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December 2010

December 2010 » Market Analysis » NY New Developments

December 2010 New York New Developments

New Developments

Manhattan condominium prices climbed 9.4 percent in August, compared to the same month a year earlier. Transactions borough-wide increased 12.8 percent during that time, as well. Despite this recovery from 2009, activity and pricing are still a far away from pre-crash levels. This year, through August 31, has posted the second-lowest transaction count.

A final hearing was held for the public to weigh in on Riverside Center, the proposed complex that Extell Development wants to build on the Upper West Side. The city council subcommittee on zoning and franchises heard more than four hours of testimony on the project, which would bring five high-rises, stores, a hotel, a movie theater, a parking garage and an auto showroom to eight acres between West 59th Street, West 61st Street, West End Avenue and Riverside Boulevard.
Developers are converting units to rentals to create revenue, thus allowing residents to get the condo lifestyle without the commitment. Cipriani Club Residences at 55 Wall Street is also renting unsold units. They want to sell the units, but in the meantime, due to so much demand they are doing short-term rentals. 75 Wall Street is also renting out some of its available condos, and William Beaver House, also in the Financial District, has had a number of condos for rent as well.
Brack Capital Real Estate has joined a European hotel partner to develop a 78,000-square-foot hotel at 218-222 West 50th Street in Times Square.

IStar, the troubled lender that has some of the city's most high-profile condominium projects in its portfolio, including One Madison Park, William Beaver House and Trump Soho, is negotiating with creditors to exchange debt and set up new financing. Istar, which is hoping to avoid bankruptcy, is in talks with Franklin Resources and Centerbridge Capital Partners, among other lenders. The lender is hoping to set up as much as $2 billion in financing. Despite recent warnings regarding iStar's fiscal health, that the company is becoming more attractive to potential lenders. The fundamentals of iStar's business appear to have improved.
Almost three dozen Catholic schools in the greater New York area are facing possible closure due to dire financial times. Five of the schools are based in Manhattan, including St. Joseph of the Holy Family in Harlem, Our Lady of Sorrows on the Lower East Side and Sacred Heart of Jesus School in Midtown. Ten others are based in the Bronx and Staten Island. The Archdiocese of New York's Superintendent of Schools said that numerous financial hardships have put these schools in precarious positions.

JPMorgan Chase is facing two class-action suits alleging foreclosure fraud after the bank temporarily halted foreclosures nationwide in September. JPMorgan also became the latest big Wall Street bank to disclose a list of lawsuits it is facing that allege that the bank underwrote mortgages used in securitizations which harmed investors. JPMorgan said it encountered the some of the same lawsuits that other banks, including Citigroup and Bank of America, have said they face. JPMorgan also said it was facing suits from nine Federal Home Loan Banks, Cambridge Place Investment Management and Charles Schwab.

Glenwood Management is foreclosing on $78.6 million in loans that were given to developer Tribeach Holdings. 301 West 46th Street, at the corner of Eighth Avenue, where Tribeach sought to build a 38-story hotel and condominium was battered by the economic downturn. By 2009, construction ground to a halt. The original lender on the project, Bank of Scotland, declared the loans in default. On September 13, the bank sold the note for an undisclosed price to Glenwood's entity West 46th Street LLC, a lawsuit filed shows.

PB Capital, the American subsidiary of Deutsche Postbank, was granted a receiver to oversee Sorrento New York, a stalled 43-story condominium and extended-stay hotel that is the subject of an $84 million foreclosure suit. The Ismael Levya-designed tower, at 306 West 48th Street, was developed by manhattan-based Esplanade Capital. Investors were named as the guarantors of $84 million in loans for the newly constructed project, which was scheduled to include extended-stay housing under the BridgeStreet Worldwide hotel brand.

Construction on Extell Development's 34-story International Gem Tower condominium, on West 47th Street between Fifth and Sixth avenues, is on hold. Meanwhile, 580 Fifth Avenue, at the corner of 47th Street, is looking to be the center of the global diamond trade. Though Extell's tower was recently approved as a Foreign Trade Zone by the U.S. Department of Commerce, 580 Fifth Avenue at 400,000 square feet is 95 percent leased, while the Gem Tower's 750,000 square feet remain frozen at sidewalk level.

The city is kicking off a search for companies that would install 50,000 square feet worth of solar panels atop the Brooklyn Army Terminal's main industrial building. The $10 million project would result in the largest solar-energy system in the city, partially powering the 97-acre office and industrial complex in Sunset Park and two smaller city-owned sites that have not been picked out yet. If it succeeds, the Bloomberg administration is looking to replicate the technology elsewhere, including at the Brooklyn Cruise Terminal.

The developers of the embattled Trump Soho condominium-hotel are offering to refund buyers as much as half of their deposits, if they agree not to join a lawsuit that accuses them of fraudulent misrepresentations at the 46-story Spring Street building. Only those buyers who have not yet closed would be eligible for the refund, though it is unclear how many have been offered. They must think the fraud lawsuit has legitimacy and that they will have to settle for more than 50 percent. Or, the refunds could mean that the developers could be planning to convert the entire project to a hotel.

The owner of 885 Third Avenue has filed for bankruptcy. Metropolitan 885 Third Avenue Leasehold LLC, the owner of the tower known as the "Lipstick Building," has listed as much as $500 million in debts and assets while filing for Chapter 11 bankruptcy in a Manhattan court. Foreclosure on the building has loomed for months, after the owner defaulted on a $210 million loan earlier this year.
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