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Though 461 Dean was a financial debacle (@ $539K/unit), Forest City still claims it saved 20% on construction costs

Check out these passages from news about the "opening" of the 363-unit 461 Dean, aka B2. From Architectural Digest, 11/17/16, The World's Tallest Modular Skyscraper Welcomes Its First Residents:
Ninety percent of construction was completed off-site, at the nearby Brooklyn Navy Yard. Not only was this welcome news for neighbors, but it also cost developers 20 percent less than building a traditional skyscraper.
From Business Insider, 11/16/16, The world's tallest modular apartment building just opened in New York City — take a look inside:
Its developer, Forest City Ratner Companies, built 90% of 461 Dean in its factory at the Brooklyn Navy Yard. That allowed them to save 20% on construction costs, Forest City's VP of residential development, Adam Greene, tells Business Insider.
This is Trump-world fantasy time. The Yormarkian Greene has been peddling that 20% line for a while, and also claiming that Atlantic Yards/Pacific Park buildings are "very low density."

No savings

Let's recall that the developer aimed to save 20%, thanks to concurrent work on-site and in the factory, but instead recorded an impairment charge--an accounting loss--of $146.3 million, as I reported in February 2015. The developer had to prematurely pay off a tax-exempt loan it surely would have wanted to maintain. An activist outside investor classifies B2 as among Forest City's "value destructive transactions."

The total project cost for 461 Dean/B2, which Forest City once "estimated to approximate $162.1 million, after giving effect to the impairment," rose to $195.6 million, according to a August 2016 investor presentation, excerpted below. 

At 363 apartments, that's nearly $539,000 per unit. As Eliot Brown of the Wall Street Journal tweeted, "Well that seems unsustainable." Indeed, it was, and the new Greenland Forest City Partners joint venture decided to proceed with conventional construction for subsequent towers. Meanwhile, Forest City and former modular partner Skanska are suing each other over cost overruns regarding B2.


Low income from apartments in Brooklyn

According to the slide below, from a November 2016 investor presentation, Forest City is earning only a microscopic .1% in Net Operating Income from its two apartment buildings in Brooklyn DKLB BKLYN (aka 80 DeKalb) and 500 Sterling Place.

That is a small sample. It may have something to do with the luxury apartment glut in Boorklyn. It also may have to do with past problems (better now?) at 500 Sterling.


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