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Thursday, October 16, 2008

Roosevelt Island Riverwalk Court Condo Sales Tactics - Increase Broker Commissions or Price Reductions For Buyers? Is Rent To Own Next?

Image of Roosevelt Island Riverwalk Court

The NY Observer reported last month that 35% of the Hudson/Related Riverwalk Court condo units on Roosevelt Island have been sold. Who are these buyers?
Buyers at Riverwalk Court, part of that massive Riverwalk development, generally fall into three categories: Manhattanites looking for inexpensive but convenient real estate; current Roosevelt Islanders choosing to upgrade; and "people who appreciate Roosevelt Island as a quiet enclave ... who are picking Roosevelt Island in lieu of living in Queens or New Jersey or Long Island," said Mr. Kramer, the Hudson Companies principal.
According to the President of Related Residential Sales responding to a question from the NY Observer, Riverwalk Court buyers are also more concerned with the subprime mortgage market than other more sophisticated New York City buyers.
Do you think there’s more anxiety at Related now, with Fannie Mae and Freddie Mac collapsing, than after 9/11?

I don’t.… Because we run the gamut on price-per-square-feet, we feel we don’t have all our eggs in one basket. … Let’s say at Riverwalk [on Roosevelt Island], our customers are more concerned about the subprime market. When you’re dealing with Astor Place or the Harrison or the Brompton, that sophisticated, more, you know, wealthier individual [is] more comfortable.
Could this recent announcement of a 4% brokerage commission for condo sales at Roosevelt Island's Riverwalk Court building be a sign of difficulties in selling the remaining condo units to such unsophisticated buyers? It could not have helped Riverwalk sales having Roosevelt Island listed by Gawker's post-recession New York City neighborhood map as being in the wilderness together with Queens, The Bronx and outer Brooklyn.

Blogger and real estate agent Urban Digs says new condo developers should decrease prices on unsold condo units instead of increasing brokerage commissions.
... New developments typically pay between 2.5% and 3% commissions upon closing of the apartment. Sometimes they pay 4% commissions. Recently, developers are offering to pay commissions in advance and 4%, 5% and 6% commission emails are popping up in my email twice daily.

... What I would love to see instead is... Price reductions! Or at least closing cost incentives; pass savings on to the buyer! Most real estate agents who love their jobs want to pair their customer with the best apartment at the best price. Offering commission incentives does nothing for me. I will offer to lose the extra commission to try to get my customer a better price on the apartment every time. But I wont bring a customer to a building where prices are completely out of their budget.
What's next for Roosevelt Island condos? Perhaps rent to own programs like that at Northside Piers, a similar waterfront development in Williamsburg, described at Curbed or others from this article in current issue of The Real Deal?
... Those developers, who are predominantly in Brooklyn, are trying to woo would-be buyers with deals that allow them to rent a unit in a condo building while at the same time putting their monthly rent checks toward a down payment.

The so-called "rent-to-own" programs, which started popping up in the last few months, collect the rent money in escrow until the end of the lease period.

Early last month, the real estate Web site reported that Toll Brothers was offering units at the first tower in their Williamsburg waterfront development Northside Piers on a rent-to-own basis. A week later, the site reported that another Williamsburg condo, the Decora on North 10th Street, was doing the same.

It turns out that they are not the only ones.

In Fort Greene, the Clarett Group is mulling doing the same thing for its condo, the Forté, where sales have been sluggish.

"Because of the overall economic climate, potential buyers are having trouble making decisions about whether to buy now," said David Von Spreckelsen, Toll Brothers' vice president...
Curbed has some additional advice on buying into new condo developments.

UPDATE: 12/2 - The NY Times and Urban Digs have more information on rent to own programs. Curbed reports on Rockrose's Long Island City The View condo development that is offering a 5 year money back guarantee to apartment purchasers.


Anonymous said...

Did you notice that the construction of the two yet-to-be-finished buildings slowed down quite a bit? Looks like they are waiting for the real estate market to recover a bit.

Anonymous said...

Whoa! Really? It slowed down? How so? I have a contract signed on a condo in the RiverWalk Court building (moving from San Francisco to R.I.) and I'll be renting at the Octagon until end of April.


I have no knowledge of any slow down.

Anonymous said...

I live next door and have a good view; they're actually moving very quickly -- a lot of work has turned internal.

Anonymous said...

ah! Great thank you guys. That scared me.

Anonymous said...

The Octagon? Why not see if there is anything available next door at Riverwalk Landing which is closer to the subway, tram and the new buildings; although last time I checked there was nothing available so it must be a decent building to live in. As far as the construction, the landscaping around the building is moving along and the rest of the work is being done inside and quickly.

Anonymous said...

I'm wondering how the world economic & banking problems will affect the plans for the planned 3 final Southtown buildings on the east side of Main St. And the existing bldgs are the more marketable!

Anonymous said...

I’m sorry to disappoint you, but the building is not going to open until the summer (at least), they are revising the prices dramatically down and will go out public within the next two weeks...

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Justin Sara said...

The River walk condo at Roosevelt island is too good. Very good place to stay.
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