What was KPMG smoking? Report claims 75% of Meier's On Prospect Park has been sold; other statistics are way off
KPMG's Atlantic Yards market study, conducted on request of the Empire State Development Corporation (ESDC), backs up the assertion that Atlantic Yards might be completed in the announced ten years, rather than, as then-ESDC CEO Marisa Lago said in April, "decades."
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.
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.
My information, which may not be perfectly up-to-date, but which was at least straight from the horse’s mouth is that On Prospect Park was, on a square foot basis, the second most expensive condominium project in Brooklyn, second only to the also mentioned One Brooklyn Bridge Park that is now marketing with the offer of a free car and free parking space. Actually, given the extraordinary height of the One Brooklyn Bridge Park building’s ceilings “square feet” is probably not the fair way to measure space in that building- It ought to be “cubic feet.” So, in essence, that makes On Prospect Park the most expensive p/s/f building in Brooklyn.
ReplyDeleteBut to compare either On Prospect Park or One Brooklyn Bridge Park to a building that would be next to the Ratner Malls, next to a sports arena (generally recognized as quite blighting), next to open rail yards and acres of parking lots, is ridiculous. Both On Prospect Park or One Brooklyn Bridge Park are replete with their respectively resplendent views of two of the very best parks in the city, one extant, the other coming with some not entirely unjustified super-hype paving its way. One Brooklyn Bridge Park additionally has spectacular views of the harbor and lower Manhattan skyline and eventually should be just feet away from a marina, kayaking and sports. One Brooklyn Bridge Park, at the foot of Joralemon Street, abuts becoming an extension of Brooklyn Heights, the Borough’s number one prestige neighborhood. On Prospect Park similarly abuts or is considered to be in Park Slope, another of Brooklyn’s most prime and high priced neighborhoods. Park Slope was recently named one of the ten best neighborhoods by the American Planning Association.
Interestingly, both Park Slope and Brooklyn Heights are especially valued as historic neighborhoods and On Prospect Park or One Brooklyn Bridge Park manage to fit into these neighborhoods reasonably well, where by comparison, Atlantic Yards will be doing incredible damage to the ability of its surrounding neighborhoods even though they would, but for AY, be ascending in their appreciated status.
Michael D. D. White
Noticing New York
http://noticingnewyork.blogspot.com/
For several years Richard Meier's On Prospect Park was touted a 116-unit masterpiece. Turned out to be a hard sell, banks got nervous with only about 20% of the units sold & occupied. So recently Developer Sleight got the % up a bit -- 17 units were combined -- reducing the On Prospect Park total to 99. Now the percent sold is an underwhelming 25% (25 units) and prices have been reduced by 40%. After several years on the market it's clear that not many people want to live in Richard Meier's aqua-tinted aquarium -- despite its agreeable situation. I expect On Atlantic Terminal Mall would be an impossible sell.-- Patti Hagan
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