The mysteries of Williamsburg's Warehouse 11 are buried deep, but just how dirty is it down there? (Very.) The 120-unit North 11th Street condo building recently resurfaced after a foreclosure scare promising some pretty cheap prices for the Williamsburg scene, including some units below $500/sqft. There was buyer frenzy, but also some suspicious looks from neighborhood competitors. And the building's brokers made things hazy by saying prices would go up, eventually. So what's the deal with this hot slab of Karl Fischer confection? The Real Deal's Amy Tennery has some answers. Though building reps maintain that the price cuts are due to market conditions, a source tells Tennery that the developer is trying to raise cash in the face of a lender-imposed March 31 deadline to buy back the debt.
Here are the known details:
Developer McCaren Park Mews LLC initially faced a Dec. 21, 2009 deadline to buy back the debt, according to bankruptcy filings. But, the developer had been "able to renegotiate terms with the bank," the spokesperson said, and extend the closing deadline to March. The offering plan attorney, Abe Lowy, confirmed that there was a deadline extension on a bank-developer agreement but would not elaborate on the terms of the agreement.
Last year, the total debt was approximately $50 million, bankruptcy filings show. Capital One, which holds the note on the building, is willing to accept a reduced price, according to the documents. The source says that the bank is willing to sell the note for around $30 million since offers are coming in around that price.
So that explains how this zombie building suddenly became up and active, but is this information all that damning? The shaky situation may scare off some buyers, but at last check the Warehouse 11 contract-signing count was up to 60. It seems like interested buyers could use the deadline for leverage as the clock ticks down. What might turn off buyers, however, is that Capital One accused developers Yitzchok Schwartz and Isack Rosenberg of looting the appliances and letting the building rot, allegations the developers called "ludicrous." Any open house visitors wish to chime in?
· Warehouse 11 races against clock [Real Deal]
· Warehouse 11 [Official Site]
· Warehouse 11 coverage [Curbed]