Apthorp broker Howard Margolis talks discounts
May 20, 2009 04:15PM By Sara Polsky
Howard Margolis discussed the Apthorp at a continuing education class at Touro College.
Prices have dropped to an average of $1,850 per square foot for a finished apartment, down from $3,000 when the 163-unit building, which spans an entire block between Broadway and West End Avenue on 79th Street, first came on the market in June 2008.
The Apthorp narrowly avoided foreclosure in January after lenders Anglo Irish Bank and Apollo Real Estate demanded that Maurice Mann, the original sponsor of the condo conversion, pay more than $22 million to correct a loan imbalance. Mann was replaced as managing agent by Broadwall Management, and the price cuts represent the latest effort to kick-start sales at the struggling building. Mann also recently lost a court battle with Broadwall and Lev Leviev's Africa Israel in an attempt to block the building's new business plan from moving forward.
Margolis said Elliman felt the prices had been too high to begin with.
"Developers really didn't take Elliman input on pricing," Margolis said to an audience of brokers attending a continuing education course at Touro College this afternoon.
The Apthorp's developers now have four months to make the building's plan effective. If 15 percent of the units have not been sold by Sept. 1, the developers would need to wait a year to file the plan again, Margolis said. He would not identify which percentage of units have been sold so far.
"It's still possible" that the Apthorp could sell enough units by Sept. 1 for the plan to be declared effective, he said.
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Comments
Anonymous
Is this an article or an ad.
Comment #1 Posted By: Anonymous 05/20/09
Anonymous
You'd have to be insane to purchase an illiquid asset like this!
Comment #2 Posted By: Anonymous 05/20/09
Anonymous
Why would someone pay millions to live in a building full of people who are legally entitled to pay almost nothing for rent?
Comment #3 Posted By: Anonymous 05/20/09
Anonymous
Agree with comment #1- give us some Real Deal inside info, not a sales pitch from Elliman...Typical!
Comment #4 Posted By: Anonymous 05/20/09
Anonymous
Please, please be the first to buy. (You can almost hear the desperation coming from this article.)
Comment #5 Posted By: Anonymous 05/20/09
Anonymous
Can anyone confirm if even one unit has been sold?
Comment #6 Posted By: Anonymous 05/20/09
Anonymous
He is the broker - of course his pitch is to sell...
Comment #7 Posted By: Anonymous 05/20/09
Anonymous
# 6 - yes
Comment #8 Posted By: Anonymous 05/20/09
Anonymous
#6 no - you can't actually sell a unit before the plan is deemed effective - but you can have them in contract and indeed they have some in contract - but clearly not the 15% needed.
Comment #9 Posted By: Anonymous 05/20/09
Anonymous
OK- now we know that the desperation has set in. Absolutely wait for at least another nine months, then see where prices are. His "sell" smacks of a great deal down the road, if that's where someone wants to steal a unit. I wonder if he knows that that's how this comes off? Probably not- thank goodness for idiots in real estate! Heads up, buyers!
Comment #10 Posted By: Anonymous 05/20/09
Anonymous
Hmmm. Is he listing these places? Whatever happened to the REQUIRED BY LAW fiduciary and confidentiality for his seller? I don't think that bad mouthing a property fits the criteria. This is a listing agent that doesn't understand loyalty, and should be out of real estate. Would you want him blathering about YOUR overpriced property like this? Unbelievable.
Comment #11 Posted By: Anonymous 05/20/09
Anonymous
He's probably assuming that Elliman is about to lose the Apthorp anyway, just as they lost Mirival, Manhattan House, and others.
Comment #12 Posted By: Anonymous 05/20/09
Anonymous
Court papers show that that sponsor was planniing on selling a block of 78 apartments for $1,000 per foot. Why is the general public getting rooked for almost double this price?
Comment #13 Posted By: Anonymous 05/20/09
Anonymous
I seriously doubt any units are in contract. Only a fool would buy into this mess!
Comment #14 Posted By: Anonymous 05/20/09
Anonymous
I've found that that bullet-head look is a sure sign of mental instability.
Comment #15 Posted By: Anonymous 05/20/09
Anonymous
DEVELOPER: Sue the crap out of this agent. He may be losing the listing, but fiduciary is INDEFINITE. He screwed up- go get him (them)!
Comment #16 Posted By: Anonymous 05/20/09
Elliman agent
The reality is this: two units went into contract during the 4Q 08'. That's it baby. Who would put down 10% in an basically 1% interest bearing account to speculate that they will get 15 more units in contract from owners who don't need financing. I hope the partners have the cash to buy a few units! This was a world class rental building. Looks like it will continue to be.
