather leave it to the professionals. A third of the time, I find redesigns are trying to make the apt into something it’s not. The second third of the time, the design just comes out worse: people seem to have a high degree of arrogance about what they & their designer can achieve relative to the design company on whose shoulders hundreds of millions in sales depend. The final third of the time, it does come out appreciably better. I’d rather just have original design, or pay up for the good third having seen the finished product & without expending my time.

A lot of finished product choices right now at high-end. And Reno indeed is a big headache for most people.

@keith - I am a fan of Stephen Jay Gould. Unfortunately (per my personal beliefs), so many in the culture in which I was raised swear by The Bell Curve. And, the recent James Watson kerfuffle just added fuel to their fire. I envy those who don't have deep ties to the the culture in which I was raised.

+1 on preferring finished product if you can find one you like. We were never able to find one that we liked in our price range and preferred neighborhood in NY, but we were succsessful Columbus. Thrilled to just move in without even so much as having to paint.

I guess it's the old rebel streak in me, something about every unit in the building looking exactly the same. It's like the vertical version of AutoCAD houses in Orange county. Certainly creating your own home out of a white box is not for the faint of heart... Guess we're in that minority who actually enjoy it, a sort of creative satisfaction. Although my experience has been limited to a few relatively small homes.

@mcr I think you would enjoy reading Jared diamonds book. I discovered Gould through my interest in evolution theory. I went to hear him speak at NYU in the early 80s, though I found his mocking creationists just a little bit mean-spirited for my taste.

DJT once defended to crap finishes he delivered in Trump Tower by saying something like "I love a nice black marble bathroom, but who wants to live in a building with all black marble bathrooms? So this way people can put in what they want."

30, I am guessing back in the day, people didn't have the so many new developments to choose from. That said, almost all new developments are somewhere in the range of contemporary finishes. I like them but understand that there are people who are not into contemporary.

Do you consider the Robert A.M. Stern buildings of the recent decade (15 CPW, 30 Park Place, 220 CPS) contemporary-ish or something else? Not 100% my preference, but I do appreciate that they’re putting out something that is different than all the rest.

There’s a beach house in Montauk that is amongst my favorite beach houses: concise, great integration with the beach, decidedly modem design. Turns out it was Stern circa 1973.

I like Robert AM Stern A lot. The buildings you mention are certainly contemporary but with a lot a classic elements - herringbone floors, generous moldings, separate kitchens in some cases, detailing on the facade with little less glass and more stone - the last one being the biggest difference. I think he likes the term Modern Classics. I toured his offices and his work and team has a lot of breadth and they are not tied to particular style. They can design completely classic if the client wants it.

Mansion Hell dubs Stern a "New Traditionalist"

Great blog for laughing at the suburbs too.

https://mcmansionhell.com/post/149284377161/mansionvsmcmansion

" I like them but understand that there are people who are not into contemporary."
You wouldn't necessarily get that from (what I personally find) the shocking number of people who insist on buying prewar apartments and then absolutely obliterating anything prewar about them.

30, Pre war means different things to different people. For me, it is about the building exterior and higher ceilings compared to 8 foot ceiling height in 60-80’s buildings. To some one else, it may be extensive moldings (to me moldings can be redone). To some, it may be inadequate size and no of bathrooms/closets which forces them to reconfigure. Then there is the maid’s room at the back of the kitchen - you put a kid in there away from the favorite child? People want to put central ac and washer dryer if possible even if it means some reconfiguration. They want better lighting, electric oven, and higher load (AC and electric oven) leading to upgrading and redoing electrical. Of course, to some, pre-war is about layout which mean spruce up what you have and try to modernize selectively.

30, Forgot to mention that keeping most of the layout is most cost effective if you can make some compromises.

This one is for MCR & ph41, who are into this sort of thing. Who knows, maybe George would have been a customer had he not blown his RE dollars on a second home in Nowhere.

https://streeteasy.com/building/838-5-avenue-new_york/rental/3169189

$32K for high-floor 4500 sq ft prewar overlooking the park on prime UES, plus storage space, plus studio on first floor for staff or (as MCR prefers it) a home office.

