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From Bloomberg, a story that quotes Robert Levine, lead developer of One Brooklyn Bridge Park, as saying his firm "got killed" on the project. The story says two-thirds of the units are still unsold. http://www.bloomberg.com/apps/news?pid=20601109&sid=aEWE_9YUNBkI&refer=home One Brooklyn Condo Demand `Killed' as Market Slides (Update2) By Sharon L. Lynch and Jonathan Keehner Nov. 3... [more]
From Bloomberg, a story that quotes Robert Levine, lead developer of One Brooklyn Bridge Park, as saying his firm "got killed" on the project. The story says two-thirds of the units are still unsold. http://www.bloomberg.com/apps/news?pid=20601109&sid=aEWE_9YUNBkI&refer=home One Brooklyn Condo Demand `Killed' as Market Slides (Update2) By Sharon L. Lynch and Jonathan Keehner Nov. 3 (Bloomberg) -- Nowhere is the high-water mark of New York real estate more visible than the former Jehovah's Witnesses distribution facility at One Brooklyn Bridge Park. The 14-story condominium complex shattered the borough's price ceiling when real estate entrepreneur Elizabeth Stribling agreed in March to pay $6.05 million to live there. Now, two- thirds of the 449 units in the 1.2-million-square-foot building remain unsold, testament to the financial excesses brewed up across the East River in the Wall Street canyons framed by One Brooklyn's floor-to-ceiling windows. ``We were killed,'' said Robert Levine, chief executive officer of RAL Companies & Affiliates LLC, who masterminded the $550 million waterfront project with views of the Brooklyn Bridge and the Statue of Liberty, along with amenities such as virtual golf, a movie theater and a planned 85-acre park. ``We have negotiated and done some contracts, but people are clearly much more aware of the current economy.'' So are his backers. Levine's partner in the Brooklyn Heights development, 10 blocks south of the Jehovah's Witnesses headquarters that abuts the Brooklyn Bridge, is a $300 million fund run by American International Group Inc.'s real-estate investment unit, a business that is itself on the block as New York-based AIG sheds assets to pay an $85 billion government loan. Wall Street Layoffs Just when sales at One Brooklyn should have taken off after New York real estate's annual June-August lull, Lehman Brothers Holdings Inc. went bankrupt, Merrill Lynch & Co. was forced to sell itself and Congress authorized a $700 billion bailout of the nation's financial system. About 160,000 New Yorkers may lose their jobs, including 45,000 in finance and related businesses, according to an estimate by Governor David Paterson. The result: Stribling Marketing Associates, exclusive broker for the property, has sold just 18 units since March, compared with an average of 14 a month in each of the prior 10 months. Levine, 56, is seeking about $1,684 a square foot for the most expensive unit, triple the average price in Brooklyn and higher than the $1,240 average for Manhattan's Upper East Side. The building itself is among the most eye-catching on the waterfront, occupying roughly the same space as the Chrysler Building, the art deco skyscraper on 42nd Street in Manhattan, according to www.mrofficespace, a real estate data site. The developer said he plans to fill the bottom two floors with a grocer, bakery and other services convenient for residents. Brooklyn-Queens Expressway One Brooklyn is cleaved from the rest of Brooklyn Heights by the Brooklyn-Queens Expressway. The Robert Moses-era beltway spews fumes and noise 24 hours a day from cars and trucks heading between the Verrazano Bridge and La Guardia Airport. The nearest subway, at Brooklyn's Borough Hall, is about eight blocks away and accessible by shuttle bus. ``I was surprised that they got $1,000 per square foot in that location,'' said Cliff Finn, director of new development marketing for the New York real-estate brokerage Citi Habitats. ``I didn't consider that to be prime Brooklyn Heights,'' he said. ``Traditionally, the outer boroughs, if it's not enough of a discount from Manhattan, they are going to have a little bit of a problem.'' RAL mitigated the noise from the expressway by installing commercial-grade windows of thermopane, double-glazed insulated glass that cut down ``considerably on any transmission of sound,'' Levine said. 40 Floor Plans Buyers at One