One Madison Park future?

The pennies start to drop.

A "New" listing on StreetEasy. Unit 20B. Already listed as in contract, but suddenly not. It was also one of the units counted as bona fide in the last amendment.

It can't have actually closed yet, because there is no TCO.

Get ready for more listings and terrific availability in this unique, sold-out building!

http://www.streeteasy.com/nyc/sale/447779-condo-23-east-22nd-street-flatiron-new-york?email=true

A very interesting fact about the first sale at One Madison Park.

According to ACRIS (and StreetEasy), unit 11A was sold to some folks named Braun for $2.025M.

That seems like a really terrific deal. Because according to the 15th Amendment (filed a couple months ago), the contract price for unit 11A was $3.250M, and the Brauns had paid 10% of that amount into escrow.

That seems like a pretty good deal. Particularly for a first sale. Hmmmmmmm.

I'm sure there's a perfectly good explanation. Could someone help? :)

Well, there is an "Assignment/Termination of Contract/Bid" filed for the unit from THE MAITLAND GROUP INC. to the purchasers. Also, on the deed filing, the price is listed as $2,061,956 which I'm going to assume is the $2,025,000 plus purchaser paid taxes.

So 30yrs, what does that mean?

As I say, Amendment 15 lists the contract price at over $3M, and a contract date of 12/26/2008.

Was this one of Wendy's units that she assigned? If so, did she buy at $3M and assign for $2M?

It's hard to say because the actual assignment document doesn't appear to have been filed. One possibility is that the three parties came to an agreement where the purchasers paid that purchase price, the assignor walked away from their deposit in return for the Sponsor not going after them for the difference and the sponsor got the purchase price PLUS the deposit of the assignor (?$300,000?). Of course that is absolutely 100% speculation. Perhaps someone is more familiar with the actual events will fill us in.

I'm wondering whether the plan has a (rather big) math error, or whether I'm just reading something wrong.

Schedule B in the last amendment (14) shows total revenue from residential common charges to be $1,876,976.

However, on Schedule A (which shows the Common Charges per residential unit), the total MONTHLY common charges add up to $116,494.56. That makes a full year revenue from residential condo fees equal to $1,397,935. That's almost $500,000 less than they need to run the place.

To me it looks like a big math error -- but am I reading something wrong?

The only reason I noticed it was that someone (thanks, anonymously) told me there was a new amendment (16) circulating that showed a revised Schedule A and B. And the per unit condo fees showed increases of as much as 70%.

I haven't seen the amendment yet . . . but can someone confirm that these two schedules should tie together? And while I know a 25% change in the overall budget gives a right to rescission, what would happen if your unit experienced a significant increase in fees NOT because of the overall budget, but because of a major mistatement/miscalculation in the plan?

And is there some sort of prize for the sloppiest offering plan of the year?

Nevermind those questions. I got the amendment and the facts.

The total Schedule B budget increased only 16% (under the 25% that triggers a right to rescind).

And the math error HAS now been corrected (Schedule A and Schedule B now tie).

The unfortunate consequence is that assessments on individual units have increased by 70%.

Now sure how the regs apply, but as a buyer, this seems like a pretty major error in the offering plan and carried forward in all of the amendments until now.

But hey, the plan is so full of errors, what's one more on the list.

So they can increase the assessment on individual apartments by 70% and not trigger the right to rescind. Interesting. The cynic would ask why you think that the original discrepancy between the Schedule A and Schedule B totals was an error...

Anyway you slice it, this development sounds like a mess--huge increase in assessments, only closed unit appears to be an assignment from the lead broker, reflecting a 30+ % discount from the amendment contract price--yikes . . .!

"So they can increase the assessment on individual apartments by 70% and not trigger the right to rescind. "

They don't trigger the right to rescind based on THAT clause, but I'm pretty sure under general NY BCL there's "material misrepresentations" issues.

30yrs -- you're exactly right. There are plenty of material misrepresentation issue. Those just take longer to resolve. The 25% test would be one of those quick and easy resolutions.

The irony here is that the clear reason for the 25% test is to provide an automatic escape clause for buyers who buy a condo assuming a certain level of association fee, but then find out that the real fee is significantly higher.

Here, that is exactly what is happening. Buyers were told condo fees were X, but now they are 50% to 70% higher (depending on when they bought).

However it's not because of an increase in Schedule B alone (which is where the trigger to the escape clause lies), it is because of a small increase AND a major math error.

three closings YTD--anyone know what is happening???
Are there additional closings? Is Rem still designing the lobby? When will work begin on 22 ST
Surely there must be something happening here??????????

And the price drops continue. 46A. ON the market for 3.1 M in February. Latest price, $2,495.

Likely close? I'm betting closer to $2M.

I'm contemplating buying a full floor above the 32nd floor. Looking to pay 2100psf. Any thoughts?

Is it above 34? If so, I would say that's a decent deal if you're going to live there. The views from there up are pretty amazing.

You should wait and see what happens with the building over the next month or so. My guess is you will probably be able to do better than 2100psf in this market.

For a full floor over 30 that sounds like a great deal actually. If not mistaken (you would know better than me if you are close to buying) a floor at that height has a great view of the clock w/ the empire state bldg right there to the left. If memory serves 34 is dead on w/ the clock. Personally, I would prefer to be there than go higher. You get the unobstructed views and face a killer landmark to add some character. Whatever you do, good luck.

