Chelsea Stratus - Lots of inventory

the place is huge and it was ridiculously overpriced to begin with so....

Sizzlack is right, though that could be stated about any building in Manhattan. Stratus is surrounded by luxury rentals - all for 50% to 75% less than carrying costs at Stratus.

what kind of retail is moving in there? any idea?

I think a bank. LMAO.

A bank would be a good location there.
is it tax abated? Have prices fallen or are they still holding out trying to make a profit?

Yea it is abated.

People are clearly still tryin to make a profit...look at 16A.

09/06/2007
Previously listed in StreetEasy by Elliman for $1,310,000
06/19/2008
Previous sale closed for (insiders only)
10/09/2008
Listed in StreetEasy by Elliman at $1,595,000
11/22/2008
Price decreased to $1,499,000

16A, hefty little profit:

101 WEST 24 STREET, 16A Manhattan 6/19/2008 $1,333,907

Had it sold for the original price, it would be a 16% profit in 6 months.

Notice they paid more than asking.

Notice how much it would cost you to own it:

Down Payment: $299,800
Mortgage Amount: $1,199,200
Mortgage Payment: $8,385
Total Monthly Payment: $9,392

Notice how much a similar apartment across the street would cost to rent:

http://www.nybits.com/apartmentlistings/46cb0eb7f72cc7d8c58da35885dab81b.html

Rent: $5,595

Or this one, also across the street:

http://www.nybits.com/apartmentlistings/ac8a815eff3e2f756f8fbd6a3b894fd5.html

Rent: $5,300

That doesn't include what happens when the tax abatement runs out.

after the re commission and the NYS and NYC taxes plus the mansion tax, they will barely break even

"they will barely break even"

Not even close, because it's not going to sell at close to that price. It has to fall 50% to equal the rental price for virtually identical units across the street.

If in 2 years that place goes for $750,000, I'd be surprised.

An entire class of buyers in Manhattan has been eliminated. Bonuses will never be what they were - commercial banks don't pay large bonuses because they can't: regulators won't allow them, and they're only allowed 10x leverage so there isn't enough money for them to make that much money. And after Madoff, you can be sure that hedge funds and investment managers are going to be re-regulated, as well. This $50 billion fraud is going to reverberate around the world.

I said a year ago that this was the "perfect storm." The Lehman debacle turned it into a typhoon.

"I think a bank. LMAO."

whats funny about that?

"An entire class of buyers in Manhattan has been eliminated. Bonuses will never be what they were - commercial banks don't pay large bonuses because they can't: regulators won't allow them, and they're only allowed 10x leverage so there isn't enough money for them to make that much money. And after Madoff, you can be sure that hedge funds and investment managers are going to be re-regulated, as well. This $50 billion fraud is going to reverberate around the world.

I said a year ago that this was the "perfect storm." The Lehman debacle turned it into a typhoon."

thanks for the recap

"thanks for the recap"

No problem, ccdevi. Thanks for not posting litter.

you mean like your 5 posts in this thread?

A bank would be an ideal tenant here. Great location and would benefit the bldg as well.
Steve, the problem with your entire carrying costs formulas are you assume that each person only puts down 20%. Truth is, most people put down more than 20%, especially when it's going to be a long term holding. Many people look at RE as a 5 or 10 year plan versus what you see on TV, the flippers who only put down, at most 20%.

The carrying costs reduce significantly when you put down much more than 20%, so it is impossible for you, without looking at someone's balance sheets, to know what their carrying costs are.

I think those that want to rent at the Chelsea Stratus are not going to have a problem. Compared with existing inventory in the neighborhood, it is by far the best, and renters would much rather rent there, esp. in a bldg designated as a condo, then in an all rental bldg. It may drive down prices in the neighborhood of rental bldgs as they try and compete with the Stratus.

My concern is the number of people who are trying to make a quick buck by flipping it. They bought at the peak of the market, now they expect to make a profit from that?
Just cuz they bought pre-construction doesn't mean they bought at a low price. It was high. I just didn't think there would be so many of them.