Brooklyn can expect to pay anywhere from $525,000 for a 782-square-foot studio overlooking the highway to $7.75 million for a 4,600-square-foot penthouse with wraparound views, four bedrooms and terraces that approach 1,000-square-feet. They can pick from about 40 different floor plans in the 1928 building, most including 14-foot-high ceilings, oversized doorways and towering circular columns that flair out at the top like mushroom caps, part of the building's original support structure. Built as a warehouse, the structure housed light manufacturing businesses until the Jehovah's Witnesses bought it in 1983 and used it to package and ship religious literature, according to Richard Devine, a spokesman for the group. ``The construction is very, very high quality and that's what drew us to it,'' said Theresa Ortolani, a fashion and portrait photographer who paid $575,000 in July for a 900-square-foot studio with her stuntman husband, Ian McLaughlin. ``We love being on the water and the proximity to Manhattan.'' `My Manhattan' Stribling, who founded the closely held New York real-estate brokerage Stribling & Associates in 1980, chose her penthouse apartment during a tour with Levine even before he bought the building. She is combining two units into a 3,400-square-foot, three-bedroom apartment with a library, three fireplaces and a wrap-around terrace. ``This is the most dynamite view I've seen,'' said Stribling, who plans to move to Brooklyn from her Upper East Side Manhattan townhouse. ``It's like I'm looking over my Manhattan.'' Levine bought One Brooklyn for $205 million in June 2004 through 360 Brooklyn Investors LLC, a joint venture with the AIG real estate fund. It was envisioned as an anchor for Brooklyn Bridge Park, whose sports fields, kayaking docks and bike path will replace the otherwise barren waterfront below the Brooklyn Heights Promenade. The park is scheduled to be 90 percent complete by 2010, Levine said. Wine, Salmon Tartare The purchase and development of 360 Brooklyn, named for the project's address at 360 Furman Street, was funded by $290 million in mortgage debt and $40.2 million in mezzanine funding from Deutsche Bank AG, according to public records on the New York City Department of Finance Web site. Mezzanine loans typically carry higher interest rates and are for shorter time periods than first mortgages. John Gallagher, a Deutsche Bank spokesman in New York, declined to comment. Stribling's marketing company invited brokers from Brooklyn and Manhattan to tour One Brooklyn's five model units on Oct. 29 over wine and salmon tartare. The tour ended with coffee and dessert in a $2.9 million-dollar, four-bedroom apartment overlooking the water. Equally impressive to the brokers may have been a tweak to push more sales. Agents who sell a second unit now stand to reap a commission of 4 percent, up from the standard 3 percent, and the fee rises to 5 percent for subsequent sales, said Evelyn Cole, one of Stribling's on-site sales managers. Levine said he recently backed out of plans to buy the Bossert Hotel, a Brooklyn Heights landmark also owned by the Jehovah's Witnesses, after agreeing to pay $85 million. He said he's not interested in cutting prices at One Brooklyn. ``We work very hard to maintain the price integrity of our properties,'' he said. ``I have not ever greatly reduced the price to move a unit.'' To contact the reporters on this story: Sharon L. Lynch in New York at sllynch@bloomberg.net; Jonathan Keehner in New York jkeehner@bloomberg.net. [less]
yet he's "not interested in cutting prices." good luck with that.
"Price integrity." Rofl. I snort really loud right in the sales agent's face whenever I hear that. If other buyers paid $1700 psf to live near some freeway in Brooklyn, they deserve to feel stupid.
`I have not ever greatly reduced the price to move a unit.''
Guess he's only in the business for a few months now.
"wine and salmon tartare."
That's it - they're drunk and got sushi worms!
As I said delusional. The funny thing is they're selling at absurdly high prices, and renting at the same absurd price. $2800 for 588 sf! Seriously? Would anyone rent at that price in that area with the subway eight blocks away? You're better off buying a one-bedroom somewhere else in Brooklyn like in be@schermerhorn or some other new dev and most of them are negotiable.
