Kola Aluko’s posh penthouse apartment in One57, one of Manhattan’s most expensive luxury towers, has finally sold after months of delays in what New York realtors agree is the most expensive residential foreclosure in city history.
The sale price - a paltry $36 million - suggests that the stress seen in the ultra-high-end real estate market in New York City has only worsened as buyers brace for a glut of new luxury buildings coming online in the coming years.
The buyer of unit 97, one of five bidders aside from the bank, wouldn’t answer questions, and his name wasn’t immediately available. Aluko purchased the building through shell companies. Recently, his assets have been seized by authorities in several countries as he’s wanted for bribing officials to receive lucrative contracts with his country’s state-owned oil company, Bloomberg reported.
Aluko bought the 6,240-square-foot (580-square-meter) residence in December 2014 for $50.9 million, according to New York City records. The sale yielded a compound annual return of about minus 11%.
And in September 2015, he took out an unusually large mortgage with an unusually short term: one year. The $35.3 million mortgage was obtained from Luxembourg-based lender Banque Havilland SA. The full payment of the loan was due one year later, according to court documents filed in connection with the foreclosure. The borrower failed to repay, and now Banque Havilland has forced a sale to recoup its funds.
“It’s probably the most-expensive foreclosure we’ve ever seen in luxury development,” said Donna Olshan, president of high-end Manhattan brokerage Olshan Realty Inc. “I don’t know of a foreclosure that’s larger than that."
WSJ reported in August that luxury condos in Billionaires’ Row have faced steep discounts as building owners have struggled to find buyers.
An analysis of condominium records shows the average discount on nine contracts signed at the Baccarat in 2016 was 22% below the peak asking prices of 2014, when the market was red hot. These include the sprawling 7,300-square-foot penthouse plus terrace that sold in June 2016 for $42.6 million, soon after the asking price was from $60 million to $54 million. Overall that amounted to a 29% price reduction.
One57 went on the market in 2011, and as of August there were still five units for sale. As we’ve previously reported, foreclosure proceedings were started in January. An auction scheduled for July was delayed after a creditor claimed Aluko owed it about $83 million for gasoline and jet fuel.
Keith Jurow, a real estate analyst and author of the Capital Preservation Real Estate Report, pinged me a few days ago with his analysis that suggests long-term mortgage delinquencies are seriously under-reported.
Hi Mish,
I thought you might be interested in the important clarification I just received from my contact at the NY State Dept. of Financial Services.
A few weeks ago, I sent you the latest update (attached again) of pre-foreclosure notices sent to delinquent homeowners in NYC and LI. I had noticed that 80% were listed as delinquent for less than 60 days. I asked my contact why that percentage was so high when he had been telling me for several years that over 40% of these notices were repeat notices – sent to long-term delinquents.
His response was that for repeat notices, the mortgage servicers often provided the same information as on the original notice. For example, if a repeat notice was sent two years after the initial one, the length of delinquency was not changed from that first one. That was why a second notice where the borrower might be three years delinquent could show a delinquency of 60 days.
This clarification confirmed my belief that many – if not most – of the borrowers were now delinquent for several years.
Keith Jurow
New York Loan Delinquencies
Out of 65,523 loans, a whopping 52,218 supposedly fall into the 60-days or less delinquent bucket.
90-Day Pre-foreclosure Notices Filed with the NY Department of Financial Services
100% of those 65,523 delinquencies generated a 90-day pre-foreclosure notice.
It is hard to believe that Baltimore was once one of the greatest cities in the entire world. Unlike nearby Washington D.C., Baltimore is a blue collar city that is home to some of the hardest working people in America. When I was in high school, my brother and I were huge fans of the Baltimore Orioles, and once in a while our parents would drive us from our home in Virginia all the way up to Baltimore to see them play. As an adult, I spent a number of years living near D.C., and I would take frequent trips up to Baltimore. To say that the city is in a state of decline would be a major understatement. Everywhere you look there are abandoned buildings and homes, and as you drive through some of the worst areas you can actually see drug addicts just lying in the streets. Just like so many other communities all over this country, decades of liberal policies have taken a brutal toll, and now the city is just a rotting, decaying shell of the glorious metropolis that it once was.
There are some sections of Baltimore that you simply do not go into once the sun goes down. And actually it isn’t a very good idea to go into those areas during the day either. The crime in the city has gotten so bad that authorities have actually formally requested help from the federal government…
According to The Baltimore Sun Newspaper, the city has logged in 118 homicides today with the projection of >400 murders for year’s end. It’s so bad here that Baltimore’s Mayor has asked the Federal Government for help in attempt to regain control. Even the police union sounds the alarm of an officer shortage leading to decrease in patrols. All of this is occurring as the Baltimore population declines, nearing a 100-year low, U.S. Census says.
