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  #4381  
Old Posted Dec 13, 2016, 7:58 PM
CityGuy87 CityGuy87 is offline
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The luxury market has softened a bit the last year or so. It's the reason JDS is keeping the units at Steinway off the market for another year. They don't want to give the "relative" discounts that you see now at 432 Park and One57. Unlike office towers that usually get a significant signing before they can get financing, residential towers are largely built on spec. It really wasn't that long ago Extell got financing for the Manhattan Square tower currently rising, a different sort of residential tower.
Considering the fact that Extell is well into construction for this tower, will that be a factor in convincing banks to give them a construction loan? At this point in the development process, wouldn't it be a real pain in the ass for them to pause on construction only to resume later granted Extell is unable to obtain financing before their July 2017 deadline and would it even be possible to stall construction at this stage?

Also, didn't Extell say they were going to launch sales before the end of year? I guess even Gary Barnett is losing faith in the market now but who knows?
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  #4382  
Old Posted Dec 14, 2016, 1:09 AM
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Considering the fact that Extell is well into construction for this tower, will that be a factor in convincing banks to give them a construction loan? At this point in the development process, wouldn't it be a real pain in the ass for them to pause on construction only to resume later granted Extell is unable to obtain financing before their July 2017 deadline and would it even be possible to stall construction at this stage?

Also, didn't Extell say they were going to launch sales before the end of year? I guess even Gary Barnett is losing faith in the market now but who knows?

Doubtful they will pause construction. We've seen some instances where that happened, Gehry's Beekman St tower Downtown is an example.

As far as sales, Barnett has said that would start by the end of the year. As far as a drop in the market, he has also said that it wouldn't be a problem because he doesn't need to get One57 level prices here.


http://ny.curbed.com/2016/8/11/12443...c-sales-update

Quote:
the One57 developer announced that sales for Central Park Tower will launch later this year. The move confirms that the 1,550-foot condo won’t be following the lead set by its neighbor at 111 West 57th Street, where sales were put off until next year amid a slowing market.


https://www.bloomberg.com/news/artic...-s-bondholders

Quote:
Barnett acknowledged slowing demand for New York’s priciest apartments, but said the risk is mitigated for Israeli creditors because the Extell unit issuing the bonds is backed by a pool of diverse properties that also includes hotels, rentals and less-expensive condos. As for his upcoming luxury developments -- including Central Park Tower on West 57th St. -- Barnett said he acquired land for them years ago at favorable costs, which means he doesn’t need to sell condos at record prices in order to see a return.

“One of the things we’ve tried to make clear to the bond investors is that Extell Ltd. is not dependent on getting these super-high luxury prices,” Barnett said. “There are many ways of repaying the debt and we don’t anticipate we’ll have a problem.”


http://therealdeal.com/2016/10/05/in...estate-tetris/

Quote:
Extell is in talks with several potential lenders for the $900 million construction loan — though Barnett declined to confirm any names, sources said the list includes JPMorgan Chase and the Korea Investment Corporation.

But the developer is in a serious time crunch. It has just three months to repay a $235 million land loan from Blackstone Group, which it secured in 2013. To repay the loan, Barnett is counting on securing the construction loan rather than going through a refinancing. If he’s unable to repay Blackstone by the deadline, the loan goes into a one-year standstill agreement, whereby the private equity giant can’t demand an immediate settlement until the latter part of 2017.

...if Barnett can’t close on a construction loan by July, SMI has what amounts to a real estate get out of jail free card: It can force Barnett to buy back its equity stake for roughly $300 million, plus interest. And if he can’t come up with the funds to buy SMI out by July 2018, it can push him to sell the whole project.

...Barnett believes he’s on solid footing. “It’s an extraordinarily low loan-to-value loan,” he said. “We’re going to be looking at less than $2,000 a foot [basis] for a construction loan and 220 [Vornado Realty Trust’s 220 Central Park South] is averaging [sale prices of] between $8,000 and $9,000 a foot.”
Quote:
A possible source of funds, Israeli investors believe, is a sale or refinancing of Extell’s 555 10th Avenue. The 52-story, 478-unit luxury rental project will begin leasing in October and IBI forecasts its annual net operating income at $30 million.

When RXR reduced its mezzanine loan for the three Extell projects, it also restructured the deal so that Extell has greater financial flexibility on 555 10th. Extell may now sell or refinance its stake, which is valued at between $300 million and $400 million, based on a total asset valuation of between $700 million and $800 million, Saylan said.

