With Harlem's Riverton Houses complex teetering on the brink of mortgage default due to unrealistic projections in converting rent-stabilized apartments to market-rate profit machines, the Times has a crack at predicting the next misguided housing megainvestment to sour. After flirting with taking Stuyvesant Town in this derby of misery, they settle on another middle-income enclave?Harlem's Delano Village at 139th Street between Fifth Avenue and Malcolm X Boulevard, which became the "hip and historic" Savoy Park after selling for $175 million in 2006. The warning signs are there: the complex was bought by overextended predatory investors and Times whipping boys Apollo Real Estate Advisors/Vantage Properties, all of the 1,802 apartments were rent-stabilized, and the projection was a 10% turnover per year into market-rate rentals, when experts predict that 2%-6% is more likely. Still, the landlords have a sizable reserve fund if they can't keep up with the payments, and one analyst rates the chance of trouble as only "moderate to high" and not "assume the crash position." The situation isn't critical, but if some kind-hearted Savoy tenants would be generous enough to just hurry up and die, your landlords would really appreciate it.
· Fear of Defaults After a Flurry of Apartment House Sales [NYT]