"you mean like your 5 posts in this thread?"

No. I mean your unrelated posts that streeteasy keeps on deleting.

"The carrying costs reduce significantly when you put down much more than 20%, so it is impossible for you, without looking at someone's balance sheets, to know what their carrying costs are."

And so is the opportunity cost of investing in something that isn't going to fall 50% in value.

"renters would much rather rent there"

Depends on the price.

Steve, most people do not look at RE investment as a 2 year in-and-cash out event. Especially with the heavy taxes and fees you have to take into account. So most people, educated people, are aware that is at least a 5 year event.
For you to just assume a 50% depreciation is just grabbing a number out of thin air. Not even in Miami from peak to current has RE depreciated 50%. The city has changed so much that historical events and trends cannot even predict what is ahead, let alone you.
You like to think that there has been a whole class of buyers completely eliminated. Yes, there are a lot less buyers out there, but not to the extent that a whole class has been completely eliminated. Nothing like taking something to the extreme, huh? I guess it's easier for some people to make these broad and general statements than to really analyze the event.

I think if people calculated their carrying costs to competitive rents, and want to rent out their condos, they will do quite well. For those hoping to make a quick flip and walk away with a net of $200k are misinformed.

But have you been to the bldg? I have, and it's very nice. If I was renting in the area and had competitive rent vs existing neighborhood rentals, hands down I'd choose Chelsea Stratus. Nice amenities and the floor to ceiling windows are very impressive.

"For you to just assume a 50% depreciation is just grabbing a number out of thin air"

No. That's the ratio of rents to carrying costs, and that's the historical rent-to-price ratio fall, and that's the PITI number, and that doesn't even take into account falling disposable incomes with the demise of Wall Street.

"Not even in Miami from peak to current has RE depreciated 50%."

It's about 45%, and still falling.

"but not to the extent that a whole class has been completely eliminated"

Oh where, oh where has Wall Street gone? Oh where, oh where can it be?

"I think if people calculated their carrying costs to competitive rents, and want to rent out their condos, they will do quite well."

Show me one example where you could buy a property at today's price with a standard 80/20 30-year mortgage, and rent it in an arm's length transaction and make money.

Just one.

"But have you been to the bldg?"

I pass by it all the time, but don't go in because I'm not interested in overpaying.

"Nice amenities and the floor to ceiling windows are very impressive."

You can get virtually the same thing at the 5 market-rate rental buildings that surround it, at 50% of the cost.

I see your logic. You just make up numbers to fit your arguments. You don't have a single fact to back up anything, besides what you believe in your head it to be.

Completely pointless having any conversation with you, because you throw around numbers and then do equations based on these numbers to try to justify your statement, but if the original number you are basing everything on is corrupted, the entire formula is corrupted.

If x bought a condo for $1.2 at the Stratus in all cash, his only carrying costs are the RET and C.C., which would be well below rental rates. Like I said earlier, you assume that people only put down 20% and do your carrying costs on that, but the truth is, that's not the norm. Most people put down more than 20%, especially if they want to rent it out. Maybe for their primary purchase, but for an investment, you HAVE to put down more than 20%.

http://www.housingtracker.net/old_housingtracker/location/Florida/Miami/

From peak of the market 8/2005 to current data, 10/08, median price for all of Miami is off 38.8%, not even close to 50%, and that's more than a 3 year lull.

And everyone knows that Miami has huge pockets of both wealth and huge pockets of poverty. By far there are more poor and lower class areas than wealthy areas.

And you expect Manhattan prices to fall 50%? When most of Manhattan is considered prime?

Yes, there will probably be a 20-25% fall from peak, accelerated as of the bad news lately. But nowhere even close to 50%. Maybe you wish, and I wish, too, but not going to happen.

http://www.zillow.com/real-estate/FL-Miami-Beach-home-value

Demonstrates Miami Beach, which could more accurately be described as a CLOSER comparison to Manhattan than Miami at large.

