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September 24, 2008

Closings Begin at Oro

oro-entrance-0908.jpg
It's official: the Oro has received its Temporary Certificate of Occupancy and now, let the closings, and the moving, begin. The building has 40 stories — the tallest residential building built in Brooklyn in 80 years — and the first TCO covers floors one through 30. The top ten floors should get their turn in a matter of weeks. When we wrote about it a couple of weeks ago, roughly 45 percent of the building's 303 units were spoken for.
Oro Closings Becoming a Reality [Brownstoner]




Posted by lisa at 10:03 AM | Comments (21)
Categories: Condos, Downtown Brooklyn

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Brooklyn finally recovers from the Great Depression just when the Second Great Depression begins!

Sweet!


Posted by: Polemicist at September 24, 2008 10:09 AM

Look for closings to be really slow on this one. Most of these people signed contracts thinking that they were going to get mortgages for 80-85% of the purchase price. When they go back to their banks to close, they're going to find out that nowadays banks are only giving about 70% and they are going to go scrounging around to find that extra 10% of equity. This is a big problem that's going to affect all condo projects for a while - especially the ones that signed most of their contracts more than 9 months ago.

Posted by: Make My Heights the P Heights at September 24, 2008 10:13 AM

I just don't understand this place - such a horrible location.

Posted by: gkw at September 24, 2008 10:42 AM

No offense to "make my heights P heights" but where are you getting the 70% financing from? If you have good credit and can show your income you can get 90% up to 729k. If you have ok to fair credit you can still get the below loan amounts on an FHA loan.

Thats an 810k condo with 10% down
911k condo with 20% down
975k with 25% down

All I'm saying is have facts to backup your point.

Posted by: Adam Dahill at September 24, 2008 10:53 AM

I agree with gkw, I am mystified by Oro and other developments in that immediate area. In my view, the location leaves much to be desired. Maybe I am missing something.

Posted by: Paul C at September 24, 2008 11:00 AM

I'm getting 70% from talking to friends of mine who work for developers who are telling me that their buyers are are having trouble getting more than 70%.

Posted by: Make My Heights the P Heights at September 24, 2008 11:05 AM

Totally false that this is the tallest building built in the last 80 years in Brooklyn. Oro is 400 feet tall (that's the height limit in this area); 12 MetroTech (330 Jay Street) is 473 feet tall (and was built in 2005).

There are also several buildings under construction that will be as tall or taller -- Toren, Avalon, City Point, Lawrence Street tower, Bridge Street tower.

Posted by: zinka at September 24, 2008 11:08 AM

You are assuming that Oro is eligible for an FHA loan, Adam. P Heights is totally right. Take it from someone actually trying to getting a loan right now.

Posted by: bklyn zooo at September 24, 2008 11:35 AM

I'm sorry but I do this for a living and I have 2 clients that are buying in ORO and we have one approved for 90% and another at 80% on our Fannie Jumbo Product. I haven't had an FHA loan in this building and the only reason to take someone the FHA route is if their credit isn't up to snuff. We would have to review the project for FHA guidelines but that's a whole other thread of explanations.

70% is what you are going to be capped at if you require a loan over 729k.

Posted by: Adam Dahill at September 24, 2008 12:02 PM

"...a couple of weeks ago, roughly 45 percent of the building's 303 units were spoken for."

Night and day between credit conditions then and now.

Posted by: DOW8000SP800 at September 24, 2008 12:11 PM

Location isn't so bad - it's right over the Manhattan Bridge w/ the Q, R, M, B, F, A, C trains nearby plus all the new good stuff happening in downtown...and Fort Greene is 5 minutes away. The area is developing at a rapid rate and this will be a good investment.

Posted by: katiebk at September 24, 2008 12:13 PM

i agree with katie -- location isn't much now, but it will be once downtown gets its feet under it. this will happen with all the development already in the ground.

Posted by: bklynite at September 24, 2008 12:17 PM

Face it, the location sux -- its squeezed in between the Metrotech office/educational complex to the west and the projects to the east. Neither will ever get their "feet under it" to become anything more or less than what they currently are -- and neither is a place where you'd really want to stroll around (I'm not talking safety issues here, there just isn't anything to do). The little island in between isn't going to develop much, and its not even that close to Fulton St., which is the only potentially interesting place nearby in downtown.

