Warehouse 11: Selling, But Developers May Still Be Screwed
Two articles came out yesterday that spotlighted the Williamsburg condo Warehouse 11 in very different ways. The first, in Crain’s, talked about how its fire-sale prices resulted in half of its units selling or going into contract very quickly, thus making it something of a post-boom success story. The other article, in The Real Deal,…
Two articles came out yesterday that spotlighted the Williamsburg condo Warehouse 11 in very different ways. The first, in Crain’s, talked about how its fire-sale prices resulted in half of its units selling or going into contract very quickly, thus making it something of a post-boom success story. The other article, in The Real Deal, digs deep into the legal wrangling that inspired the fire sale in the first place. The main takeaways are that a “U.S. Bankruptcy Court judge rejected on Friday a settlement agreement that would have extended until next month the deadline for the developers of Williamsburg’s Warehouse 11 to buy the property’s discounted debt from lender Capital One,” plus “Capital One alleged in court documents that the developers commenced sales without its approval, which would be required to close the sales.” The latter allegation, of course, could throw a serious wrench in the plans of all those new contract holders. The TRD story also details how the building’s developers are besieged by debts on a number of fronts.
Price Cuts Yield Condo Sales in Williamsburg [Crain’s]
Judge Rejects Warehouse 11 Extension [The Real Deal]
Warehouse 11 Sales: Do or Die For Condo’s Developer [Brownstoner]
Price Cuts Lead to Feeding Frenzy at Warehouse 11 [Brownstoner] GMAP
Photo from TRD.
Why would the bank not want more than $30 million worth of sales to close, if that’s the amount they were going to accept anyway?
i know several people (families), interested in combing units here, so i am still hoping that the building sells out, and people close and move in. it’ll add more retail to the area and really support the retail that’s there already.
an almost finished empty building seems really sad.
Banks don’t have to worry about taking a haircut because the government is paying the barber! Tar and feathers for the lousy bankers!
…right WBer and that’s why i think the bank has the stronger case (not to mention that it’s the dvper who has failed in its obligations to pay the bank on the underlying loan). bank agreed to accept a haircut if it could close out the loan by date certain. dvper pushed the limits and seems to have delivered nothing but contracts and some amount of cash less than the agreed amount. deal over and bank says thank you for helping create some momentum for my sales process. even if the bank helped in the sales process, if that was not documented in any agreement then the bank can be seen to have been (correctly) preparing for a back-up scenario.
I thought that the developer drove the fire sale – reading between the lines, as a way to raise the case needed for the developer to buy the discounted debt?
Once everybody is moved in, will the monthlies go up to help dig the place out of the financial hole?
it always helps to read the underlying story…
messier than i supposed, so yes there may be some delays involved as well…
the bank certainly will not release the lien until it know where the cash will go (ie to its own pocket).
that said i do think the bank wins the legal battle. they agreed to accept a discount based on a lump sum cash payment by a date certain. instead, dvper pursued a different route…
May not make sense, but having that lien in place, and making it impossible for buyers to close, is the bank’s leverage — it’s unclear from the Real Deal article exactly what the bank wants, but either way, they don’t want to lose the leverage.
if the bank is driving the fire sale, then why would it not release the lien? that makes no sense.