The year ahead for Manhattan’s struggling condo projects

Developers lower prices, faced with tension among investors and lenders

New York /
Mar.March 10, 2021 11:15 AM
(iStock/Illustration by Kevin Rebong for The Real Deal)

(iStock/Illustration by Kevin Rebong for The Real Deal)

Developers have been saddled with an oversupply of new condos for years, and now — thanks in part to the pandemic, which further hobbled the luxury market — they’re taking steps to turn the tide.

It’s estimated that there are more than 15,000 unsold units across 900 projects, largely in Manhattan, with a total listed value of $45 billion, Bloomberg News reported. That’s resulted in developers lowering their prices, investors amassing funds to buy unsold units and lenders aggressively foreclosing on lingering projects.

Urban Standard Capital found that there are about 300 developments where 15 percent of the units remain unsold. Led by Seth Weissman, the firm has $100 million to buy out those units at a discount.

At its Charlie West project, Elad Group agreed to sell 70 units to Tishman Realty. The move aimed to get rid of most of its unsold units at the 121-unit property.

“Time is the worst enemy,” Shlomi Reuveni, president of Reuveni Real Estate, the brokerage that marketed Charlie West to buyers before the bulk sale (which his firm was not involved in), told the publication. “There’s a strong pipeline that’s coming, and that has to be contended with. Brand new projects that open up might be more attractive to buyers.”

For others, like HFZ’s The XI, defaults and litigation has already arrived.

“There’s going to be foreclosures, there’s going to be restructures, note sales, it’s all coming,” Brett Siegel, vice chairman for New York capital markets at Newmark Knight Frank, told Bloomberg. “Lenders are starting to realize they have to go back to their business of making loans. They can’t just be in the business of giving forbearance forever.”

[Bloomberg] — Sasha Jones





    Related Articles

    arrow_forward_ios
    Steven Mnuchin and 740 Park Avenue (Getty, Google Maps)
    Steven Mnuchin’s $26M home finally finds a buyer
    Steven Mnuchin’s $26M home finally finds a buyer
    Robert Millard and 9 East 88th Street (MIT Corp, Google Maps)
    Former Lehman exec lists Carnegie Hill mansion for $38M
    Former Lehman exec lists Carnegie Hill mansion for $38M
    April’s occupancy levels climbed to 61.6 percent, above March’s 60.9 percent. (iStock)
    Demand for short-term rentals surges past pre-pandemic levels
    Demand for short-term rentals surges past pre-pandemic levels
    Cape Cod and the Jersey Shore suffered among the sharpest inventory declines. (iStock)
    Here’s where homes virtually sold out in the pandemic
    Here’s where homes virtually sold out in the pandemic
    1384 Meadow Lane
    The 20 priciest Hamptons sales this year
    The 20 priciest Hamptons sales this year
    Airbnb CEO Brian Chesky. (Airbnb, Getty)
    Airbnb’s losing spree continues with $1B loss in Q1
    Airbnb’s losing spree continues with $1B loss in Q1
    Madison Realty principal Josh Zegen, Raphael Toledano with the properties at 325-329 East 12th Street and 223-235 East 5th Street (Madison Realty, Google Maps, Toledano by Michael McWeeney)
    Madison Realty Capital closes on Toledano’s bankrupt East Village portfolio
    Madison Realty Capital closes on Toledano’s bankrupt East Village portfolio
    Manhattan and Brooklyn saw all-time records in lease signings in April (iStock)
    April leases soared across city; so did concessions
    April leases soared across city; so did concessions
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...