The above may have been slipped under your door, or will be. It's a Tenants Association flyer, printed on heavy stock, promoting "taking control of our future" via the condo conversion plan that's being set up between the TA and Brookfield Asset Management. The quality of the flyer suggests money involved, so I suspect its chiefly, if not exclusively, money from Brookfield that went into printing it.
There's zero new info, however, so it's still the TA/Brookfield trying to get the world out. Attached is a card one mails in (or deposits at the Oval Concierge!) where one can indicate: 1) Notify me about ways to join the conversation, 2) Contact me about helping the TA spread the word about the plan, and 3) Contact me about joining the TA.
The flyer notes that "6,951 units signed pledges in support of the TA exploring options to develop a tenant-led bid." And: "We believe our plan is the best way to protect current residents and to permanently maintain the middle-class character of our community."
As for the buzz word "affordability," used with such carefree smoothness by both politicians and the TA, we have this on what the plan would also do: "Explore avenues for public support with the ultimate goal of establishing a set of permanently affordable rental units for the next generation of tenants."
The flyer admits that "we're just at the beginning of this process" and that "prices for the units have not been determined yet...."
I'm kinda tired of this constant beginning process, however, and the circling of wagons around it, and very eager to learn specifics, just as I'm sure we all are.
38 comments:
Why do you think the Tenants Association is conspiring against us?
Tenants should take this opportunity to ask every possible question of the TA—attach an extra page if you have to. Don't toss the flyer and then vent here.
"Why do you think the Tenants Association is conspiring against us?"
If the question is directed at me, I don't think the TA is conspiring against tenants (maybe it's just conspiring, period), but I also don't think going condo is necessarily good for tenants. But, really, there is no plan at this point. So we wait until the plan takes shape and details emerge.
I am becoming more and more suspicious of the TA and the politicians involved. I feel pretty sure I will not be a buyer. If you don't have a feeling of trust, and that is very difficult in this situation with all the secrecy and back room dealing, then it is not a good idea to sink your money into something as major as this. Just my gut feeling. Don't expect others to feel the same way.
no flyer here. We never receive any of these 'notices' in our pcv building.
?
I just think it's far too early to judge anything. I do hope I can afford to buy, but I if can't, I'm in the same position as I am now.
I do hope the TA isn't overselling this and then the actual terms don't measure up. But again, we won't know that until we see the offer. We can't view ourselves as such victims. I can assess an offer and determine if it's a good deal, and certainly have the sense to run it by a lawyer and retain one for the actual purchase if I do want to buy. But I'm certainly not a sitting duck, like it seems like you are painting us.
Anonymous 6:25 p.m.: The flyers just became available. If your building regularly doesn't receive info from the TA, please contact them at 1 (866) 290-9036.
I have put posts about this on my blog which STR was kind enough to advertise for me (www.pcvstconversionforum.blogspot.com.). I've had over 700 visits but very few comments. Not to steal any of STR's fire, but I've set up for all the back & forth in the world to occur.
I've noted that the TA has not enabled communication about its actions. Go to the 2 TA websites. You'll see they've provided no ability for people to comment about their articles. All one way communication. As if they're afraid to invite counter-reaction.
I am in favor of seriously considering conversion. I think everyone should keep an open mind at this point & keep asking questions. You don't want to make a decision that you'll greatly regret later.
But the TA has shielded folks from the Guterman-Westwood plan which is definitely worthy of consideration and has endorsed Brookfield when Brookfield has not even presented a full plan and a price. That makes no sense to me.
To be honest, Guterman seems a bit like Herman Cain to me, kind of a shyster, fast-talking, not alot of substance. I don't think I would feel very comfortable engaging in a real estate transaction with him.
Just so everyone knows, the TA has previously stated that it will not be making an offer to CW Capital until the latter part of the first quarter, that means March at the earliest, though I heard mention at the last TA meeting that it wouldn't be until April. Obviously, no information about the pricing of apartments can happen until after that. And if CW Capital can't be persuaded to sell to us, all bets are off.
no flyer here. We never receive any of these 'notices' in our pcv building.
?
You 'never' receive notices in your PCV building? What PCV building are you in?
