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When the auction started at 1:22 p.m. this was the room.
When the auction ended at 5 p.m. on Sunday at the Sheraton New York Hotel, the remaining hopeful bidders for one of 54 Solaria condos on the block seemed variously dispirited or stubborn despite discounts that averaged 45 percent off the listing prices.
But their mood hardly could have matched that of the condominium’s developer, Joseph Korff of ARC Development, or of the auctioneers, Real Estate Disposition (REDC). By the anticlimactic close after nearly three and three-quarter hours, even the typically frantic hand gestures and shouts of the auctioneer’s floor personnel had waned to wan facial expressions.
This was the scene when the auction ended at 5:00 p.m.
Although people connected with REDC put a happy face on the results, noting how rare it was for a building to sell as many as 54 condos in a matter of hours, rather than years, “at prices within 5-10 percent of retail,” everyone on the sell side had to be disappointed. Here’s why: The asking prices of all 54 units, which averaged 1,500-2,000 square feet and as much as 3,000 square feet, ranged from $660,000 to $4.35 million. By my new calculations (see previous post with caveats), list prices of those units totaled $71,905,000, with 45 apartments were more than $1 million.
When the hammer went down for the last time, the total bid was $39,900,000–55 percent of the list price and, therefore, a 45 percent discount. The average price per square foot was a mere $440, and only four units went for $1 million or more.
As they were led from the auction room, successful bidders were beaming, embracing and kissing. But they didn’t focus on a phrase the auctioneer uttered throughout the session: “Subject to seller confirmation.”
I don’t know and may never find out how many of the apartments finally obtained the developer’s assent, but he’s in a bind: Now that the market has spoken, literally, either he hangs on to his unrealistic hopes and takes his losses later or absorbs those losses now.
What if, instead of whatever it may have cost him to auction the properties, he simply had reduced the prices long ago or even now?
More than his bank account are at stake. As everyone knows, numerous developments are in serious trouble following the collapse of Lehman Brothers, and their owners have to be scrutinizing Solaria’s auction with more than passing interest.
Moreover, REDC also has quite a bit a stake. If the auction is considered successful, there will be lots and lots more business for the company in the New York area. It also must have wanted to recoup its marketing expenses (at least one full-page ad in the Wall Street Journal, plus the retention of not one, but two, public relations firms, including the estimable Howard Rubenstein) that must have exceeded half a million dollars.
I suppose by REDC’s measure, the auction was a success. I do wonder what Mr. Korff and what you, Dear Readers, think as well.
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I, on Cambodia 
Does anyone know what the individual units got bid up to? It seems like all the units are still listed on http://www.auction.com.
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i too took a pre-auction tour. they only showed us 2 apts..One had a crack on the mirror in the bathroom which i had to point out to the man showing the apt.and the laminate floors were badly damaged(the man said what do u expect; a lot of people have seen these apts) also sub-par kitchen cabinets.. no bid from me!!!!
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Riverdale is not even considered the Bronx by those who live in the Bronx… Whisper (even though it is) The Kennedy’s lived in the Riverdale and the average Home (not apartment) goes for $600.00+. The houses closest to the Hudson are mansions. Anyway that said…
The apartments in this building are absurdly over priced and this projects failure will only drive prices down in the area even more. The guys on this project have been clearly delusional and arrogant as to what this building should have been. They tried to back door the neighborhood which resulted in legal action halting this project upwards of four years. They lost tens of Millions before they even got out of the gate. … Look close before you buy. It all looks slapped together. Over the four years in construction they have had a changeover of installers that is mind boggling. No one would take responsibility to correct anything I was told by one resident. The situation is really sad. How do you fit 60 plus appartments in a twenty story building with an 80′ x 80′ footprint and it’s not even square… Leaving the apartments on angles. Everything is imported and outdated so good luck finding materials to do repairs. Good luck to those still looking at this as a good investment. There isn’t even a garage in the building. They keep saying there is available parking but it is next door in an already full garage in another building owned by Mr. Korff which means you will be paying him to park from now until the end of time. I looked hard at this and wouldn’t touch this deal with a 50′ pole. Auction or no auction… I wouldn’t touch it… Of course that is my opinion only for me… You do your own research and make up your own mind. Make sure you see the actual unit you intend to buy.
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I have been watching this from CA after I saw the first article in the NY papers. Very interesting, I think Mr Korff forgot Riverdale Solaria is in the Bronx and now is the time for him to cut his losses. Now if he could say Bernie M lived in one of them that would be a different story. All the units would have sold for more than the asking price. I also think the market spoke and like I’ve heard so may times by New Yorkers, “Bronx no Thonxs.” Time to move on next story!!!!!!!!!!
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James,
Clearly, you do not know the neighborhood of Riverdale.
The Bronx, in general, is a beautiful section of New York City….home to Wave Hill, The NY Botanical Gardens, and The Bronx Zoo.
There are numerous wonderful sections of the Bronx, but I would not expect someone outside of New York – particularly from CA – to appreciate that.
So I kindly ask you to think about being respectful to those people and locals that you are not personally familiar with, as I found your comments to be rather insulting.
You may comment on the Solaria, but please make informed opinions of Riverdale and the remainder of the Bronx.
– your neighbor out East
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James,
You might want to use the google before you write of a neighborhood about which you clearly haven’t got a clue. I don’t even know where to begin to educate you. I mean . . . wow.
j.
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i hope this is a harbinger of a more sane real estate market. I think it’s gotta be. when i toured the building I was told that there weren’t 10 units sold . some of them are rented. And let’s see
how many go thru. These prices are still too high. This building has a lot of deficits. And the so called things that make the apts. luxury, probably hide a lot of substandard things in the building. I say this because many of the buildings put up during this boom are showing a lot of structural problems.
nyc is at the end of the curve. despite the media trying to make out like the bust is over. It sure isn’t . Especially in nyc.
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