Family’s Misdeeds Lead to Auctioning Off of It’s 7 Apartments
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
The city sheriff auctioned off seven luxury apartments yesterday in a packed Manhattan courtroom under a partial judgment against a wealthy Turkish family who bilked $1.8 billion out of Motorola.
More than 250 potential buyers crowded into the room filled with sheriff’s deputies and extra folding chairs yesterday afternoon, in an attempt to bid for two apartments at the Trump World Tower and five at the United Nations Plaza Tower. Together the properties are valued at more than $10 million. Proceeds from the sale will go to Motorola, after the city’s Department of Finance claims a 5% fee for the auction.
A number of snafus punctuated yesterday’s proceedings, including a postponement to noon from 10 a.m. When the proceedings got under way, a lawyer representing the Trump World Plaza ruffled some feathers. He announced the building’s condominium board was reserving its right of first refusal, or may not allow the successful bidder to complete the purchase of the unit.
When the auction finally began at 1 p.m., the auctioneer’s cell phone rang, and after he turned off the offending item, he forgot who had won the first bid and had to repeat the bidding. Later, the auctioneer misstated bidding prices and missed some bids, causing confusion and some anger among the potential buyers, who were bidding hundreds of thousands of dollars. Despite the difficulty, all seven apartments sold for a total of more than $11.5 million.
Bidders included investors with dreams of buying the units for under market value and flipping them for a profit. David Vogel, who described himself as an Internet entrepreneur, was inspired to buy apartment 59C at the Trump World Plaza, his first such investment, after his third wife made money buying and selling real estate. He paid $2.2 million for the two-bedroom, 2.5-bath unit with 2,051 square feet and southern and western exposures.
The auction prices did not include back taxes owed on the properties, which are the responsibility of the buyer. The taxes and other liens on this unit add up to $159,000. Mr. Vogel said that despite the cash outlay, he hopes to flip the unit for about $4 million, “earning a cool seven figures,” he said.
Real estate experts say the $2.2 million purchase price is the market rate for an apartment of this size in the Trump building, but that with the lien and other fees, Mr. Vogel will be lucky to break even.
“I can’t imagine he will make money off the purchase,” real estate agent Fred Golden of Manhattan Realty Corp. said. “Even if he sells the apartment for $2.5 million, he has to pay a commission, and even if he only pays a 4% commission, which would be doubtful, he would just break even.”
“With real estate prices so high, many people are hunting for a bargain and there is a buying frenzy today at the auction, but the apartments are mostly going at market value and there aren’t deals to be had,” an agent for boutique real estate firm Picture Realty, Ray Schmitz, said.
Others investors who attended yesterday’s auction were disappointed by the large turnout, hoping for a more discreet event where fewer bidders would have translated into fewer bids.
“I didn’t think there would be anyone here, I’m surprised by all these people,” said Ira Freiman, who lives on the Upper East Side and was interested in buying one of the apartments as an investment to flip for a profit.
Some audience members were buyers looking for a home. Kristen Klabin is renting an apartment at 63rd Street and Second Avenue with her husband, and was hoping to find a home through this process. “I thought this would be a good way to find an apartment,” said the 34-year old. When she got to the courtroom and saw the chaos, “I figured it would be a better idea to sit this one out and watch the proceedings, then I can bid for a property at the next auction if I want,” she said. It didn’t help that she hadn’t brought with her a certified check necessary for the 10% deposit to claim the property.