The primary factor fueling all of this violence is an opioid epidemic that is completely and totally out of control…
The opioid epidemic is the quiet killer that has been leaving a trail of bodies on the streets of Baltimore.
“The individuals that are putting these drugs on our street, they’re killing people on our street,” said deputy commissioner Dean Palmere of the Baltimore Police Department.
Drug overdoses is expected to have killed 2,000 people statewide in 2016 and more than 800 in Baltimore alone.
“There are more people dying from overdose here in Baltimore City, than there are dying of homicide,” said Baltimore City health commissioner Dr. Leana Wen in February.
That last paragraph amazed me when I first read it.
Even though Baltimore is on pace for the highest murder rate in the city’s history, more people are actually dying from drug overdoses.
And now police in the city are warning of a new opioid that is reportedly “100 times more potent than heroin”. It is called Carfentanyl, and it can kill people almost instantly.
I would like to share with you a short YouTube film put out by Alastair Williamson just a few days ago entitled “The Baltimore Experience”. No matter how much I write, I could never communicate the devastation in the city quite like this little video does…
Did you see the part near the end where Williamson stops to offer a bottle of water to a man that is just lying in the street?
Hopefully that particular man is not on anything, but it is quite common to see people lying around like zombies in cities where an opioid epidemic is raging. These are very cruel drugs, and they will utterly consume you if you allow them to.
The more drugs that come in, the worse the violence gets, and within the past 24 hours we have seen four more senseless murders in Baltimore…
Two men were shot and killed Tuesday morning in west Baltimore, police said. Officers responded at 5:52 a.m. to the shooting on the 2800 block of Lanvale Street.
Police said officers found the victims in and around a vehicle. Both had been shot in the head and were declared dead at the scene, police said.
A 35-year-old man was fatally shot Monday evening in southeast Baltimore, police said.
The victim, identified as Charles Gatuthu, 35, was shot in the head and body at about 7:45 p.m. in the 6100 block of Boston Street. He was taken to Johns Hopkins Bayview Hospital, where he died.
A 25-year-old was shot and killed Monday afternoon in west Baltimore, police said.
And an official bulletin went out to all members of the Chicago police on Monday warning them about the “high-powered weapons” that gangs are now using to kill people…
Chicago police issued a bulletin Monday warning its officers about gangs armed with high-powered weapons, after three people were shot to death over the weekend – including two attending a memorial for the earlier victim.
Department spokesman Anthony Guglielmi said the three people who were killed in the shootings Sunday were all members of the same street gang.
Sometimes it is hard to believe that this is still America.
The precious people that are getting hooked on these drugs and that are committing these murders were once innocent little boys and girls. Somewhere along the way they were led down the wrong path, and this is happening on a massive scale all over the nation.
A couple of years ago, in the midst of its bankruptcy proceedings, we posted a series of stunning pictures illustrating the "Death And Decay Of Detroit." Once a beacon of America"s manufacturing prowess, a series of time lapsed pictures revealed how, in just a few years following the "great recession" of 2008, the once vibrant metropolis became the poster child for urban decay.
Unfortunately, at least according to a new study from WalletHub, Detroit"s crumbling commercial and residential infrastructure isn"t the only thing deteriorating rapidly in "America"s Comeback City." The study, which ranks America"s 150 largest cities based on overall health, pegged Detroit "dead" last.
Of course, in many ways, the map of America"s most healthy cities mimics an electoral college map with the Northeast and West Coast ranking generally more healthy while residents of the Southeast and Texas suffered the consequences of their love for fried foods.
Meanwhile, the map of "least healthy" cities is pretty much the inverse of the following map of the "fattest" cities.
Among other things, the health of America"s metropolitan areas was ranked by the prevalence of obese residents and access and health and wellness facilities at reasonable costs.
To reach their findings, WalletHub graded each city using 34 categories as metrics along with a specific weight for each category. The categories were split among four groups that accounted for 25 points each: health care, food, fitness, and green space. The higher the score, the healthier the city.
Categories considered in the study included mental health counselors per capita, cost of medical visit, and quality of public hospitals for health care; healthy restaurants per capita, share of obese residents, and produce consumption for categories under food; fitness clubs per capita, weight loss centers per capital, and share of residents who engage in any physical activity for categories in fitness; and quality of parks, bike score, and walking trails per capita among the categories for green space.
And here are your top and bottom 10 most/least healthy cities. Unsurprisingly, the health conscious, liberal bastions of California dominate the most healthy cities while Texas and the Southeast dominated the least healthy cities.
Apparently people in CA, OR and WA love to eat their fruits and vegetables while the folks of LA, AL, MS and AR are still looking for a viable way to deep fry their strawberries before partaking.
But, keep you head up Detroit...we"re sure things will turn around for you at some point.