Peak home value in Miami Bch 3/06: $418,000
Home value 11/08: $312,500

peak to current loss in value -33.76%

Where are you getting 45% from? And sales activity in Miami and Miami Beach INCREASED 73% in the months of October and November as home price affordability encouraged buying.

"you assume that people only put down 20% and do your carrying costs on that, but the truth is, that's not the norm."

I just assume the standard financing for a long-term asset. If you want to buy all cash, you can, but that doesn't change the economics of the transaction, as you will have an offsetting opportunity cost.

"but for an investment, you HAVE to put down more than 20%."

Maybe today - because of the risks - but not traditionally.

"Yes, there will probably be a 20-25% fall from peak."

We've already falling 15% - 20%, and the job losses are just beginning.

Sorry, was miscalculating data.
Should be stated

peak to current loss in value -25.23%, NOT -33.76%. -33.76% was for North Miami Beach, which is a much more blue collar area, probably equivalent to Bronx or parts of Queens.

and what would that alternative opportunity have been?

Put your money in the stock market and see the money lose 45% value in 3 months with nothing tangible to show for it?

Throwing your money out the window renting, helping your landlord pay down his debt to eventually one day owning something while when you move out, you get nothing?

Buying a car that depreciates the second you drive off the lot?

A lot of people like having something to show for their investment, and nothing reflects that more than a piece of property.

There aren't very many alternatives out there to invest your money in, so I don't know how heavy I would consider opportunity costs.

Besides, as I pointed out, every time you do a carrying costs vs rental costs 'analysis' you are assuming it's 20%. And people who put down 20% are making a purchase for their home, NOT for renting it out.

From your blind calculations, I assume you have nothing to do with finance or financial advising or business. Not sure what business you're in, but I GUARANTEE, it has nothing to do with money or wealth acquisiton.

Sure there are alternatives - safe alternatives that generate dependable income. Just because you are too stupid to only think of cars and the stock market is your problem.

For example, last week I bought two fixed income products: a 5.25% FDIC insured CD and a 7.5% investment grade bond.

Face it, you made a lousy investment and no you're sore about it.

Very vulgar. No, I didn't buy, and "no you're sore about it." You're right, I'm not sore. What would I bore sore about? How is my tone sore? I just like to back up what I say with statistics rather than blindly throwing numbers around and claiming that they are accurate.

I like the reality of the world we live in, and not the reality I like to create in my head. Congratulations on your certificat of deposit. I always advocate that, but that doesn't mean that RE investors are left empty handed. Your economic situation is different than someone else's, so you make your decisions based on your situation. But what Steve doees is ATTEMPT to persuade, or dissuade people from making decisions based on fictitious numbers that have no bearing on reality. That's irresponsible, even if he has no connection to investments. If he's a janitor, fine. More power to him. But I don't know anyone that would take financial advise from a janitor. And, like I said, I know for a fact that he has nothing to do with finance or business.

this thread should serve as a lesson that stevejhx just makes up his data and statistics as he seems fit. Since he has no basis in contributing to any conversation, I am ignoring his posts.
When I challenged him with stats, he made his usual posts that ...he assumes... then ran away.

His behavior is very irresponsbible. I'm not on a molecular biology website claiming to have factual data about molecules and DNA because I don't. And I don't find myself so inept that I have to make up facts to feel knowledgeable and important.

steve's carrying costs analyses are always wrong. I, along with many others, have shown the flaws in his analyses on many past threads.

One of steve's biggest flaws is that he ridiculously refuses to account for the benefit a buyer gets from the mortgage interest tax deduction. That makes his whole analysis just plain silly.

