99 John finally lowers prices!

.. so whats the real risk here? Is the only way to loose money is if the sponser files BK?

And I'm assuming the price in 5 years is determined by the sponser and not the 'true' market price (i.e the only comps they will use is on units that have sold in THIS building and not comparable?)

The meeting went like this: The market is frozen, If we don't sell 20% of the units (at above quoted prices), it triggers our first "default" in our loan documents, "SH-T" we need to do something.... Marketing Guy : Market is trying to find out where and when the bottom is and prices continue to decrease. Some bloggers on streeteasy are even saying 50% decrease ( quoted on "sideliners" - w67thstreet). Principal: So we need to guarantee their price in a few years.... how about I take their deposit invest in a 3% yielding and I promise them 110% or a yield of 1.9% for 5 years, that'll at least get my bankers off my back and give me 5 years to think about that hamburger job in Miami. Alright let's print up the brochures and send a mass e-mail. :)

The guarantee is not backed by any bond or security. I'm still gonna offer way below asking.

ouch. I wonder what happens when a bunch of buildings do start defaulting. If fire sales start, then its just dominoes...

buyback guarantees = desperately trying to buy some time = very, very ill financial situation

Agreed its not good, but note that 99 John was previously a rental building... not a new development like some others.

20 Pine has cut their prices by 25% off the StreetEasy prices. Nothing is moving in FiDi so I would expect discounting galore.

isn't it Rockrose? aren't they involved in both rentals and new construction? i'd take a close look at whatever financial information is available. This may just be an effort to get enough sold so that the condo plan doesn't tank, but it could portend something worse.

99 John is a Rockrose rental conversion, not new construction.

"99 John was previously a rental building"

99 John was previously an office building.

I know that Rockrose is converting 99 John. My question runs more to the area of overleverage. Conversions cost a lot, new developments cost more. What does Rockrose have on its plate that could render it unable to pay the promised 110% in five years?

Steve, wasn't it an office building, then a rental building, now a condo conversion?

Dude its got "ROCK" in its name... that company will be around forever... just ask the Lehman analyst.

I don't know how long it's been around, but apparently it was an office building also... is it possible they already made their money back and just trying to exit?

Given the only debt that can be sold right now is that which is guaranteed by the FDIC, why would you trust a buy back guarantee from a developer. You're better off just bidding really low.

"Steve, wasn't it an office building, then a rental building, now a condo conversion?"

I don't know its subsequent lives, but I did have a client there about 15 years ago.

It is a much better policy than those low price guarantees in Williamsburg.
Location is not so great in the FiDi, a little dark and John Street is what I think is the second worst street in FiDi, right after Fulton Street.
But good luck to them. It is a nice building.

Do you know the range of price per square foot?

The building is famous for being designed by the same architectural firm that created the Empire State building.
It was bought in 1996 for 17M by Rockrose and renovated to be a "luxury" rental
Became popular as a party place for a younger and happier crowd

They are asking a little over 1k/sqf
Definetely not a luxury building, but they are trying

See also Noah Rosenblatt's site:
http://www.urbandigs.com/2007/12/converting_rentals_to_condos_i.html
Or Curbed
http://curbed.com/archives/2008/01/25/development_du_jour_99_john_deco_lofts.php

This sort of deal reminds me of the "life-time" money back guarantee offered on infomercials.

But, as stated, it is worthless if the company doesn't exist in 12 months....

It's not a cheesey gimmick like that, and I don't think Rockrose is going anywhere.
It's actually much more of a marketing ploy. IMHO I think they are trying to do reassure otherwise nervous buyers that they should believe in the bldg.
I am not a huge fan of the FiDistrict but I can see this being more attractive now. Kudos to them for thinking outside the box.

Lousy location. And who wants to live in an office conversion? In Chicago they build new luxury condos from the ground up, but due to lack of creativity and NIMBY regulations, NYC is forced to convert offices, factories, and warehouses, into condos.

Actually is an art deco themed office bldg, so a lot of people find that appealing.
The location is not lousy, it's not the most prime, but it's in the FiDi. I don't like John Street, but if you work in the FiDistrict, it's very convenient.

You cannot really compare anything in NY to Chicago, so there's really no point in even stating that Chicago builds new luxury condos. Chicago does not have the land values that NY does, so it's easier to buy huge parcels of land to build new construction. Chicago also does not have the population density that NY does, so to raze existing structures and 'create' land is much cheaper and easier. The two are different types of cities completely. Chicago's situation would be more accurately compared to Minneapolis or St. Louis than NY.

The economic picture in Chicago is very bleak. I doubt there are any new construction plans being proposed now, and those in the works, are probably bordering on forclosure. Chicago, despite being a big city, has a very Midwest mentality, and people would much rather live in small suburbs than an urban area. It's not accurate to compare Chicago to NY in any sense - different demographics, socioeconomics, political, cultural, and religious characteristics make it impossible to compare.

Why does rufus always bring up Chicago? This is SE about NYC not Chicago? Does he live in Chicago?