Steelman --

Kind of confused. Do you have a specific unit where that is a viable deal, or are you just checking about pricing?

Not sure where the market will be, but just as a reference point, the closest three full floor units above 32 were all listed as "in contract" to third party investors. The actual prices (as opposed to what you see on StreetEasy) are as follows:

37 for $8.35M ($2,523 sf).
42 for $10,500 (3,172 sf).
43 for $8M ($2,417 sf)

So if it's one of these three people, they have a really bad attorney if they are willing to take that big a loss just to get out of the deal.

On the other hand, if it's one of these units and you're buying from BHS, it means the old buyer had a good attorney, got out, and BHS is now in resale mode. If that's the case, wait. Because there will be a LOT more inventory available soon.

And while you're probably an all cash buyer, if you're not, do get your bank involved early on this one.

Flatirony --

Might it mean that one of those buyers walked away from their 10% deposit (presumably 43) and that the sponsor is comfortable trying to do a quick flip by keeping the 800k and lowering the price to a new buyer by about that much? That would take the pp down to about 2100 psf right?

That's true.

But it's a little inconsistent with a developer who SAYS the development is sold out and that they are selling units at $3,000 sf when buyers back out (as Wendy said in the NY Times).

You would NOT sell at $2,100 sf if the market was higher.

So, if it is Wendy selling at this price, you know the values are plummeting in the real world (vs. The press world!)

Flatirony --

I certainly can't speak to broker puffery, neither here nor there. Brokers aside, if I am selling my one apt I might hold out for top dollar, however, if filling up a building in an admittedly uncertain mkt I think a developer would have to be nuts to hold out for top dollar, even if he thinks he could do a little better by waiting. Look at it this way, you have a pretty big bldg to sell out, lots of costs, debt svc etc. If I can keep a deposit and lower prices to get the bldg sold I would much prefer that to trying to squeeze every last dollar out of the project (the live to fight another day mentality). This may lead to some people like Steelman getting a nice little deal. Are there some risks? Sure, but if you can take advantage of a sketchy mkt to pick up a full floor apt here for 2100 or so psf I would have a hard time arguing against it. The bldg might have been sold out at one time but you have made it pretty clear that you are walking and I must assume others are too. I think it just good business on the part of the developer to drop prices by that 10% deposit and get units sold --broker sunshine be damned.

mktmaker-your posts are very intelligent and thought-out yet you keep saying 2100 psf is a god deal. Whats up? Do you really think 2k/sq ft is a GOOD deal?? These apts should be selling for 1000 sq ft and the rest of the market 500 but the brokers are doing a great job keeping up the false bottom.

That's called triangulation.

mbrokerNY --

Obviously "good deal" is a subjective description and there will be wide variation in what rational people consider to be good deals. I have lived in the area for a long time, feel relatively well educated on the mkt and, in my humble opinion, think a high floor in this bldg is a very good deal in that price range. Now, if you think that apts here should be selling for 1000 psf and the rest of NY 500 psf then, again in my opinion, you simply wish to deny the world we live in and hope for a return to the late 70's in the NY mkt (which none of us should hope for). The bottom of the bldg w/ 1 to 2 bedrooms are closing for about 1700 psf, w/o killer views. A full floor 4 bdr apt facing the clock tower and NY State bldg on one side w/ 360 unobstructed views should garner a far higher price point. Is that #2100? Not sure, but to me it sounds pretty darn good if you have the resources.

Good luck to you.

mktmaker --

Of course I agree with everything you're saying.

But Steelman wanted to know whether $2,100 is a good deal or not.

I'd argue that nothing will have a bigger impact on that question than how many units have really been sold in the building. $2,100 might be a good deal if this thing is almost fully committed (as the brokers say -- puffery or not).

But if in two months we find 30 units on the market -- He'll probably be able to get something for much less, because the developer will have to sell.

Since none of us seem to know the real facts here, all I was trying to do was determine whether their actions are more consistent with a full building or an empty building.

And while I know nothing, I'd just suggest that selling at $2,100/sf is inconsistent with the developer's party line on the demand for the building and the level of sales.

And that just means before concluding that $2,100 is a good deal (which you seem to suggest), he should find out a lot more about what inventory will really be available for the building.

Beleive me, I'd be happy to be wrong. The developer probably wouldn't be fighting leavers so desperately if the market supported anything close to what they need to break even.

But they are fighting. And they are selling at huge discounts (remember that first closing). So Steelman should consider that the 1 Mad deals could get better. That's all.

By the way.

Some other questions Steelman should ask.

What exactly does the second building look like? Remember, these are the people who had it growing from 165 feet to 355 feet. And while that plan is likely did -- if it resurfaced, your developer just killed part of your view . . . congrats!

And how 'bout that 22nd street entrance? Any word on when you'll have an actual front door? The temporary entrance is apalling (brokers promised one with excellent fittings), and when the restaurant moves in, you'll be forced to walk through the real back door. Will it be one year? Two years?

