PhillyDeals: Aria to discount condos
Urban Residential, a New York developer, spent $40 million turning the 33-story Lewis Tower, at the northeast corner of 15th and Locust Streets, into the 114-unit Aria Condominiums just before the bottom fell out of the market.
Urban Residential
, a New York developer, spent $40 million turning the 33-story
Lewis Tower
, at the northeast corner of 15th and Locust Streets, into the 114-unit
Aria Condominiums
just before the bottom fell out of the market.
More than half the condos were sold, at prices originally listing from $300,000 into the low millions. But sales stalled last year, and in January, lender Istar Financial began foreclosure.
In September, Richard Oller, a veteran Philadelphia real estate manager, and his partner, Jeffrey Goldstein, bought Istar's $23-million unpaid note and 55 unsold units at a deep discount. At yesterday's sheriff's sale, nobody offered more (the price was not disclosed and Oller wouldn't
say what it was).
"We own it," Oller told me.
He's shaving an average 30 percent off the prices of the unsold units to reach the "current market."
The 2,600-square-foot, 33d-floor penthouse, with views, he promises, of both the Delaware and the Schuylkill, is marked down to $1.9 million from $3.3 million. Oller says he's got 13 deposits on units so far.
Road warriors
A couple of years back, when big investment firms like
Carlyle Group
and
Citigroup
were trying to buy toll roads from cash-strapped governors such as Pennsylvania's
Ed Rendell
,
Brian Chase
was one of the guys Carlyle sent here to locate deals.
The Pennsylvania Turnpike deal (with Citi) died in the General Assembly. Then the financial crisis dried up private offers for public roads.
Chase left the road-buying business, and now consults for the World Bank. But he read with interest last month that the Pennsylvania Turnpike Commission - an archenemy of private highway management, at least where its own roads are concerned - had paid for a study that supports its latest plan to take over state-long I-80 and start charging tolls, based on expected traffic and expenses.
Chase wasn't surprised the turnpike found experts who back its position. That's what tends to happen when you hire experts, he told me.
He was surprised to find the consultant, hired by the turnpike's engineers at McCormick Taylor Inc. of Philadelphia, was someone Chase had never heard of: Provident Capital Advisors L.L.C., of Baton Rouge, La.
Searching state records, Chase found Provident Capital had changed its name from Provident Healthcare Coalition L.L.C. in June, just before it got the $50,000 Pennsylvania Turnpike contract.
He also found that it was an affiliate of a Louisiana-based nonprofit, Provident Resources Group, which managed health-care centers and prisons - including a juvenile facility in Marienville, Pa. - but hadn't previously advertised road finance.
Why not a name-brand investment bank? he asked. "Houlihan Lokey has the best reputation for doing fair-market value analyses," Chase said. "Citigroup has been one of their municipal-finance advisers."
I ran that by Carl DeFebo, spokesman for the turnpike.
"We wanted a firm that had not worked for either the Pennsylvania Turnpike Commission or PennDot, and was not involved with earlier toll-road privatization proposals - a group with no vested interest in the conclusion of the analysis," DeFebo told me.
Not road experts? "Provident utilized corporate valuation techniques that are universally applicable for a wide array of industry sectors, whether it's an investment bank, an energy company, or a toll road," DeFebo said.
Plus, Provident's managing director Patrick Mooney "has 30 years of corporate- and public-finance knowledge." He was, among other things, head of investor relations and an energy trader at Union Pacific Resources, and a managing director of investment banking at consumer lender Capital One Corp.
I called Mooney to ask what he knew about roads. "I'm in a car," he told me. "I'm not driving. But I'll call you back." That was Monday. He hasn't called back yet.
Mooney's Provident report, with the rest of the turnpike's proposal, "will be evaluated by the Federal Highway Administration based on its merits," DeFebo promised.
FHA rejected the turnpike's last two attempts to toll freeways. But that was under President George W. Bush.
Under President Obama, at least one FHA official is well versed in Pennsylvania highway agendas: New U.S. Department of Transporation Undersecretary for Policy Roy Kienitz, until May, was Rendell's deputy chief of staff, responsible for transportation issues.