Developer faces foreclosure on Soho condo
August 21, 2008 01:57PM By Adam Pincus
The Lofts of Greene Street
Note: Correction appended.
A developer whose company is pairing with General Electric to build an eco-friendly planned community in Myrtle Beach, S.C., is facing foreclosure at his Soho condo unit.
The Bank of New York filed papers in Manhattan State Supreme Court on August 15, alleging that Robert O'Neel III has defaulted on his mortgage and now owes $3.2 million, the full value of the condo at 103 Greene Street. O'Neel is president and chief executive officer of RWO Acquisitions, located in Midtown.
O'Neel, who had no role in developing the building, bought the Soho condo unit in August 2002 for an undisclosed sum and took out a $1.7 million mortgage. By 2006 he had increased the debt to $3.57 million, the filing said.
His 3,005-square-foot unit was valued at about $1,190 per square foot. Apartments in the building have sold for between $1,301 and $1,976 per square foot in the past three years, according to PropertyShark.com.
The full-service seven-story building, called The Lofts of Greene Street, is in the Soho Cast-Iron Historic District, between Spring Street and Prince Street, and was converted to condos by hotelier and restaurateur Tony Goldman in 2002.
RWO Acquisitions and GE Consumer and Industrial announced in 2007 that they would partner to develop energy-efficient homes within a planned 900-acre community at the former Myrtle Beach Air Force base known as Withers Preserve.
O'Neel refused to comment.
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Comments
Anonymous
On the way up everyone was calling developers greedy pigs - now that developers are proving that it's not all fun and games are the same detractors going to pony up and admit that maybe making money in real estate isn't so easy after all. And maybe developers really are just charging prices that compensate them for the risks they take?
Comment #1 Posted By: Anonymous 08/21/08
Anonymous
Exactamundo... kind of. Making money in real estate is never easy, but developers aren't JUST charging prices that compensate them for the risks they take. Again, broad and general assumptions leave no room for the exceptional and the relativity of real estate investments. For the sake of evening the playing field with these polar extremists, many developers are also charging obscene prices, but apparently reasonable and marketable, to do what everyone wants to do in real estate - make that money, honey! And might I add, in huge, enormous hunks.
Comment #2 Posted By: Anonymous 08/21/08
Anonymous
So #1 let me get this straight. Developers are not greedy because they are in a risky business and happen to buy a 3.2 million dollar property beyond their means to begin with? Maybe this guy with all his experience could have sufficed with a bit more manageable 2.5 million dollar property forecasting some turbulance in the next few years in his business. its the same thing if someone buys a $300,000 home and can only afford a 150,000 home - they are stupid to try to spend beyond their means thinking the money was going to come in at some point. How is that any different then adding a few 0's. This guy could have been very comfortable with a mortgage just a little bit more manageble for him. Shame on him and only him for extending himself too much regardless of his business. If anyone should understand finance and market fluctuations it is him.
Comment #3 Posted By: Anonymous 08/21/08
Anonymous
Property Shark says That this Loft was bought in 2002 for 800$PSF, I hope that he didn't leverage his company assets like it looks like he did his home.
Comment #4 Posted By: Anonymous 08/21/08
Anonymous
This is a new building. There's no way in hell it was built in 1879, since I live nearby and saw it being built from the ground up just a few years ago. It's just a question of time before all the morons who paid two or three times rational prices lose their shirts. The ponzi scheme is over folks. It doesn't matter if you're rich or poor, fat or tall, Swedish or Chinese. Game over.
Comment #5 Posted By: Anonymous 08/22/08
Anonymous
#3 this guy can't make his payments because his business failed not because he bought too much house - even if he bought a $1M home with all cash he would be losing it. Most often 2nd and 3rd tiers of debt are recourse loans and require a developer to put up their house as collateral. Markets change quickly and real estate deals take years. It's very difficult to predict how the market will react for 5 consecutive years. Building condos is very risky. In good times you look like an all star in bad times you have to tell your wife and kids that you're declaring bankruptcy.
Comment #6 Posted By: Anonymous 08/22/08
SoHoGuy
This guy wasn't the developer. Can no one read here? He took risks in buying a condo (every property deal is a risk) - like so many poorer people did with subprimes - and he lost. I have no pity for him. The capitalists are the ones who don't want to bail out the poor who made bad subprime decisions or who request rent stabilization laws. Now, on The Real Deal the crocodile tears run out for one of their own ilk Isn't capitalism a wonderful system? On the other hand, hundreds of inexperienced anti-capitalist SoHo artists like me who paid $50K for his loft(plus some improvements) have seen recent appraisals at $2M I'm laughing at this (greedy) CEO and his scheme to make yet more $$, and now he must eat crow. Boo-hoo. Now, the actual developer, Tony Goldman has a reputation throughout SoHo for being, shall we be kind, greedy. He likely made out well on this project, which was NOT built in 1879, more like 2003!! Gee, how do we take anything on this site seriously if it gets such basic facts correct.
Comment #7 Posted By: SoHoGuy 08/22/08
Anonymous
#6 I really dont care what this guy had to do to put up his next development. Did he have to do it? He is in the business and understands the risk how is that any different then then a person who has a $300,000 house with $100,000 of home equity and uses it to start a business that also fails. I dont really care about your side since the man is in the business is a grown up and can make decisions about the development and his lifestyle during that period. Cant he try to seek outside funding? Have additional investors to help put up some additional financing?
Comment #8 Posted By: Anonymous 08/22/08
Anonymous
I think many have missed my point - this guy is losing his home because of a real estate deal he was doing. Real estate developing often involves risking everything you have. It's much more than just sitting back and counting all of your money. I just hope when times are good again that people realize that developing involves risks and it's reasonable for developers (like all other business owners) to try to make as much money on their deals as they can.
Comment #9 Posted By: Anonymous 08/22/08
Anonymous
I think you have missed the point. Does he need a 3.2 million dollar home while he is doing risky deals? Maybe he can suffice with a 1 million dollar home that he can manage so he doesnt risk his home - or in this guys case his 3rd or 4th home. I am very close to a local developer on the JC Waterfront - he rents. He just finished a $10 millon project and is on a $15 million project. He still has a home to go to sleep in.
Comment #10 Posted By: Anonymous 08/22/08
Anonymous
You don't know how much the guy was worth - perhaps he had $20M of cash and bought the $3M place with 50% cash down - we don't know if he could afford his house or not - what we know is that the development he was working on is in bad shape and it's forced him to lose his house.
Comment #11 Posted By: Anonymous 08/23/08
Anonymous
Why would any of you laugh at someone about to lose their home? Why is being a developer a horrible and greedy job? This guy was working on a project that was innovative - he planned for energy efficient homes with use of solar in the entire community and was trying to make a difference. Such judgment...
Comment #12 Posted By: Anonymous 08/31/08
Anonymous
This guy is loosing everything because since he was able, he has lived beyond his means. This forclosure is only the tip of the iceberg with this guy. Lear Jets, $350,000 MBZ Maybac...Greed is NOT good....
Comment #13 Posted By: Anonymous 09/28/09