LuxuryBlurb
Archive for August, 2010
Thursday, August 19th, 2010
The unemployment rate for college graduates hovers around 4%, yet it is more than double for those with limited education. AP reports to-day about the jobless claims rise, yet to-day again on the cover of the New York Times, an article is written about the amazing new technology to invite attendees to FASHION WEEK in New York….a system that replaces several dozen jobs. no more printed invitations (graphic designers, printers, mail, etc) and the attendees will scan themselves in (fewer greeters at the shows). The reality is these jobs won’t be coming back …ever. The Duane Reade check-out ladies have been replaced by self-check-out systems. Those jobs are gone forever too. Business and private equity is sitting on 2,5 trillion dollars worth of cash right now, and they are not hiring….why? They are MUCH more profitable with fewer workers. untill big business is incentivized to hire, these unemployment figures won’t drop. The unemployed have to re-tool for a new economy. Fortunately for New York, the city attracts a high concentration of very skilled and educated people, another reason why the real estate market is significantl more stable than other parts of the USA.
WASHINGTON – Employers appear to be laying off workers again as the economic recovery weakens. The number of people applying for unemployment benefits reached the half-million mark last week for the first time since November.
It was the third straight week that first-time jobless claims rose. The upward trend suggests the private sector may report a net loss of jobs in August for the first time this year.
Initial claims rose by 12,000 last week to 500,000, the Labor Department said Thursday.
Construction firms are letting go of more workers as the housing sector slumps and federal stimulus spending on public works projects winds down. State and local governments are also cutting jobs to close large budget gaps.
The layoffs add to growing fears that the economic recovery is slowing and the country could slip back into a recession.
“The rise in initial jobless claims over the past three weeks makes it difficult to maintain confidence in the recovery and suggests the labor market is backtracking,” Ryan Sweet, an economist at Moody’s Analytics, wrote in a note to clients.
Stocks tumbled on the fear of more layoffs and weak job growth. The Dow Jones industrial average fell 185 points in midday trading. Broader indexes also declined.
Jobless claims declined steadily last year from a peak of 651,000 in March 2009 as the economy recovered from the worst downturn since the 1930s. They hit a low of 427,000 in July before rising steadily over the past six weeks.
In a healthy economy, jobless claims usually drop below 400,000.
“This is obviously a disappointing number that shows ongoing weakness in the job market,” said Robert Dye, senior economist at the PNC Financial Services Group.
Dye said claims showed a similar pattern in the last two recoveries, but eventually began to fall again. The current elevated level of claims is a sign employers are reluctant to hire until the rebound is well under way. That’s what happened in the recoveries following the 1991 and 2001 recessions, which were dubbed “jobless recoveries.”
California reported the largest increase in new claims two weeks ago, the latest data available. The state saw a jump of 4,393 in claims, due to more layoffs in services. Georgia has seen claims rise sharply for two straight weeks because of layoffs in construction and manufacturing.
The nationwide increase suggests the economy is creating even fewer jobs than in the first half of this year, when private employers added an average of about 100,000 jobs per month. That’s barely enough to keep the unemployment rate from rising. The jobless rate has been stuck at 9.5 percent for two months.
Private employers added only 71,000 jobs in July. But that increase was offset by the loss of 202,000 government jobs, including 143,000 temporary census positions.
July marked the third straight month that the private sector hired cautiously. Economists are concerned that the unemployment rate will start rising again because overall economic growth has weakened significantly since the start of the year.
After growing at a 3.7 percent annual rate in the first quarter, the economy’s growth slowed to 2.4 percent in the April-to-June period. Some economists forecast it will drop to as low as 1.5 percent in the second half of this year.
The four-week average, a less volatile measure, rose by 8,000 to 482,500, the highest since December.
The number of people continuing to receive benefits fell by 13,000 to 4.5 million, the department said. The continuing claims data lags initial claims by one week.
But that doesn’t include millions of people receiving extended unemployment insurance, paid for by the federal government. About 5.6 million unemployed workers were on the extended unemployment benefit rolls, as of the week ending July 31, the latest data available. That’s an increase of about 300,000 from the previous week.
During the recession, Congress added up to 73 extra weeks of benefits on top of the 26 weeks customarily provided by the states. The number of people on the extended rolls has increased sharply in recent weeks after Congress renewed the extended program last month. It had expired in June.