From what I can tell, the rentals may well be offered by previous purchasers, not by the developer.
Personally, (to cleanslate) I prefer this location to that of other downtown Brooklyn locations, but I realize that's a personal thing, and others would prefer downtown.
Reasons? Even without the park built, the location is dramatic. I live there now, and don't find the BQE or Furman St. to be at all off-putting. Joralemon is lovely; the walk to the subway is very quick (shorter than the walk I have in Mid-town to my office at the other end) and a pretty walk; for those who prefer not to walk, there's a shuttle); the promenade is a 5-minute walk; restaurants are close by; and the light is great.
Avg price/SF is not even close to $1700...avg is more like $1000 or slightly under. People will have to judge for themselves on whether that's too high. It was comparable to apartments we looked at in Dumbo, but it's much quieter. We have people living beside us who have a small child, and also directly above us, and cannot hear a thing. And as noted consistently, the finishes and quality of space are excellent. Certainly, the price per square foot varies by where you are in teh building, with Harbor sides higher than the Brooklyn facing sides, and higher floors commanding higher prices. So of course, those on the 3rd and 4th floors facing Brooklyn (and the BQE) are not going to be paying the highest prices.
Regarding the Brooklyn-facing side: when we looked, apartments on the 3rd, 4th and 5th floors had some minimal BQE noise. The developer put in thermal pane windows to minimize this. Again, it was quieter than the apartments we looked at in DUMBO. By the 6th floor and above on the Brooklyn facing side (the 6th to 12th floors), the highway noise dropped off significantly to a very distant hum; you've really cleared the BQE by this point.
Again, there's so much personal preference when it comes to apartments. Granted, we signed our contract a year ago before the sky fell, but we're long-termers, not "flippers", so over the long term I've no doubt it will be fine. The location may not be for everyone, but that doesn't make it something to summarily dismiss! For us, and our own personal preferences, it's a far more attractive lcoation than a downtown Brooklyn building.
Of course, it's not fun to have sales stall like this. As far as I can tell, it's selling at about the same pace as the Edge, or On Prospect Park, or some of the other high-profile buildings, but for those who can take the long-term view, I do think it's a quality product and a great place to live.
jzwart, isn't taking the shuttle a bit of a hassle though? It's like taking a bus to the subway kinda thingy, it adds time to your commute. Walking would be preferable obviously, but I doubt that's fun during winter and esp. if it's snowing.
I think it's disconcerting that there are about 300 units still unsold and that's quite a bad publicity. I believe it's all over the news too including the Daily News. 2/3 unsold is a really long way to go and without any plans for price reduction. There's just not a lot of buyers to go around these days and there's a lot of new devts all over the place in Brooklyn. It's much harder to get a loan now and they also ask for more downpayment.
That's cool you actually plan to live there long-term, but you still lose the opportunity to possibly get a better deal and to actually have more choices. But it is what it is and I agree, you just move on.
I have to say though that there are buildings which are starting to negotiate their prices and some which have brought down their prices dramatically. They are usually buildings which have few more units left to sell and there are some that are almost done but not enough contracts signed, so they tend to negotiate.
There are developments which are firm they are non-negotiable, not sure how long they can hold out. I just don't see too many people out there attending open houses at this point and I don't know if there are enough qualified buyers for that reason in this new landscape.
I dunno...I think it's imperative at this point that if you buy, you actually buy a unit you love and has everything you're looking for, so you can live with that purchase no matter if the RE crashes.
in two to three years you'll read a story in the NY Times Real Estate section about this development and how it is the best example of the excesses of the 2000s.
Been there...you need to be 6'1" or tall to look out of the windows. They were about 30% overpriced to begin with, and now with this downturn they have to come down about 50% to start selling. Good Luck Mr. Levine.
"in two to three years you'll read a story in the NY Times Real Estate section about this development and how it is the best example of the excesses of the 2000s."
