Ok, so we debated and debated about whether to actually blog about the story that we heard over the weekend with 50 Franklin, the
Our tipster overheard that 50 Franklin is "just trying to get some cash in the door" by "closing the all cash buyers first" and as many of the financing buyers after that (well...duh, so is everyone). Now here comes the fun part - our tipster reports that he "almost choked" on his (we imagine) very expensive lunch after he heard one sales agent mention that the building would "try to close 20-25%" of the condos and then...go rental.
At first, we were quite surprised by this somewhat seedy revelation from 50 Franklin, which is fairly new to market and has yet to close a single sale in it's 72 unit inventory. However, after giving it some thought, it occurred to us that probably EVERY undersold building is either thinking about or outright adopting the rental strategy. Essentially, by selling just a few units, the sponsor is able to pay down some debt before getting on with a much slower investment recovery strategy (e.g. renting). Is 50 Franklin definitely going rental? I mean, really who knows. If the market happens to pick up
We thought long and hard about whether we should blog about an overheard conversation, which we think is a tad "spy"-ish and also pretty darn shady. However, our tipster tells us that the conversation between the sales agents was so loud as to be outright disruptive and even prompted a nearby table to ask the Elliman agents what they thought of the real estate market these days.
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11 comments:
Wow, good job Jason Walker and Co.! Does this deem an out-clause in their contract for the Developer? Corcoran-sunshine, where are you?
Hey DT, divvie here from the SE board.
It's like I said, the floorplans are classic ground up rental plans.
Hi Anon - wouldn't that be interesting? It makes you wonder if Elliman has some sort of 25% sold or so arrangement with the sponsor - I have to say, Elliman isn't doing a bad job with what they've got - the 10% down thing appears to be getting more people in the door and we here that they're paying transfer taxes as well.
'sup divvie! You should pop by here more often...
Agreed that 50 Franklin has a very classic rental layout (with the exception of the penthouses) and in that area, rental buildings (particularly new ones) are VERY few and far between, so I think it will actually be quite successful as rentals.
Sorry, that should be "hear" up above - long day apparently :)
Unfortunately, the story is not correct and there are no plans for the building to go rental. The developer has enough contracts and is waiting for closings. Someone should get the facts straight.
Like the say, son't always believe everything you hear!
sorry that should be:
Like they say, Don't always believe everything you hear!
Hi Anon - thanks for commenting! So we tried to make it very clear in the post at every step of the way that this is just an overheard conversation.
Of course, you never know with interpretation. We are therefore very open to hearing from 50 Franklin (who has not contacted us about this post) - if our source just plain got things wrong and 50 Franklin would like to clarify that, we'd be more than happy to update our original post.
This is an interesting report and exactly what you don't want to hear about your new condo building. If you're looking to buy you can't spend all of your time reading through the rumors though without any concrete data.
Your real estate agent and attorney should be able to help you find something you like that's on solid ground financially. Make sure your attorney performs their due diligence on the building; it's imperative to make sure you know what you're buying into.
Hi Graham - very well said.
Any updates on this building? We live a few blocks away and are curious if people are moving in. The building looks pretty complete from the outside, but does not appear to have any traffic coming in or out.
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