Originally sold for $13.7M in 2000 to a (now) billionaire. Came on the market in Oct 2019 for $27.5M and $22K in monthlies. Reasonable starting point? Perhaps, 2009 sale a floor down was at $22.5M (included a terrace) and 2014 sale two floors down was at $32M (20% larger). A few chops later, it is now asking $19M.

So at $32K rent minus $22K monthlies, annual yield is $120K a month. I bet you can get it cheaper. And even if we use 2000’s sale price of $13.7M (oh dear, has it come to that?), it’s still a rental yield below 1%.

Will no one rid me of this turbulent UES trophy gem?

Here is my take: Even if I made that kind of money myself, I would not go for it because it is just too big, and I really do like small spaces and do not like houseguests. However, were you to shrink it down to a 1 bedroom/ 1.5 bath (still with home office on separate floor) and were I able to pay for such an abode without my husband's assistance, I would be all over it.

Combine the 2 back bedrooms into one big MBR suite, change the library into a DR, and make the current MBR into a library. There's your 1 BR home, and you can visit your guests at their rooms in the Pierre when they come to NYC. Also gives you a real DR (surprised there isn't one, given the size, and otherwise traditional lay out). I love the big pre-war LRs in the top buildings on 5th - this is one version of my idea of heaven (though I'd repaint).

How many 20 years condo buildings do you see where when you go to "past rentals" there aren't any?

One thing I find interesting in our age of fin/tech billionaires is the lack of screens. I know this fellow comes from a prior generation, but still. When he retires from investing to write his great white american novel, will it be longhand?

@Aaron2 I heartily approve the DR/library swap, but I've always wondered -- what on earth does one *do* with a cavernous MBR? Hide your Rodin collection behind closed doors to impress the ladies?

I likewise heartily approve of the reconfiguration, but it would still be too large for my taste, and even if it weren't too large, I would still be left with the second problem: There is zero chance I could I afford such an abode without my husband's assistance. Now, were he to decide he wanted to live in NY full-time, I would not object to going along for the ride. :-)

Here's one a little closer to my own neighborhood & price bracket: https://streeteasy.com/building/184-franklin-street-new_york/rental/3075642

Seems to be a case of broker-owner smelling his own farts. Very stale sales listing at $1.7M matches its 2016 closing price, but it gets better: the asking rent was just *raised* to $7K a couple weeks ago.

Low monthlies keep the yield out of the basement, relative to nada's examples, even assuming a market-clearing rent of more like $5500. But the sheer chutzpah of raising the ask after sitting unsold for years pre-Covid amuses me.

RichardBerg,
Notice there's no floorplan? Because it's like 600sf.

At that price point and for a 1BR, I’m liking 551 W 21st more & more with their 1500+ sq ft layout. The 2nd post in this thread had 3E, at $8400 in rent vs $3M sale & $5300 in monthlies. Now the floor above is available at $8500:

https://streeteasy.com/building/551-west-21st-street-new_york/4e

Play these two off one another, where do you think you can land it? I’ll put the challenge at below $7000. RB, give it a go and report back!

I really don't like that location but it's a lot of apartment for the $ (not just SF, but finish, building, etc).

@RichardBerg: Yes, it would be an absurdly large bedroom. I appreciate the potential wall space for hanging art (I collect), and maybe room for a sculpture, but it would be mostly wated space (I'm not one for whole living suites in bedrooms, even if the ancien regime did it that way).

And I would like a proper library as a space adjacent to a living room - for smaller groups, or just a place to sit and read (I don't watch TV), with a separate office to do the keyboard-based work I need to do.

Did someone say sqft? https://streeteasy.com/building/54-stone-street-new_york/rental/3043489

Asking $5M + $4500/mo, or $12K to rent (contract fell through).

Covid might not be a bad time to unload this place...I can only imagine what the weeknight noise is like when a swarm of traders hits the bar downstairs.

>Aaron- easiest thing would be to cut the living room to 29’ ( still Leaving a very large room ) and put up a wall like they did on 6th floor with nice opening to a 14’8”x 20’ dining room having direct access to kitchen. Then have a gracious opening from living room into the existing library.

