Saturday, March 01, 2008

Homeless In New York City

Gramercy Green was on the verge of becoming an outpost of Ireland. Around eighty investors had paid their deposits on luxury condominiums, planning to snap up a holiday home in the city that never sleeps. Wouldn't you know it, but just when the new owners were ready to take possession, New York University barges in and the holiday home plan is up the flue.

The developer ran into a problem when the booming housing market took a tumble. The Irish had bought up 80 flats, but JD Carlisle had the rest of the 290 condos to unload and there were precious few takers.

Looking around for another buyer, the developer was approached by New York University. The school needed additional accommodation for their students, and what better place than the luxuriously kitted out Gramercy Green?

The Irish are getting their money back, along with a little extra to cover the difference in the exchange rate so that they don't take a bath on their investment. Even with such generous terms, the buyers are stunned. They had no idea that there was a back-out clause in the contract, and they're not at all happy to have their dream of New York City living crushed so coldly.

KMS, the Dublin agency that handled the sales, will be left to sort things out and handle the fall-out from some angry investors who are wealthy enough to afford a second home that's worth close to $1 million. That's going to be some kind of angry.


Anonymous said...

Where did you get this info? I am one of those buyers who has been left out in the cold. I am finding out this info today for the first time! And any informataion is coming from the web.
The MD of KMS is missing and I have been informed that I will take the FX hit not KMS! That means a loss of at least $15,000 for me.

O hAnnrachainn said...

Orna Mulcahy of the Irish Times reported this on Saturday. The article stated that Cathal McGinley of KMS had notified all buyers, but judging by your post, that's not quite accurate. Supposedly, you're to get your deposit back in one payment, with a follow-up payment to cover the deficit due to the exchange rate.

Best of luck to you and the others who bought into the scheme.

Anonymous said...

I am another of the investors and have just read this post.
At the time the IT published the piece, the committment from KMS was to meet the forex differential. A committment repeated to me by Cathal McGinley (KMS MD) 3 times. Since then they have done nothing and are not returning calls or messages.
Seems only fair that if they got the kudos for intending to make the payment that people be aware that they have since let their investors down again.
Bad enough that they (and solicitors BCM Hanby Wallace) did not make sure the contracts were airtight, but they then let us down AGAIN on their committments made after the deal went bad. Potential investors need to know what/who they are delaing with. Maybe KMS don't have to (legally) meet that committment but no reason why they shouldn't be exposed for (not) doing so.