more developer haircuts, as 415 Greenwich lofts cut to close

big discounts, little discounts
The Manhattan lofts (and townhouses) at Tribeca Summit, 415 Greenwich Street, have had a … errrrdifficult time selling out. The project started marketing in 2006, with the first closed sales in this 66-unit development in the First Quarter of 2008. (Can you spell P  E  A  K ??) I have noted five sales in June on the Master List of Lofts Sold Since November 2008, as sales wind down here, four of which were at substantial discounts from the last asking price. (Can you spell N  E  G  O  T  I  A  B  L  E ??)

  "sq ft" deed cleared at asked last discount 2006 price orig discount
#4C 2,261 6/29/2010 $3,150,000 $3,900,000 19.2% $3,250,000 3.1%
#6H 2,781 6/21/2010 $3,381,608 $4,400,000 23.1% $3,715,000 9%
#5H 2,781 6/10/2010 $3,054,750 $4,235,000 27.9% $3,665,000 16.6%
#5E 1,751 6/7/2010 $1,960,131 $2,800,000 30% $2,600,000 24.6%
#7H 2,781 6/4/2010 $3,665,700 $4,100,000 10.6% $3,815,000 3.9%

"1960s game shows for $200, Alex"
Of course, I have no idea of the finances of this project, other than to point out the obvious fact that any project that started selling in April 2008 that has not finished yet has spent many ITAL more dollars carrying inventory than originally planned. Whether it is lenders who are creating a sense of urgency, or simple prudence, the June 2010 sales show an attitude Monty Hall would be proud of.

Notwithstanding that this developer has been at this far longer than originally planned, it is interesting that the original prices were much closer to the clearing prices than the last asking prices. The typical pattern was that the developer raised prices a couple of times before they were ready to close any units, then held (high) before formally taking a unit off the market (were they rented??), then bringing them back in 2010 at the last (high) price. From which they were very willing to negotiate. #6H is an example:

March 23, 2006 new $3,715,000
May 15, 2007   $3,865,000
April 14, 2008   $4,400,000
May 4, 2008 "delisted temporarily"  
Jan 12, 2010 back on market $4,400,000

Note that the developer was secretly negotiable on #6H, ending up the negotiation 23.1% off the last ask of $4.4mm.

a la 166 Perry Street, 135 West 14 Street

The last time that I hit on a developer offering big haircuts was my April 1, developer takes 27.2% haircut to close 166 Perry Street. The new development at 135 West 14 Street took a smaller haircut when I hit it on January 19, the last 13% haircut drives new development deal at 135 West 14 Street.

This is not a secret technique.

© Sandy Mattingly 2010

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