“Doomsday Trainwreck” Is Coming To Manhattan Luxury Real Estate, Barry Sternlicht Warns
zerohedge.com / by Tyler Durden / Aug 15, 2017 4:24 PM
It’s been a while since we checked in on the state of Manhattan’s ultra high end real estate market, and judging by what was said in the latest Starwood Property Trust earnings call, where CEO Barry Sternlicht warned of a doomsday waiting at the end of New York’s “Billionaire’s Row”, what’s coming is nothing short of a disaster. During the Starwood Q2 earnings call, Sternlicht said the development of ultra high-end residential building on West 57th Street – where two years ago Bill Ackman among others parked $91.5 million – an imminent “debacle.” He pointed out the out-of-balance mezzanine loan at JDS Development and Property Markets Group’s 111 West 57th Street project and predicted more distress in the luxury residential market, including at 53 W 53, a supertall condo being developed next to the Museum of Modern Art by Hines, Pontiac Land Group and Goldman Sachs, as the Real Deal reported.
“We are beginning to see the cracks of the high-end residential market in Manhattan,” Sternlich warned, putting in jeopardy future seasons of Million Dollar Listing. “The building on 57th Street just went through it’s B-lender. Those deals, and the building going up next to MoMA, those deals are going to be a disaster. So high-end resi in New York really is in trouble.”
Sternlicht also noted that just like during the last bubble peak, most exposed to loans backing luxury condos are not the banks but rather hedge funds, private equity firms and alternative lenders chasing high returns who have backed projects with asking prices of $7,000 to $10,000 a foot.
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Source: http://silveristhenew.com/2017/08/15/doomsday-trainwreck-is-coming-to-manhattan-luxury-real-estate-barry-sternlicht-warns/
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