Wednesday, August 18th, 2010
 So you felt sluggish through the Summer heat because of the heat? Think again. A city Department of Health study on summer air quality released yesterday showed a troubling finding: Even quieter neighborhoods that don’t have New York’s infamous crowds, traffic and skyscrapers suffer from high levels of smog…..and this bad air quality contributes greatly to one’s feeling of well being besides the heat.
The report, which examined various types of air pollution, revealed that a variety of contamination occurs throughout the city, depending on the type of neighborhood. ”The take-home message here is that the air quality just isn’t great anywhere in New York City. What’s surprising is just how variable the air quality is across the city,” Deputy Health Commissioner Daniel Kass said.
While cars, busses and trucks are a great cause of the pollution, buildings are equally offensive. So will this affect Manhattan real estate? Here is a list of where we think changes can be made to improve the air quality:
1) A greater reliance on hybrid and electric vehicles
2) Increased planting of trees, a tremendous asset in cleansing air.
3) More public transportation.
4) Heavier fines for heavy polluters to persuade them to clean up. What about all those retail stores that keep their front doors open in Summer blasting icy cold air onto the streets while doubling their consumption?
5) More pedestrian zones without traffic, especially Midtown.
6) Buildings wil have to clean up and LEED certification will become a pre-requisite for new construction.
7) Pre-war buildings especially will have to re-think those super-inefficient window units.
 Existing buildings will have to retrofit with new, more efficient systems throughout, including more energy efficient windows and upgraded insulation.
9) Green roofs, wind and solar power will become more prevelant on building roofs. Think of the MILLIONS of square feet of roof space that could be utilized….
10) Energy efficient thermostats that modify AC use more efficiently.
11) Build smoke chambers on the streets for those pesky smokers who stand in front of buildings smoking up a storm: Maybe if they had to inhale 100% of the smoke they create, not the 10% they take in while puffing, they would re-consider this filthy habit that impacts us all.
“Maybe this is why Rush Limbaugh moved away from New York: For someone so anti-environmental causes, he probably saw how polluted the city was and continues to preach against cleaning up from a less polluted location so that he is not affected by it,” says Leonard Steinberg, leader of the LUXURYLOFT team, a broker specialized in the marketing of luxury New York real estate. “With evidence this clear, it must be extremely difficult to deny that something has to be done to clean up our air: Sitting in an air-conditioned studio, or the back of a Maybach of course does not help expose you to the realities of life.”
Read more: http://www.nypost.com/p/news/local/choke_on_us_jlddqVpVYRYpktYNtYbJ7I#ixzz0wxO7p4r5
Tuesday, August 17th, 2010
 While politicians bury their heads in the sand and focus on pointing fingers for blame, building mosques and Bristol Palin, the single largest problem our economy is dealing with is still housing. Until we have a solid plan in place to clean up the housing mess and a solidly revised plan for the future of financing housing, the chance of future financial meltdowns remains strong and certain. We MUST remove politics from this debate: voters should insist on it. The lax laws governing qualifying for housing financing has cost this country way too much. And both parties are to blame for this in their embarrassing quest for power.
Reuters reports that the Obama administration called for “fundamental change” at Fannie Mae and Freddie Mac, but a long, politically explosive debate lies ahead on the future of the bailed-out mortgage finance giants and U.S. housing policy.
U.S. Treasury Secretary Timothy Geithner on Tuesday raised basic questions with housing industry leaders about the U.S. government’s long-standing role in subsidizing and supporting the $10.7 trillion housing market.
“It is not tenable to leave in place the system we have today,” Geithner said at a conference hosted by the Treasury Department almost two years after the government seized Fannie Mae and Freddie Mac to save them from collapse.
Since then, the two firms have received nearly $150 billion in taxpayer bailout money and have been placed in conservatorship, sharply restricting their past activities.
“We will not support returning Fannie and Freddie to the role they played before conservatorship, where they took market share from private competitors while enjoying the perception of government support,” Geithner said.
“We will not support a return to the system where private gains are subsidized by taxpayer losses.”
The conference, with some of the mortgage sector’s top lenders and investors, is billed as a “listening session” for the administration to gather ideas as it develops an overhaul plan by January. No major changes are expected before 2011.