Comment #17 Posted By: Elliman agent 05/20/09
Elliman agent
I agree, by the way, that The Real Deal is owned by Elliman's PR company.
Comment #18 Posted By: Elliman agent 05/20/09
NOT an Agent
The candidness and realism of this article is refreshing. Most brokers would still be trying to justify $3000 per sq ft in this market.
Comment #19 Posted By: NOT an Agent 05/20/09
Anonymous
another year and they will be lucky to get $700 a foot. when one rolls the dice sometimes one craps out.
Comment #20 Posted By: Anonymous 05/20/09
Anonymous
It's great that at least one broker in NYC is honest with the public! I wish more brokers were as honest as this guy!
Comment #21 Posted By: Anonymous 05/21/09
Anonymous
Its about time that Leviev would take Mann out the Apthorp.
Comment #22 Posted By: Anonymous 05/21/09
Anonymous
have Michael Shvo come to the recue!
Comment #23 Posted By: Anonymous 05/21/09
Anonymous
Real Estate is the sexiest topic. Look at everyone so caught up in it. Dont hate me because Im beautiful. Commenter 20 : Keep on dreaming. How is the plumbing in your rent stabilized studio?
Comment #24 Posted By: Anonymous 05/21/09
Anonymous
To comment #10, your advice to wait 9 months is ignorant. The article clearly states that they need to have 15% in contract by September. What it's not saying is that their 15 month window to offer these apartments for sale under the offering plan will expire and the offering plan becomes defunct. A new offering plan can be files 12 months after that conclusion of the first one if they want to attempt to convert the building still which is doubtful.
Comment #25 Posted By: Anonymous 05/21/09
Anonymous
To further my last comment (#25) those who are posting negatively slanted posts here are failing to acknowledge some key elements of basic real estate sales in new developments and conversions. EVERY property in this catagory must sell 15% to buyers who have the intent to use the property as a primary or secondary home. The incentive to be one of the first buyers is to get the "ground floor" prices and how quickly everyone seems to forget this because the market has shifted. Secondly, the Apthorp is a gorgeous pre-war building with dramatic apartments and if someone still has the scratch left coupled with the desire to be a part of this building, I say go for it. You'll know in 4 months whether you're going to be able or not in which cas you get your deposit back. When the real estate market gets it's footing back and your in this as a long term investment, your apartment will appreciate more when you're in a well-known, pre-war beauty.
Comment #26 Posted By: Anonymous 05/21/09
Anonymous
It's a crappy building in a crappy location. 'Nuf said!
Comment #27 Posted By: Anonymous 05/22/09
Anonymous
The building is all hype. It's actually very run-down and dirty.
Comment #28 Posted By: Anonymous 05/22/09
Anonymous
There are no "ground floor" prices here. It's "sky high" right off the bat!
Comment #29 Posted By: Anonymous 05/22/09
Anonymous
$2000 a foot at 79th & Broadway!! Who's kidding whom?
Comment #30 Posted By: Anonymous 05/23/09
Anonymous
Translation for Fiduciary Responsibility = Lie, Lie, Lie
Comment #31 Posted By: Anonymous 05/23/09
Anonymous
#31 -- Not all brokers are crooks. The guy mentioned here seems honest!
Comment #32 Posted By: Anonymous 05/23/09
Anonymous
You would be a fool to go into contract at $1800 a sq in a building that even if they get the 15% will still be a questionable deal. Will the developer maintain the project for years to come? Many rents are below market in this building so you have to wonder can the cash flow meet expenses? The only way to save this mess is to sell below $1000 a sq and then there will be more people willing to take a gamble.
Comment #33 Posted By: Anonymous 05/24/09
Anonymous
#26 - There's no guarantee, and it seems highly doubtful, these people will ever give the deposits back.
Comment #34 Posted By: Anonymous 05/25/09
Anonymous
$700- a foot would attract buyers. however,maintenance charges will be so prohibitive to discourage purchasers.
Comment #35 Posted By: Anonymous 05/25/09
Anonymous
In order to sell apartments here, videos showing various stages of seduction between two actors are running continuously in the building's unrented retail spaces on Broadway. What were they thinking? If you buy an apartment you will get laid! Who in their right mind dreamed this up? All this shows is they are losing money on retail space. Why make it so obvious?
Comment #36 Posted By: Anonymous 05/26/09
Anonymous
Saw the videos! It looks like they are marketing to pick-up artists. Priceless!
