Lower Manhattan’s 8 Spruce Street, the Frank Gehry-designed rental tower instantly recognizable for its one-of-a-kind undulating surface, is for sale with an equally eye-catching price tag. — The Real Deal
Owner Brookfield Property Partners and Nuveen, the real estate arm of insurance company TIAA, have put the 76-story building on the market for $850 million. At the time of its opening, the approximately 900-unit tower was the tallest residential building in North America.
The building struggled during the pandemic as residents fled the city, leaving a quarter of its units vacant, according to The Real Deal. However, the building’s occupancy has since reportedly recovered to 94 percent.
11 Comments
At that price, buy two and move them to UCSB.
I assume the $850m is substantially less than the cost to build. Does anybody know the numbers and what this means?
My guess is that the investors already made a profit by selling units. I wonder how much of the building is 850? Not that I am very interested.
But, I am seeing more and more real estate for-sale signs in Los Angeles lately too.
https://www.architecturalrecord.com/articles/7304-spruce-street
according to arch record, 875 mill in 2011 for total development costs. but these were rental units, so they have been generating money for 10 years. and the property ownership changed in 2018 when the original developer was bought out by a canadian company. hard to say - but not an impressive outcome for sure. though the current owner likely made money off this sale.
The property likely carries a mulit-hundred million martgage, these kinds of deals are all finance structured. The debt is typically minimally serviced and passed forward to the new owner, which is reflected in the sale price.
Thanks, guys. I have a small brain and limited imagination. It's hard for me to believe, much less understand, all this high-rise construction and what reality it is based on. Speculation is a marvelous and mysterious thing. But it's hard not to wonder if we've gone on another ride, and if so, what signs might indicate a shift. Almost no one saw coming the burst of the housing bubble over a decade ago.
If we're going to build these things, I rather like this one. And it's a Gehry—no extra added value here? Or we are seeing an esthetic shift as well?
Banks foresaw the collapse of the housing market, which is why they gave away no-income check mortgages for more than 100% value, often including the required down payment. This turned liabilities (overbuilt speculative development that they were heavily vested in) into assets (loans payable to the banks).
Then they bundled these toxic loans, bribed the rating agencies, and sold them as AAA rated bonds. All this was courtesy of Bill Clinton's financial deregulation (the Gramm-Leach-Bliley Act and the Commodity Futures Modernization Act).
The 2005 Bankruptcy Abuse Prevention and Consumer Protection Act was passed with foreknowledge of the impending collapse and protected creditors over debtors.
Then when the whole thing blew up Washington bailed out the criminal banks. We have the very best government that money can buy.
But many investment banks were heavily leveraged in these things, up to the end. I still remember a NY Times article before the bust which expressed concern that falling housing prices might be bad for the economy. Sigh. Prices always fall. The whole thing was predicated on the assumption that housing prices would keep rising, though one expert thought there would be a problem if they didn't rise fast enough. I gave the mess a shot here years ago, though I confess to not much more conclusion than dizziness.
Apparently you are unfamiliar with 'pump and dump'.
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