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August 5, 2009
The best and worst deals
The 15 biggest winners and losers since the crunch
The Real Deal
by Sarah Ryley
Next month will mark the one-year anniversary of the fall of Lehman Brothers — a date often referred to in "pre-" and "post-" terms in the New York City real estate market. With that in mind, The Real Deal zeroed in on the 15 best and worst deals since Wall Street's collapse and the earlier onset of the credit crunch.
The deals were selected based on interviews with real estate professionals, published reports from the past year, research and an informal survey.
...Best: Bruce Ratner's pending purchase of the Vanderbilt Yards site in Brooklyn from the MTA for $100 million
Instead of charging developer Bruce Ratner $100 million in one lump sum for the right to build over Brooklyn's 8.5-acre Vanderbilt (Atlantic) Yards site, as originally agreed, the MTA announced in June that Ratner could pay just $20 million upfront to close on the portion of the rail yards beneath his planned arena for the Nets. Payments for the rest of the property, if he continues building, could be spread over 20 years, starting at $2 million a year in 2012 and jumping to $11 million in 2016 at an implied 6.5 percent interest rate, according to financial services firm Keefe, Bruyette & Woods.
The original $100 million purchase price was already far below the yard's appraised value, which the MTA justified by the additional $345 million Ratner promised he would make in infrastructure improvements. Under the new agreement, however, Ratner is not obligated to spend as much on those upgrades.
Schechtman said that while the purchase price of the land may be high in today's market, "the built-in financing over a 20-year period, at a time when there is an absolute absence of construction and land financing, makes this a real coup."
NoLandGrab: Wow, what a steal for The Bruce! And since the seller is a public corporation, Bruce's "real coup" means a "real screwing" for taxpayers. Of course, this is one deal that's still a long way from being "done."
Loyal NLG readers will recognize Sarah Ryley's byline from her days covering Atlantic Yards for the Brooklyn Daily Eagle.
Posted by eric at August 5, 2009 10:03 AM