Apthorp: What Happened?
Christine Toes posting here.
I had several customers contact me in absolute shock after they saw last week's NY Post Article on the recent closings at the Apthorp. From the Post article:
In case you didn't notice, the apartments that sold for really low prices were all "Penthouses". What the article didn't mention was that these Penthouses were originally built as staff apartments. They have low ceilings and none of the beautiful architectural detail that the building is famous for. Most of them are not accessible by the elevator, you have to take the elevator to the top floor and then walk up a flight of stairs to get to them. They were also not renovated and in need of a complete makeover.
"...one-bedroom penthouse went for a mere $228,900 -- down more than 88 percent from the asking price of $2,025,765, a source revealed. The 763-square-foot home had been on the market for 13 months..." "A 405-square-foot penthouse sold for just $123,717 in July -- down 86 percent from an asking price of $895,000. And a 964-square-foot penthouse also closed in July for $417,177 -- down 84 percent from an asking price of $2,559,420."
Even still, most of us would love to buy a condo, even one that needs a gut renovation, for $123K-$229K. So what happened that these buyers got such great deals? The building had been in litigation for months and had a limited period of time to sell 15% of the units required by the Attorney General's office to declare the condo offering plan effective. So they cherry picked the least desirable, smallest units in the building to get rid of in order to meet the 15% requirement. If they had not done so, they would have had to wait another year to sell the units. Hence the number of "penthouses" selling for low prices and no larger units selling for similar prices. Everything else seems to have gone for $1350/sq ft.+
I had buyers offer $1,250/sq ft for a 2 bed, 2 bath at Apthorp in the late spring/early summer of 2009 and we barely even got a counter-offer. So if you feel like you "lost out" - don't! I suspect that the sweetheart deals probably went to "friends and family," or possibly investors who had a relationship with the developer. The summer of 2009 was one of the worst times in the market - almost no one was buying anything - and the Apthorp had had such problems that my buyers were not interested in paying more than $1,250/sq ft when there was no guarantee they would be able to get financing or close on the apartment. They needed a home and didn't want to wait an indefinite period of time while their deposit was tied up. So we moved on to another building with less risk.
There was a lot of risk at Apthorp for these early purchasers, and risk often equals reward. Of course, it could have also equaled disaster (i.e. developer going bankrupt, someone potentially running off with your deposit, lawsuits, having to live in a construction site for months and possibly years...). Think about the saga at One Madison Park!
Now that the Apthorp plan is effective, there is no reason for them to unload units for low prices. Apartments are apparently back to selling for $2,000/sq ft. One to four bedroom residences are available for immediate occupancy - for $2,000,000 to $7,000,000!
Posted by urbandigs
Mon Nov 15th, 2010 03:15 PM
Interesting Christine..good piece of reporting here. Looks like the last few sales WITH an associated listing sold for:
11K sold at 1,313/sft
10E sold at 1,374/sft
9C sold at 2,069/sft
6DS sold at 1,445/sft
4L sold at 1,578/sft
Of course these include the transfer fees and other concessions that ACRIS dubs TOTAL CONSIDERATION. So the bid and contract price were at lower levels.
It seems the uber low sales should be considered outliers, and do fit with what your reporting, a rare occurrence that Im sure the developer pick and chose who to sell to. These cant be looked at as the new benchmark, although buyers will certainly bid and try. Future sales will likely be more in line with above trends
Posted by bb
Tue Nov 16th, 2010 10:15 AM
Noah,
You wrote "Of course these include the transfer fees and other concessions that ACRIS dubs TOTAL CONSIDERATION. So the bid and contract price were at lower levels."
No, you are totally incorrect. If ACRIS is including the seller concessions in the price reported, then the bid and contract price were actually at higher levels, not "lower levels."
Posted by Noah
Tue Nov 16th, 2010 02:09 PM
bb - NO. The BUYER is paying the TRANSFER TAXES and that is part of TOTAL CONSIDERATION. Its ADDED to the contract price at the end, adding to the full sales price that is recorded by ACRIS. Affects new devs mostly.
Here is one example:
ARIEL WEST - 22A - 245 W 99th
Contract Price = 3,385,000
Sales Price = 3,446,776
I did this deal I should know.
Another.
LAUREL - 10D - 400 E 67
Contract Price = 1,600,000
Sales Price = 1,629,200
The BID is always lower and the sales price is higher as the buyer assumes the sponser's transfer taxes at closing which gets recorded in the total consideration.
Posted by Christine Toes
Tue Nov 16th, 2010 04:52 PM
Well, it also depends whether you get the sponsor/developer to pay their own transfer taxes/attorney's fees... Usually when there are uneven dollar figures in ACRIS (how many people would bid $1,629,200, for example) it means the buyer got some kind of concession.
Posted by Noah
Tue Nov 16th, 2010 05:13 PM
Clearly it can go either way..We went through a new dev boom thath saw 1000s of units close with the BUYER paying the sponsor's transfer taxes. SE stated this a while ago: "They recently decided that they would switch to reporting all consideration, cash, non-cash and assumption of expenses. "
Lets be clear that transfer taxes are sell side expenses that developers passed down to buyers during the boom. In these cases, the CONTRACT PRICE was lower than the SALES PRICE because those transfer taxes amounted to a % of the sales price, and was added on top of the price and ultimately recorded. As is the case in the ones I mentioned.
Toes I think when u say "it means the buyer got some kind of concession. " u meant that the buyer assumed the sellers expenses. The bid was 1.6m, the sale price we see is 1.629m as the buyer paid 29k in sell side transfer taxes.
Here is another source for it:
"So if a buyer assumed an underlying mortgage from the homeowner, or paid transfer taxes that are usually paid by the seller, that amount would now appear as part of the total price. And for sponsor sales in co-ops, ACRIS adds a buyer's portion of the underlying mortgage of the building to the purchase price."
source: http://www.realtown.com/SandyMattingly/blog/manhattan-real-estate-business/sales-price-kerfuffle-as-acris-changes-so-does-streeteasy-but-world-does-not-end