Sale/Leasebacks at William Beaver House

So, if you caught this article in the Real Deal yesterday about the latest scheme to try and get anyone to buy anything at the William Beaver House, you may be applauding the level of creativity employed by broker Prodigy (I mean, this is what the sponsor had in mind when they booted CORE isn't it?).

This type of transaction (which we guess is called a "master lease") is really just a plain old "sale/leaseback" where the sponsor sells us an insanely overpriced apartment and then guarantees rental income for some period of time (in this case "up to" 3 years). The example in the article discusses a $1.4 million ha ha ha ha 1 bedrom ha ha ha ha which the sponsor will gladly leaseback for $3500 per month (which is an unsustainable number anyway once that building starts pouring units on to the market). So...$1.4 million sales price and $3500 a month (if even) in rent....we don't even have to do the math on that one to declare this to be a bad deal all around, although we guess it's better than simply paying the $1.4 mil without the income stream ha ha ha ha.