International Property Journal - News and information on global property markets

U.S. real estate executives sound like bad mystery writers these days. The hot topic of discussion is “shadow inventory,” a mysterious and frightening figure hovering around the corner ready to stick a shiv in the recovering residential market.

Recent debate focuses on a report from Standard & Poor’s, which suggests that it may take three years to absorb the current shadow inventory of distressed properties.

After a long dry spell, new condo sales are picking up in New York City, thanks to steep discounts.

In the first quarter, 460 condos went under contract, a 181 percent increase from a year earlier, according to Corcoran Sunshine Marketing Group. Of course, a year earlier the market was in the dark cave of the downturn, but the increased activity—the highest level volume since the second quarter of 2008--is certainly good news for the industry.

Turns out only about one-third of the units in the controversial Trump SoHo in New York are under contract, according to a media report.

In June, 2008, Donald Trump, Jr. announced that 60 percent of the 391 units in the 46-story hotel-condo project had been sold, “largely to foreign buyers.” That figure was often repeated even as the market collapsed and skeptics scoffed at the idea of paying $1.2 million for a unit in the hotel-condo scheme, which restricts owners from using their unit for more than 120 days a year.

The news is the latest installment in the saga of Trump SoHo, which is scheduled to open April 9, after a long series of delays.

Trump Soho, the controversial New York condo-hotel, is definitely, absolutely, we-really-mean-it-this-time set to open in April.

A few months ago management indicated the oft-delayed tower would open in February, but that didn’t happen. Now those darn last minute kinks have been worked out and the hotel is officially set to open April 9, according to a press release.

The 46-story Trump Soho, which towers over most of the neighborhood, drew the ire of activists for using the condo-hotel concept to circumvent local zoning laws restricting apartment construction.

A subsidiary of Dubai World turned over ownership of New York’s famed Knickerbocker building to lenders this week, after defaulting on mortgage payments.

Istithmar World Capital, an investment arm of state-controlled Dubai World, paid $300 million for the Times Square icon in 2006. The company said it wanted to turn the office building into a luxury hotel.

Instead, Denmark-based Danske Bank assumed control of property this week and hired Jones Lang Lasalle to sell it. Danske took over the mortgage in the wake of the collapse of Lehman Brothers, Reuters reports.

New York-based King Penguin Properties, which controls property in the United States and Europe, says it is moving away from luxury condo units to focus on multi-family properties.

“Affordable multi-family units present less downside risk that a prolonged period of slow economic growth may present,” managing partner Michael Mikelic said in a press release.

As part of the move, Mikelic says the company is selling the company’s interests in the Trump Place in New York, where Mikelic sat on the board and served as treasurer. In an earlier statement the company said it would invest most of the proceeds into a distressed property fund.

With sales of new condos sputtering, New York City developers have been offering an array of incentives to woo buyers. Mortgage payment deals and buyback guarantees are among the plans builders have floated in recent months, “with little indication of success,” the Real Deal reports.

However, a Manhattan firm is pitching a scheme to developers, which will offer buyers a new twist.

The company, Sirius Value Protection, is essentially proposing a price protection plan to buyers. In exchange for 20 percent of the sales price, which will be placed in a trust, Sirius says it will guarantee to buy back the unit at its original price after a set period of time.

Using the Hamptons real estate market as a barometer, Wall Street is clearly in recovery mode. Over the last few months sales activity has picked up in the New York retreat, known as one of the country’s toniest addresses.

The number of sales jumped 22.9 percent in the fourth quarter from the previous quarter, a 55.4 percent increase from the same period a year earlier, according to the latest Prudential Douglas Elliman Hamptons Market Overview.

Of course, a year earlier Wall Street executives were groveling for bailouts and jumping out windows. Nevertheless, any sign that the wealthy are ready and willing again to snap up lavish estates is good news in the Hamptons 'hood--and all 'hoods like it.

By an overwhelming margin, investors chose London as the world’s top commercial property market, according to an annual survey by Washington D.C.-based Association of Foreign Investors in Real Estate.

London moved past Washington D.C. and New York, with Paris and Tokyo rounding out the top five. In the 2009 survey, London was second, in a virtual dead heat with New York and Washington, but this year respondents chose London by a wide gap, the association reports.

Fifty-one percent identified the U.S. as the best opportunity for capital appreciation, compared to 37 percent in 2008 and 26 percent in 2007. Two-thirds of respondents said they planned to increase their U.S. investments in 2010.

The annual survey reflects the responses of 200 AFIRE members, who control more than $842 billion in real estate.

Headlines from the world of property:

Dubai: Older Offices Have a Vacant Look

New buildings are gobbling up tenants, leaving older buildings to struggle. From the National.

New York: Priciest Condo Takes a Tumble

Price of condo in Philippe Starck building drops $7 million. From Curbed.