New York's "Billionaires Row" Suffers Biggest Foreclosure In History

In the latest sign that NYC’s ultra-high end property market is on the verge of imploding after a wave of overly aggressive development, another luxury condo at Manhattan’s One57 tower, a member of “Billionaire’s Row,” a group of high-end towers clustered along the southern edge of Central Park, has gone into foreclosure - the second in the span of a month.

The 6,240-square-foot (580-square-meter) full-floor penthouse in question, One57’s Apartment 79, sold for $50.9 million in December 2014, making it the eighth-priciest in the building.

“It’s probably the most-expensive foreclosure we’ve ever seen in luxury development,” said Donna Olshan, president of high-end Manhattan brokerage Olshan Realty Inc. “I don’t know of a foreclosure that’s larger than that.”

According to Bloomberg, the shell company that purchased the property took out an unusually large mortgage and promised to repay in full a year later.

In September 2015, the company took out a $35.3 million mortgage from lender Banque Havilland SA, based in Luxembourg. The full payment of the loan was due one year later, according to court documents filed in connection with the foreclosure.

 

The borrower failed to repay, and now Banque Havilland is forcing a sale to recoup the funds, plus interest.

And, in what’s become a strong contender for the “no sh*t” quote of the day, a spokeswoman for Extell Developments, the developer that built One57, said there' s a lesson to be learned from this unfortunate situation.

“This shows that too much leverage is probably not wise,” Anna LaPorte, an Extell spokeswoman, said of the most recent default.

A June 14 auction was scheduled for a 56th-floor apartment at the same tower. That condo was purchased in July 2015 for $21.4 million. Public records have yet to reveal any transfer of ownership for that property.

Investors across the NYC property spectrum should take note; prices in Manhattan and Brooklyn have risen so quickly they’ve effectively pushed marginal buyers out of the market and forced renters to devote a greater share of their income to housing. Today, more than 30% of Americans pay half their income in rent - the highest percentage in decades.

And with more investors in the city concentrating on luxury properties, some ultra-luxury buildings like One57 are struggling with unsustainable vacancy rates of nearly 40%.

Until last month, no apartments on Billionaires’ Row, which also includes 432 Park Ave., had been subject to a foreclosure auction, according to PropertyShark. The loss of a Manhattan residential property to creditors is a rare event, regardless of the unit's price-tag: Only 27 new residential foreclosures in the borough in the first quarter.

Could this be the start of a trend? We think so. Which leads us to our next question: How, exactly, does one short the luxury real-estate market?

We also look forward to The Left deciding that a probe into this transaction is warranted, just in case it was some complex way to transfer Russian funds to Trump... (only half-kidding).

Comments

Manthong Fri, 06/23/2017 - 21:11 Permalink

/* Style Definitions */
table.MsoNormalTable
{mso-style-name:"Table Normal";
mso-tstyle-rowband-size:0;
mso-tstyle-colband-size:0;
mso-style-noshow:yes;
mso-style-priority:99;
mso-style-parent:"";
mso-padding-alt:0in 5.4pt 0in 5.4pt;
mso-para-margin-top:0in;
mso-para-margin-right:0in;
mso-para-margin-bottom:10.0pt;
mso-para-margin-left:0in;
line-height:115%;
mso-pagination:widow-orphan;
font-size:11.0pt;
font-family:"Calibri","sans-serif";
mso-ascii-font-family:Calibri;
mso-ascii-theme-font:minor-latin;
mso-hansi-font-family:Calibri;
mso-hansi-theme-font:minor-latin;
mso-bidi-font-family:"Times New Roman";
mso-bidi-theme-font:minor-bidi;}
  Was that a NINJA sub-prime mortgage?

bamawatson JRobby Sat, 06/24/2017 - 10:11 Permalink

ANNA LAPORTE Executive Vice President | With more than 15 years of experience in real estate public relations, Anna LaPorte is the Executive Vice President at M18, specializing in high profile mixed-use and residential properties. Prior to joining M18, Anna was a Senior Vice President at Rubenstein Associates, where she directed and carried out successful public relations campaigns for many of the top projects in the industry, including such signature buildings such as One57 developed by Extell, 56 Leonard designed by Pritzer Prize winning architects Herzog de Meuron, and One Brooklyn Bridge Park, the borough's largest residential conversion.                                Should see her pic; as you said classic((also classic is the mangled awkward use of "such"; do these people have no pride? it's your flippin bio  sweet face))reminds me of this and such and iraq and such such https://www.youtube.com/watch?v=A-vTsJ1tiKo

In reply to by JRobby

Déjà view Bob Sat, 06/24/2017 - 08:29 Permalink

Presume FinCEN calls off THE DOGS-SOON...

