Despite long waits to sell $2M+ condos in Brooklyn, Greenland Forest City didn't cut prices at 550 Vanderbilt but maneuvered lowering cost of ownership
Selling a luxury condo in Brooklyn? You could be in for a long wait, The Real Deal reported yesterday, saying units asking for $2 million-plus have been on the market an average of 249 days, or more than eight months.
Well, how does that apply to 550 Vanderbilt? Sales of some units launched in June 2015, Curbed reported, and sales presentations in China began that month, though later September 2015 was called the official launch.
So it's been at least 26 months, or maybe 29 months. By my calculations, based on public documents, only 10 of 55 units listed for $2 million-plus have sold, though it's certainly possible that some sales are in process.
Lowering the cost of ownership, though not cutting prices
Given slow sales, many condo sponsors would cut prices. The Real Deal reported that sellers were "taking an average price cut of 24 percent on listings for $2 million or more during the third quarter of 2017," according to Miller Samuel data.
But Greenland Forest City Partners has not cut prices. Instead, as I reported for City Limits, they maneuvered to significantly lower the monthly cost of ownership for more expensive units, vaporizing 97 percent of taxes by connecting 550 Vanderbilt to an affordable building down the block.
That means the cost of ownership goes down. How much? One particularly glaring example, as I reported: the four-bedroom, 4.5-bath Penthouse West, priced at $6.86 million, was formerly projected to require annual taxes of $42,711 (already a 20 percent discount off taxes without 421-a). Now, annual taxes would be just $1,665.
Well, how does that apply to 550 Vanderbilt? Sales of some units launched in June 2015, Curbed reported, and sales presentations in China began that month, though later September 2015 was called the official launch.
So it's been at least 26 months, or maybe 29 months. By my calculations, based on public documents, only 10 of 55 units listed for $2 million-plus have sold, though it's certainly possible that some sales are in process.
Lowering the cost of ownership, though not cutting prices
Given slow sales, many condo sponsors would cut prices. The Real Deal reported that sellers were "taking an average price cut of 24 percent on listings for $2 million or more during the third quarter of 2017," according to Miller Samuel data.
But Greenland Forest City Partners has not cut prices. Instead, as I reported for City Limits, they maneuvered to significantly lower the monthly cost of ownership for more expensive units, vaporizing 97 percent of taxes by connecting 550 Vanderbilt to an affordable building down the block.
That means the cost of ownership goes down. How much? One particularly glaring example, as I reported: the four-bedroom, 4.5-bath Penthouse West, priced at $6.86 million, was formerly projected to require annual taxes of $42,711 (already a 20 percent discount off taxes without 421-a). Now, annual taxes would be just $1,665.
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