And about that second tower -- remember they were hoping for $4,500/sf to make money there. Now they have a smaller tower and will likely have to build it with MUCH lower sales prices in mind. I'd suggest there's a difference in value between a front door with an iconic building (like the Rem tower, like it or not) and one with a cheesey glass box.

Your last post is very well taken flairony, those are good questions to pose. From the prior post I would only make two points. 1. Any developer, in any mkt, would and should "fight leavers" to keep their deposit. That is why a developer gets a deposit. I would hardly equate telling a buyer who wants to walk away that they plan to keep their deposit w/ a sign of desperation. That simply sounds like sound rational business to me. Heck, even if they could get a higher price from a new buyer they have no reason to just hand back a deposit. 2. That first closing still puzzles me a bit but I can't determine if it indeed represented a "huge discount" or not. That sale did not add up. I highly doubt that a broker picked up a low floor apt for an insider price of 2.9 to flip (in any mkt that does not make sense, especially considering that broker could have gotten a much higher apt for that price). Someone will have to chime in one day on what the deal was there.

I thank all of you for your input. I will sit tight for a short time, i think there could be a better deal to be had.

it's such a cool building...
too bad it's doomed.
One apartment per floor means never having to say you're sorry (to your neighbor).

mktmaker,

I totally agree, a developer should never give back a deposit.

Well, almost never.

If a developer has made mistakes in their plan and their development that could potentially give every buyer the right to rescind -- it might make good business sense to let a few buyers out than risk larger consequences.

On that first closing -- we do know the contract price as it was represented to the AG was $3.2 Million. And that the sale closed at $2.025 (to the same named parties). So unless there was a misrepresentation somewhere, there is a clear 30% discount to a contract price.

What if the buyer didn't actually receive a discount? Rather, The Maitland Group Inc first signed a contract for the original schedule A price of $2,025,000, as seen in the offering plan. Then, The Maitland Group Inc assigned it's contract to Braun, the end buyer, as seen in one of the two recorded tax filings. Maybe this is how the assignments are being recorded and the real purchase price of $3,200,000, as represented to the AG's office, will come up at a later date? I'm hesitant to believe Braun was given a discount, given that The Maitland Group Inc is actually filed in public record. If there was a 30% discount given, why have The Maitland Group Inc associated with the sale at all? I imagine there would be some sort of negative tax implication for all parties involved, such that it wouldn't be worth anyone's while unless one party was taking a nice profit on the transaction.

Actually BobbyO, that makes perfect sense.

Original sale of $2.025 to Wendy. Wendy sells to buyer for $3.2M. She (or she and the developer) pockets $1.2M and the developer makes the transfer at the original price.

The recording is a little odd, but I think you're right.

I agree it's probably something like that, but add this: the buyer threatens to walk and sue Maitland and hold them up (i.e. drag out letting the escrow holder releasing it to Maitland). For whatever reason, Maitland is unable to close on the unit and is in danger of losing their (what was the total deposit? 10%, 15%, 20%?). Maitland Group gets squeezed and cuts their profit. I am not familiar with what happened in this project, but I know what happens a lot when you get a group which ties up a whole bunch of units at the begging price: they never intend on closing on ANY units, so they use as much leverage as possible. So, if they have $3,000,000, they don't buy a $3,000,000 unit. They put 10% down on 10 units. they figure even if they don't flip ALL of them, the can either finance the last couple or use the profits from the one's they did close on. But when the market turns, you can have a nice game of musical chairs: the end buyers know exactly how much profit the flipper is making based on the public offering. they may also hear things about how strong they are. A strong buyer might threaten to walk from a $320,000 deposit where the flipper may actually have $300,000 (15%) or $400,000 deposited with the developer. And in a game of chicken, if the flipper blink, remember that they were making pretty much pure profit: if they simply walk away and let the buyer buy at THEIR contract price, at least they get their deposit back, rather than LOSING $300K or $400K because they CAN'T close on the unit without this buyer. (and someone always could have thrown somebody a little shmata ).

BobbyO and flatirony have hit it I think. Far more likely than your scenario 30yrs (though I think I have seen this scenario on an episode of Mission Impossible). Pretty sure these brokers do not have to put that much down like the rest of us, just some nominal amt, one of the many perks they likely get. Also, if that scenario was playing out it is hard to imagine the developer forcing his star broker to be one of the first closings, he would have put this unit on the back burner.

some units went back on the market today.

OK, the obvious explanation for some of these is that the buyers have walked (low floors, ready to close, sudden availability). But is there another one?

Flipping comes to mind -- but the timing is odd. If these were third party buyers (not related brokers), and if the developer was going to let them flip, wouldn't they have been able to list something before now (about when the units are available to close)?

At least two of the "new units" were previously listed as in contract to third parties in the AG filings. Unit 19B is brand new (so a default seems likely), and Unit 21B has been on for a while (so the flipping explanation is more likely).

Unit 10B was not on the AG filing, so likely either a broker unit, or one that never sold.

For the pros out there, I'd assume that as buyers walk away and units start coming back to the developer, that they won't list them all. Is that right? I can't imagine that showing all available units is good for sales.

There has always been a major disconnect at OMP
due to the large number of broker held apts as I mentioned earlier in 6 weeks four closings on mostly less expensive apts
no doubt people are walking, also major maintenance issues,
third party holdings, with all the supposed sales closings are few
and surely developer not listing all availabilities-flip flopping!