Nice find, RB. But are you sure you don’t want it combined with the lower floors for 11 bedrooms?

https://streeteasy.com/building/54-stone-street-new_york/pha

That way, your trader friends can just crash rather than having to trek over to Jersey at midnight just to come right back at 7am.

Fatal flaw on 5th Ave apt to me is the ceiling height. The giant living room makes it worse, so splitting it would be an improvement IMO. However, for $20M I’d want higher ceilings regardless.

@inonada -- good point. I thought something was off in the photo proportions, and later realized what building it was, so yes, there wouldn't be particularly high ceilings there -- also not helped by the deep coffering in this particular example (though now that I look at 6, maybe they're stuck with it). Can't say I like the decor of 6 - I hope the buyer gutted it. And took out the multi-line phone next to the toilet. Such a classy touch. Not.

$2.3M with $3341 in monthlies:
https://streeteasy.com/building/trump-tower/57c

$4900 asking rent:
https://streeteasy.com/building/trump-tower/52c
on a lower floor.

note theres a bunch of units and none are renting:
#35E - 721 Fifth Avenue $7,700 4 rooms, 2 beds 2 baths 1,001 ft²
#54D - 721 Fifth Avenue $7,200 ↓NO FEE 3 rooms, 1 bed 1 bath, 1 half bath 1,096 ft²
#42D - 721 Fifth Avenue $6,900 3 rooms, 1 bed 1 bath, 1 half bath 1,100 ft²
#52D - 721 Fifth Avenue $6,500 3 rooms, 1 bed 1 bath, 1 half bath 1,092 ft²
#33E - 721 Fifth Avenue $5,800 ↓ 3 rooms, 1 bed 1 bath, 1 half bath 1,100 ft²
#42C - 721 Fifth Avenue $4,999 ↑ 4 rooms, 1 bed 1 bath, 1 half bath 1,150 ft²
#52C - 721 Fifth Avenue $4,900 3 rooms, 1 bed 1 bath, 1 half bath 1,137 ft²

oh...and the one real sale?
https://streeteasy.com/sale/1392266
$1.15M after asking $1.45M by the end. initial ask was $1.9M

In 1989 I was interviewed by 7 Days Magazine about the crappy resale values at Trump Tower.

AnonMan, I think you got that a little wrong: it’s $4341 in monthlies, not $3341.

Good news is that maybe monthlies came down in the past year? 35c had them at $4682 from a year ago, and 52c had them at $4481 from their sale at $1M last year. That’s the same one for rent at $4900.

So that’s ($4900 - $4481) * 12 = $5028 annually, or 0.5% of purchase price. If they get their ask. Ding, ding, ding, we have a new winner!

I was told cash-on-cash rental yield doesn’t matter in NYC bc your rental return comes from long-term asset appreciation of 4-5% per annum x 70% LTV. In other words, we got a whole island full of speculators playing the same game of hot potato. Only difference between here and Fresno 2009 is that the unleavened carry costs are 2-3% of the asset vs. there at sub-1%. Got my popcorn ? out to watch this one

Unlevered... no bread involved here ;)

30...And in 2017 I was interviewed by Vanity Fair about Trump Tower's slumping sales. Perhaps we should take our act on the road.

ali r.

@inonada: yes, typo on my end. whoops

frankly, even at the #s i gave it would be a lousy return.

Drama in my building! Two more identical "04" units both entered the market today.

https://streeteasy.com/building/20-pine-the-collection/1504 - asking $1.6M
https://streeteasy.com/building/20-pine-the-collection/1804 - asking $1.4M, or rent for $5500

Meanwhile,
#1204 just rented at a last-ask of $5K, for a cap rate around 1%
#1404 has been valiantly searching for a $10K sucker since 2018

All of these have identical monthlies (quoted around $3K, more like $3300 when the 421A expires in January). None has touched the original interior (which in fairness is one of the better layouts they carved below the 25th-floor setback). Who will win the race to the bottom?

>> Unlevered... no bread involved here ;)

No bread, but a lot of dough.

Oh and how could I forget, #1604 is also FSBO on the condo's bulletin board.

What do you think the agent from 1504 is saying to the owner?

