When a real estate transaction doesn't go as planned or costs run too high, it's possible that the development of the real estate will have to be stopped and that it will need to be auctioned to pay back the debts that are owed. That's what is happening in this case involving the development of a condo tower in New York. For buyers, this is in opportunity to purchase a building at a lower price, while the seller gets out of debt by going through bankruptcy or selling the real estate development opportunity to others with the funds to see it through.
If you've been following real estate development news in New York, you may have heard that the Sutton Place development site will be auctioned in December. The head of the group had planned to create a luxury condo tower at 3 Sutton Place; it was designed to be 1,000 feet tall. The project has now entered into bankruptcy as a result of defaulting on a high-interest loan.
A judge ordered the sale of the property to pay back the loan along with other creditors. The September ruling set Dec. 8 as the final date for bids, and an auction will take place on Dec. 13.
Not all people are upset about this bankruptcy. Residents in the area had been upset about the tower's proposed height. It would have been out of the norm in the neighborhood, changing the look of the neighborhood and sticking out. In January 2016, a group asked to limit the heights of buildings in the area to 260 feet.
Source: The Real Deal, "Auction scheduled for Beninati’s Sutton Place site," Rich Bockmann, Nov. 18, 2016