"There's been an enormous shift in the past 12 months," the senior managing director of Beck Street Capital, Kevin Comer, said. While lenders in the past were anxious to finance condominiums, they now want to ensure that renting the units is a possibility if they don't sell. "Lenders only want to lend on cash flow projects. They want to be certain that they have a fallback as a rental that works," he said.Credit Crunch Turns Condos Into Rentals
As a result, he said, condominium projects all over the city have begun to go rental, especially those in the areas of the city where the real estate market has been hit hardest, such as Harlem and areas of Brooklyn and the Bronx. "I think that trend is going to continue and move into Manhattan in the coming months," he said.
5 comments:
As Gomer Pyle used to say, Surprise! Surprise! Surprise!
You have been reading these predictions on Crappie for months.
First Hotel or Condo, then Rental, then Section 8 Warehouse or Immigrant Barracks.
Then teardown for even bigger!
All in the space of, oh, say, 40 years.
Yet slumlords like Lefrak keep raising rents and pushing the poor and middle class out. Dumb greed?
More Soviet Bloc buildings in our midsts. Where the hell is this one? I can see this being a hot sheet motel in 2 years.
Actually, this trend had its beginnings about eight years ago.
A real estate broker friend of mine
told me, way back then, that there was a glut on the market and a buying slow down was in progress.
He predicted that overinflated prices on ersatz "luxury" condos would lead to a collapse in the that market and a conversion of these units into rentals.
It looks like he was right!
People will invest in a fine home.
They will not throw away $900.000
on a cheaply constructed apartment!
Luxury has to be built in
and not just proclaimed on an advertising banner hanging off the exterior of a building.
People aren't that stupid.
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