"Never, ever look at the StreetEasy forums"

Crappy yields aren't just for the high end. Interesting sequence of events at 1 Wall #502:

https://streeteasy.com/building/cocoa-exchange/502

10/20/2006 - original sponsor sale $419K
01/28/2019 - listed for $600K
07/12/2020 - contract signed
08/17/2020 - listed for rent @ $2500
09/10/2020 - closed ($511K)
09/16/2020 - asking rent dropped to $2K

The seller has been owner-occupying. His home appreciation lagged inflation, but he probably came out ok thanks to generous abatements from Mr. Bloomberg (or rather, the credulous taxpayers who voted for him).

Now as the abatement is set to expire, a buyer-couple jumps in, who were willing to rent it out at 1% cap rate before they even closed! Maybe they've decamped for the coming school year, but felt like "buying the dip" and breaking even during the hiatus? Either way, great for renters...

When I read "1 Wall" my 1st thought was "they still haven't started sales there." Until I saw the link.

1 Wall St was supposed to hit the market a year ago at this point with 575 units. But Urban Digs shows 25 contracts signed (total Resales plus New Developments) over the last year for FiDi. UD also shows current FiDi inventory at 310 (obviously 1 Wall St isn't the only shadow inventory). What do you think is going to happen to this building, and all of FiDi, at this kind of inventory to sales ratio?

There are still a dozen or more unsold sponsor units at 15 William (2007).

I think Harry Macklowe will be on his knees for a bailout.

I do think there exists a price level at which buyers in the neighborhood can avoid losing their shirt. But the "7-8% discount from ask" figure that certain talking heads bandy about ain't it.

Is 1 Wall Street Court an actual address recognized by the post office? Wikipedia lists the address of the building as 82-92 Beaver Street.

According to usps.com the official delivery address is:

1 WALL STREET CT APT 502
NEW YORK NY 10005-3403

Local records (deeds, tax lots, etc) probably show Beaver Street, however. Such discrepancies are common. For example, when "Chemical Bank @ 18 Pine" rebranded itself as the "Armani Condominium @ 20 Pine The Collection", delivery services & utilities & retail all used the new address, but NYC government records still show either "18 Pine" or "18-20 Pine".

I think a lot of FiDi will suffer from the historical issue that when the RE market crashes in NYC, units with high monthlies relative to their sales prices do even worse.

Indeed, I've been reading up on your past predictions of nonlinearity.

Then there's the fact that interest rates are rock bottom, which makes the "high maintenance discount" larger than ever no matter how you choose to calculate it.

For example, at https://streeteasy.com/talk/discussion/43103-baking-in-maintcommon-charges

>> Generally at the peaks of the market high maintenance gets under discounted and at the bottom gets under discounted

I assume you meant "...at the bottom gets over discounted" ?

Yes that's what I meant, sorry.

Some browsing based on 30yrs mentioning of 100 11th Ave led me to this gem of a story, 5A.

Purchased in 2011 for $3.3M, a hard bargain “discounted” from the original pre-2008 ask of $4.1M and abated monthlies of $2500:

https://streeteasy.com/sale/627129

And rented with a last ask of $17.5, yielding 5.5% or perhaps 5% leaving some room for negotiation. Nice work!

Fast-forward 9 years, and it is chopped to asking $11K:

https://streeteasy.com/building/100-11-avenue-new_york/rental/3160618

Meanwhile, monthlies are up to $8.2K and the owner is hoping to come out alive on sale with a $3.5M ask:

https://streeteasy.com/building/100-11-avenue-new_york/sale/1483106

So a sub-1% yield at the mid end too.

But...but...but... It was such a good deal when they bought it...

My friend's parents own a condo here, though they never really used it much. They purchased when the building opened, basically because at the time it was thought of as a bit cutting edge, newly famous architect etc. This is somebody in the ultra high net worth category, he co-invented a very commonly used and important piece of medical equipment among other things.

That's said, just for some reference, over $1,700 a square foot for a condo on 11th avenue in Chelsea was not considered a deal in 2011. Js.