“It’s safe to say there’s no clear consensus yet on how best to design a new system,” Geithner said. “But this administration will side with those who want fundamental change.”
With Congress focused on elections in November, federal spending coffers depleted and nerves on edge about changes that could trigger another housing crash, lawmakers looked likely to move slowly on overhauling housing finance, analysts said.
Enthusiasm in some quarters for removing government from housing finance was certain to collide with the political reality that housing subsides, such as the mortgage interest deduction, are deeply entrenched facets of U.S. economic life.
The problems and costs of Fannie Mae and Freddie Mac were not addressed in the sweeping Wall Street reform legislation approved by the U.S. Congress in July — a yawning gap in the Democratic bill that Republicans have sharply criticized.
Bank and mortgage-backed securities investors are watching warily as the administration weighs options, ranging from full nationalization at one extreme to privatization with no government support at the other, and alternatives in between.
Geithner said there is a strong case for a carefully designed government guarantee for mortgages, and that a key question will be whether the private sector can provide a form of insurance or guarantee on its own.
“The challenge is to make sure than any government guarantee is priced to cover the risk of losses, and structured to minimize taxpayer exposure,” Geithner said.
A government guarantee is considered essential to at least one major investor — Bill Gross, co-founder of bond-trading firm Pacific Investment Management Co. Gross told the housing conference participants that a government guarantee is needed to keep mortgages affordable.
Geithner also said government should reassess how it promotes access to affordable housing.
Shaun Donovan, secretary of Housing and Urban Development, told the conference the government’s “footprint” in housing finance needs to be much smaller than it is today.
Fannie Mae, Freddie Mac and the Federal Housing Administration now back 90 percent of new U.S. home mortgages, he added.
Geithner stressed a smooth transition period so as not to disrupt the fragile housing market. “As we go through this transition, it is important that consumers maintain access to credit at attractive rates,” he said.
Fannie Mae and Freddie Mac both jumped into subprime mortgages during the housing boom in the early 2000s in an attempt to broaden home ownership — with disastrous results.
Participants at the conference included executives from Wells Fargo and Bank of America, as well as Lewis Ranieri, who helped develop the model for the private mortgage-backed securities market that was central to the housing bubble that burst in 2007-2008.
The conference occurred a day after U.S. home-builder sentiment unexpectedly fell for a third straight month in August to its lowest level in nearly 1-1/2 years, according to a survey that added to evidence of slowing economic recovery.
A stubborn housing crisis is likely to weigh on voters already concerned about a sluggish economy headed into November elections.
Across America, the average congressional district has more than 9 percent of its mortgages delinquent by 90 days or more, according to a study by Deutsche Bank. That’s more than 2-1/2 times the delinquency rate on election day in 2008
Friday, August 13th, 2010
 And you thought New York was expensive? Think again. A six-bedroom, two-floor penthouse in the One Hyde Park development in Knightsbridge, London has sold for £140 million — equivalent to around $220 million — making it the world’s highest priced apartment sale, according to THE REAL DEAL. The buyer, who remains anonymous, will enjoy views of the London skyline, private wine tasting facilities and top security features which include bullet-proof windows and a panic room. The property also has tunnel access to the Mandarin Oriental Hotel and its 24-hour room service. One Hyde Park was designed by Sir Richard Rogers’ architectural firm Rogers Stirk Harbour. In 2004, the site was acquired by developers Nick and Christian Candy for £150 million, or close to $235 million. The recent sale dwarfs the previous purchase price record for Britain held by an apartment in Westminster’s 8 St. James’ Square, which sold for £115 million — or $180 million — in 2008.
In Manhattan, the most expensive residential property listed is a townhouse on the Upper East Side at 1016 Madison Avenue, listed for $ 72 million, about one third of the cost of the One Hyde Park penthouse. “It is not surprising that New York attracts so many foreign buyers: the value on the very high end for an international city is actually strong, and the supply is very limited”, says Leonard Steinberg a managing director of Prudential Douglas Elliman. “This sale is explained by the lack of super-secure, full service new construction buildings in a prime location. The pound is weak right now, so a perfect opportunity for a foreign buyer to step in.”
