20 Bayard Goes Belly Up
The sponsors of the condo 20 Bayard Street have filed for Chapter 11, according to a story in the Real Deal. The development, which was the priciest of the three Karl Fischer Row buildings overlooking McCarren Park, first showed signs of being on shaky financial ground when about half of its units were offered as…
The sponsors of the condo 20 Bayard Street have filed for Chapter 11, according to a story in the Real Deal. The development, which was the priciest of the three Karl Fischer Row buildings overlooking McCarren Park, first showed signs of being on shaky financial ground when about half of its units were offered as rentals last winter. Sponsors North Development Group, which is led by Isaac Hager, owe upwards of $10 million to 50 different creditors, according to the bankruptcy filings. What will this mean for the people who bought there?
20 Bayard Condo Files for Chapter 11 [The Real Deal] GMAP
Photo by zachvs.
Believe it or not, best scenario for the current owners is a firesale of the units to individuals (rather than a block sale to a real estate holding company). Then they can establish a condo association that will have to the power to make sure everyone’s investment is taken care of long term.
Pull that band aid off!!
Seems to me that only owners who are forced to sell in the short-term are screwed. Can those of you tossing around blanket statments that owners are screwed flesh that out a bit more? I’m not challenging you/saying you’re definitely wrong, just trying to understand your position.
As someone else said above, seems this will certainly depress values in the building (and nearby comps as well) in the short term as the new bank owner likely sells units at a steep haircut, but for those with a reasonably longer holding period this shouldn’t be an issue, other than services perhaps suffering.
so – i read it
why is this a big deal? if all the units are occupied one way or another, this just seems like a ploy by the sponsor to get out of paying some of that debt.
Park Slope is a totally different animal. It was never HOT like Williamsburg. Williamsburg (and Long Island City) were boomtowns like Vegas and Miami over the past 10 years. Every street has 5 new developments on it…each crappier looking than the next. One in 100 looks decent to me.
Park Slope is a historic area and has been established for a long time with very little new development except on 4th Avenue, which actually seemed to sell pretty well, despite it being hideously ugly. I credit the good schools and the lower prices (compared to Williamsburg).
I don’t think you can paint all of NYC with such a broad stroke…different neighborhoods will suffer to differing degrees.
One thing I DID note…I walked by the Brown Harris Stevens office last night in Park Slope and was quite shocked to see that almost everything up on the Union Street side now says “in contract”
Also, the 3.2 million dollar 591 2nd Street is now in contract after just 2 months on the market. A few other pricey homes in PS have recently gone to contract as well.
PS: the renters are also screwed if the condo association can’t pay for heat or meet payroll.
BHO – if the owners thought they had any equity in their apartments they were idiots anyway. You are right they bought at the top and so now they are totally underwater….this is not news (at least it shouldnt be) – the fact that the sponsor filed doesnt affect that all that much.
As for the sponsor not being able to pay the carry charges on the rentals – actually false. If anything the real risk would have come if the sponser held on till foreclosure – cause then the incentive would be for the sponsor to drag it out as long as possible – collecting rents and NOT paying the carry charges. Foreclosure can take awhile and THEN the owners would have been screwed. The sponsor actually did the owners a favor, cause in bankruptcy the situation can be dealt with faster and all parties have a big incentive to keep the building going to preserve the value.
“As always, any posts I might write only serve as material for your quips.”
Because there’s nothing to debate about. The MAB is RIP. That spells trouble, not R-O-L-A-I-D-S. You have no choice but to join Team Bear (via underground railroad Team Reasonable). It’s a done deal. Half off is coming. I am overjoiced. This kinda shit brings out the child in me (I know, always a child right?).
Jesus Christ! Who the fuck are you, @ 11:50, and what did you do with 11217! [welcome to Team Bear, 11217! Now if we can just get you to own up on Park Slope’s fate…]
***Bid half off peak comps***
Unfortunately, the banks are in as much denial as many first time condo owners and may prefer to keep the dream prices rather than actually find a market clearing price. There is a culture of denial, “extend and pretend”,being fostered by the US government to avoid banks having to take write downs. Obviously, at some point the Piper must be paid, but those expecting a fire sale will be mistaken. Banks will avoid write downs to keep their fraudulent balance sheets (and the corresponding inflated bonuses) going as long as possible. The game plan is to sit on the inventory until inflation or the alleged recovery revives the market.
Music may not stop for another few years.
If you belong to a condo association where about 50% of the owners are bankrupt you are in trouble. Not only because carrying charges are in doubt but also because your unit’s resale value is pretty much zero. If the sponsor owns 50% of the units and is going bankrupt that is the bad situation you face. The renters are fine, but the owners are screwed.