Posted by: aishling at September 24, 2008 12:37 PM

Adam,

"Make My Heights the P Heights" is not far from reality. I have been trying to close myself at another Brooklyn building and I can tell that I'm still trying to work things out with a few banks. I don't doubt that you clients are approved for the Fannie Jumbo loan, as that is an option that has been offered for us. However, the banks needs to approve the building before your clients are able to close. Fannie/Freedie/FHA all require a new condo to be at least 51% sold, so your clients would need to wait until that happens, as I undestand that Fannie/Freedie/FHA don't accept exceptions. I have exactly that problem right now and the bank said that I need to use a diferent type of loan.

Also, have you done an appraisal? That's another risk for buyers that bought last year. First, some sponsors are cutting prices on remaining inventory and second, appraisers and banks are being more conservative.

Lastly, you have to factor about 5% closing costs in your calculation about the condo that people can afford.

Posted by: noticket_nolaundry at September 24, 2008 12:43 PM

I know about Fannie warrantabilty. I've been doing this quite a while and was an underwriter for years before originating. We have done appraisals and the values are inline with the purchase price. We are the bank and we have choosen to do a limited review on specific projects and and other new construction projects we approve the entire building. That said there are a few projects that are having issues but that is not the norm. There are banks that do not have to meet warrantabilty guidelines as well since they portfolio their loans. I know of a specific building that Citi will not do but Wells and Chase and another that Wells will not but Citi will do.

The point I am trying to make is that there is financing out there for the right clients. You just need to do you homework.

Posted by: Adam Dahill at September 24, 2008 12:55 PM

They really need an edit button. I always see spelling mistakes and missed words after posting.

Brownstoner- Can you add an edit post feature?

Posted by: Adam Dahill at September 24, 2008 1:03 PM

Adam,

The fact that SOME people can still get loans at 80% or higher doesn't change the fact that for MANY people the ground has shifted under their feet and the terms they are being shown now are very different than the ones they saw 9 months ago when they put down their deposits. The ORO developers can't rely on only selling to people with credit scores above 750, since there are just enough of those people out there to buy up their hundreds of units..

Posted by: Make My Heights the P Heights at September 24, 2008 1:15 PM

Fine, it is obvious that you know what you're talking about. However, I'm sure that not 100% of the buyers at Oro or any other pproject are on the "right client" category. So, the point that was made about closings slowing down is still valid. "The norm" was that there were no issues because all buildings were 99% sold out by closing time, people could get 100% financing, the appraisals were higher than the selling price, and people were not being laid off, etc. Today, even Goldman Sachs can't get easy money - Warren had to come to the rescue.

Posted by: noticket_nolaundry at September 24, 2008 1:19 PM

And now that that's all settled, I can turn my comments to the other thread in this discussion: Clearly Oro's location leaves something to be desired - it's near the projects, no attractive retail around there and is kind of a long and boring walk to the subway. That being said, I can't think of location in the City with more upside than downtown Brooklyn and people who are buying in Oro are clearly doing so on the assumption that the residential influx in downtown Brooklyn (scheduled for ealy 2010 when most of these buildings will be open)will bring about a transformation of the retail landscape. I think the pricing on Oro reflected the fact that the location is on the upswing, but not "there" yet.

Posted by: Make My Heights the P Heights at September 24, 2008 1:39 PM

The location was one of my first criteria when wanting to buy in Oro. I love nearby Fort Greene park, the restaurants on Dekalb, Lafayette, BAM, the proximity to the bridges when I need to drive into the city. It has great proximity to all of the growing neighborhoods in downtown brooklyn (dumbo, cobble hill, caroll gardens etc) and is very close to the city. Those are big pluses. But it is a personal choice, I have liked the neighborhood since the late 90's when I went to school there and have always wanted to live there.

Posted by: bklyn zooo at September 24, 2008 2:22 PM

bklyn zooo from your last post can we to suggest you take a look @ Forte in FG. It has all what you seem to be looking for in a more established and architecturally interesting location.
We do realize the Forte's styling is not for everyone..

Posted by: pierre de taille at September 24, 2008 3:06 PM

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