Extell has already sold off other assets, including a site at 134 West 58th Street to Stanley Wasserman’s S.W. Management for $61.5 million and another at 12 West 48th Street to DNA Development for $37.2 million. It’s also looking to sell a site at 30-32 East 29th Street.

“If the economics make sense to sell, I’ll sell,” Barnett said. “If it makes sense to keep long-term, I’ll keep it. I like owning New York real estate long-term — but not if it’s stupid.”

But Barnett said he won’t necessarily move funds from these prospective sales into CPT. He has plenty of other projects, such as CityPoint in Brooklyn and a development site on East 86th Street, into which the money could go.

https://www.bloomberg.com/news/artic...ash-at-a-price

Quote:
“By having another year and more resources to continue building, it potentially will be easier -- if they’re 20 stories out of the ground -- to convince banks to give a construction loan,” said Eisenberg, who analyzed Extell’s filings but doesn’t advise the firm.

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Last edited by NYguy; Dec 14, 2016 at 1:22 AM.
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  #4383  
Old Posted Dec 15, 2016, 1:17 PM
jayden jayden is online now
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Is that 131 floor count confirmed?
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  #4384  
Old Posted Dec 15, 2016, 5:44 PM
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Is that 131 floor count confirmed?
It's just marketing-speak. Obviously if this building had 131 floors, it would be 2,000+ ft.

Superluxury condos have very high ceiling heights these days, and the lower floors are a department store with up to 30 ft. ceilings.
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  #4385  
Old Posted Dec 16, 2016, 11:59 PM
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http://therealdeal.com/2016/12/16/ex...al-park-tower/

Extell to refi $235M land loan at Central Park Tower
Fortress, Baupost, JPMorgan among new lenders on the project



December 16, 2016
By Katherine Clarke


Quote:
The one-year loan gives Barnett breathing room to secure a roughly $900 million construction loan for the 233-unit, 88-story ultra-luxury project, which is set to rise at 217 West 57th Street.

The company secured the Blackstone loan in 2013 and had been hoping to secure a construction loan to replace it, rather than going through a refinancing. Had Extell failed to refinance the debt, its interest rate on the loan would have shot up to 14 percent from 8 percent as part of a standstill deal.
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  #4386  
Old Posted Dec 17, 2016, 3:38 AM
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Well, that's some positive news... some breathing room at least.
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  #4387  
Old Posted Dec 19, 2016, 8:33 AM
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Well, that's some positive news... some breathing room at least.
Only just. Consider what this does to the comfort level of the general contractor and all the sub-trades. Hopefully the market doesn't read this as a negative signal.
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  #4388  
Old Posted Dec 19, 2016, 6:10 PM
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Not to get into politics - again NOT TO GET INTO POLITICS, or to discuss the president elect, but we'll see how this plays on the market...

Did I mention this WAN'T to discuss politics? I think we're mature enough to handle this clip.


Video Link
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  #4389  
Old Posted Dec 19, 2016, 10:56 PM
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Hard to watch, but there is truth that if he has good political and business relationships with Putin and Russian corporations, their CEOs and VPs or whatever equivalent will want to be near Trump Tower to conduct their deals in the "Whitehouse North" and they'll have the funds to pay for those super-expensive condos. (If this seems political, remember that it's hard for it not to given the subject matter, but I said everything I did based on fact.)
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  #4390  
Old Posted Dec 19, 2016, 11:28 PM
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Originally Posted by JACKinBeantown View Post
Hard to watch, but there is truth that if he has good political and business relationships with Putin and Russian corporations, their CEOs and VPs or whatever equivalent will want to be near Trump Tower to conduct their deals in the "Whitehouse North" and they'll have the funds to pay for those super-expensive condos.
I think you must have looked at a different video. The clip was about a return of Russians to the luxury real estate market in Manhattan, not about anyone being near the president elect to conduct business. It's not hard at all to differentiate that from one's own political beliefs, which do not belong in the thread.
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  #4391  
Old Posted Dec 20, 2016, 5:45 AM
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Video seems pretty straightforward and logical to me.

Last edited by NYguy; Dec 20, 2016 at 1:57 PM.
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  #4392  
Old Posted Dec 20, 2016, 6:05 AM
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Yes well that video was proof that Russians want a positive relationship with the US.
This is exactly why the Central Park Tower will command sky-high rates from international buyers.
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  #4393  
Old Posted Dec 20, 2016, 2:16 PM
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Yes well that video was proof that Russians want a positive relationship with the US.
This is exactly why the Central Park Tower will command sky-high rates from international buyers.
That video is proof that Manhattan will continue to be a magnate for international buyers. That may slow or pick up due to a variety of issues, but it will always be true.