The most expensive home in the United States is the Manor in Holmby Hills, Calif., a $150 million, 56,500-square-foot mansion owned by Aaron Spelling’s widow, Candy, according to Overseas Property Mall. The 4.6-acre California property features a library, gym, bowling alley, wine cellar, gift-wrapping room and media room. The grounds have pools, gardens, a waterfall, and parking for over 100 cars.
So does One Hyde Park have a gift wrapping room?
Friday, August 13th, 2010
The FHA has come out to guarantee mortgage loans on a few new buildings in Manhattan: While the idea is brilliant, and long overdue, the plan is a perfect example of how governments can take a great idea and muck it up really badly. As we exit (very slowly and grindingly and uncerytainly) from the worst recession since the Great Depression, the FHA wants to offer guarantees on loans involving up to 96.5% financing! Did we learn ABSOLUTELY NOTHING from the mistakes of the past few years?
“This stupidity makes me want to take to the streets and yell at the top of my lungs!” says Leonard Steinberg, leader of the LUXURYLOFT team specialized in luxury Downtown Manhattan/New York real estate. “One of New York’s saving graces in this recession was that New York hardly accepted financing with less than 10% down: co-ops required a minimum of 20% down, unlike the rest of the country. Yes, help 50% or less sold buildings obtain financing, but don’t provide it to unqualified buyers and don’t minimize the commitment to the point where walking away is a no-brainer.”
Whitney Gollinger, marketing chief for a Manhattan condo building with an outdoor movie theater and panoramic city views, is highlighting a different amenity to spur sales: the financial backing of the federal government.
The Federal Housing Administration agreed in March to insure mortgages for apartments at the 98-unit Gramercy Park development, known as Tempo. That enables buyers to make a down payment of as little as 3.5 percent in a building where apartments range from $820,000 to $3 million.
“It’s a government seal of approval,” said Gollinger, a director at the Developments Group of New York-based brokerage Prudential Douglas Elliman Real Estate. “We need as many sales tools as we can have these days, and it’s one more tool.”
The FHA, created in 1934 to make homeownership attainable for low- to moderate-income Americans, is providing a lifeline to new Manhattan luxury condominiums after sales stalled. Buildings featuring pet spas, concierges and rooftop lounges are applying for agency backing to unlock bank financing for purchasers. The FHA guarantees that if a homebuyer defaults on his mortgage, the agency will pay it.
At least nine Manhattan condo developments south of 96th Street have sought approval for FHA backing since the agency loosened its financing rules in December, according to a database of applications kept by the U.S. Department of Housing and Urban Development. The change allows the FHA to insure loans in new projects where only 30 percent of units are in contract, down from at least 50 percent. About 1,900 apartments in New York’s most expensive neighborhoods would be covered by the applications.
Filling a Void
The agency also offers insurance to half of all mortgages in a single building after previously setting a limit at 30 percent, according to the new standards, which expire in December. The entire property must be approved for a buyer to get backing. Most of those that applied in Manhattan are buildings converted to condos or built since 2007.
The FHA is filling a void left after mortgage-finance agency Fannie Mae tightened its condo lending standards last year. The Washington-based company won’t back loans made in new buildings where fewer than 51 percent of the units are in contract, sometimes setting a requirement as high as 70 percent.
That in turn makes mortgage lenders hesitant to make loans at developments under those thresholds, said Orest Tomaselli, chief executive officer of White Plains, New York-based National Condo Advisors LLC, which advises condominiums on how to adhere to Fannie Mae and FHA standards.
‘Not an Accident’
“It’s not an accident that the FHA is offering this — not private lenders,” said Christopher Mayer, senior vice dean at Columbia Business School’s Paul Milstein Center for Real Estate in New York. “An unfilled condominium complex is not the kind of thing that a bank looking to rebuild its balance sheet on real estate is looking to do.”
In New York City, the priciest urban U.S. housing market, the FHA insures loans of as much as $729,750, and permits buyers to borrow up to 96.5 percent of the price.
No buildings in Manhattan applied for FHA recognition between 1998 and 2008 — though in those years the program didn’t require an entire property be approved and condo buyers could seek FHA-insured loans on their own, Tomaselli said.