Chelsea Stratus is probably a good example of condos not priced at levels where 80% financing would be covered by market rents. There are many others. Get down into the coop market in not-so-hot neighborhoods in outer boroughs and I'm not convinced. And one area I differ with steve on with rent-v-buy is that I believe in those third-tier markets the market could end up with market rents higher than what it would cost to buy the same apartments with 80% financing. The par or equilibrium level in some cases is the peak of the cycle. But steve's right about these one-bedroom highrise condos priced at over a million.

mortgage tax deduction is the most "REGRESSIVE" tax on the books. The benefits does not currently outweigh the falling prices and the fact in a deflationary period debt holders lose out BIG TIME.

"peak to current loss in value -25.23%"

Peak to September 2008 for Miami under Case-Shiller is -38%. Prices have fallen more precipitously since September 2008. Case-Shiller is more accurate than "median values" because it corrects for the change in inventory mix.

If you want to see real price falls, go here:

http://buybeach.com/resi/condo_mls_reo.htm

And count the number of apartments.

"Put your money in the stock market and see the money lose 45% value in 3 months with nothing tangible to show for it?"

"Tangible to show for it"?

Stock markets are volatile, they recover far more quickly than real estate. Gee, up 20% from the bottom a month ago. Pick your start and stop dates, you'll get whatever result you want.

"based on fictitious numbers that have no bearing on reality."

I publish my sources. Where are yours? Where is that apartment in Manhattan that you can buy today and cover your payments in an arm's-length transaction?

Doesn't exist.

I don't publish on molecular biology websites, either.

"then ran away."

Actually, I was on the phone to a friend in California, discussing the real estate market.

w67 is correct.

"Put your money in the stock market and see the money lose 45% value in 3 months with nothing tangible to show for it?"

"Tangible to show for it"?

Stock markets are volatile, they recover far more quickly than real estate. Gee, up 20% from the bottom a month ago. Pick your start and stop dates, you'll get whatever result you want.
-

Realistically, no matter which way you analyze it, renting is ALWAYS better than buying, and stocks will ALWAYS come out ahead of residential real estate, if the analysis is done by steve. Period. No argument can refute what I just said. Just try it, publish your sources. LMAO

"if the analysis is done by steve"

It was done by Professor Shiller.

Wait! There's a "shill" in his name! He must be an impostor!

havent we somehow wandered from the initial question which is the reason for there being high inventory in the Stratus building which was asked by nointerest? I believe it is a combination of factors, 1 being that buyers have defaulted on a number of units and they are now back on the market for sale through the developer, another group are yes, investors who bought into the building and are looking to flip or rent the units, so are therefore advertising for sale and for rent at the same time. I think it is apparent at this point that in any building right now where someone has bought a new development condo and needs to sell or flip immediately that they will not get the numbers to break even, therefore i am assuming that the units which are not for sale through the developer will have a tougher time of it. Having said that, I think you have to remember that this is a very large building, and the number of units still for sale and/or resale is relatively small compared to many other buildings which still sit with half the units unsold. Overall this development was highly successful. Although I would not consider the finishes the pinnacle of luxury, when comparing them to the rental buildings close by, they are far and away nicer units. And have you seen the south facing views from even the mid level floors? pretty astonishing and not to be found elsewhere in Chelsea.

"Overall this development was highly successful."

I know a lot in South Beach that were, as well, and are now short sales.

oh, steve, come on........... south beach is a sand bar in the ocean in a metro area of second homes and retirees

South beach is definitely a different market...but if you listened to some of the hype on why the market was not at the peak of a bubble around 2005 it sounded an awful like why Manhattan wasn't at the peak of a bubble in early 2008. Foreigners, a booming population, low unemployment, limited area to expand (supply), etc. would drive demand forever. There was very little fundamental analysis as to if prices really could be sustained and instead a lot of bullshit bantered about like the examples above.

