IRISH INVESTORS who had been hoping to collect keys to their Manhattan condominiums in the coming weeks have been told that they will be getting their deposits back instead.
More than 80 Irish buyers who prebooked the New York apartments at the height of the property boom in 2006, and before the US dollar tumbled, have been notified that their sales will not go ahead.
The Irish paid deposits on units costing €340,000 to €1.4 million at Gramercy Green, a building at 3rd Avenue and 23rd Street, that promised luxury fittings, a gym and 24-hour concierge service. Now developer JD Carlisle has opted to sell the entire block to NYU (New York University) as student accommodation.
KMS, the Dublin agency which sold the apartments, has told buyers that they will get their 15 per cent deposits back and an amount to cover the currency difference. The dollar has fallen in value by about 20 per cent since the deposits were taken.
One buyer told The Irish Times that the value of his $71,250 deposit had fallen by €6,500 since he paid the money in 2006.
The Irish were the single biggest group of buyers of the 290- apartment scheme, queuing to book units at a show at the Berkeley Court Hotel in early 2006.
However, in New York, the remaining units were slow to sell and the developers decided to accept an overall offer from NYU. An opt-out clause in the sales agreement allowed the developer to change the use of the building at the 11th hour - from luxury condo to student digs. This allowed him to cancel the Irish sales.
KMS had previously sold about 120 apartments for JD Carlisle in a block near the Rockefeller Center, all to Irish buyers who took possession of their $1 million-plus condominiums last year.
KMS director Cathal McGinley has now told all the depositors at Gramercy Green that they would be getting their money back.
"Everyone's deposit is being returned and a separate payment is being made by the developer to cover the currency loss," said Mr McGinley, who has lost an estimated $2 million in fee income and advertising.
One purchaser, who asked not to be named, said yesterday that at no stage had it been explained to buyers that the developer had the legal right to pull out of the deal.