Renting 1 BBP: 'We Would Like Things to be Different'
This weekend’s cover story in the real estate section of the Times is about Brooklyn developers who have started renting units in their condos, with a focus on the hybrid-ization of One Brooklyn Bridge Park, where developer RAL recently began renting some of the unsold inventory. First, the stats: There have been 77 closings at…
This weekend’s cover story in the real estate section of the Times is about Brooklyn developers who have started renting units in their condos, with a focus on the hybrid-ization of One Brooklyn Bridge Park, where developer RAL recently began renting some of the unsold inventory. First, the stats: There have been 77 closings at the building and 26 other units are in contract, leaving 300-some-odd vacancies; for now, RAL is only renting 20 units, and five one-year leases have been inked. Then, there’s the commentary from RAL president Robert Levine, who says stuff like, “This building is not a rental building, it is a condominium,” and “We would like things to be different,” and “We had a vision and it turned out to be exactly what we wanted. And then the world fell apart.” (On this last quote, it’s worth noting that 1BBP went on sale almost a year and a half before “the world fell apart” last September.) Anyhow, the bigger questions the article addresses are, how much of a stigma is it for a condo to rent some units out, and to what extent—if at all—does it push down values? On the first question, an Elliman broker says, “if you start to rent 25 percent of the building or more, it takes on the flavor of a rental,” and on the second question, appraiser-guru Jonathan Miller says that “In the long run, there’s no impairment to value.”
Renters to the Rescue [NY Times]
Rentals, Price Cuts and Loan Extension at 1BBP [Brownstoner]
“Rob reads exterminator blogs.
Rob is a renter.
What does that tell you?
haha”
He’s got you there, Rob. Care to elaborate?
…that’s different like a muuufucka!
***Bid half off peak comps***
“300-some-odd vacancies”
Jeeeeeeeeeesum piece!
***Bid half off peak comps***
1) Rob reads exterminator blogs? WTF?
2) I seem to remember that at the same time that they put up 20 units for rent, they also instituted some price drops on this bldg- something like 20%. SO they’re not just plugging up their ears and screaming LALALALA.
3) FLoating world – you should head over there again. You’s see that constrcution of the park around this building is well underway. SUre maybe they won’t have money to finish the park for a while, but the portion of the part immediately surrounding this building will be open by spring. That’s what really matters. And the “scary” walk to BH involves crossing furman, going about 20 feet under the BQE and then being on beautiful BH street. Not really so bad.
“this might sound strange, but owners tend to have more cockroaches than renters. i remember reading that somewhere on an exterminator blog.”
Rob reads exterminator blogs.
Rob is a renter.
What does that tell you?
haha
I’ve been to the sales office several times. I’ve looked at many units, beautiful finishes and great room sizes. I would have happily bought there except:
$700,000 for an in-your-face view of the BQE no way, it’s a re-sale impossiblity, even in a boom market. You could never open your windows and the sound of the highway is always there. This is where the golf and fitness rooms should have been located.
No Pool? In a development this size?? You’ve got to be kidding me.
The city has no money so the park is iffy at best.The traffic noise isn’t all that great either.
Crossing the BQE to get to Brooklyn Heights is scarry, that alone should cut $100,000 off the unit’s price. No mother with a baby in a stroller is going to see that walk as safe, fun or value adding.
“Renting is a cash business that reflects what people can actually pay based on their salary, not how much they can borrow.”
This is a great nugget of wisdom. Most buyers focus on the monthly cost to them of borrowing, and not on the amount of money they are borrowing. In the process they lose sight of the fact that someday they will be a seller and then the amount that can be borrowed (and not the monthly nut) will be what matters. This is one of the reasons I consider interest only mortgages to be a tool for the financially illiterate.
We are coming out of a period of falling interest rates and rising prices and going into a period of rising interest rates and falling prices. In the next decade how many New Yorkers are going to have their interest-only ARMs reset to much higher rates for underwater mortgatges on which they have repaid zero principal? I’m sure when that happens they will find some way to blame the banks, or Hank Paulson, or Bush, or anyone but themselves and their own financial stupidity. I’m sure we can expect some legislation to protect these victims from their own thick-skulled idiocy.
And here’s a pre-emptive answer for all of you people who post idiotic forum messages asking where you can get a mortgate with 5% or 10% down or looking for names of lenders who will still write interest-only ARMs to 12 year olds who read stock charts upside down. You can’t afford to buy. Rent. NEXT!
God I’m in a foul mood today.
Lechacal’s spot on again. Especially apt is the image of developers (and I would say lots of sellers in general) covering ears and saying LALALAL I CAN’T HEAR YOU re: current market.
From patrick killea:
Renting is a cash business that reflects what people can actually pay based on their salary, not how much they can borrow.
That fact alone explains the developers fear and loathing of renters. The other stuff is a side show.
But, at least these condos have people willing to rent, unlike other areas of the country who can’t find either buyers or renters at any price. In fact, some developments are being plowed under:
http://articles.latimes.com/2009/may/05/business/fi-demolish5