What does anyone hear about the full floor units. The larger ones.

I have not heard of developers giving breaks to "their" brokers in terms of diminished down payments. In fact, in up markets, developers don't want the broker's representing the building to buy units PERIOD. Think about it: you'd have to be pretty stupid as a developer to allow your broker to 'steal' what should be your profit by buying up large chunks of your building. And if anything, the people who you would want to squeeze on closing FIRST are the flipper in hopes of getting the units back and selling at higher prices.

Steelman,

I think the full floor units are great. The prices are obviously high right now, but your patience will likely be rewarded.

The divided floors have terrible layouts. The three bedroom units are workable if you just use them as two bedrooms. But the small two bedrooms (A units) are crazy. The larger two bedrooms have the wonky divider that split the units into unlivable spaces. And the one bedrooms are just silly.

Mind you, there will probably be opportunities to buy two half floors and do the combination yourself if you really want to invest.

The good news for you is that -- as predicted -- there are more full floor units hitting the listings each day!

Heck, it looks like about 20% of the building's units are showing as available right now -- with strong indications that more inventory will be available now or later.

New today -- the 54th Floor. Listed as a sale to a third party for $11.325. Now on the market for $12.25. Incidentally, even if this is a flip . . . the spread wouldn't cover broker's fees and the cost of the developer's closing costs (which buyer pays).

48th Floor. Not listed as a sale to third parties. So either a broker floor, or inventory they've held back.

30th Floor. Off again, On again, with a new, higher price.

34th Floor. Not a third party sale. Flipper or broker.

thanks flatirony

has anyone received any updates about rem koolhaus involvement or where the actually lobby will be and in what time frame along eith the amenities?

I was wondering the same. I walked into the temporary lobby -- it's not particularly high end. And I see that they are finishing the north tower -- putting in the lower 4 or 6 floors just to the east of the front door. If I remember correctly, that is where the permanent "Back door" will be. If the Charlie Trotter's deal is still on, and the south tower and "front door" aren't built for a few years . . . I'm assuming they'll move the entrance to the newly built back door.

$3,000 sft and a speakeasy entrance!

I dont' see a single sale yet on ACRIS.

More inventory . . . with ever higher prices!

Why does it feel like watching one of those guys keeping all the plates spinning on poles?

OK, 46B. One of the third party sales (according to AG filings). Listed as sold 10/2007 for $5M.

The listed as sold just a couple weeks ago (09/23/2009), while listed at $6.375.

Now, on the market again at $6.625.

The only thing that appears to be certain is that this is another of the (increasingly few) third party sales that is not planning on closing.

Any word on closings? I heard that there have been two more (for a total of 6 so far). That sounds really low, considering there is a TCO for over 30 floors.

actually heard from a rea friend there are no closings to date and no TCOs!

2748 - While my skepticism surrounding the project grows on a daily basis, your real estate friend's knowledge seems to be lacking. There are deeds filed on public record showing closings within the building and a TCO granted on the DOB website. Did your friend offer any additional insight or was this simply casual conversation?

Heard sponsor is offering some contract owners portions of their deposits back. I smell blood in the water. That can only mean they know the AG will force them to offer them back or feel they can't win in court. Either case it's a gigantic show of weakness.

This could get really ugly really soon

2748, your information is completely wrong. Your rea friend needs to learn how to use Acris, it's all there. They have to look under the new lot numbers for the individual units (not the old block and lot). There are TCO's and there have been closings. You can also follow the StreetEasy closings back to Acris.

Flatirony, can you tell us what the new block and lot numbers are? Bit hard to find for me. Thanks

In ACRIS, do a business-name search on "Madison Park Group Owner" with doc class "Deeds". The four closings to date will be at the top. Same ones you see here on SE.

Too slow going by each lot #, but if you want a list of them, do a block/lot search on one of the closings and pick up the condo declaration.

Source tells me there have been 6 closings to date (takes time to show up online) w/ 3 more scheduled in the near future (including a full floor). That would bring to 9 the total #, out of approx 38 TCO'd units (or about 25%). Seems like they are on pace for about 50% closings on the lower floors, counting walk aways and deposit fights. Would only be a guess but I imagine the lower floors will be their toughest sell since you are relying more on the bldg than the eye popping views above. If they can get 50% or so of the lower floors closed their percent should spike as they go higher . . . in theory at least.

thank you!

NWT -- Terrific shortcut, thanks!

mktmaker -- 50% sounds about right. And the lower floors are where you'd probably run into folks who might be forced to walk because of financial issues. The issue for the upper floors is whether folks will want to stick with their current contracts and boom pricing when there is some chance that developer may have handed them a "get-out-of-jail-free" card.

The developer has got to hurry to close as many of those units as possible before there is any word of success in litigation or with the AG. The combination of a weak market and some certainty about rescission prospects would almost have to lead to a lot of price renegotiation.

But hey, with Wall Street bonuses at 140 Billion, I can't think of a better little bauble than a floor at 1 Mad -- so maybe everything will be fine!

More apartments available!

The Brown Harris advertisement in today's paper has two listings that are clearly 1 Mad, but that are not showing up on their website or streeteasy (maybe they will pop later, but as of Sunday evening, the listing numbers bring up nothing at BHS).

