June 2, 2009
Jersey City Auction Offering Condos ‘Regardless of Price’
Florida-style desperation to move condo inventory is headed for a Big Apple suburb. Metrovest Equities, developer of The Beacon in Jersey City, plans to auction 25 one- and two-bedroom luxury units June 27 at a nearby hotel. A dozen units are being offered “regardless of price”-an attention-grabbing measure designed to draw traffic. Suggested opening bids range from $150,000 to $250,000; they were originally priced from $380,000 to $700,000.
The condo auction-aggressive for this region, but common in the Sunshine state, which is battling a multi-year inventory glut-is designed to close out sales in the first phase of the project, 315 units in two buildings, as well as accelerate sales of the second phase, 25 live/work condos in a third building, the developer says. The sale is also another indicator that the New York area, which long seemed buffered from the nation’s housing crash, is weakening as job losses and foreclosures mount.
The Beacon project-a $350 million-plus transformation of the 10-building Jersey City Medical Center-opened for sales at the height of the housing frenzy in late 2005. Buyers rushed to sign contracts-40 a month, at one point-for the development replete with floor-to-ceiling marble, a billiard room with $1 million of sculpted artwork, two theaters, a hot tub (pictured) and an 8,000-foot sundeck with a bar and barbecue grills.
But, by the time it was delivered in 2007, some buyers changed their minds or couldn’t secure financing, says George Filopoulos, Metrovest Equities’ president.
While the original phase, a former office building and hospital connected by a lobby, was 90% presold, “when the market fell down the tubes, we lost about 50 original contracts,” he says. It is now 77.5% sold and occupied.
The timing of the initial wave of condos was far from ideal, but Mr. Filopoulos isn’t giving up on restoring the art-deco campus built between 1931 and 1943. Billed as the largest historical residential restoration project in New Jersey’s history, it will ultimately comprise 1,200 residences in ten buildings and 80,000 square feet of retail space.
Completion of five phases – originally set for 2010 – is now more likely between 2012 and 2014.
“The work is very intense, number one,” Mr. Filopoulos says. “Number two, the market conditions changed significantly from when we first started.”
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