Clarett, Goldman Lose Control of Forte
Not everything Goldman Sachs touches turns to gold. A multi-million-dollar bet on the Fort Greene condo market appears to have backfired, with the Crain’s report yesterday that control of the Forté Condos at 230 Ashland Place would shift from Goldman, the 75 percent equity holder, and The Clarett Group, the developer, to the lender, Eurohypo…
Not everything Goldman Sachs touches turns to gold. A multi-million-dollar bet on the Fort Greene condo market appears to have backfired, with the Crain’s report yesterday that control of the Forté Condos at 230 Ashland Place would shift from Goldman, the 75 percent equity holder, and The Clarett Group, the developer, to the lender, Eurohypo Bank, which is into the project for $41 million. (Prudential Real Estate Investors also has a small equity stake.) Clarett is proud to have delivered such a beautiful, high quality property—on time and on budget—to enhance the skyline and contribute to the renaissance of downtown Brooklyn, the developer said, in a statement. Unfortunately, the sales market in Brooklyn has not been as strong as Forté itself. A last-ditch marketing makeover by The Developers Group in recent months as well as behind-the-scenes efforts to sell blocks of apartments apparently weren’t enough to save the equity investors, as the project was less than 40 percent sold after two years on the market. Clarett’s nearby project on Lawrence Street, the 51-story Brooklyner, is still expected to begin renting early next year.
Goldman Sachs’ Brooklyn Condo Bet Sours [Crain’s] GMAP
Benson – last time I checked, Euro Hypo was a bank right? You don’t think they can figure out a way to offer financing it means crawling out from under this deal?
And by the way – people are closing on units with financing atOne Brooklyn Bridge Park. Last time I checked that building was less than 40% sold too. So it is happening.
antidope the only numbers you need to know is that GS just walked away from an entire building in the heart of Brooklyn. smart money is saying prices are going much much lower and not recovering anytime soon. I am sure that you know the numbers better then them though right?
Has anyone run any numbers?
The German govt rescued Hypo last year and they will not rush to sell if the price creates a significant haircut.
And if they can fish some good prices by offering seller financing, they will. Real estate is their business.
Isn’t it possible also that the rental stream from 60% of the building is enough to cover maintenance and debt service on the loan now that the equity is wiped out? It may not have been enough to give a return to the equity, but it’ll pay for a large (if not all) chunk of the carry.
And we won’t be at the bottom forever. there will eventually be a recovery.
Sorry I missed all the fun in this thread…
When equity holders lose control and the debt holders take over, that opens the door for serious price cuts (as the equity holders could NOT cut the prices without making it obvious to the debt holders that default was imminent).
If they lower prices aggressively, they will probably be able to sell the place.
If they want to rent them, they can rent them, but will the sale price of a “used” condo be higher in 2 years than the sale price of a new one now…
Will be interesting to see what happens.
they have not been able to sell this building at 600 psf and now that its gone bankrupt it will sell for 500 according to team bull. SCARY
bkre = right
ditmas = snark = no idea what’s going on.
Bkre;
You give me too much credit (no pun intended). I have no power in the credit market. I merely stated my perception of the current status of the condo financing market.
Since you disagree, would you be so kind as to let us know which banks are offering financing for condos that are in new buildings that are only 40% sold?
won’t be sold for anywhere close to $300sq ft because owner would never do that. More profitable to keep as rental and for future appreciation.
You don’t think Eurohypo could arrange/guarantee financing to invidual buyers if wanted to continue selling off the condos?
> There will be financing and these units will sell for about $500/SF.
Just because bkre says there will be financing doesn’t make it so.