October 30, 2009
What's a Prospect Heights condo worth? ESDC low-balls Goldstein (who once walked away from $500K profit) and overpromises the public
Atlantic Yards Report
The Empire State Development Corporation had to inflate the residential-condo projections for Bruce Ratner's Atlantic Yards megaproject, so the project appears to be financially viable. On the other hand, the public-private corporation is lowballing the price for one home owner whose condo the agency is planning to seize, using the state's power of eminent domain.
If you go by what the Empire State Development Corporation (ESDC) offered Develop Don't Destroy Brooklyn spokesman Daniel Goldstein for his condo in the Atlantic Yards footprint, and compare that to the values projected by ESDC consultant KPMG, you might suffer some vertigo.
After all, KMPG agrees that Forest City Ratner could get $1217/sf for condos in 2015, a figure that represents more than double the $600/sf price that consultant (for AY opponents) Joshua Kahr thinks is currently realistic.
KPMG says that the current condo market in Prospect Heights is $470-$1225/sf, though the latter seems a major stretch, limited perhaps to a few units in the Richard Meier-designed On Prospect Park, which isn't doing well and surely must be dropping prices.
And it's more than two-and-a-half times--by my calculation--what the ESDC is offering Goldstein.
Both extremes, I suspect, are unrealistic: the ESDC is low-balling Goldstein and KPMG (and Forest City Ratner) are overly optimistic. Whether Atlantic Yards proceeds or dies, iit's unlikely Goldstein would ever (nearly) double his money, as Forest City Ratner once offered. (To be precise, his gain would've been 83%.)
Looking at the price per square foot
$466: what Goldstein paid in 2003
$850: what Forest City Ratner paid in 2005 in one building
$850: what FCR estimated in 2006 it would get for Atlantic Yards condos
$600: what Joshua Kahr estimates is the current Brooklyn condo market
$470-$1225: what KPMG says is the current Prospect Heights market
$450: what (I estimate) Goldstein has been offered
Posted by lumi at October 30, 2009 5:52 AM