Is District Ditching Brown Harris Stevens?

We were tipped off by a reader that District, the sexily marketed FiDi building on Fulton Street seems to have pulled all Streeteasy listings on Friday. Are they going to pull a 45 John we wondered, complete with sponsor foreclosure and an elimination of their web presence?

Nah. It just looks like the only thing they're pulling is their relationship with Brown Harris Stevens, the most recent broker attempting to sell anything at the new development. We're not certain that District is changing brokers yet again, however BHS no longer has listings for the building either, which is a major clue. Are we surprised at the outcome? No, not really. Even though BHS gave it the ol' college try, District has sold only 6 units this Spring, not even close to the nearby and significantly more overpriced William Beaver House, which sold 26 units between March and May.

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The Busy Little Beaver

We enjoyed reading this rather simplistic but quite interesting analysis in The Real Deal yesterday, which highlighted the Manhattan condo buildings that saw the most In Contract units from March to May of this year as well as the most Closed units.

Curbed was all over the not surprising news that FiDi's 20 Pine is third on the list of ALL condo buildings in Manhattan with the most In Contract units, a general trend that we noted a couple of weeks ago. Although it's informative to look at In Contract units, these listings don't always end up in sales, particularly for new construction buildings where sponsors can easily fudge Streeteasy data (the source for the article) and undersold buildings far below the 70% threshold will not actually see any closings for one year or more. For example, on that same Real Deal list in 9th place is Battery Park favorite One Rector Park, a great but badly-timed building that needs to sell around 80 units just to get to the 50% mark and is itself anticipating that closing won't happen until Q1 of 2010 even though the building is finished and move-in ready. Given this information, do you really care that the building claims that 5 units went into contract in the Spring? We don't either...

A much more illuminating view of the condo market is the other piece of this story, which profiles the Manhattan condo buildings with the most closings in the Spring. Expecting to see a Harlem or Chelsea project on top of the list, we were instead truly surprised to see our old furry friend, FiDi's The William Beaver House topping the list for all of Manhattan with a tail-pounding 26 sales between March and May. What the heck, we wondered as we looked through the sales prices which were all exhorbitant (we'd say around $1200 per sq foot) with prices all over the place. For example, during those three months, the Beave sold 5 "G" line 1 BRs, nice units which we saw when we visited and reviewed the building back in May. Similarly located "G" line 1BRs sold for anywhere between $960,000 and a whopping $1.3 million in the same three month period. What does this tell us? Well, we're certainly tempted to conclude that these are closings from another era, full of investors that have been in contract for over a year and are finally just now being dragged to the closing table. Or...perhaps those buyers really, really want a room-sized bathtub.

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.

Ring, Ring, Ring! $420 per sq ft Sale in the Financial District - 3 Hanover Square #3A

Gosh, are we ever psyched that an 860 sq ft 2-level studio in a co-op building in the Financial District just sold for the bargain basement price of $360,000, almost 20% off of its most recent ask and a mere $420 per sq ft . The co-op building at 3 Hanover Square which houses this studio is one of the older buildings in FiDi (and a rare co-op) and has almost no amenities (except for a doorman and some seriously overcrowded "public" storage space which the residents are quite vocal about on their very informative building blog) .

#3A has beautiful high ceilings (not quite high enough in our opinion, to add the square footage enhancing loft, but we digress) although could use some updating like new floors and new appliances. The light in this unit actually isn't too terrible (many units in 3 Hanover Sq face neighboring buildings and can therefore be very dark) and the high ceilings add to the feeling of space. This unit was purchased around 20 years ago (we believe) by the current (now former) owners. This may explain the reasonable sales price since these older owners don't have the seriously annoying duh, if you bought in 2007, there's only so low you can go on your price before foreclosure becomes more attractive"cost basis" issue preventing many transactions from going forward at "corrected" prices.

