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October 7, 2009

What was KPMG smoking? Report claims 75% of Meier's On Prospect Park has been sold; other statistics are way off

Atlantic Yards Report

The following should be required reading for every numbskull at the ESDC who just put down the KPMG study and said, "well, there you have it — this esteemed accounting firm's report proves that Atlantic Yards is a slamdunk."

KPMG's Atlantic Yards market study, conducted on request of the Empire State Development Corporation (ESDC), backs up the assertion that Atlantic Yards might be completed in the announced ten years, rather than, as then-ESDC CEO Marisa Lago said in April, "decades."

Well, not only are projections about condo values questionable, as I wrote earlier today, but KPMG's report has some very shoddy research. Consider that the report claims that Richard Meier's On Prospect Park is 75% sold. (Only rental buildings are pre-leased.) However, the New York Times reported September 27:
While the developers say half of the building’s 99 units have been sold, the real estate Web site StreetEasy.com documents only 25 closings through public records.

(That Meier building is almost surely the source of the stratospheric $1225/sf upper-end sales figure for Prospect Heights cited in the report.)

KPMG claims that the Oro Condos are also 75% sold. But just this week Crain's reported that prices at Oro had been slashed 25%.

What about 80 Metropolitan in Williamsburg? The report claims that it's 75% sold, but on April 30 the New York Post reported that it was just more than 40% sold.

Even the 37% figure on the failed Forte Condos is off. Crain's reported that 37 of 108 apartments had sold; that's 34%.

I'll leave it for others to fact-check the other buildings.

What's left out? The waterfront

The table, according to KPMG, "summarizes new development projects comparable to the Subject Property’s, over 100 units." But there are some curious omissions.

While the table includes the 114-unit 80 Metropolitan Avenue in Williamsburg, it omits larger (and more troubled) Williamsburg buildings like The Edge and Northside Piers. In a 7/12/09 New York Magazine article headlined The Billyburg Bust--published well before the 8/31/09 date on the KPMG report--those buildings are struggling.


NoLandGrab: We've said it numerous times before, but somehow, it yet bears repeating — if the Atlantic Yards project is so great, why does everyone pushing the project forward, and every alleged "study" extolling its virtues, have to stray so far from the truth to make it appear viable?

Posted by eric at October 7, 2009 9:32 PM