true, jgr, but in the end there's no there in south beach but along jammed N/S boulevard lined on both sides with hotels and t-shirt shops, with some condos as well

chelsea, on the other hand, has art galleries, the railway overpass which will be this-and-that someday (sure....), lots of restaurants, and is near new york city, with all its job market

on second thought......... I take that back. At least in south beach there's always jobs holding doors open at the hotels

wow interesting that there are actually not that many rentals here

lol -- just checked this thread...seemed interesting
Of course it became the same as all the other threads on this board once Steve got on it
Kudos to Steve - the 1 dimensional man who sucks up every thread -- w/o him there would be no streeteasy

That's the guy who is angry that he rents but can't get a rent stabilized apartment, and is angry at teachers and is angry at people in the real estate industry and is angry at people who work in finance and is angry at people who sell things for a living and is angry at the government because he bought Lehman, shall I go on?

"shall I go on?"

Don't forget kindergarten teachers and cops.

was steve arrested?

For a private investor there is no better way to make money in real estate than buying new construction. You can make profits as high as 50 percent, 100 percent or even more on the money you invest. All of this with little work or risk on your part! Manhattan has proven to be one of the safest and most profitable real estate markets in the world.

Over the past three years, the wealth effect from rising home values in the United States accounted for a third of all growth in consumer spending, which was single-handedly responsible for keeping us out of recession for two years. In Manhattan, the average sales price for apartments was up over 10% from third quarter 2005 to third quarter 2006 while median prices rose even more sharply during the same time period from $750,000 to $845,000. Predictions are for similar increases and further price gains of 10-20% in 2007. This comes at a time when markets around the rest of the United States are stagnant.

Real Estate in Manhattan is the greatest, easiest and safest way to build wealth!

the walls are paper thin in the stratus. that is why my friends are selling. they are willing to take a loss to get out of there.

"the walls are paper thin in the stratus. that is why my friends are selling"

now that really sucks... I used to live in an apartment with thin walls and you could hear everything... drove me nuts!!!

jansonkyle, which line are your friends living in. I live in the Stratus and I couldn't heard a thing from my neighbor above or next door.

they live on the e line. a nice 2 bedroom facing east and north. the problem that have is the wall next to the d line. which line do you live in? i like the building otherwise and if prices come down more i would consider it when it is time for us to buy in the spring. i kind of prefer the a and b lines personally.

I live in the a line. It's very quiet. I thought the common wall between the e and d lines is behind the kitchen and a walk-in closet, so the noise shouldn't affect the bedrooms. I guess it all depends on their neighbors.

would it be ok to ask you what you like and don't like about the building so far?

"And sales activity in Miami and Miami Beach INCREASED 73% in the months of October and November as home price affordability encouraged buying."

BTW, the national stat just a few weeks ago (got posted here) said most volume was foreclosure...

so not sure if thats actually saying anything good about Miami.

"For a private investor there is no better way to make money in real estate than buying new construction. You can make profits as high as 50 percent, 100 percent or even more on the money you invest. All of this with little work or risk on your part! Manhattan has proven to be one of the safest and most profitable real estate markets in the world.

Over the past three years, the wealth effect from rising home values in the United States accounted for a third of all growth in consumer spending, which was single-handedly responsible for keeping us out of recession for two years. In Manhattan, the average sales price for apartments was up over 10% from third quarter 2005 to third quarter 2006 while median prices rose even more sharply during the same time period from $750,000 to $845,000. Predictions are for similar increases and further price gains of 10-20% in 2007. This comes at a time when markets around the rest of the United States are stagnant.

Real Estate in Manhattan is the greatest, easiest and safest way to build wealth!"

Was this guy being serious or not? I really can't tell.