New development in Manhattan represented 23 percent of the sales market in the second quarter, compared with 35 percent two years earlier, according to New York appraiser Miller Samuel Inc. About 8,700 new apartments in the borough were empty as of June, partly because of a lack of available financing for buyers, said Jonathan Miller, president of the firm.
‘Ironic’ Move
“Something has to happen for this product to be marketable,” Miller said. “I just find the whole thing ironic that FHA is providing financing for luxury housing.”
The FHA loosened the condo rules because of “market conditions,” according to Lemar Wooley, an agency spokesman.
“We are certainly cognizant of falling sales prices, limited availability of liquidity, etc., so we wanted to be flexible,” Wooley wrote in an e-mail. “The risk was considered before issuance of the temporary guidance.”
The new rules are a “game changer,” said Ryan Serhant, vice president at Nest Seekers International, a brokerage with offices in New York and Florida. He’s marketing 99 John Deco Lofts, a 442-unit conversion project in downtown Manhattan that features a “zen” flower garden and Brooklyn Bridge views.
The development, where sales began more than two years ago, had 10 units go into contract with FHA backing since approval in March. The FHA suspended its support for the building Aug. 3, according to the agency website. The property is working to have it reinstated, Serhant said.
Eager for Approval
Angela Ferrara, who markets the Sheffield condos on West 57th Street, checks every day whether the 597-unit property, which applied to the FHA in May, has won approval. Ferrara, vice president of sales for New York-based the Marketing Directors Inc., says she is eager to start touting the FHA backing to potential buyers. That’s a reversal from the past, when government loan programs weren’t necessary — or advertised.
“People would get the wrong idea, and think it was a different type of government-subsidized product,” Ferrara said. “It was almost regarded as a negative, particularly in the luxury properties.”
Now, she said, “It’s actually became a widely accepted marketing tool.”
The Sheffield promotes amenities such as concierge service, a pet spa and massage rooms, according to the project’s website. A neighborhood guide on the site lists chef Thomas Keller’s four-star restaurant Per Se as a nearby attraction, along with Lincoln Center, Carnegie Hall and Tiffany & Co.’s flagship Fifth Avenue store.
‘Great Solution’
The Sheffield’s owner, New York-based Fortress Investment Group LLC, took over the condo conversion project in foreclosure last August after the original developer, Kent Swig, defaulted on a loan. With 56 percent of the converted units sold or in contract, the building has about 230 units left to sell, Ferrara estimates.
FHA is “definitely is a great solution right now,” said Tomaselli of National Condo Advisors, which prepared the FHA applications for Tempo and Sheffield.
“The savvy developers did it first,” Tomaselli said. “But everybody else is catching up.”
In the borough of Brooklyn, FHA support accounted for half of the 29 units sold at the 111 Monroe condos in Clinton Hill and a quarter of apartments in Williamsburg’s NV building, which is sold out after two years on the market, said David Behin, executive vice president at the Developers Group, a New York brokerage for new buildings.
Limits to Success
The FHA’s effectiveness will be limited in Manhattan because apartment prices are higher than in Brooklyn and the insured loan is capped at $729,750, Behin said. The median price of a Manhattan apartment in a new development was $1.4 million in the second quarter, according to Miller Samuel and Prudential Douglas Elliman.
“With apartments over $1 million, FHA isn’t going to help you,” Behin said. “You’d have to put down 30 percent to get the loan of $729,000. And if you have 30 percent to put down, a bank will loan to you without FHA.”
Borrowers backed by FHA are essentially buying mortgage insurance, said Debra Shultz, managing director at Manhattan Mortgage Company Inc. in New York. Buyers pay an upfront premium of 2.25 percent of their loan value, and a monthly fee equal to about 0.5 percent of the loan amount for at least five years, she said.
Nationwide, the FHA insured 21 percent of all mortgages made in the second quarter, or $71.4 billion worth of loans, according to Geremy Bass, publisher of the Inside FHA Lending newsletter. That’s close to the $79.5 billion total value of all FHA-backed loans in 2007.
Rising Defaults
Nine percent of all FHA-insured loans were 90 days or more past due or in the process of foreclosure in the first quarter, compared with 7.4 percent a year earlier, data from the Washington-based Mortgage Bankers Association show.
The agency doesn’t require a minimum credit score for the mortgage insurance, though many lenders who fund the loans insist on a rating of at least 580, said Shultz.
