Less than 5% of condos at 550 Vanderbilt still available, with "new pricing" earlier this year. But those high-end units represent about 10.5% of building value.

In describing a marketer's effort to rebrand a maisonette at the 550 Vanderbilt condo tower with the boutique address of 655 Dean Street, I yesterday noted that, by my count, 11 of 278 units remain unsold.

It hasn't been easy to move the last units--as I wrote, as of a flash sale in December 2018, there were 32 apartments left, mostly more expensive ones. In 2019, however, pricing was further pressured by a new mansion tax.

Before the coronavirus pandemic upended things, making it even harder to sell units, I noticed in early March an advertisement on a trash can in Downtown Brooklyn, at Court and Schermerhorn streets, aiming to sell the remaining units at 550 Vanderbilt.

"Last 5% of inventory with New Pricing!" the advertisement states. "25 year tax abatement." 

The "last 5% of inventory" implied that 14 of 277 units were still available--and that conformed to the statistics I'd been keeping. (The 278th unit is for the super; that sale, to the condo board of managers, only closed this past August.)

Higher-end units remain

Since then, only three more units--plus that super's apartment--have closed, by my count.  Though that leaves fewer than 5% of the apartments available,  they tend to be higher-end units, including three penthouses plus one of the three maisonettes.

So their value, based on earlier prices (as in 3/7/17 Amendment 8 to the condo offering plan, at bottom), represents far more than 5% of the building's value. By my calculation, they as of March 2017 were priced cumulatively at $41.1 million, which represented 10.5% of the then-expected total offering price of $390.9 million. 

(Unit prices, and the building's total, have been adjusted slightly, and now, of course, there are discounts.)

As seen at right, a wider-angle view of the advertisement offered, in background, the Barnes & Noble and cinema built by original Atlantic Yards developer Forest City Ratner in the background.

The 550 Vanderbilt tower was built by Greenland Forest City Partners, with Forest City taking a 30% share and Greenland USA a 70% share. Forest City's parent Forest City Realty Trust was in later acquired by Brookfield.

New pricing, new savings, huge tax break

What did new pricing mean? Well, Unit 1410, once listed for $1,500,000 and $1,450,000, was once seeking $1,745,000, as shown in Amendment 8 to the condo offering plan. It ultimately sold for $1,377,799.

According to StreetEasy and as shown in the screenshot at right, previous sales averaged $1,478 per square foot, while the current sales--active and in contract--average $1,374 and $1,304 per square foot. 

Note that several of those are resales, which would typically represent an increase in value--but these are not typical times, given the pandemic and, at least for some units in the building, proximity to construction.

Still, there is a stunning 25-year tax abatement, engineered via a dubious linkage with a "100% affordable building," as I reported for City Limits. That enabled not only a longer period than the 15-year abatement originally planned, but significant savings on taxes.

For example, monthly taxes for Unit 1410 are projected at $39, as opposed to the originally projected $399--or $1,326 without any tax abatement. 

And Penthouse East monthly taxes are projected at $97, as opposed to the originally projected $2,674--or $3,585 without any tax abatement.

Arguably, as noted in my tweet below, some (many?) units were priced overoptimistically, especially given that the much-touted "park" is years away and some units will be subjected to construction noise.

Some back story

Remember, in December 2018, I reported for The Bridge that, to get the final 32 units sold, uber-broker Ryan Serhant, of Million Dollar Listing fame, had alerted real estate brokers to a flash sale.

Sales had moved slowly. As I wrote:

In a July 2015 Real Deal article about the seeming lack of condo inventory in Brooklyn, an executive for brokerage firm Citi Habitats predicted that the building would be sold out by the end of 2016, in time for move-ins.
In September 2015, when the developers opened a sales gallery in Brooklyn, they declared that 80 units had gone into contract thanks to pre-sales, which turned out to rely significantly on marketing in China.
In July 2016, the Real Deal reported that the Greenland Forest City claimed the building was 50% sold, with more than 140 units in contract. But that masked relatively slow progress in closing deals since the September 2015 sales gallery. By mid 2016, based on that pace, it looked like the sell-through could last 20 months, through early 2018.

Availabilities

As of today, according to the building web site, only four units are for sale. 

But that's obviously not the full complement. As stated, by my unofficial count, 11 units remain unsold.

The challenge for a large number of the remaining unsold NYC luxury units is that they were built for an era that doesn’t exist anymore and the discounting required to move them is not insignificant. https://t.co/4ebehBgIJd

— Jonathan Miller (@jonathanmiller) October 27, 2020

Indeed.
Though arguably some (many?) of the units at #550Vanderbilt were priced over-optimistically, especially since the much-touted "park" @pacificparkbk would not be finished for a while & some units subject to construction noise
→the price reductions before the pandemic.

— Norman Oder (@AYReport) October 27, 2020