What was KPMG smoking? Report claims 75% of Meier's On Prospect Park has been sold; other statistics are way off
Well, not only are projections about condo values questionable, as I wrote earlier today, but KPMG's report has some very shoddy research. Consider that the report (dated August 31) claims that Richard Meier's On Prospect Park is 75% sold. (Only rental buildings are pre-leased.)
However, the New York Times reported September 27:
While the developers say half of the building’s 99 units have been sold, the real estate Web site StreetEasy.com documents only 25 closings through public records.
(That Meier building is almost surely the source of the stratospheric $1225/sf upper-end sales figure for Prospect Heights cited in the report.)
KPMG claims that the Oro Condos are also 75% sold. But just this week Crain's reported that prices at Oro had been slashed 25%.
What about 80 Metropolitan in Williamsburg? The report claims that it's 75% sold, but on April 30 the New York Post reported that it was just more than 40% sold.
Even the 37% figure on the failed Forte Condos is off. Crain's reported that 37 of 108 apartments had sold; that's 34%.
I'll leave it for others to fact-check the other buildings.
What's left out? The waterfront
The table, according to KPMG, "summarizes new development projects comparable to the Subject Property’s, over 100 units." But there are some curious omissions.
While the table includes the 114-unit 80 Metropolitan Avenue in Williamsburg, it omits larger (and more troubled) Williamsburg buildings like The Edge and Northside Piers. In a 7/12/09 New York Magazine article headlined The Billyburg Bust--published well before the 8/31/09 date on the KPMG report--those buildings are said to be struggling.
New York reported:
The Edge—which, in addition to offering 360 “moderate-income” rentals, includes two towers of 570 condos, plus all the usual amenities—is expected to be completed by the end of year; right now, just over 20 percent of the units have been sold.
...It is hard to imagine the Edge successfully selling at its current prices (about $950 a square foot) given what’s happening next door at Northside Piers. That project was designed to include three towers around 30 stories each, one of which is complete, another almost finished. When Tower One hit the market in 2007, sales were initially brisk, with units going for an average of $900 a square foot. But only 70 percent of that building had sold by the time I visited, and with sales already begun on Tower Two, Toll Brothers had announced the most dramatic price cuts the neighborhood has seen so far, with some units in the first tower being reduced by as much as 36 percent from their listing price.
And what of One Brooklyn, the building inside Brooklyn Bridge Park, also omitted in the chart? On September 10, the Brooklyn Paper reported that some buyers were being offered a free parking space and a free Audi--a discount of more than $170,000. The building "remains two-thirds vacant," the newspaper said.