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Wait for the Vultures, Condo Buyers

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If you're thinking of buying a condo downtown, you're better off waiting 12-24 months to purchase, writes Fred Cordova, a Senior Vice President with commercial consulting company Colliers International, in a guest editorial on Blogdowntown. Cordova's two main arguments: 1. The market won't recover until unemployment levels improve. 2. The frozen credit markets may have essentially killed projects like Roosevelt Lofts and The Brockman, which simply suffered from "bad timing," according to Cordova, but once these distressed properties find new owners, buyers will have the upper hand. "Once these projects run out of reserves and are taken back by the lenders — or in some cases the lender is in trouble (like Corus Bank with the Concerto) — fresh capital will come in to recapitalize the projects at 50% to 60% of their construction cost. The new buyer, armed with a low capital structure, will be able to drive rents or condo pricing to levels that the existing owners will have to follow if they want to move product. A real-time example is the Kennedy Wilson/LeFrak/Guardian Life Insurance Company acquisition of The Mercury from Forest City. They are now selling units for 40% of the previous asking prices." (Indeed, The Mercury's new owners recently said they'd now be selling condos that had started in the mid-$300,000s in the low $200,000s.) Counterpoint? Blogdowntown is likely already getting angry rebuttals to this argument from downtown real estate agents. [Blogdowntown]