We're not sure we like the kind of "oldish" vibe of 3 Hanover Sq (dark hallways, W/D every three floors and can't put them in the units), but we sure do like the sound of a sale under $500 per sq ft in a building located within spitting distance no sexual pun intended, really of the William "$1.2M is totally reasonable for a 1 bedroom" Beaver House and 20 "of course the amenities are done" Pine.

The Skinny on All of Those Rentals at The Beave

In our furry quest to determine exactly why it is that the beautiful William Beaver House, a former CILF of the week, is perpetually empty, we decided to poke around Craigslist and see if all of those "everything is for rent" rumors are actually true.

After some interesting research, including feedback from potential renters at our favorite martini drinking flat tailed friend, it turns out that we believe that most buyers at the Beave are in fact "investors", who are sometimes European, sometimes not, but ALL trying to rent out their units in this curious building that should really be a Related property but has somehow managed to sell small chunks of units to excited international men of mystery.

From what we understand, the Beave is pimping out the sponsor's marketing agents as a "rental concierge" helping those international investors of mystery by using sales agents to show individually owned units for rent as part of the "service that the building provides" to owners. In addition, evidence abounds that investors who purchased several units are hiring individual brokers to shop around their "lot" of units for rent. Just check out all of this activity on craigslist for reference:

http://newyork.craigslist.org/mnh/abo/1169277726.html
http://newyork.craigslist.org/mnh/abo/1169442438.html
http://newyork.craigslist.org/mnh/abo/1169188503.html

As for us, we can't believe that the rental asking prices on 1BRs at the Beave of around $3000-$3300 are actually going to hold (yes, we've seen the tubs, yes the amenities are starting to shape up) in a market already flooded with new construction "investor" properties for rent (are you reading 20 Pine?).

CILF of the Week - 15 William St (The William Beaver House)

The Beave as a CILF? Oh, the irony...

We sure had quite a hard time deciding to name this comically undersold development in FiDi as this week's CILF. In addition to all of the press that this Andre Balazs pet project (no pun intended) gets for not being able to sell any darn units, we love reading the oh so snarky coverage of it's black and yellow exterior (we're pretty sure that you can see the Beave from space) as well as the uber sexualized marketing campaign targeted at wealthy wish they were oversexed Wall Streeters.

In reality, when we popped by the Beave today, we saw a truly empty building (yes, all of the rumors are true, as far as we can tell absolutely nobody lives here) even though the sales agent claims that they are 55% sold (whatevs). The common areas were like some kind of weird and empty ghost relics - sort of like discovering a fully intact Titanic underwater. The gym is beautiful, the pool looks good (and full), the roof deck however is not complete (will be done by end of May they tell us - we report, you decide), and the theater is just an under construction room. The outdoor basketball/handball court is huge but also not looking like it's going to be finished anytime soon. We were additionally sad to learn that Balazs has abandoned plans to give the over-the-lobby jacuzzi a glass floor, although we are happy to report that there is a jacuzzi and it does appear to be functional. Plans for the first floor library and restaurant (although depicted in the cool 3-D renderings in the sales office) appear to be on permanent vacation, but that's fine with us, as this building needs to really focus on completing the amenities that have at least been started.

So given the emptiness and the unfinished common areas, why make this a CILF you might ask? It turns out that much to our surprise, the Beaver House actually has really great units. The layouts of the 1BRs that we saw were good, we liked the hardwood floors, and even the oft-panned kitchens were perfectly fine. We like the little built-in murphy offices and thought that many of the features in the apartments made good use of space. In addition, we lust, lust, lust after the enormous tubs (yes, it's sexy to have them open into the bedrooms), a feature that we have not seen in any other development. We also love the in-unit washers and dryers (are you listening 90 William?).

Overall, we think this is a great building. The asking prices however at over $1MM for a 700 sq ft 1 BR are unreasonable bordering on insane way too high for even a nice building in this quiet area of FiDi. We love you though Beave and are curious whether you are going to go the hotel route or the full on rental extravaganza.