1111 viewsBy Leslie J.W. Singer, Licensed Associate Real Estate Broker
Luxury real estate is as challenging as it Is exciting, requiring a high level of expertise, resourcefulness, and collaboration. This past year, I was able to navigate the most emotionally charged, intellectually challenging, team-driven deal of my career. Here is an overview of the 16-month journey it took to get to the closing table.
Our client was a senior executive establishing his company’s headquarters in NYC. He had exceptional liquid assets to his name and a father as a guarantor with outstanding liquidity. He had a proven track record with many personal accolades and philanthropic efforts that would make him an asset to any building.
The seller was a Titan of Industry in his own right and they were a match for each other. The stars were aligning; Park Views, abundant square footage, outdoor space, a Fifth Avenue co-op that allows to purchase in a Trust when very few do. I knew this from previously closing another deal in the building. Any other Fifth Avenue home with outdoor space would likely be a penthouse, costing at least triple this home’s price. On paper, it should have been smooth sailing, the home met all my client’s restrictive critical criteria and they were highly qualified. The financial profile we as Brokers like to call a “slam dunk.”
Very quickly, however, everything started drastically coming apart. There were so many impediments and most would have given up, but the hurdles only strengthened our convictions. My team understood that we had made a commitment to this once-in-a-lifetime opportunity, a transaction we could never replicate for our clients. We were determined to see it through!
After the initial showing, my clients thought the property was overpriced and it came off the market for summer. I continued having discussions with the Broker. The seller had the home on and off market for years and as autumn approached, he started to accept market conditions. His Broker strategically suggested we return to look at the apartment at sunset. As we opened the door, a blast of golden crimson light filled the foyer as the sun set over Central Park, reflecting brilliant hues across the reservoir and spotlighting the Temple of Dendur. This magical moment solidified everyone’s dedication to the process.
Very soon after, WE STRUCK A DEAL. I negotiated a price that would secure my clients a significant return on their investment, given I had sold the home directly above at a 46% premium. As the contract process began, so did the unraveling. With the seller’s direct contact with the board, we learned they would not accept the father as a guarantor and only wanted the shareholder on the stock certificate. With the purchaser’s strong liquidity, we did not anticipate an issue and were advised to start the Purchase Application.
The circumstances were becoming increasingly more complicated, our clients were not actually yet US Citizens and the assets in US Trust were limited. Concurrently, the seller Googled our client and noticed that he had recently stepped down from his position at his company – alarmed that the board would see this professional shift as a demotion questioning his future success, he put the home back on market with our deal sheet out!
Devastated that we would be outbid, a new challenge arose: while our client’s assets were trading on the international stock exchange, the board was adamant that it be solely US based liquidity. Naturally, we suggested our clients transfer funds, but to our surprise the financial regulations of the buyer’s home country only allow $1M a year into US-based accounts.
After weeks of relentless work and brainstorming, we devised a sophisticated proposal. They would transfer $1M per year––the legal limit––for 5 years for a total of $5M to demonstrate they had more than sufficient funds to carry the home. This, combined with assets already in a US Trust, was our only opportunity. We had the attorneys draft a legal document, a critical component of our co-op application. After months of upsets, and no contract in play, our clients were becoming disenfranchised. To keep them engaged, we had them return with their architect; only to learn that the apartment was not legally combined! Like any lender, JP Morgan could not execute the loan until the units were legally united. The legal combination suddenly took priority—a process that could take six to eight months at a great expense. Now my clients were about to walk!
Driven by incredible determination, the seller’s broker found a remarkable and attractively priced expeditor/contractor who could complete the entire task in two months with the sign-offs from the board and city equally expeditiously. We even hired a professional copywriter to craft a detailed and persuasive cover letter that explained the buyer’s “official” title change due to legal restrictions. The letter also detailed the family was in the process of securing their US citizenship and living on a US1 Visa. The goal was to convince the board this was to be their primary residence: Their young children’s education was the impetus for the move, they were enrolled in UES private schools. After almost half a year of obstacles and sheer tenacity, we were finally FULLY EXECUTED and given all the work upfront, within hours, we submitted the board application.