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has renewed rules that force U.S. title insurance companies in targeted urban areas to identify the natural persons behind companies used to pay all cash for high-end residential real estate in some parts of the country.
FinCEN renewed for 180 days the so-called Geographic Targeting Orders (GTOs) requiring the reporting in these jurisdictions: All boroughs of New York City; Miami-Dade, Broward and Palm Beach countries in Florida; Los Angeles, San Francisco, San Mateo, Santa Clara and San Diego counties in California; and Bexar County in Texas. The GTO initiative represents FinCEN’s latest effort to identify individuals attempting to hide the proceeds of criminal activity through the anonymous purchase of high-end residential real estate, as well as any real estate agents, lawyers, bankers and insurance agents who assist them.

http://ownershiptransparency.com/kyc/fincen-extends-beneficial-owner-ru…

In reply to by Bob

Cheka_Mate Justin Case Fri, 06/23/2017 - 21:58 Permalink

The year is 2017, Manhattan has become a maximum security debtor's prison for the entire country. A fifty-foot containment wall is erected along the New Jersey shoreline, across the Harlem River, and down along the Brooklyn shoreline. It completely surrounds Manhattan Island. All bridges and waterways are mined. The United States Police Force, like an army, is encamped around the island. There are no guards inside the prison, only prisoners and the worlds they have made. The rules are simple: once you go in, you don't come out.

In reply to by Justin Case

Handful of Dust vato poco Sat, 06/24/2017 - 05:41 Permalink

Supposedly, China is enacting even tighter controls over the Loot flooding out of their country. Seems that the previous regulations only slowed down the little people from transferring their small amounts out but had little effect on the Big Dawgs there when you see how much is pouring into the Canadian and west coast RE markets.

In reply to by vato poco

divingengineer vato poco Sat, 06/24/2017 - 09:03 Permalink

Attention. You are now entering the Debarkation Area. No talking. No smoking. Follow the orange line to the Processing Area. The next scheduled departure to the prison is in two hours. You now have the option to terminate and be cremated on the premises. If you elect this option, notify the Duty Sergeant in your Processing Area.

In reply to by vato poco

Endgame Napoleon Mine Is Bigger Sat, 06/24/2017 - 00:00 Permalink

Underemployment is the big cause for the mass of citizens who sink half of what they make into rent, with retail collapsing all over the place as a result. We've had 40 years of declining wages for males, with permanently stagnant wages for most females due, in part, to the fact that they helped to create an oversupply of workers chasing low-wage jobs, including welfare/taxfare moms and moms with a spousal income who not need for wages to rise. Their main bills, like housing, are covered by government, husbands or ex husbands.

In reply to by Mine Is Bigger

Mine Is Bigger Endgame Napoleon Sat, 06/24/2017 - 00:39 Permalink

No, its the fake money the Fed prints that causes this. The money people earn for work should not be the same as what the Fed can simply conjure up. Therein lies the fraud. It is only natural ordinary working people become unable to afford homes under the current system.You and I have to work and save money to buy a house. But someone connected can simply borrow millions of dollars, speuclate in properties and drive up prices. New York stores closing one after another has the same cause. The property prices have gone up due to speculation with no respect to economic reality. Rents have kept going up although shop sales have not increased.

In reply to by Endgame Napoleon

Handful of Dust Mine Is Bigger Sat, 06/24/2017 - 05:50 Permalink

I don't see the problem; stawk markets at all-time highs, Obama said "Americans be exceptional," and the media and financial newspapers claim the economy is "awesome." Just don't go outside and examine stuff first-hand for yourself and you'll be fine; just stay encapsulated and keep reading NYT and WaPo.   DEAD MALL SERIES : Rehoboth Mall : Most Depressing Dead Mall On Earth?  https://www.youtube.com/watch?v=n6Cdav9MhDg  

In reply to by Mine Is Bigger

makinbacon Fri, 06/23/2017 - 21:26 Permalink

My fav story is when David Siegel and his wife Jackie Siegel  went semi -belly up on their 90,000 sqft "home" and had to give up the family jet.On their first commercial flight , their 9 year-old son looks up at mommy and says ..."What are all these people doing on our plane?"Priceless.... 

Economiffed makinbacon Sat, 06/24/2017 - 09:14 Permalink

Lived in Orlando for more than 30 years. I know plenty of stories about the Seigels. Some real insider shit and some rumors. However, When my buddies and I get bored, we occasionally hit the fastest go karts in town. Many times David's wife is there with her oldest son. We make up names for The scoreboard. That poor kid has to use his full name! While he is driving, his mother/pole dancer, chats it up about who she is to all the guys.
It's funny to hear her talk herself up to people that barely speak english!

The point is - KARMA

For all the dumbasses that got pressure sold into timeshare, David gets to pay for her beyond his grave!

In reply to by makinbacon

ThrowAwayYourTV Fri, 06/23/2017 - 21:49 Permalink

If I was a Billionaire, or even a Millionaire, before I even considered a place in a shit hole city I would build a helicopter in mansion on a secluded pond out in the middle of nowhere.What fool wants to live in the middle of 8 million hungry people teetering on the edge?

wstrub Fri, 06/23/2017 - 21:41 Permalink

What does everyone expect the Chinese to do with all those dollars we sent over in exchange for the crap that lines our retail shelves?????  It's not over.....we have sent them money for 20 years....it's coming back!!!!!