Even towers like One57 and 432 Park saw "discounts", they were still among the top in Manhattan.



http://therealdeal.com/2016/12/19/on...below-its-ask/

Quote:
One57 apartment sells for $13M below its ask
The 6,000-square-foot apartment was originally listed for $58.5M


December 19, 2016
By Miriam Hall


http://therealdeal.com/2016/12/20/th...sales-of-2016/

Quote:
A decade after developer Harry Macklowe acquired the site for 432 Park Avenue, sales at the supertall condo tower dominated 2016’s top residential deals.

Six of the building’s ultra-luxe pads were among this year’s 10 priciest closed sales — including the building’s $87.7 million penthouse, which closed in September. The spate of big-ticket deals at 432 Park can be attributed to the fact that three years after sales launched, developers Macklowe Properties and CIM Group finally obtained a certificate of occupancy in late November 2015, allowing buyers to close on their purchases.
There have been other big sales, but these are the sales that are closed.


Quote:
1. 432 Park Avenue, PH 96 | $87.7 million

2. 432 Park Avenue, Unit 88 | $60.9 million

3. 432 Park, Unit 79 | $59.1 million

4. 4 East 66th Street, 5 | $52 million

5. 212 West 18th Street, PH2 | $45 million

6. 432 Park Avenue, Unit 64A | $44.8 million

7. 432 Park Avenue, Unit 82B | $43.3 million

8. 33 East 74th Street | $42.8 million

9. 20 West 53rd Street, PH | $42.6 million

10. 432 Park Avenue, Unit 77B | $39.2 million


With investors - an important part of the ultra luxury market - showing more interest and a return to the market, it will be easier for Barnett to obtain the financing that has been difficult to get up to this point.

That is the point of the video. It is not an invitation for anyone's political talk or beliefs.
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  #4394  
Old Posted Dec 20, 2016, 4:37 PM
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That video is proof that Manhattan will continue to be a magnate for international buyers. That may slow or pick up due to a variety of issues, but it will always be true.
The video only talks about Russian international buyers... what about other countries?

Any increase in Russian investment [because they like Trump] might coincide with a corresponding (and larger) decrease in investments from other nations [because they dislike Trump and are altogether much larger than Russia].

If this comment merits deletion than the original video posted merits deletion as well. I will keep reposting this comment until I receive an explanation as to why mine keeps getting deleted and others don’t.
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hmmm....

Last edited by streetscaper; Dec 20, 2016 at 6:35 PM.
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  #4395  
Old Posted Dec 20, 2016, 6:22 PM
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The video only talks about Russian international buyers... what about other countries?
The video doesn't say anything about other countries, as you note. It's spelled out very clearly, and its not an opinion piece. The Russians have played a big role in the Manhattan luxury market, probably more than any other country. Yes, it is significant if they return to Manhattan's luxury market which has slowed enough in the past couple of years to put some developments on hold.
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  #4396  
Old Posted Dec 20, 2016, 6:43 PM
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The international luxury market (which is what made 57th street the billionaire's boulevard) attracts those VIP that are making an investment. This is not their primary residence.
Most cities would love to host such wealth.
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  #4397  
Old Posted Dec 20, 2016, 9:47 PM
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Yes, it is significant if they return to Manhattan's luxury market which has slowed enough in the past couple of years to put some developments on hold.
Perhaps not as significant as the foreigners turned off/away from Manhattan's luxury market. So it might not make a significant difference at all if there is more Russian investment.

From a NYTimes article on effect of Trump's election on the New York real estate market:

Quote:
...It’s also unclear what effect the policies of the new administration might have on foreign buyers. While Russians might feel welcome, given the admiration Mr. Trump has expressed toward that country’s president, protectionist policies and rhetoric could have a chilling effect on investors from China and Arab nations.....

...Mr. Mermelstein, an international real estate lawyer, fielded jubilant calls from Russian clients hopeful that Mr. Trump’s victory would improve ties between their country and the United states. His Chinese clients, though, expressed concern about the prospect of a protectionist American administration. “It’s hard to tell what it’s going to look like a year from now,” Mr. Mermelstein said...
Also, I would think that there are more potential Chinese buyers than Russian buyers in the luxury market.
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  #4398  
Old Posted Dec 20, 2016, 10:20 PM
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Originally Posted by streetscaper View Post
Perhaps not as significant as the foreigners turned off/away from Manhattan's luxury market. So it might not make a significant difference at all if there is more Russian investment.

