Lobby of Graceline Court
The Real Deal took a look at 20 NYC buildings that have seen the highest percentage of contract disputes since the start of the downturn. Two are in Harlem falling in at number 5 and 8 respectively. While we have not been to look at 5th on the Park, the monstrosity that sits on the site of a former church in the Mount Morris Historical district, we did take a look at Graceline Court this summer. The layouts and views at Graceline were some of the best in Harlem. We’ll be posting a separate piece on Graceline after the holidays.
5. Graceline Court at 106 West 116th St. in Harlem: Lowen Development
Disputes on at least 6 of 32 units (19 percent) have been filed with the AG’s office. Lowen declined to comment.
8. 5th on the Park at 1485 Fifth Ave. in Harlem: Uptown Partners
Contracts on at least 14 out of 160 condo units (9 percent) and two parking spaces are in dispute. Cases involving eight of those units and the two parking spaces, which are worth a combined $7.6 million, are filed in state and federal court. Six disputes are filed with the AG’s office. Attorney Lawrence Weiner said the ILSA cases involving seven units in this building could be among the first to be decided in New York. A trial is set for Jan. 26. Developer Lew Futterman said many buyers simply can’t come up with large enough down payments. Uptown Partners has tried offering a rebate toward the down payment and now has a second mortgage program to help bridge the gap. Still, in addition to the 14 contract disputes, Futterman said, “30 to 40 people are sitting on the fence — not saying ‘No, we’re not going to close,’ but just sort of quasi ignoring us.”
Read: The Real Deal
Christopher
January 4, 2010
Anonymous, I beg to differ with your closing statement. The UWS is still far pricier than much of Harlem and the preponderance
of co-op units makes it difficult for the first time buyer to get a foot on the property ladder.
Anonymous
December 25, 2009
Is your lead title a rhetorical question? Look, for Harlem to have 2 of the top 10 is not good, all things considered in that Harlem has a very tiny number of the new developments in the last 3 or 4 years….yet 2 in the top 10. Also this is completely distorted in that for example for 5th on the Park, when they say 9% or 14 of 160 units….the total number of units is 160 – that is not the number of units in contract. The number of units in contract at that development might easily be 28, and in truth and fact OF THE UNITS in contract, 50% might be in dispute (same with Graceline). Look, all I am saying is I highly doubt there are any buyers of either Harlem bldg that are content with going into contract a year ago, or whatever. I know two buyers are the second most expensive development in Harlem, plush apartments, they went into contract at full retail at the height of the market at $1M level and very much regret it today as they probably could not sell their places without taking a 30% loss. That’s the facts if you look at the sales at the Normandy of people that bought 2 – 3 years ago. Furthermore the bigger nonsense and joke of these developments like 5th on the park? No bank, no mortgage company is going to swallow the bait and believe the valuations anylonger, those days are gone. I work real estate, am familiar with the landscape with the mortgage markets, and you can’t get a mortgage at 5th on the Park putting down10% for example. That’ s why they’re turning into rentals. The nonsense of the last years needed the mortgage markets to wink and nod and buy into the nonsense. Those days are gone. Do your research, there are some classic cases of “would be buyers” of 5th on the Park, that went into contract, issued a 10% downpayment/deposit, lined up a mortage and waited for the project to get completed. Over that time the game changed,the inflated prices exposed, and these people that went into contrac have had their formerly greenlightd loans yanked, pulled, cancelled….and cannot get another mortgage ANYWHERE at the level of where they entere contract. Hence these are people looking at losing their 10%, etc. deposits. This is real, it’s happening at 5th on the Park, and what’s very poor about this article above? It does not address the Mortgage banks that have turned SOUR on Harlem condos new construction. Most all these disputes you see are from people who’s mortgages have been yanked, and their strategically trying to get out of their commitments without losing their deposits. They got caught in the vortex of the hype (1) Commite and issued Deposits and were exposed at that point. (2) Then the markets changed and the funding source they lined up reversed as they knew the apartments were not worth anything close to what the mortgages were. The real article here should be on the all the banks and funding sources that refuse to buy into the prices Harlem developments want. The markets don’t have confidence in Harlem going forward, that’s all. Sure, you can still get a mortgage, however on the open market? Ha! Good luck, you’re going to have to put down 20% and even then I doubt many banks would accept the prices 5th on the Park wanted. The scheme, the nonsense, the Real Estate shaninigans of the last years needed that silent partner, the banks to juice and rig and prop the whole scheme. Remove the mortgage fire, the fuel, and it’s close to a house of cards, just watch those who bought 3 years ago, and sell now for 30% losses. Again, the Normandie is the model of those that have lost a nice chunch of change, short term, in Harlem.
That sale of that Condo unit at the Normandie a couple of months ago at a loss of 30% was due the few warm bodies, the actual people that can even get a mortgage. I would guess 80% of the buyers of the number of units in contract at 5th on the Park are in dispute, just what I hear. It’s not “where are buyers backing out of Harlem”, it’s “Why did the Mortgage markets cancel formerly approved loans on Harlem Condos”. Probe that fact, that reality and it’s not a pretty picture. The truth is today, New Harlem Construction Prices are the same (and in some cases higher) than prices in far more desireable places of Manhattan. I love Harlem, but I would be hard pressed to buy in Harlem when I can get close to the same thing on the UWS for the same money.
uptownflavor
December 25, 2009
The article referenced addresses many of the points you made in your comment. Take a look-see: http://therealdeal.com/newyork/articles/fighting-buyer-mutiny
There is no ‘angle’ to the post, we are not a commercial real estate site. We are simply referencing information that might be of interest to our readers. Thanks for your comments.