Roosevelt Hoping Buyers Fall in Love with Valentines Day Auction
Eric Richardson
[Flickr]
Nine months after entering bankruptcy, Roosevelt Lofts today got a judge's permission to proceed with the sale of units.
DOWNTOWN LOS ANGELES — Prepare for another round of auction fever.
Judge Geraldine Mund today approved the Roosevelt Lofts' petition to become the latest Downtown condo property to turn to a one-day sale in an attempt to move a large chunk of units. The auction, to be conducted by Kennedy Wilson, is proposed to include 65 units and likely to take place on February 14, 2010.
Unit pricing has not been released, but project's reorganization plan assumes an average sales price of $425,000.
Only units on floor eight and below will be available, as the building's upper floors still need to be completed. According to today's order, floors nine and ten must be completed by March 31, with floors 11 and 12 to follow by June 30.
Today's ruling is good news for a project that has been stuck in limbo. When the Roosevelt Lofts filed for Chapter 11 reorganization on April 13, developer Milbank Real Estate Services put out a statement saying that sales would continue "without interruption."
Nine months later, no units in the building have been sold and the project has turned to short-term leasing as a way to generate some cash flow.
The motion to sell units was opposed by Bank of America, which has the construction loan on the property and has filed to end the bankruptcy case, which would allow it to start foreclosure proceedings. That motion is still set to be heard on February 2, but today's order seems to make clear that Judge Mund views the project's plan for reorganization as valid.
The Valentines Day auction is timed to get the units sold before other nearby projects enter the market. There are currently 350 units on the market in Downtown, according to a declaration filed by Richard Winchell, President of Kennedy Wilson. He expects that number to nearly double in the upcoming months as an additional 305 units hit the market at 705 W. 9th -- another building currently navigating bankruptcy -- 655 Hope and Santee Lofts.
Kennedy Wilson recently operated an auction for nearby Market Lofts, which sold its last 55 units in a one-day event on November 14.
The 222-unit Roosevelt Lofts is located at the corner of 7th and Flower, in the Financial District. It was developed by Milbank Real Estate Services.
Fabricio on January 08, 2010, at 04:32PM – #1
What I would like to know is what other fees besides the unit mortgage is added to the monthy payment. I just don't think it would cost me the same as a house for $425000 somewhere else.
Eric Richardson (@blogdowntown) on January 08, 2010, at 04:43PM – #2
Fabricio: HOA dues on similar projects run $350 - $600 per month. All of that information would be published before the auction.
Joe on January 08, 2010, at 10:04PM – #3
Another mortgage loan market crash victim, huh? It's sad to see so many developments just fall apart in the last year or two.
Kevin Lynn on January 09, 2010, at 07:12AM – #4
I've toured the building and am really impressed with it. They put a lot of money into it and obviously a lot of that is not going to be recouped. The big question is with real estate prices deflating, what is the price point that will induce people to buy?? I am not sure how long a ready pool of foreign investors coming in can be relied upon as has been the case in other auctions downtown.
McCall on January 10, 2010, at 07:57AM – #5
Fabricio, the additional costs would be things like parking, and crime and the other various "costs" associated with living downtown. However, with those costs come some perks, as well. Great rooftops, usually. The view from most of the buildings/units down there are magnificent. The 'walking' culture - you don't have to roam far (at least M-F) for food and a paper and a good cup o' Joe.
Another thing: Filming. I had a pal, who lived in a hip, un-"redone" Artist's loft, around 5th and Main... He basically paid his rent from the filming $ given to him (practically) every few months. There is a LOT of filming in that "lofty area" and they tend to pay well when they interfere - so I guess you can consider that a perk or a pain, depending on your personality and, of course, whether you directly receive, or if your bldg. 'absorbs' that extra ca$h. (Cost for parking, as well as studio inconvenience fee distribution - Might both be good questions before bidding.)
I guess, basically, like anywhere else, there are the pros and the cons. But I happen to personally know the manager of this particular place and as long as she is there, these units will be better 'cared for' than most upcoming in other bldgs. ; )
Robert on January 10, 2010, at 12:12PM – #6
Is the Roosevelt eligible for the Mills Act for historic properties? It currently saves me about 65% on my annual property taxes. It makes up for the normally high HOA fees.
LA Lover on January 10, 2010, at 10:01PM – #7
I toured the building before, and they told me that they have Mills Act already.
Their finishes are very high end, and there were a lot of amenities that most others do not have. The roof and pool are awesome, with great skyline views.
I saw some larger sized units, so if those are going for the mid $400s, I would live there (they used to be $700k plus before).
Maybe thsi is finally going to be an affordable place, which has all the amenities of much more expensive places!
Downtown Cowboy on January 11, 2010, at 06:35AM – #8
I visited the Roosevelt and went through the units. It's one of the nicest conversions downtown. They really did a good job. The Market Lofts auction went for $400 - $450 a square foot, so look for these to sell in that same range or slightly higher. The good news/bad news is that it is right above the subway stop. This makes is extremely convenient, but also brings some less than desirable strangers to your doorstep. This place is hugely convenient, though - Ralphs is a block away, Macy's is across the street, Gold's Gym is a block away and Bottega Louie is a block away. No need to ever leave the hood.
Simon Ha on January 11, 2010, at 08:34AM – #9
Downtown Cowboy: Market Lofts auction got around $350/sf average. Curbed LA has an article which lists units sold and winning bid prices - http://la.curbed.com/archives/2009/11/weekend_wire_market_lofts_auction_sells_out.php
With An E on January 11, 2010, at 02:22PM – #10
Legal background question: How are they able to sell/close on 65 units? Presumably this doesn't meet 50% requirement.
Kip Nitrale on January 11, 2010, at 07:09PM – #11
I also wonder what will happpen to the current tenants, many of whom recently signed leases. Will they only sell unoccupied units? Do the tenants have any rights of first refusal? Surely some of this must have been anticipated when they were leasing up the building. Does anyone know the particulars? Also how long is it anticipated to finish the construction of the upper floors? Will those be auctioned off as well at some point?
doc on January 11, 2010, at 07:33PM – #12
What about those (11 or so) people who have put 5% deposits on units? What is going to happen to those units and the deposits?
And yes 50% occupancy on 222 units would be 111, so I would wonder also?
Downtown Cowboy on January 11, 2010, at 08:40PM – #13
re: Simon Ha The $350 a foot is based on the square footage provided by the developer. What every buyer MUST know of a new development is that the s.f. quoted by the developer is NEVER the actual size of the unit they are buying. Developers are allowed to amortize the common area into those s.f. amounts. Consequently, actual size of the unit the buyer is purchasing is significantly less. They find this out when the purchase appraisal comes back with the lesser, and correct, s.f. size. Hence, the $350 a s.f. at the Market Lofts becomes $400 - $450 a s.f.
Kip Nitrale on February 04, 2010, at 05:24PM – #14
I haven't heard any more on this ... I assume the Valentine's Day auction is slipping?