From a NYTimes article on effect of Trump's election on the New York real estate market:

Also, I would think that there are more potential Chinese buyers than Russian buyers in the luxury market.

Again, there is no evidence of Chinese buyers turned off of the market for reasons you state. There are a variety of reason why buyers from various countries may have slowed on real estate purchases, but as far as any potential effect the Chinese have on this tower, I would say that's already been given...


https://www.bloomberg.com/news/artic...ires-row-tower

Quote:
Extell Finds Chinese Partner for New NYC Billionaires’ Row Tower

by Oshrat Carmiel
August 11, 2016


http://nypost.com/2016/05/02/another...-mega-mansion/

Quote:
Another Russian billionaire is planning another NYC mega-mansion

By Jennifer Gould
May 2, 2016


The first crop of post-Soviet billionaires still have a profound presence on the New York trophy real estate scene.

Len Blavatnik, Kuzmichev’s billionaire crony and serial New York real estate buyer, paid $80 million for New York Jets owner and shampoo heir Woody Johnson’s co-op at 834 Fifth Ave. — where Wall Street titan John Gutfreund currently has his duplex on the market for $120 million.

A third Russian billionaire, Roman Abramovich, bought three Upper East Side mansions at nearby 11-15 E. 75th St., as The Post exclusively reported.

Abramovich hopes to join them to create a megamansion after he receives approval from the landmarks preservation commission.

You're reaching for something that isn't there to make a point, and I say give it up already. This is about the market returning, which we always knew it would. New York is New York, and that doesn't change. People from around the world will always want to put money here, regardless of politic.


http://www.forbes.com/sites/sarahsu/.../#173128a036a6

http://www.nytimes.com/2016/12/19/ny...-new-york.html
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  #4399  
Old Posted Dec 20, 2016, 11:02 PM
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Originally Posted by NYguy View Post
Again, there is no evidence of Chinese buyers turned off of the market for reasons you state. There are a variety of reason why buyers from various countries may have slowed on real estate purchases, but as far as any potential effect the Chinese have on this tower, I would say that's already been given...


https://www.bloomberg.com/news/artic...ires-row-tower





http://nypost.com/2016/05/02/another...-mega-mansion/




You're reaching for something that isn't there to make a point, and I say give it up already. This is about the market returning, which we always knew it would. New York is New York, and that doesn't change. People from around the world will always want to put money here, regardless of politic.


http://www.forbes.com/sites/sarahsu/.../#173128a036a6

http://www.nytimes.com/2016/12/19/ny...-new-york.html

The video you posted says:

"The number of Russian buyers interested in buying US properties spiked... Right now the real estate industry waits to see if interest turns to purchase"

The NYTimes articles state:

"Chinese clients, though, expressed concern about the prospect of a protectionist American administration. “It’s hard to tell what it’s going to look like a year from now,” Mr. Mermelstein said"


So there's really no hard evidence yet that says how this will turn out. There is only interest growing from some people (in your video) and interest wavering or decreasing from other people (from my article). If I'm reaching, as you say, then you're reaching as well. I would love to believe your narrative (that's all it is so far... a narrative) and really hope that this election is a boon for the real estate market, but I have to be realistic that there's another side of the coin to the Russian optimism. We have to wait and see. Again, I hope you're right, but right now the luxury market has not bounced back yet (and certainly no evidence for an increase or decrease in investment broken down by country since Nov 8th, 2016)
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  #4400  
Old Posted Dec 20, 2016, 11:07 PM
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Originally Posted by streetscaper View Post
The video you posted says:

"The number of Russian buyers interested in buying US properties spiked... Right now the real estate industry waits to see if interest turns to purchase"

The NYTimes articles state:

"Chinese clients, though, expressed concern about the prospect of a protectionist American administration. “It’s hard to tell what it’s going to look like a year from now,” Mr. Mermelstein said"

The video showed a 35% spike already in Russian interests. Your article gave some vague statement about some "concern" though not that they aren't interested outright. I'm sure there is concern all around, as there should always be. You haven't shown a case for anything, it's best you stop wasting time with whatever point it is you seek.



Another older aerial...


Brendan Bannister

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