Thursday, January 26, 2012

Street Beat Update

We remain busy with three deals closed and in the books for 2012. That said it has been tough getting my buyers expectations aligned with the sellers over the last few weeks, we are really grinding it out. We were out bid with an all cash, $100k higher bid a day before signing the contract on a lower fifth avenue two bedroom (2nd time in this building with the same clients! I really feel for them).

 We were also outbid on a two bedroom, newer construction apartment in Clinton after arriving at an accepted offer. This one was disappointing as we really beat the price down, though trades are thin in the building this would have been sweet from a financial standpoint. Similar situation with some of the new construction out in Brooklyn, sponsors are tightening up. If your bid is not in line with their expectations, forget about getting transfer taxes paid on many of the buildings.

 Even on units that have been sitting for 100+ days I am getting resistance to what I consider strong bids; 5% off ask with TT's paid by the sponsor. They are digging in at about 1.5-3% off ask, yeah you would think we were close enough that if we dug in our heels and and walked they would come back to us; nope.

 There are a couple of buildings out there that if I gave up names and all the specifics you would really be very surprised by what is going on. That said we were able to come too terms on three fairly large deals with my clients feeling very satisfied. But they all required quite a bit of massaging and negotiating to get to home base.

 Many of the bears don't like to hear this but the markets are stable, inventory is low for quality apartments in desirable neighborhoods. This market is far to segmented to try and generalize at the present moment and I think it will continue on this track for sometime. What has been very amusing is that even clients bidding on apartments that are in sub-par locations are getting a lot of resistance to their bids. I mean these are apartments on the fringes that have been sitting for 120+ days or more and the listing broker tells me our bid is "insulting"???? On a few of these I thought our bid was damn generous!

 So that's the story so far this year from my little part of the world. We have a lot of irons in the fire and my clients are patient. But the bottom-line is no one is giving anything away. Be prepared to pay a reasonable price based on the actual recent comps, otherwise be prepared to move on.

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