Unit 46A for $3.1M (hey, 46B is available, so you can put together your own full floor!).

More significantly, a 1560 sf B unit for $2.95M. Now, that has to be a very low floor . . . which means someone isn't closing.

So, add two more "shadow" listings to the 15 official ones, the unsold units, and the pending walkaways.

This thread was getting to long to follow. Just created a new one -- "One Madison Park Future? II"

I find the 33B closing of particular interest. Now, getting a little higher (from 30 on up this bldg is awesome with views) they got north of 2,000 psf. This is not a full floor and is one of those really awkward bad layouts that flatirony spoke of -- the sliding wall 2 bdr. Seems to me that if this unit is getting north of 2,000psf the full floors in particular (and non-sliding wall 2 bdrs to a lesser degree) should be well north of this. 2,200 plus psf seem rational (unless 33B was a lunatic) and for the top 10 floors 2,500+ seems very doable.

No?

That is interesting, and good for everyone. I'll be curious about when the resale took place.

I don't know this for sure, but I believe this unit was purchased by a broker (as was 36B). The limited facts out there seem consistent with that:
- It wasn't listed as a third party sale with the AG,
- The property appeared to stay on the market at prices up to almost $4.5M,
- The final sale was at a discount just a bit over 10% to the original sale price (per StreetEasy, the listing price was $3.45M at the time the contract was signed) . . . sounds like a forfeited deposit, no?

What's more curious to me is why -- over two months into the closing process -- there are so few units actually sold. I notice on Acris that two other units have closed (baby units 18A and 20A) -- aose at historical prices (I'm sure they'll hit StreetEasy soon). It just seems unusually slow.

Agree with flatirony, seems odd that closings started in August and only 5 YTD and it is November, word is that lenders, aside from percentage of sales/actual closings, concerned as to no confirmation as to amenities and as to their completion. Think folks on lower floors who paid less dependent upon financing and re-negotiating mortgages and getting prices more in line with the new economy. Is this building stalled?????

Piggy brokers get slaughtered.

33A, now six closings.

06/04/2007 Listed in StreetEasy by Brown Harris Stevens at $3,000,000.
06/13/2007 Listing is no longer available.
11/14/2007 Price increased by 2% to $3,050,000.
11/14/2007 Listing entered contract.
12/11/2007 Price increased by 22% to $3,725,000.
11/22/2008 Later Listed in StreetEasy by Brown Harris Stevens at $3,975,000.
10/30/2009 Listing sold.
10/30/2009 Sale recorded for $2,950,000.
11/04/2009 Brown Harris Stevens Listing sold.

Well, this is a VERY interesting one. Let's follow the pricing path . . .

The listing was out there for $3.975M at the end of 2008.

According to Amendment 15, the actual buyer was a third party, and entered into a purchase contract on 1/19/2009 for $3.5M.

When it came time to close, that buyer got a price chop of $550,000 from their 2009 contract price.

So . . . this buyer bought in -- POST CRASH -- at $3.5M . . . and THEN in the last several months got another reduction of $550,000.

Imagine the discounts available to those who bought in at the pre-crash 2007 prices?

flatirony, that was fun. too bad we don't have interested people following more of the new developments with this kind of detail.

Look who it sold to....another reality co.

I wish I were less interested! :)

I'm not sure about this, but I think this might have originally been a broker buyer.

It kind of makes sense that they originally committed to the unit for $3M or less. Then -- after the crash -- found someone to buy at a price ($3.5) that was a substantial discount from the almost $4M ask. (I mean "Ipanema Realty Inc." as the buyer . . . really?)

Then, the new buyer saw the light, and wasn't going to let the broker make any money on this deal -- hence back to $3M.

Mind you, that's all undocumented real estate fantasy that I made up . . . but it does kind of make sense!

But hey, it's still $2,200+/sf for a bad floorplan and decent views (it faces west and I think just barely clears the ugliness that is 5 East 22).

Closings seem to be on an interesting schedule. 11, 18, 20, 33? Where are the units in between? Why so few closings to date?

flatirony, I think you hit the nail on the head w/ the most relavent part of your post being "it's still 2,200 /sf" for a non-full floor layout. My point a while back was that full floors over 30 are good deals at this price point. The fact that this was a post crash buyer lends some support to that. If this layout on 33 is going for 2,200 then it is not a far leap to suggest that full floors over 40 could well be in the 2,500 sf range. No?

mktmaker -- initially, I would agree. Though I would also caution that it's too early to assign too much importance to this post-crash buyer.

The truth is that this buyer bought at a very different time in the life of this development. Today's buyers have some different information.

What Ipanema knew was that this was a virtually sold out building with rock solid contracts and that they were getting a significant discount from the listing price.

Since then, the situation has changed. The active listings have grown to over 20 percent of the building, and that's likely just the tip of the iceberg. Any investigation will show that the contracts may not be rock solid, and that there may be a lot more units available.

And NOTHING will effect pricing here more than supply and demand.

That's why you aren't really seeing all of the units available and why the brokers are spreading chipper stories about impending closings. They want this to appear to be a scarce commodity.

