Restart Coming at 20 Henry?
20 Henry—the high-end residential conversion in Brooklyn Heights—has been on ice since early last year when money and legal problems brought the renovation work to a halt. We’re starting to wonder if the 38-unit project might be on the verge of gearing back up though. A couple of weeks ago a tipster told us as…
20 Henry—the high-end residential conversion in Brooklyn Heights—has been on ice since early last year when money and legal problems brought the renovation work to a halt. We’re starting to wonder if the 38-unit project might be on the verge of gearing back up though. A couple of weeks ago a tipster told us as much, and then yesterday morning we spotted a handful of well-groomed suits meeting up outside the entrance of the old Peaks Mason Mints building. Perhaps the bean counters at the banks are feeling that sales comps in the neighborhood are strong enough to warrant taking another shot.
Equity Partner Sues Developers of 20 Henry Street [Brownstoner]
Update on 20 Henry [Brownstoner] GMAP
Condos in Contract at 20 Henry Street [Brownstoner]
First Pricing Clues at 20 Henry [Brownstoner] DOB
20 Henry Swings Back Into Action [Brownstoner]
From Mints to Condos at 20 Henry Street [Brownstoner]
“BHO, you have so many disputable assumptions there hard to know where to start.”
Ditto, blofeld. Right back at ya.
I’ll start here: “TONS of cash folks out there with low returns on said cash”
Low returns are better than no returns. RE is generally not returning and even losing. Even cash under a mattress earns interest effectively in deflation via increasing purchasing power. Credit is deflating, therefore the economy’s deflating.
“Condos are selling through all over northern BK.”
Generally at losses.
“There will be a shortage of product in late 2012. Count on it.”
I counted the population. It’s still 8 mil. I counted condo inventory. Listed is rising. Shadow is spiking. There’ll be an even shorter shortage of buyers in 2012 than now.
“Double dip recession idea is silly”
Agreed. We’re still in the first dip.
“stop blowing smoke”
Stop smoking crack near me and I’ll stop blowing it back at you.
“The last run up in housing prices was funded by lending, and happened WITHOUT an increase in jobs in northeast.”
No shit?!
“Odd but it happened.”
You goddamn right it was odd. It was unprecedented in modern history as the collapse will be. The bigger the boom, the bigger the bust.
“Will happen again, but slowly”
Yeah, as in another generation or two. We’ll be long dead. You’ll never see peak comps again in real terms during the remainder of your life. NEVER!
“Issue with 20 Henry is that loan was so large and money spent so fast, not clear how developers blew all that dough… to be fair, demo brought a lot of surprises, and condition of structure was too optimistically estimated but a real mess to clean up”
Sounds a lot like Cooper Sq/Stuy Town. Overly optimistic prospects – could easily and legally jack up rents. In 20 Henry’s case, could easily demo and reno with small construction budget, ignoring risk of unforeseen conditions. Whoops!
“…And so negative that hard to read.”
I can just hear you: ‘La la la…I’m not listening.’ Negative data, fundamentals and news (including rampant fraud in the banking system and Washington) command a negative perspective. I was negative when they said “no housing bubble”, “no subprime contagion”, “no hard landing”, “no recession”, “yes recovery”, etc. It’s not like they were stupid and didn’t know the truth. It’s being hidden from us. Why do you think FDIC closes banks every Friday who’s assets are REPORTED higher than their liabilities. They don’t show us the other book! Legalized, fraudulent, Enron-style accounting.
***Bid half off peak comps***
It’s been awhile since I took a close look at this stalled project and I don’t have my notes in front of me, but my recollection is that hard costs were estimated at approx $200 psf. The blended psf number for both reno of the existing structure and the construction of the new building should easily be above $300 psf, and probably closer to $400 if they were intent on delivering a “luxury” condo product. Also, liens down the block and around the corner, last I looked.
brennan right as usual tho i doubt original developer will be involved given heavy error i hear opposite about budget but donald knows more about this how did they spend 13mm and end up here?
From what I can glean, construction budget estimate, and therefore lender committment, was way below what actual cost to undertake this type of project typically pencils out at. Not sure who is going to eat it here but I would be surprised if all three original players – bank, equity and developer tried to finish the job. Certainly a gamble at this stage to think reflation will get this ship off the rocks and over the finish line.
BHO, you have so many disputable assumptions there hard to know where to start. And too shorthand for most folks to understand. And so negative that hard to read.
Banks are generally sticking with deals and writing them down, selling at some discount the note to folks who can finish the product. Some banks getting out entirely, but they have an opportunity by staying in, when new investor putting up cash (there are TONS of cash folks out there with low returns on said cash, TONS), to stay in and make a new loan.
Condos are selling through all over northern BK. There will be a shortage of product in late 2012. Count on it.
Double dip recession idea is silly, stop blowing smoke. The last run up in housing prices was funded by lending, and happened WITHOUT an increase in jobs in northeast. Odd but it happened. Will happen again, but slowly
Issue with 20 Henry is that loan was so large and money spent so fast, not clear how developers blew all that dough… to be fair, demo brought a lot of surprises, and condition of structure was too optimistically estimated but a real mess to clean up
ol dirty hipster,
I wrote from the perspective of the “bean counters at the banks”. It was suggested that they were forging ahead on lending based on recent comps which inherently lag by the typical duration of contract phases. The “Double Dip” (misnomer ’cause real economy and RE prices by extension never really bounced in the first place, unlike easily manipulated stocks prices) – a return to the collapse after a brief time-out – is imminent. If the default risk was to be realized in a further collapsing market, it’d be cheaper for the bank to foreclose on, or short-sell, a finished product rather than having new architects/builders/expeditors clean up a mid reno mess.
Comprende?
***Bid half off peak comps***
How I wish this project was put on ice. But they mostly just walked away and there appears to have been a LOT of damage done in the last year or so. I’ve heard the roof wasn’t secured and then it was and then it wasn’t. It looks awful to my untrained eye.
much love BHO – but i never have any idea what you’re talking about.
“sales comps in the neighborhood are strong enough to warrant taking another shot”
We’re “double dipping”. Those comps have an expiration date. But better to repossess a finished product that you can rent out or sell (for a minimized loss) than a mid-construction snapshot.
***Bid half off peak comps***