"To be honest, Guterman..."
Actually, I have that impression of Barry Blattmen from Brookfield. Here's a interview with Guterman from 2010. He doesn't strike me like Herman Cain at all.
http://www.dailymotion.com/video/xf02qo_guterman-says-ackman-will-lose-stuy_news
Gutterman has the most experience in this Arena, rental conversion to Coop.
I'm also disappointed that we didnt go with him, or at least consider him further, his plan was cheap. Brookfield might jackup the price so they get closest to 15% of people buying so they can sell the units that people didnt buy at market prices later.
I'm hoping that prices will be in the $500 PSF range, give or take for location and floor, equals 475K
for a 2br, 375K for a 1br.
Any more than that isnt that great of a deal, considering possible maintenance and RET costs. What is market at this point? 750 PSF?
I will probably put a post on my blog tomorrow about Garodnick's disparaging statements about Guterman-Westwood. His statements definitely imply that under Brookfield we will have to pay more money to buy. Who knows...after all details are known, if put to a vote, maybe the tenants (not necessarily the TA Exec Board) would want to go with G-W.
I hope no one is under the impression that the TA Exec Board's decision really matters. What matters are combination of factors that will bear on CW's decision: amount of $ rendered, likelihood of the plan to pass NYS Attorney General review, the number of tenants who seem likely to buy under the different plans and what CW can sense about the level of tenant happiness or dissatisfaction with each plan.
I'm not so worried about the price , more worried about the maintenance costs.
Taxes and Maintenance can easily cost $1500 or more every month alone.
Not going to work for us unless the maintenance (including taxes ) is less than $1k a month on a one bedroom.
‘Allenby: Look, Lawrence, I'm making my big push on Damascus the 16th of next month and you are part of it. Can you understand that? You're an important part of the big push!
Lawrence (pounding on the table): I don't want to be part of your big push!
Allenby: What about your Arab friends? What about them?
Lawrence (the wounds on his back from his whipping bleed through his uniform as he speaks): I have no Arab friends. I don't want Arab friends.
Allenby: What in hell do you want Lawrence?
Lawrence: I told you. I just want my ration of common humanity.’
When in doubt, I always go to LOA. As a life time tenant here, whatever comes, RS, coop, condo, etc., that’s all I want as well.
Thought I would share this information. I just spoke with the woman who heads the condo board at Parkchester South. 8200 units there. She told me that the costs for a 2 BR apt there (loan principal, interest & maintenance) would cost about $600 per month. Add about $40/per month for taxes. She said that at one point they needed to take out a loan for $100 million for renovation. She said that loan costs her about $35 per month. Even if we double the charges because we're in Manhattan, that will easily beat what I'm paying.
I received mine yesterday. I immediately filed it with all of the other valuable offers I regularly receive...from ValPak, Verizon and Mee Noodles.
At least the noodle menu has pricing info...
There is NO WAY a 2 BR will go for ca. $600 in ST/PCV, loan principle included. If so, everyone should buy!
STR-It won't because this is Manhattan. Maybe a reasonable estimate would be $1200-$1500. I think that would work for most.
If the P&I plus all incidentals were going to be less than the current rent, they would just keep renting. That's pretty obvious. It's not and that's why they want to dump it off on us.
It also explains the glossy under-door marketing materials with the fatherless family complete with smiling faces. Who is paying for their buy-in? Guess it's not dad...
Actually, the woman I spoke to bought a long time ago. So that reduces her burden. Even so, with the speculation about how much maintenance might go up, you'd think that she would be paying much more. At any rate, the time will come when all the plan sponsors will need to produce figures and should openly answer all such challenging questions.
Not nice about the family in the photo. Not nice at all.
Hope Y-O-U feel better though. You sound charming.
I am one of those tenants hopeful of buying into a conversion that makes sense. I would assume monthly maintenance would be at least $1,000, and most likely more. I would be happy to spend more if it meant an increase in the number of porters on premises. The trash rooms are just awful on a daily basis.
As long as this place is being run by a Tishman or a CW or any other non-tenant owner, the focus will be on one thing: the bottom line.
