The Pearline Soap Factory model condo unit
A recent uptick in all-cash buyers helped the new Pearline Soap Factory condominium sell out after nearly two years on the market, the developer told The Real Deal.
All eight units, including one commercial unit, at the boutique Tribeca project are sold and closed, according to Gerard Longo, a principal at Atlantic Walk, the developer of the Pearline and its neighbor, the Fairchild. The last Pearline unit, a penthouse, closed on New Year’s Eve for $5.9 million, or $1,685 per square foot, he said.
Due in part to its small size, Pearline is one of the first new developments to announce a sell-out in the wake of 2008’s financial crisis. Because of strict presale requirements from Fannie Mae, small projects have a considerable advantage in the current climate.
Pearline, a new construction building on the site of the old Pearline Soap Factory at 414 Washington Street at Laight Street, went on the market about 20 months ago, Longo said. When Lehman Brothers collapsed in September of 2008, it had sold three units, he said, and sales virtually stopped amid the maelstrom that ensued.
“It was a struggle on those last units,” he said. “We had about eight months where the switch was turned off.”
That was especially true because many of Pearline’s units were priced between $4 and $6 million — the hardest-hit segment of the market.
“That market completely disappeared,” he said.
More recently, buyers started “coming off the fence,” he said. While jumbo mortgages are still scarce, all-cash deals started to emerge from two sources: international purchasers and the finance industry, which seems to be reemerging in anticipation of bonuses.
Of the last four buyers at Pearline, only one needed financing, and that was only a 50 percent mortgage, Longo said. He added that three of those buyers were in finance industry, noting that Goldman Sachs’ new building at 200 West Street is only a few blocks away. Goldman posted record profits in 2009 and has announced that its employees will receive a payout averaging about a half-million dollars for the year, despite cutbacks to the bonus pool.
Units at Pearline were significantly discounted from when they first hit the market. The last penthouse sold at a discount of 25.8 percent from the original asking price of $7.95 million, according to Streeteasy.com. Unit #6A, which closed in October, sold for $4.1 million, a 24 percent slide from its original asking price of $6.75 million.
The price per square foot in the building ended up averaging between $1,400 and $1,500, Longo said. When the project first went on the market, he hoped to sell the units for an average of $1,600 per square foot.
The final pricing “wasn’t what we set out to do,” he said. “But under the circumstances, it’s not a bad result. So many projects are upside down or underwater, I think we fared pretty well.”
Longo said he believes the project’s large units helped it succeed. Each of the apartments in the boutique development are floor-through and approximately 3,000 square feet. The original plans called for 15 units, each around 1,500 square feet, but Longo noticed a need for larger apartments in the area.
“In Tribeca the market was calling for larger units to accommodate families,” he said. “We made the decision that 3,000-square-foot, floor-through units would be the best way to go. That’s one of the things that helped us to be successful.”
The Fairchild is around 50 percent sold, Longo said.