From the November issue: After the binge comes the purge. The condo auction market is heating up in Jersey City, as developers look to move the glut of apartment inventory amassed during the heady building boom in recent years. Distressed sales of properties are also expected to accelerate in the area, with lenders increasingly looking to wipe their hands clean of troubled mortgage loans. The urge to purge is the fallout from a frenzied period of condo construction in Jersey City — a stone’s throw from Wall Street — where about 5,000 new units came on the market at premium prices, sources estimate. Condo prices in Jersey City, which saw a steep run-up during the boom, have dropped between 15 and 25 percent since the height of the market in 2006, experts estimate. Meanwhile, the number of condos closing today in Jersey City is down about 45 percent compared to the peak of early 2007, according to the Marketing Directors, which sells new developments in markets across the country, including Jersey City.

A Swedish bank that holds dozens of former Lehman Brothers Holdings
notes is foreclosing on nearly $38 million in loans secured by one of
those properties where developer Alexander Gurevich hoped to build a
75-unit condominium project near the United Nations, court papers show.
Swedbank AB sued Gurevich’s East 46th Borrower in New York
State Supreme Court June 26 to foreclose on the acquisition, building
and project loans totaling $37.8 million, the filings show. The suit
also names six construction-related firms that have filed a total of
$4.675 million in mechanic’s liens on the property. In
December, the loans on the planned 18-story condo at 313-317 East 46th
Street between First and Second avenues in Turtle Bay were transferred
from Lehman Brothers to Swedbank, an international lender based in
Sweden, with offices in New York, the filing says. Progress at the site
stalled last fall, and on October 31, the loan went into default, the
complaint says. [more]