One of our dueling listings bought for over $3.1M with $5300 monthlies had a chop, now down to $8000:

https://streeteasy.com/building/551-west-21st-street-new_york/4e

And no fees , for those of you who don't like fees. Down to 1% rental yield, if they get $8000.

For those of you needing something bigger in that building, I can offer this gem at $15K:

https://streeteasy.com/building/551-west-21st-street-new_york/6b

Bought for $5.9M, monthlies at $9K (based on 8B). Rental yield at 1.2%, sorry I can't get them all at sub-1%.

If you need something bigger still, perhaps I can interest you in "this trophy Penthouse", ? Asking $22.5K:

https://streeteasy.com/building/metropolitan-tower-condominium/rental/3073191

Monthlies are at $19K, asking $10M:

https://streeteasy.com/building/metropolitan-tower-condominium/sale/1482605

That puts us at 0.4% rental yield. But I bet you can get them down to $19K just to make it an even 0% rental yield.

Kinda interesting story on that apt. Originally owned by Sony since 1991, presumably as an apt for their NYC big-shot. Listed for $11M in 2012 and chopped until it sold at $7.35M in 2014:

https://streeteasy.com/sale/692307
https://streeteasy.com/closing/10198385

After an extensive renovation, showed back up at $16M 2015:

https://streeteasy.com/sale/1198723

Been chopping down from there ever since.

Used also for filming maybe? Recalls Leo’s apartment in Wolf of Wall Street.

Ugh: The point where the different directions of floor planks come together in hallway/kitchen/stair area. Rather inelegant. And: $10M and no ability to block seeing the mess in the kitchen and have guests walk by it on their way in and out? No thanks. At least there's a circular path through the downstairs so the kids can chase the dog around the house.

Listed today: a 5th floor walkup can be yours for a cool $2.5M, or rent for $6500, for a yield of 1.7%

https://streeteasy.com/building/138-fulton-street-new_york/sale/1497958
https://streeteasy.com/building/138-fulton-street-new_york/rental/3260144

The "Jenga" building mentioned elsewhere also boasts a wide variety of rent + buy alternatives listed side by side, all around 2% yield, ranging from $6K/$2M all the way up to 10x those figures:

https://streeteasy.com/building/56-leonard

Assuming you actually find a renter, of course...

Friends just sent me pics of dinner they are enjoying on their new roof deck in West Village rental. They decided to take advantage of lower rents and traded up from their LIC rental. They have been in the city throughout, had COVID in early March before quarantine, moved into new WV place yesterday and are now enjoying sunny skies.

And they rented Inonada-style. Rental is in coop whose owners are less concerned about covering carrying costs than they are about having bodies in the place to keep an eye in it for the next two years because they are overseas. My friends are professors and the arrangement is definitely a win/win.

Update on the Cocoa Exchange (aka "1 Wall St Court" above): new owners have lowered the ask to $1700, bringing the yield under the 1% mark. And they're still competing against a couple other studios in the building with the same ask on higher floors.

I understand a lot of existing landlords are stuck dealing with lowered rents as best they can, but why on earth did this couple buy here & now? They live in Midtown, husband is a corporate attorney, not exactly the rubes I'd pictured.

Good lawyer does not equal good investor. We know a number of good lawyers who tout NYC condos as good investment. When we got to NY, many were directing us to new dev condos that were sure things. High power NYC attorneys have great cash flow and little time. Sitting ducks for the machine.

Although one corporate lawyer friend who is a good investor comes to mind. He switched to ibanking for a few years for better money, but headed back to law because he preferred the culture of law firm over that of ibank.

MCR,
Good for your friends. What do you think the chances are that they are going to switch to being buyers in the next six months?

RichardBerg,
When units get listed for both sale and lease, what percentage do you think get sold vs rented?

Zero. They are firmly in Inonada’s camp; sworn enemies of ownership of NYC real estate. They have better use for their capital in the form of their own start-up company. I could see them buying if company yields them nine-figure-net worth; short of that, they will rent-hop between beautiful apartments in different neighborhoods.

And wrt to the professors in question - they are scientists for whom no other city will do. One had a “better” offer in another of the great world cities, but she preferred the entire package of current position because it came with living in NYC.