So, if it turns out that over half the units are still available, then no, I don't believe $2,500 pricing will hold. And the developer will face increasing pressure to just close deals just to get some cash in the door. All of that will bring prices down.

I have heard that the sponsor has made approaches for additoinal financing (perhaps to weather the storm). The jury is still out here, but I'm not sure I'd be confident that there won't be a fire sale.

That said, I think fire sale is more like $1,700 to the low two thousands.

"Closings seem to be on an interesting schedule. 11, 18, 20, 33? Where are the units in between? Why so few closings to date? "

I haven't followed this building too closely, we see from this very thread the other closing discussed had some significant "play" with the pricing. So, the reason you may see the closings all over the map is more a function of the individual price negotiations post contract than the physical finishing of teh units/building.

November 8, 2009
BIG DEAL
Changes of Heart

By JOSH BARBANEL
ONE Madison Park, the soaring 600-foot glass condominium that towers over East 23rd Street, opened to its first residents in August, but since then only five buyers have closed, according to city records. Other would-be buyers have walked away — raising questions, brokers at several firms said, about the prospects for the building in a depressed real estate market.

Last week the developers, Ira J. Shapiro and Marc Jacobs, confirmed that one of the largest buyers in the building had changed his mind. The buyer, Paul Davies, a British interior designer who was in contract to buy three upper floors in the 50-story building for $31 million, was given at least some of his deposit back.

A lawyer, Richard N. Cohen, said he had negotiated a settlement on behalf of two other would-be buyers, both Wall Street executives, who were unable to close on two apartments worth a total of $5 million. But after the buyers signed deals for a return of a “substantial portion of the deposits,” he said, the sponsor backed out of them.

Mr. Cohen said the sponsor indicated the mortgage holders had refused to go along, perhaps raising a question about the project’s financing. But a spokesman for the sponsor said that the mortgage holder, iStar Financial, a publicly traded real estate investment trust with a $238.5 million mortgage on the project, was “fully supportive” and had continued to pay for ongoing construction expenses.

Streeteasy.com shows 67 apartments at One Madison Park in contract, 16 on the market and only 5 units closed (though the sponsor said two more had closed but were not yet listed in public records). Brokers who have followed the building have long been skeptical of the number of units in contract, and have contended that some of them were sold to the listing brokers and their friends and family.

The building is listed with Wendy Maitland and Wilbur Gonzalez, brokers at Brown Harris Stevens. The brokerage is conducting a wide-ranging review, including whether commissions were paid on sales and purchases by its brokers in the building, brokers at other firms said.

In an e-mail message, Ms. Maitland confirmed that she had bought one apartment at One Madison Park, closed on it and resold it. Mr. Gonzalez said he was in contract to buy an apartment but had not closed.

“I bought one apartment at whatever market price was at the time, as is common in the industry,” Ms. Maitland said, “and I’ve since sold it.”

Mr. Gonzalez said Brown Harris Stevens “gets 30 percent of all our commissions without exception.”

In an e-mail message, Amy Gotzler, director of communications at Brown Harris Stevens, said the firm “is meeting with the developers of One Madison Park as part of Brown Harris Stevens’s evaluation of its role in the project,” and added, “We believe no Brown Harris Stevens agent sales were done without the developers’ consent.”

Several brokers said the building had been reaching out in recent days to brokers at other firms for their views on marketing the property.

Buyers at many buildings in New York City have been trying to wriggle out of contracts now that prices have fallen sharply. When the first apartment closed at One Madison Park on Aug. 14, Ms. Maitland said the closing had beaten a deadline that would have given buyers the right to rescind that contract.

But lawyers have been going over offering plans, and Mr. Cohen said that a discrepancy in the plan seemed to set the deadline at Aug. 1 at the latest, giving all buyers a chance to rescind.

Mr. Davies is a shrewd investor who nearly doubled his money when he sold a London town house to Madonna. Shaun Osher, the founder of Core Group Marketing, which helped Mr. Davies find the $31 million apartment, said he backed out because “the market did an about turn.”

“He didn’t want to be exposed right now for a piece of real estate that is now worth $18 million,” Mr. Osher said.

But a spokesman for the sponsor said that a duplex unit making up two floors of Mr. Davies’s purchase was now in contract again “at an equal purchase price” with a closing expected in January.

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E-mail: bigdeal@nytimes.com

If a property is assigned to a third party, the price still shows up as the original purchase price. There is another figure that shows as the assignment amount. It seems that the hypotheses are wrong on the 33A sale, and appropriate commentary that this blog is made up of "undocumented real estate fantasy made up". There's no indication that there was a price drop on the $3.5M deal. That would mean that the most recent transaction is for over $2600 psf. Also, many individuals have holding companies for real estate purchases. That doesn't make them realty companies.

I'm sorry, did Mr. Osher just say in that article that this building's value is down 42%?

“He didn’t want to be exposed right now for a piece of real estate that is now worth $18 million,” Mr. Osher said.

After Osher's quote, the spokesman for the sponsor says that one of Davies's units is in contract again "at an equal purchase price". That means there will be a record of that sale in January. Unless Osher sold the unit that's in contract now, he wouldn't know what it's worth. He threw out a number and it's in the NY Times now. I heard that Core pitched to do the marketing and sales for the project originally. He didn't get the project, nor did he keep their biggest sale in the building--even at a negotiated price. Sounds like sour grapes.

