William Beaver House, the André Balazs-designed Financial District condominium that was just bailed out by the Los Angeles-based CIM Group, is going partially rental under its new ownership.
The 333-unit tower, which had been facing a foreclosure lawsuit prior to the takeover, was part of a three-piece deal in which CIM agreed to buy the debt on two troubled Sapir Organization buildings (Trump Soho and Beaver House) and take an equity stake in another (11 Madison Avenue), sources said. As the Wall Street Journal reported earlier today, CIM purchased the loan on over 200 unsold condos at the Beaver House and subsequently took ownership through a deed-in-lieu of foreclosure.
On that deed, the sale price was listed as $184.4 million, but it was unclear whether the sum was tied up in the agreement with Sapir at the Trump Soho condo-hotel, where CIM reportedly paid down roughly one-third of the senior loan held by struggling lender iStar Financial, and at 11 Madison Avenue, Sapir’s 30-story office tower overlooking Madison Square Park. The price CIM paid for its stake in 11 Madison remains undisclosed, and the firm did not respond to a request for comment, nor did representatives for Sapir and iStar.
As The Real Deal previously reported, a number of units at the Beaver House, located at 15 William Street, were taken off the market earlier this year as Sapir became mired in a number of lawsuits over the building’s finances. Currently, the condo is roughly one-third sold, with 111 units closed and, sources close to the building say, another 20-plus in contract.
Rodrigo Nino, president of Prodigy International, which is marketing the William Beaver House, would not say how much of the building is now expected to hit the rental market, but said in a statement that “with the inventory of units that we have available, some will be put on the market as rentals, while others will remain for sale.”
He continued: “Now that the William Beaver House is on stable ground with a new owner and on strong financial footing, we believe that buyers will once again strongly consider acquiring condominiums.”
But will there be enough of them?
According to Elie Pariente, who runs the downtown residential brokerage Urban Marketing and has done a number of deals in the Beaver House, the new owners are likely to aim for between $1,200 and $1,300 per square foot for the condos, but it could take up to two years to sell off the remaining units at that price point.
“It’s probably the smartest thing to rent out some of the units at the same time,” Pariente said. “At least that way they can start generating cash flow right away… I have no doubt they’d rent it out very easily.”
Meanwhile, with rumors now swirling that the building’s future may not be entirely in sales, real estate attorney Adam Leitman Bailey was chomping at the bit to sue on behalf of a group of buyers seeking to renege on their contracts.
While he wouldn’t disclose how many clients he has at the building, Bailey said that he is “waiting for the new amendment to come out so we have something to sue on.”