RB & MCR, funny that you mention lawyers & rubes. Earlier today, I ran across a new-dev-to-rental listing whose rental yield was 1.2% at ask. Like RB (my brother from another mother), I have a need to look up the owner to figure out what led them there.

This one turned out to be a real estate lawyer specializing in commercial & landlord/tenant litigation. Yikes! Clearly, his gig is to screw the crap out of the renter somehow, right?

A little more search revealed he was a simply a flipper, including a very nice one at 15CPW where he netted a 2.3x flip with a 3-year hold, putting only 30% down. So let’s say something like 5x on his money after 3 years.

Now simpletons like RB & me, we’d just scratch our heads if that happened to us, say something must be wrong when that happens, cash in our chips, and head elsewhere. Others, however, seem like they cannot step away. They need to lose it all back slowly over the years, I guess.

FWIW, this is not the first 15 CPW lottery winner I’ve seen piss it away on subsequent flip attempts according to ACRIS.

Even professional flippers can be like that. I knew a bunch of guys who made good livings from 1982 through 1987, and then lost it all back in 1989 through 1992. Same with 2001 through 2007. A big factor is they tend to roll over into bigger and bigger deals and Peter Principle themselves. Even big guys like Marty Raynes fell to it because their formula was dependent on prices rising 25%; they didn't even have to drop, but simply stop going up (NB Raynes bought the biggest residential deal in NYC history at the time when he purchased the MacArthur Portfolio
https://www.nytimes.com/1993/06/13/realestate/perspectives-the-macarthur-portfolio-new-ownership-for-unsold-apartments.html )

Seeing the foreclosure sales on new developments start coupled to the lack of new development sales, shadow inventory, discounts it is taking for developers to move inventory, the plummeting rental market making it impossible to simply rent these units and wait it out... I'm finding it shocking people refuse to see what's coming.

I'm curious what people think is going to happen at 1 Wall St, which was supposed to start sales a year ago at this point, has 566 units, and aside from a spate of very recent sales at 130 William St (which I can't seem to get a straight answer to whether it was some sort of bulk sale) there appears to be half a dozen new dev contracts in all of FiDi this year.

PS What's the one real advantage most people have over the house in Las Vegas?

@inonada - I am guessing lawyer about whom you write is the very one we rented from at 310 E53rd? He was a great landlord and we really liked that apartment, which definitely cost less to rent than to own. He has apartments in buildings all over town. I haven’t researched which have panned out, but 15 CPW was a homerun.

P.S. - But when I think further, he made a mistake with us in not accepting our multi-year offer. We rented for two years and would have renewed for another two years at same rate because we were too busy to deal with all of it. Rather than take us up on our offer, he held firm on wanting an increase (can’t remember amount), so we just packed up and put stuff in storage and bought a place because we sensed this was going to be an annual headache that we just did not have time for. He tried to re-rent for 20% more than we were paying, but ultimately dropped ask to what we were paying a few months later. I guess he just needed to test the market to feel good about renting 4 years in a row at below cost.

Correction: Apt rented with last ask 10% above what we were paying, so maybe he did end up getting more from new tenant. I would be curious as to how he has done on all his units because he was a good landlord and did not strike us someone who did not know what he was doing in that area.

@30yrs - you get lucky once in awhile?

Or is it that you can always quit when you are ahead?

And for anyone who wants to play along at home, the RE lawyer I am talking about is Warren Estis. Basic ACRIS search turned up 297 entries spanning 35 years. I would bet money that he is ahead in yhe overall game, but too much work (and math) involved for me to satisfy my curiosity.

The second.

Unbelievable, MCR! What a incestuous little circle this whole thing is, it’s like “Name That Tune” for RE. MCR: “I can name that owner in two facts.”

Good to know that he is a solid person too.

Looking at the apt you rented, that one is looking like a total loss (or more) in the current market. The unit above is in contract at the same price as the 2005 contract price. Of the 20% down, ~10% went to renting at below monthlies+interest and another ~10% goes to transaction costs, and who knows what the unit above closes for, so maybe a bit more there.

But of course, he can let it ride, and the one 15 CPW win could cover a dozen such losses.