Comment #37 Posted By: Anonymous 05/26/09
Anonymous
Perfect song for the video soundtrack: (I WANT TO BE) SEDUCED (Gary Richard Tigerman) Recorded by : Peggy Lee; Leon Redbone; Richard Dreyfuss..
Comment #38 Posted By: Anonymous 05/26/09
Anonymous
It's definitely strange marketing, especially now when "value" carries more weight than "luxury."
Comment #39 Posted By: Anonymous 05/26/09
Anonymous
I'm a broker, and I love taking my clients to The Apthorp. The apartments are GORGEOUS, the light is perfect, the convenient location 2nd to none. The bang-for-the-buck (remember, this is a rare pre-war condo) is incomparable. Nothing better can be bought for these prices in this market. Yes, I did to a big deal there. I intend to do more.
Comment #40 Posted By: Anonymous 05/27/09
Anonymous
Why waste your customer's time on a place where you will never get paid?
Comment #41 Posted By: Anonymous 05/28/09
Anonymous
The courtyard is depressing with all those tenement-style window treatments.
Comment #42 Posted By: Anonymous 05/28/09
Anonymous
14 years ago, you guys were telling your clients "Don't buy at the Ansonia, it's a dump, it's gonna cave in, the condo will fail" etc -- But we brokers who sold their had the last laugh, and Ansonia prices reached nearly $2000 per sq. ft. by summer 2008. We didn't force clients to buy at the Ansonia, they truly wanted to buy and they did. So, same with the Apthorp.
Comment #43 Posted By: Anonymous 05/28/09
Anonymous
The Ansonia still has leaks and water seepage that was never fixed. Do you think any broker was going to be truthful with their buyers about this? Of course not. Instead, they never mentioned the leaks and people who bought choose to either live in fear of being poisoned by mold spores, or they simply dumped the units back on the market without saying anything to anybody. FACT!
Comment #44 Posted By: Anonymous 05/28/09
Anonymous
Here's another fact - I sold 5 Ansonia units in the 90's, and all my clients are still there. If only I could get them to sell....
Comment #45 Posted By: Anonymous 05/29/09
Anonymous
The Apthorp has about $400 million in bank debt, and in condo foreclosures, the debt priorities are reversed. After a foreclosure process that these days can take two years — during which unpaid common charges proliferate — the building gets its due only after the bank is paid in full.
Comment #46 Posted By: Anonymous 05/30/09
Anonymous
The bank debt is only the half of it. There are mezzanine loans on top of the bank debt.
Comment #47 Posted By: Anonymous 06/03/09
Anonymous
Have you ever met a broker who didnt say this was the best time to buy? Its always time to buy..from them
Comment #48 Posted By: Anonymous 06/07/09
Anonymous
"Buy now, or be priced out forever." (A broker's mantra)
Comment #49 Posted By: Anonymous 06/08/09
Anonymous
"Buy now, or be priced out forever." (A broker's mantra)
Comment #50 Posted By: Anonymous 06/08/09
Anonymous
More broker mantras: Buy now because you never know when the market reverse by then its already too late Buy now because activity this spring proves a rebound is occurring (really a head fake) Buy now because Manhattan never goes down. Did I mention buy from me so I can get my 6% comission.
Comment #51 Posted By: Anonymous 07/07/09
Anonymous
How can brokers justify 5-6% commissions??...it boggles the mind. At best they should get 2.5%.
Comment #52 Posted By: Anonymous 07/07/09
Anonymous
Bet u the maintenence in Apthorp must be at least 2 to 2.50 dollars a foot..does anyone know?. Must be very costly due to rent stabilized and rent controlled apts paying much less than their share.
Comment #53 Posted By: Anonymous 07/07/09
Anonymous
Case-Shiller, Goldman Sachs, Deutsche bank, Reuters, Noriel Roubini all think market will fall another 30%. I would wait 9 months until the smoke clears. Apthorp may have to reduce to about 800sf
Comment #54 Posted By: Anonymous 07/07/09
Anonymous
Think about this...a NYC school teacher may earn about 50-60K per YEAR while a broker will "earn" this amt in 1 transaction...go figure. Brokers dont produce anything tangible and often times ruins deals. Of they make it much more expensive to sell factoring in comissions. Oh btw buy buy buy at Apthorp...just kidding!
Comment #55 Posted By: Anonymous 07/07/09
Anonymous
Brokers that represents sellers and broker that represents buyer..Hmmm....Is there a such thing? Brokers represnts only one thing and it how can I make a high commission as quickly and effortlessly as possible. The reality is that they work for themselves and NO ONE ELSE!
Comment #56 Posted By: Anonymous 07/07/09