Sunday, August 17, 2008
Harlem Developers Near Default
The owners of the 1,230-unit, rent-controlled Riverton Apartments in Manhattan's Harlem neighborhood anticipate defaulting on the property's $225 million mortgage by next month, marking one of the housing bust's largest collapses of a New York City residential development.
Developers Rockpoint Group LLC and Stellar Management have told the mortgage's servicer that they made minimal progress toward their goal of converting half of the 61-year-old complex's units to market-rate housing since obtaining the mortgage in December 2006, according to Trepp LLC, a data-and-analytics provider that tracks commercial-mortgage securities.
A Rockpoint representative on Thursday declined to comment.
The Riverton mortgage, like many commercial loans in recent years, was sliced up and sold to multiple investors as bonds. The market for such commercial-mortgage-backed securities has been all but shut since the credit crisis began last summer. Defaults on those bonds remain rare, but mortgages on apartment-complex developments have gone into default more than those on retail, office or warehouse properties.
Most of those defaults have occurred in Florida, Texas and parts of the Midwest. The New York City residential market, so far, hasn't suffered the sharp declines in values seen in other parts of the country. "It's surprising that you'd have a New York City multifamily [default] happening so quickly," said Manus Clancy, Trepp's senior managing director.
Write to Kris Hudson at kris.hudson@wsj.com
1 comment:
The trend of reconstructing old buildings and turning them into tall towers is slowly catching up in Thane, Mumbai. Quite often, people are cheated by developers during this process due to their ignorance. Mr. Srinivas Ghaisas, a legal advisor from Thane, recently held a discussion with those attending the Aatre Katta session in Thane, where he recommended the following steps to avoid getting duped:
•When you decide to reconstruct the building, call an architect to survey the place and estimate the floors that can be increased and other technical details
•Go for tendering process while selecting a builder
•Shortlist the tender and inquire into information given by the builder in the tenders, most of the work mentioned by them in these tenders did not exist
He also added that, “Take a written offer from the builder and then decide your terms in the society meeting. If the builder is building an extra six floors, it is your right to enjoy some profit earned by the builder. Make your own development agreement and shortlist the demands. Decide which demands are negotiable and which demands are non-negotiable and which could be negotiated. Make a final agreement based on the offer given by the builder and the final demands put forth by you. When the builder knows that he is dealing with knowledge able people he will agree to most of the demands put forth by you."For more view- realtydigest.blogspot.com
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