Mr. Osher has no corner on the valuation of real estate. Who cares? What matters is what it's actually in contract for in the new purchase. Has Osher seen the building or the view from 500'+ elevation? I hear there are actually ocean views. I wouldn't put much stock on a number thrown out by a broker whose company didn't get a listing they pitched, brought in the biggest buyer, and couldn't manage to salvage the deal, even at a negotiated price.

The new deal, according to the spokesman for the sponsor, is on the duplex that Davies purchased. So whatever that price is won't reflect the value of Davies purchase, which included the duplex and another floor.

Thanks for the clarification -- that makes sense on the assignment, and I retract the fantasy!

It doesn't really change the facts much, and I'm not sure the $2,600 price would be attained today.

It does strike me that the bigger fantasy is that the project is holding its value. The only thing that seems to support that is word from the brokers.

On the other side seem to be a bunch of facts (or close to them). So I'd love your thoughts on the following;

- If the project was truly a hot commodity, why would the sponsor's finance company say no to deals the sponsor had negotiated to let buyers out? It sounds like they are nervous about the project, but perhaps there is another explanation.
- If the project is hot, would there be discussions with other brokers about selling it? Or is this just fantasy?
- Was the British buyer (who sounds pretty real estate savvy, and who had one of the best units in the building) just crazy?

I go back to the fact that there is a growing list of inventory, and that is never good for pricing. No building is immune.

This NY Times article does make it feel like the PR machine is starting to slip as well . . . and no project needs uncertainty floating around it.

Oh, one final thing. Is there a way to find out who assigned 33A? I think it's an interesting part of the story.

Yes, I read that response, too. The spokespeople have been talking about "contracts" forever. That's the point of the article -- the spokespersons' statements aren't exactly reliable.

The quote "in contract again 'at an equal purchase price'" seems like a carefully worded non-statement. At an equal purchase price to what?

How do you know that Osher pitched the One Mad business? Seems like you might not be a disinterested party either.

I guess you can read it for what you want, but you're taking the word of the spokesman over Osher. I can't see why the spokesman has any more credibility.

Rebutted or not, Osher is out there saying this thing is down 42%. People can disagree, but that's not insignificant to say that one of the top new development brokers is pointing out a jaw-dropping decline in value.

"The building is listed with Wendy Maitland and Wilbur Gonzalez, brokers at Brown Harris Stevens. The brokerage is conducting a wide-ranging review, including whether commissions were paid on sales and purchases by its brokers in the building, brokers at other firms said."

hmmm . . . a "wide-ranging review" of Maitland and company . . .?

Am I missing something or does this suggest that Wendy et al may be having their feet held to the fire a wee bit right now? Or is this just a case of jealous brokers (i.e. Osher) trying to light the funeral pyre?

So the bad press has started, but let's keep this whole thing in perspective.

We are talking about a great, one-of-a-kind building with terrific views. It's a small building, with only a few units. That means -- once we get the initial sales out of the way -- it will be a relatively scarce commodity. That can only be good for values long term.

The sponsor will likely do fine out of this. By that I mean that -- while they may not make a fortune here -- they probably won't lose their shirts either. When it first went on the market, the story was that it needed less than $2,000 sf to break even. Even in this down market, that's certainly not out of the question. After all, despite the ramped up sales prices shown on the site as asking prices (which are, and always have been completely irrelevant), the highest $/sf sale filed with the attorney general is under $3,500.

The brokers -- well, they will get hurt.

And buyers . . . well, most of these folks have very deep pockets. And they may just decide that the long-term is good enough that they aren't going to haggle over price now.

However, it does seem that the development team has screwed things up enough to give buyers the right to walk or possibly renegotiate. So the question is whether the deep pocket folks will take advantage of that, or just stick to their deals, knowing that new buyers are going to come in and snap up equivalent units at today's prices.

If BHS is right (hey, there's always a first), then new units are still going for old prices, and everyone's happy. If they're wrong, then expect to see some musical chairs.

I dont know flatiron. If this building has only sold 10 percent at this stage they will most likely lose money on this. Have people started to move in yet?

Sam, they've only closed 10% . . . many more than that are in contract. How many is a bit of a debate, but it's certainly north of 50%.

And don't expect to see lots of lights on at night even when closings get rolling. I suspect that many of these units will be second/third/etc. homes.

Was today a BHS crash & burn moment? Looks like 40+ apts no linger available-are prices being dropped or is BHS?

2748, Where are you seeing this? Nothing has changed according to SE?

I was emailed a list of 40+ apts earlier today from
Street Easy that these OMP apartments "were no longer available"!

Can't get out, but don't want to live there? :) Actually, I thought they had bailed long ago . . .
From the NY Post:

A place to Liev

Posted: 12:41 AM, November 12, 2009

Vespa-loving thespians Liev Schreiber and Naomi Watts are zipping around the city, on the lookout for another downtown pad. When we last checked in with the doting parents of two tots this past April, they were eyeing a 3,000-square-foot, $5.4 million unit at the Pearline Soap Factory in TriBeCa. But now we hear they are scoping out hip West Chelsea properties, including a $9 million, full-floor loft at 120 11th Ave.