The FHA is considering a minimum required score of 500, according to a notice the agency filed in the Federal Register on July 15. A person with a 500 rating is in the lowest one percentile of credit scores nationally and was likely delinquent on several accounts in the last year, said John Ulzheimer, president of consumer education for Credit.com, a consumer and credit education company based in San Francisco.
Taking on Risk
“The government is taking on more risk,” said Guy Cecala, publisher of Inside Mortgage Finance. “That’s the bottom line. They really can’t say no, because that’s their purpose. It’s to support the housing market when there’s no other funding.”
Until they heard about FHA, Asha Willis and her boyfriend, Cesar Rivera, didn’t think they would buy a place for at least five years — enough time to save a 20 percent down payment, she said. The couple reasoned that they earned enough to make monthly mortgage payments, and began an apartment search in February, limiting their hunt to buildings with agency backing.
Willis, an attending physician at Maimonides Medical Center in Brooklyn; and Rivera, a sales associate at Chelsea Piers in Manhattan, toured several glass and steel high rises and decided on a one-bedroom at Toll Brothers Inc.’s Two Northside Piers in Williamsburg, Brooklyn. It didn’t have FHA approval at the time, but developers promised it was on its way, Willis said.
Contract Contingency
“Our contract had a contingency that if they weren’t FHA approved we could get out of the contract,” said Willis, currently a renter at Manhattan’s Stuyvesant Town.
Prices at the building range from the “high $300,000s” to more than $2 million, according to Adam Gottlieb, project manager for Northside Piers. The property, which began sales in October 2008, received FHA approval in June.
Shultz, whose Manhattan Mortgage has sourced FHA loans for buyers in Brooklyn, the borough of Queens and on New York’s Long Island, said the last month brought a sudden surge of calls from would-be buyers seeking FHA insurance for Manhattan purchases.
“It’s definitely breaking through to the Manhattan market,” she said.
At Tempo, which is still under construction, developers are hoping that FHA approval will appeal to buyers of lower-priced units and inch the number of contracts signed to the 51 percent that conventional mortgage lenders require, Gollinger said. About 15 percent of the 98 units are under contract.
The developers plan to tout FHA support in e-mails and other promotions in a sales push next month as the building nears completion, Gollinger said.
“I never even dealt with this,” she said. “All of a sudden it became an absolute must.”
Thursday, August 12th, 2010
Luxury New York real estate is invading the media….
Supposedly, according to the NEW YORK POST, Brown Harris Stevens brokers, Brenda Powers and Elizabeth Sample, made it past the first cut of candidates to potentially join the cast of “The Real Housewives of New York City.”
Kim G…..watch out! What about Jackie, Dolly? Hello????
Wednesday, August 11th, 2010
Over the short term the market looks vulnerable to a correction. The last couple of weeks of bad economic news have been neglected because the bulls are hoping that Ben Bernanke will very soon set the market afire with a new batch of quantitative easing. We have entered a mind set of perverse logic: The weaker the economic figures the better, for they increase the chance that liquidity will once again flow abundantly. It is important to see the historical pattern here. A lot of the problems of too much debt in the system we are having today are due to the Greenspan put, now we have the Bernanke put (if the economy remains weak I will buy more assets.)
Tuesday, August 10th, 2010
In this morning’s POST, it is reported that New York hedge fund honcho Bill Ackman has set his sights on the beleaguered Manhattan apartment complex Stuyvesant Town-Peter Cooper Village — with an ambitious plan to wrest control of the 11,227-unit complex by transforming the infamous rental property into a giant co-op.
The 44-year-old investment guru’s Pershing Square Capital Management set things in motion yesterday by revealing Pershing and a partner had purchased a $300 million slice of StuyTown’s second mortgage, or mezzanine financing, for $45 million — or 15 cents on the dollar.
Ownership of the key slice of the $1.4 billion second mortgage puts Ackman in control of the debt of a Tishman Speyer entity that operates StuyTown and is responsible for paying the $3 billion first mortgage.
Ackman’s first move will come on Aug. 25 when he is expected to foreclose on the Tishman partnership entity — which doesn’t have the funds to pay Ackman’s group the interest due it — thus putting him in the lead negotiator’s position in dealing with lenders.
