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Changes of Heart

  Big DealChanges of Heart By JOSH BARBANELPublished: November 6, 2009 ONE Madison Park, the soaring 600-foot glass condominium that towers over East 23rd Street, opened to its first residents in August, but since then only five buyers have closed, according to city records. Other would-be buyers have walked away — raising questions, brokers at several firms said, about the prospects for the building in a depressed real estate market. Skip to next paragraph One Madison Park RelatedFollow Big Deal on Twitter at twitter.com/bigdeal_nycLast week the developers, Ira J. Shapiro and Marc Jacobs, confirmed that one of the largest buyers in the building had changed his mind. The buyer, Paul Davies, a British interior designer who was in contract to buy three upper floors in the 50-story building for $31 million, was given at least some of his deposit back. A lawyer, Richard N. Cohen, said he had negotiated a settlement on behalf of two other would-be buyers, both Wall Street executives, who were unable to close on two apartments worth a total of $5 million. But after the buyers signed deals for a return of a “substantial portion of the deposits,” he said, the sponsor backed out of them. Mr. Cohen said the sponsor indicated the mortgage holders had refused to go along, perhaps raising a question about the project’s financing. But a spokesman for the sponsor said that the mortgage holder, iStar Financial, a publicly traded real estate investment trust with a $238.5 million mortgage on the project, was “fully supportive” and had continued to pay for ongoing construction expenses. Streeteasy.com shows 67 apartments at One Madison Park in contract, 16 on the market and only 5 units closed (though the sponsor said two more had closed but were not yet listed in public records). Brokers who have followed the building have long been skeptical of the number of units in contract, and have contended that some of them were sold to the listing brokers and their friends and family. The building is listed with Wendy Maitland and Wilbur Gonzalez, brokers at Brown Harris Stevens. The brokerage is conducting a wide-ranging review, including whether commissions were paid on sales and purchases by its brokers in the building, brokers at other firms said.In an e-mail message, Ms. Maitland confirmed that she had bought one apartment at One Madison Park, closed on it and resold it. Mr. Gonzalez said he was in contract to buy an apartment but had not closed.“I bought one apartment at whatever market price was at the time, as is common in the industry,” Ms. Maitland said, “and I’ve since sold it.” Mr. Gonzalez said Brown Harris Stevens “gets 30 percent of all our commissions without exception.”In an e-mail message, Amy Gotzler, director of communications at Brown Harris Stevens, said the firm “is meeting with the developers of One Madison Park as part of Brown Harris Stevens’s evaluation of its role in the project,” and added, “We believe no Brown Harris Stevens agent sales were done without the developers’ consent.”Several brokers said the building had been reaching out in recent days to brokers at other firms for their views on marketing the property. Buyers at many buildings in New York City have been trying to wriggle out of contracts now that prices have fallen sharply. When the first apartment closed at One Madison Park on Aug. 14, Ms. Maitland said the closing had beaten a deadline that would have given buyers the right to rescind that contract.But lawyers have been going over offering plans, and Mr. Cohen said that a discrepancy in the plan seemed to set the deadline at Aug. 1 at the latest, giving all buyers a chance to rescind.Mr. Davies is a shrewd investor who nearly doubled his money when he sold a London town house to Madonna. Shaun Osher, the founder of Core Group Marketing, which helped Mr. Davies find the $31 million apartment, said he backed out because “the market did an about turn.”“He didn’t want to be exposed right now for a piece of real estate that is now worth $18 million,” Mr. Osher said. But a spokesman for the sponsor said that a duplex unit making up two floors of Mr. Davies’s purchase was now in contract again “at an equal purchase price” with a closing exp
ected in January.
Follow Big Deal on Twitter at twitter.com/bigdeal_nycE-mail: bigdeal@nytimes.com

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