The new-construction, eight-unit building, with five floors and two triplex penthouses, is expected to be completed by the end of the year. Prices range from $3.5 million for a half-floor loft to $17 million for the penthouse.

The couple recently took the stage at the American Airlines Theater for the one-night-only “24 Hour Plays,” which also drew superstars Brooke Shields, Ashton Kutcher and Demi Moore.
As for the couple’s 3,300-square-foot, full-floor combo at the troubled One Madison Park, which they bought for $6.05 million in 2007, we hear they might keep it as an investment property.

Read more: http://www.nypost.com/p/news/business/realestate/residential/place_to_liev_b76JxiDkeBsHnwF3oiRghI#ixzz0We5lgOpo

Looks like that article gave the project a new name . . . the "Troubled One Madison Park".

i want to buy in one madison but after reading al of this I am very reluctant. Please help...Please give this gal some advise

It's a great building -- particularly if you want one of the full floors above the 30's. The best advice I'd have is that there probably is no rush. It's going to have to go through a shakedown before things stabilize. There are plenty of units available right now, and indications are there are more coming onto the market.

Wait for a few more closings and to see how inventory develops. That will help you determine when to put in an offer, and how much to pay.

Ignore the asking prices shown on the site -- they are completely irrelevant. Even those shown as "in contract" have prices listed here substantially higher than the actual contract prices. In other words, the listing prices are higher than even the 2007 prices.

It will be a good long term buy.

"We are talking about a great, one-of-a-kind building with terrific views. It's a small building, with only a few units. That means -- once we get the initial sales out of the way -- it will be a relatively scarce commodity. That can only be good for values long term."

Spoken like someone who has absolutely no idea what a commodity is, or what is actually good for values long term.

I'm also sure tha the homeless problem will be great for values.

I have followed this board and this bldg quite closely for a while now (flatirony, your views seem well balanced and, by and large, surprisingly close to my own). As for the neighborhood I really could not disagree w/ Somewhereelse more strongly. I love this location (a lot more than the North side of the park). If you go downtown a block you get right into the heart of a great restaurant district and the buzz of downtown yet you avoid all of that noise by being just north of it. To the north you have what I consider to be one of my favorite parks in the city, take my son to the playground there all the time, love it. Now, I do stop at 26th street as it is a veritable wasteland above there (dreary Madison and Broadway, $1 stores west etc) but the niche of OMP sits very well (in my opinion) on the best parts of this neighborhood. Don't like 23rd street itself but the entrance will be on a very lovely 22nd street so while I get my views north I never enter or leave that way (seems like a great combo).

I don't have the resources to get one of those full floors above 30 but I certainly would not hesitate to grab one if I could. I have seen this area just get better and better for years now and see no reason why that won't continue.

Do you think the ones about 30 can be had for $1,000/SF?

You could not get near this bldg (including the lowest floor) for that number. If you want to be super aggressive, a low ball bid for a full floor from 30 on up would have to come in at 1,800 psf. And that would likely be rejected. If you want to take a stab at the lowest non-full floor think 1,500.

are you a broker for the building? how do you know what ppsf they are willing to accept now or especially in the future? I am not being confrontational just wondering.

Nope, not a broker for this bldg or any other. I have no idea what they are willing to accept and I don't think I suggested I did. I merely said that in my view a low ball bid for a high floor wold be in the 1800 psf range. I am offering an opinion to someone who questioned if 1000 psf would get a high floor apt here. My opinion is grounded in closings to date and my perception of the value of the bldg compared to inventory in the immediate area. Take a look at recent sale prices for inferior bldgs like 260, 240 and Madison Sq. North and let me know what you think makes sense here.

In my view, if non-full floors are getting 2200 psf (the 33rd floor), 1800 for a full floor is pretty aggressive.

i guess it's hard to truly look at the closings for me because they were all from deals made before the crash. but thank you for answering so concisely. i am not sure about some of the comparison buildings you used. conversions of older buildings are such a different feel to me than an all glass tower. also isn't most of the contract data in those 3 buildings based on pre-crash deals as well?

no problem.

260 is all resales and their best line (the B line) appears to be at 1,500 psf in todays mkt -- w/ no views. I don't know much about 240 but Mad. Sq. North has been sitting so long that I assume the recent closings represent new buyers who are either buying unsold inventory or sales of apts from old buyers who walked from deposits. Again, I know this all involves some guess work, however, as OMP moves from spec floor plan to concrete building one can walk, the values should firm up. As far as the area goes it is by far the best thing around. Now, whereas 2007/2008 may have generated the lofty 3000psf gaudy numbers, even in today's world I think you are looking at 2,000.

In time we will all know . . .

Available not available, listed no longer listed, in contract then nit, and multiple listing prices and closings for apts apparently still on the market?
Is this a bait & switch ploy? Anyone know what has really sold ie closed other than the 8 apts listed in SE?
Are banks giving potential buyers mortgages based on such long lag time in closings?

Available not available, listed no longer listed, in contract then nit, and multiple listing prices and closings for apts apparently still on the market?
Is this a bait & switch ploy? Anyone know what has really sold ie closed other than the 8 apts listed in SE?
Are banks giving potential buyers mortgages based on such long lag time in closings?