Marketing begins for 550 Vanderbilt condo building; units start at $550K; marketing to China (and what about the tax break?)

Well, it's too soon for the lottery for affordable housing, but not too soon for Greenland Forest City Partners to start marketing the barely under-construction condos at 550 Vanderbilt, the first condo building at Atlantic Yards/Pacific Park.

And according to the teaser website, studios will start at $550,000, while the largest units, duplex 4-bedroom apartments, could reach $5.5 million. There will be 278 units in all.

For now, we don't know the size of a typical unit, nor its price per square foot.

None of the coverage, of course, mentioned the distortion in the rendering of the building. Nor the "carve-out" that maintains a 15-year 421-a tax break for this all-luxury building, with no requirement to provide affordable housing, after the state in 2007 otherwise reformed the law.

The $550,000 floor, actually, is a higher price than the $400,000 used in an unauthorized marketing effort by a Chinese company last year.

Marketing in China

The 550 Vanderbilt website also has a version in Chinese, and it's likely some fraction of the apartments will be marketed by the Greenland Group, the lead partner in Greenland Forest City, to the Chinese market. Consider this quote from the Real Deal's article on Chinese investment in New York:

[Jay] Neveloff, who represents Forest City Ratner in its partnership with Greenland, noted that condo projects now can actually offer a “double-edged advantage.” Not only do condos allow Chinese investors to get a piece of U.S. real estate, but they can also turn around and market those condos to potential buyers in China who increasingly want investments here, too.

“It creates a huge market for potential sales,” he said.

More on Chinese investment

The Real Deal reported on the boom in Chinese investment:

But while the appetite for New York real estate has been strong among Chinese investors for a while, it recently ramped up because of a unique combination of factors, notably a rapidly appreciating Yuan, the slowing Chinese economy, and high property prices and complicated ownership rules in China. In addition, the growing middle class in China is increasing turning to institutional investors (like insurance companies) to manage and invest their newly acquired wealth.
Still, those factors pale in comparison to recent regulatory changes in China — namely looser restrictions governing how much money Chinese companies can invest abroad.
...New York developers and property owners are already gaining in a big way, thanks to the aggressive bids from Chinese buyers that have helped to push up sale prices. “They’ll accept a lower rate of return for being in the New York market, which gives them an advantage. They’ll pay more, for good reason, than a private equity firm or investor will with a five- to 10-year horizon,” said Jay Neveloff, chair of the real estate practice at Kramer Levin Naftalis & Frankel. “It’s a great strategic move that gives them a significant advantage in buying properties.”
In many cases that long-term investment strategy has given them a leg up against competitors in New York, particularly private equity firms and REITs.