A tenant-owned property, where profit is not a driving motive, seems like it would foster a nicer place to live.
Parkchester is NOT the same as ST/PCV.
It is located in a far less desirable area and falls short of the 3 axioms of real estate evaluation... location, location and location.
Gutterman is one of the sleaziest real estate guys in an industry known for less-than-honorable people. Nothing he says can be trusted. And where did that fantasy number of $500/foot come from? That is something for Harlem or Queens....not prime Manhattan.
I wonder if Lo Rhent is still around? I miss him as well as Lux and Manny. They made me smile.
8:58PM
You understand that if a co-op/condo conversion is successful the price has to be lower than what the market is, right? If market is 750 - 800 PSF, a proper discount to get people interested would be 500PSF, if that is the number they will be offered at, who knows, I am simply defining what it should be.
MBarr, I disagree with what you are saying CW is considering when accepting a bid, they are mostly concerned with getting $3B back for their bond holds, little else.
"Guterman sleazy" -
Prove it. I don't mind statements like that so long as you can prove it. I did a search on the internet. I found only one person complaining that Guterman's company was late on some leasing payments. If you can't prove what you're saying by showing references on the internet, I think your comments should be discounted as baseless smears.
I don't disagree that CW is looking to the money first but if the plan isn't legally compliant or likely to be rejected by the NYS Attorney General's office, CW won't choose it. It would just be a big waste of time. The other big factor is whether or not any plan will get the 15% necessary buy-in. If the price per sq ft is $500, 15% might be doubtful. Around $400 per sq ft would probably sail. Around $300, I think there would be a very high buy rate.
Here is how I work out Guterman-Westwood number which is $315/sq ft. According to this plan, they're shooting for a very high buy rate. As much as 80%. And any apts that stay rental will be sold to a non-profit agency at $315 sq ft & will stay rental in perpetuity. They will sell any vacant apts at mkt rate over the next 2-3 yrs. Let's say at closing there are 500 vacant apts. So 10,732 units x $315/sq ft x 1000 sq ft avg = about $3.4 billion. 500 units at market rate of $700/sq ft = $350 million. Together = $3.7+ billion. That covers CW primary debt. In addition, G-W will own the commercial space...stores & garages. So they make a nice profit. From what I can see the numbers appear realistic but will greatly depend on a large tenant buy rate.
MBarr: If Guterman-Westwood's number only works if the buy-in rate is close to 80%, unless the apartments are DIRT CHEAP (which they won't be), it ain't gonna happen.
CW Capital has a fiduciary interest to sell this place for as much as it can get. Don't count on them given tenants any kind of break.
I think the most likely number will be around $500 PSF, and with that I think they will get 15%, 15%seems to be a drop in the bucket considering the number of market rate/high rent apartments there are.
The commercial property income is a significant component of the operating/maintenance budget. If Guterman takes that money for their own, it is removed from the equation, and then tenants/owners will have to shoulder more of the operating expense. So you'll get a $250k apartment and a much higher monthly maintenance bill.
This is not the type of community that will do well under co-op. The income levels are too varied/low, the buy-in percentage/ability too low, and the risk of individual and overall default is WAY too high. Condo is a much safer and financially sound way to convert that protects the residents from the financial weakness of other residents and separates out the maintenance risks from ownership risks. Guterman's numbers are completely out of thin air and not based on any realistic scenario. They are designed only to tempt us and divert us.
According to what we've heard via the TA, the Brookfield price will not be arbitrary. It will be very carefully crafted from feedback that the TA will help get. Then Brookfield will establish a price point that will be good for some tenants (I'm guessing maybe 30-35%) and will be prohibitive for everyone else.
We already know the price G-W will ask. Relatively speaking it IS very cheap. If the TA advisers (Paul, Weiss... and Moelis) can't find any hidden dangers in this plan, then on the basis of price only, this would look like a very good deal.
4:37: I tend to agree. After the catastrophe of nationwide foreclosures -- I'm more inclined to buy condo.
Mr. Gutterman's entire real estate career took place in the 1980's. The internet did not exist then. Therefore, an internet search would not reveal anything. Just ask someone in the industry. Reputation counts for a lot more than an internet search.
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