He is then expected to try and work out a deal with the lenders — with the co-op plan being the centerpiece.
“The property doesn’t make sense as a rental, but it makes a lot of sense as a co-op,” Ackman said in a telephone interview yesterday. The moneyman called his co-op initiative “a non-eviction, affordable, co-op conversion.”
There is not enough cash flow from rentals to pay off the $3 billion mortgage — something a switch to a co-op could cure.
The landmark middle-class housing complex has been in limbo since owner and real estate developer Tishman Speyer announced last year it couldn’t continue payments on the whopping $3 billion mortgage — taken out in 2006 at the height of the property bubble.
The mortgage lenders have since been moving toward foreclosure while the tenants have been working on their own plans to buy the property.
Ackman said he hasn’t yet talked with CW Capital — the mortgage servicer currently in charge of the $3 billion mortgage — but feels confident “they’ll be happy we’re involved.”
If lenders balk at Ackman’s plan and decide to pursue a foreclosure, they’re going to have to take a haircut to the tune of at least $1 billion, he said. “We can make them whole,” he added, referring to the co-op conversion plan.
“Bankruptcy is most likely” if Ackman is able to convince lenders to accept the plan, said a person familiar with the situation.
Tenants say they are taking a wait-and-see approach to the plan, but there are already signs of resistance from the lenders.
“These are not folks that are riding in on white horses,” said a person close to the mortgage holders. “This is an opportunistic purchase and they’re trying to make a windfall out of nothing,” said the person, who declined to characterize how the mortgage holders might respond.
Are you falling behind on your mortgage? Want to sell it for 15 cents on the dollar?
Monday, August 9th, 2010
 Unemployment is very high, yet many employers are finding it extremely difficult to fill certain jobs. It is estimated that unemployment amongst the very skilled is actually rather low: We know unemployment amongst the highly educated is definitely low. In this morning’s Wall Street Journal, an article tries to establish what is causing this. Employers and economists point to several explanations. A huge problem goes back to real estate: Millions of homeowners are unable to move for a job because the real-estate collapse leaves them owing more on their homes than they are worth. The USA has been a very transient society in recent decades, and re-location for a new job was considered standard practice. With real estate very illiquid, the flexibility to re-locate for a great job with fallen home values diminishes.
“This is another reason why we believe so strongly in owning a condominium, not a co-op,” says Leonard Steinberg, managing director of Prudential Douglas Elliman and publisher of the LUXURYLETTER, a monthly report on luxury Manhattan real estate. “Most co-op’s severely limit your ability to sub-lease: condominiums will allow much more flexibility. Having the ability to rent out a property till the markets recover allows for much greater flexibility and can potentially result in avoid taking large an un-necessary losses.”
Re-location was a huge part of the real estate brokerage business: to-day, this business has dwindled dramatically.
The job market itself also has changed. During the crisis, companies slashed millions of middle-skill, middle-wage jobs. That has created a glut of people who can’t qualify for highly skilled jobs but have a hard time adjusting to low-pay, unskilled work like the food servers that Pilot Flying J seeks for its truck stops.
The difficulty finding workers limits the economy’s ability to grow. It is particularly troubling at a time when 4.3% of the labor force has been out of work for more than six months—a level much higher than after any other recession since 1948.
Our suggestion: Focus on the real estate!
Saturday, August 7th, 2010
 Could this be the next Manhattan, a take on Manhattan’s quintessential status symbol the SUB ZERO? A piece of ice four times the size of Manhattan island has broken away from an ice shelf in Greenland, according to scientists in the U.S. The 260 square-kilometer (100 square miles) ice island separated from the Petermann Glacier in northern Greenland early on Thursday, researchers based at the University of Delaware said. The ice island, which is about half the height of the Empire State Building, is the biggest piece of ice to break away from the Arctic icecap since 1962 and amounts to a quarter of the Petermann 70-kilometer floating ice shelf, according to research leader Andreas Muenchow.
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lola gardner 
These air quality concerns are alarming and your points excellent. Reducing traffic would reduce ozone. Broadway around Union Square is closing to traffic at the end of August and pedestrian friendly.
Perhaps the City should offer a greater tax incentive for older buildings moving towards LEED certification.
But Rush Limbaugh leaving the City, an improvement.