Don't disagree. Overall, looking at all the private cabanas and spas and PET SHOWERS and YOGA ROOMS and THEATERS in buildings that aren't even built for the wealthy in ten years is going to be one of those "what the F were they thinking".
Forget the waste, imagine what the maintenance will be like when the abatements are gone and those things start wearing down.
One Brooklyn Bridge Park Cuts Condominium Prices to Spur Sales
2008-11-19 20:56:26.330 GMT
By Sharon L. Lynch
Nov. 19 (Bloomberg) -- New York’s One Brooklyn Bridge Park, the luxury waterfront condominium complex that remained two-thirds unsold after 17 months on the market, reduced prices on about 50 apartments to spur sales.
Marketers of the former Jehovah’s Witnesses facility cut prices on some interior units by between 3 percent and 9 percent, developer Robert Levine said. The 14-story building shattered Brooklyn’s price ceiling when real estate maven Elizabeth Stribling agreed in March to pay $6.05 million to live there.
“We have adjusted prices, but it’s not an across-the-board thing,” sales manager Evelyn Cole said. “We’ve had a tremendously good response. The phones were ringing.”
The decision comes after New York City apartment prices fell in every one of New York’s five boroughs except Manhattan in the third quarter, including an 11 percent drop in Brooklyn, according to the Real Estate Board of New York. The median price in Brooklyn, the city’s most populous borough, fell to $500,000 as the three-year U.S. housing slump came to the city.
Prices at One Brooklyn Bridge Park range from $525,000 for a 782-square-foot studio overlooking the Brooklyn-Queens Expressway to $7.75 million for a 4,600-square-foot penthouse with wraparound views, four bedrooms and terraces that approach 1,000-square-feet.
“We have adjusted pricing on select units to be more consistent to our initial offering prices in February of 2007,”
Levine, chief executive officer of project developer RAL Companies & Affiliates LLC, said in an e-mail. “This creates some great incentives and opportunities to prospective buyers.”
Courtyard Views
The price cuts were on units that face courtyards rather than those with views of lower Manhattan across the East River.
Levine said last month he was reluctant to reduce prices because doing so would hurt the investment of earlier buyers who paid more. The reductions since then return some units to price levels set when the initial sales offering was published, Levine said. Prices were raised when the market was booming.
The Brooklyn property was built as a shipping warehouse in
1928 and sold to a joint venture between RAL and a real estate fund of New York-based American International Group Inc. in 2004.
New U.S. home prices have fallen 17 percent since March 2007 to a median of $218,400, according to the Census Bureau.
At One Brooklyn Bridge Park, brokers sold 18 units between March of this year and early November, compared with an average of
14 a month in each of the prior 10 months. The city’s traditional June-August sales lull failed to lift sales at One Brooklyn Bridge as subprime mortgage-related losses worldwide climbed toward $966 billion and job cuts to 166,000.
About two-thirds of the 449 units in the 1.2-million-square- foot building were unsold at the start of this month, according to Levine.
Deutsche Bank AG funded the purchase and development of the property with a $290 million mortgage and $40.2 million in mezzanine funding, according to public records on the New York City Department of Finance Web site.
prices haven't been reflected on streeteasy yet. i'm curious to see which units they cut on.
3-9% - what a joke
Even if they drop 20%, doubt they will have people buying like crazy again. The fact of the matter is they are way overprices and there's not a lot of qualified buyers to go around.
*overpriced, I mean
Think deflation. Until people feel confident that prices will not keep falling (condos or TVs), they will hold off their purchases.
Probably even more killing going on here.
Speaking of odd developments, how is DUMBO doing?
LMBBAO, they came in M-ASSES LOL from the midwest and don't know the city. Like Jim Jones in Jonestown, Guyana. Some places you can't get native NY'ers to live like you could not get native Guyanese people to live. Price cuts it will be and it will be a Mitchell Lama or NYCHA or a new name to represent gov't assistance.
Buy now or be priced out forever, Now is the time to buy and Catch a falling knife. LMBBAO.