"would it be ok to ask you what you like and don't like about the building so far?"
I like all the building amenities. The rooftop garden is incredible and there's nothing like it. Can't wait to BBQ up there in the summer. The gym, b-ball court, residents lounge and garden are all great. I dislike the hallway carpeting, but it's growing on me. I love having a storage room in the basement. It makes a big difference when you can hide your junks there without having to pay extra. I dislike the on-going construction in the building for the past 5 months, but it's coming to an end. The Plaza team finally moved out last month. LCOR, the developer, will remain to do the punch list for the next 3 months. It's beginning to feel like home.

thanks for your insight.

fyi folks - someone was asking for sources on manhattan price drop. FWIW, the radarlogic property index (RPX) is reasonably liquid. NY Metro area high print was 310 on the index (6/07), we're currently at 270 (-13%) and the forwards imply an index level of 191 in Dec 2010 (-39% peak to trough).

by contrast, miami peak-implied trough is -51.7% (peak-to-now -34%) and the country overall is -41% (p2n -26%).

fwiw, maybe nothing.

Honestly, if this building were not in such a crappy area, I would have considered it. Well built and all and nice amenities etc. but it is like living in midtown west without even having the luxury of proximity to work.

" it is like living in midtown west without even having the luxury of proximity to work.."
well, that really depends on where you work. And is 2 subway stop really that big a stretch? It takes me 10 minutes door-to-door to get to my midtown office.
You may consider it crappy, but I like the proximity to Whole Food, Madison Park, Ladies Mile shopping district, and the rest of Chelsea.

Prices remain stratospheric - discuss.

Prices did dip, but not as much as elsewhere. 2 of the last 3 sales had price drops.

I figure why...
shiny new building still.
Still not a ton of similar inventory in that area. You have Chelsea Mercantile, but it 'aint high-rise. The other high-rises (lots of 'em right there) are all rentals - Landmark, Caroline, etc.
You have 1 madison square park again, but crazy expensive.

Also, keep in mind, that a lot of the original prices were actually before "sale date"... preconstruction prices. So it might say 2007, but perhaps those were 2005-2006 prices in reality?

$1500 psf isn't particularly high for the neighborhood when you factor in its a luzury high-riae...

"$1500 psf isn't particularly high for the neighborhood when you factor in its a luzury high-riae..."

the market is saying otherwise

The original prices were 2007 prices. Since building completion, the area has improved with the opening of Eataly and Trader Joe's. But the lack of new inventory is the main reason for strong demand. The building is mentioned in a recent NYT article:
http://www.nytimes.com/2011/08/21/realestate/barely-missing-a-beat.html?_r=1&scp=2&sq=Stratus&st=cse

Yeah, the neighborhood has definitely improved. Huge differences on Broadway....

This is the building the real estate crash forgot. The so-called "rubes" who purchased at the peak of prices are still turning a profit during the downturn. Amazing.

Not sure why anyone would pay so much for those apts.....they seem tiny to me and crappy area....i'm not into the high rise boxy thing.....prefer the generous lofty spaces of tribeca (my home).

I love stevejhx - what a retard.

"...(3 years ago) - People are clearly still trying to make a profit...look at 16A....
09/06/2007 Previously listed in StreetEasy by Elliman for $1,310,000
06/19/2008 Previous sale closed for (insiders only)
10/09/2008 Listed in StreetEasy by Elliman at $1,595,000
If in 2 years that place goes for $750,000, I'd be surprised..."

And yet, three years later after that post, the same exact unit (except two floors lower), sold and closed at over $1,600,000 -

http://streeteasy.com/nyc/closing/2011401

Yup, the sky is so falling!

lol matson

>And yet, three years later after that post, the same exact unit (except two floors lower), sold and closed at over $1,600,000 -

inonada could rent that unit for $4,000.

huntersburg - sorry - who/what is "inonada"?

I don't know.

This neighborhood improved dramatically (relative to the rest of the city) in the last few years. I would expect some buildings here to buck the trend. There was lots of middle and higher end construction, tons of new retail in the area, and this is the only of the new construction to be sales...

... and I think Steve was just priced out of this neighborhood, hence the venom...

>somewhereelse
about 2 hours ago
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... and I think Steve was just priced out of this neighborhood, hence the venom...

So you bought in the neighborhood and are happy?

rent. very happy.

So you are saying that the difference between you and Steve is he couldn't pay the rental prices in Chelsea like you can?