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
You’ll be wrong again BO. You’re probably getting used to that.
It’ll go rental and it’ll take the bank 5 years to unload the properties unless they sell the loan to a vulture.
The 40% that own are not happy as their re-sales value will be capped until the bank unloads everything.
That said, I think they’ll trade at $500/sq ft.
Forte = rental = fail.
Ditmas snark – There will be financing available for this. Just because benson says there will be no financing doesn’t make it so. It’s not like this has never happened before. Construction lenders have foreclosed on developers and found a way to seel the units with financing. There will be financing and these units will sell for about $500/SF.
And then they will open a restaurant in the retail space and DIBS and the What can go on their date.
FSRQ hate to tell you but those rental prices you are stating as a dream for DT Brooklyn are exactly what the brooklyner has priced at so
this will sell for 300 psft bkre and the surrounding buildings are going to get hammered. Do you have any clue how many people are going to walk away from deals in this area now?
“No financing, no sales, period. Game over. Forte = Fail.”
No Ditmas
Forte=rental
And, people who buy at these prices are never “all cash buyers” unless it’s someone buying something for their son/daughter and that ain’t gonna be this!!!!
Oh BTW Welcome back Benson!!!!
The What
Someday this war is gonna end…
Benson – I dont agree that there are no comps – Toren, Oro, and a few others come immediatly to mind. However you are 100 percent correct that the price per sq ft changes drastically if a buyer is forced to go all cash. However, if the (new) owner cannot figure out some way to get buyer financing then its a forgone conclusion that the rest of the building will go rental. As for the rentals – essentially you are projecting a sub $1900 rent on a 1Br, sub $1500 on the studios and sub $3000 for the 3br (2bath) apts;
Frankly as long as crime stays relatively low in the area – unless the economy completely collapses – which seems to be more remote than this Spring, I just do not see those kind of rent levels returning in Downtown Brooklyn/Ft Greene. As you say – time will tell.