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When the going gets tough....

Andrew Goodstein may be redefining the term aggressive marketing.

In spring of 1991, as the president of Goodstein Properties, the sale and leasing arm of Goodstein Development, the 29-year-old was faced with selling the units at the Cove Club, a brand new, luxury 163-unit condominium in Battery Park City.

"Basically, we were coming out in the worst time of the market," he said. "It couldn't get any worse."

Goodstein's solution: Make opening day auction day.

On May 19, Goodstein, who was also lead developer on the project, held the first-ever grand opening auction in Manhattan at the Marriott Marquis Hotel. They offered roughly half the Cove Club units - the first 42 absolute. Sixty-one units or 35 percent of the entire project was sold at roughly $260 per square foot or a 27 percent discount of the original offering price. Post auction marketing realized a discount slightly under 26 percent and brought sales to 50 percent.

Goodstein then decided to go to Hong Kong and try an auction there. On Sept. 14, they conducted the first Hong Kong auction of Manhattan residential property. Thirty-four units were sold at a roughly 26 percent discount of original offering price. The Hong Kong auction also garnered sales about $20 a square foot better than the Manhattan auction.

On Nov. 1, with 72 percent of the units sold, they began a rental campaign. Today they are 85 percent sold and expect to be 95 or 100 percent sold by May - one year after opening day.

"Considering the state of the real estate market, it was the most successful project of the year," said Goodstein who is the third generation of the Goodstein family in the development business.

Goodstein isn't the only one who thinks so. The National Association of Housing Builders (NAHB) recently selected him as Sales and Leasing Man of the Year. NAHB also named Steven Goodstein, Andrew's father and president of Goodstein Development, Developer of the Year for 1991 for the Cove Club. And Associated Builders and Owners chose the project as the Mixed-Use Development of the Year.

The idea of an opening day auction, Goodstein said, took some selling with Goodstein Development's partners and the lender. Manufacturers Hanover Bank. They were concerned that people associate auctions with distress, Goodstein said, and they feared the auction would fail. They also questioned, he said, how much their prices would be discounted.

"I spent a couple of months convincing my partners and the institution that an auction was the way to go, he said.

"The effect to us is we end up with a bulk sale which we were thrilled with and ... the individual gets the ability to buy as if he was an institutional investor."

To the Hong Kong investors, he said, the auction held appeal because of the views of the Statue of Liberty and because they are looking for investment vehicles in light of 1997 when Hong Kong becomes part of China.

"With that coming up they really want to get their money out," he said.

While other firms have done some auctions for New York property in Hong Kong, Goodstein said, his firm sold the most units and realized more per square foot than any one else.

Development Family

The Goodstein Organization has been a force in residential, commercial and hotel development for almost 70 years. Andrew Goodstein's grandfather, Jack, founded the firm in 1927 and built his first multiple dwelling in 1929. In 1957, he was joined by his son Steven, now president, who has been responsible for the planning, construction and marketing of more than 40 residential and commercial properties in the New York metropolitan area.

The Goodstein Organization's many developments include: Liberty House, Liberty Terrace and Liberty Court at Battery Park City; the Gotham Hotel conversion; Boro Park Village, a 200-residential condominium in Brooklyn; Ave 209-unit Hampton House condominium on East 79th Street; and Fifth Avenue Tower, a 34-story office/condominium development.

In 1985, Andrew Goodstein joined the firm and, in 1987, created Goodstein Properties, Inc. a marketing and sales division. Its initial assignment was to market three beach front hotels in the Hamptons - Bath & Tennis, Dune Deck, and Harborside - that the firm had converted to sell as cooperatives, many with boat slips. Sales of more than 50 percent were achieved within the first nine days and they are currently 90 percent sold. For the remaining units, Goodstein said, they are beginning a marketing campaign based on the "share" concept where individuals would take shares in rooms. They are also marketing condominium hotel rooms and boat slips at the Montauk Yacht Hotel.

In addition to the beach-front hotels, Goodstein has marketed, for The Goodstein Organization, Executive Plaza, Boro Park Village, the Gotham Hotel and the Liberty Residences in Battery Park City.

For the past six months, Goodstein Properties has been offering its marketing skill to financial institutions. Depending on how aggressive they want to be, Goodstein may come in as a consultant to market the property or as a direct purchaser or as a joint venture partner. They are currently devising a campaign for marketing a 600-unit "job" where 120 units are empty.

"A lot of those buildings that are in trouble today just need someone to come to the table, give it a new spin and put some dollars into it, he said. " ... When they talk to us they are talking to someone who can handle every aspect."

Goodstein said they have built a clientele of potential purchasers that range from people who could buy individual units to those that can buy entire buildings.

Goodstein shared one of his secrets for marketing success. "Take each property unto itself and find what's beautiful and bring that beauty out and suppress what's negative," he said.

In New Jersey, Goodstein recently purchased about a dozen lower - to middle-income residential properties from developers and owners "who wanted out." They added a few touches and offered FHA financing for the units with 5 percent down. Goodstein said they turned an undesirable building into "the American Dream." They are currently selling four to eight units per month, he said.

"Why would you ever think about renting when you can own for less than you can rent for," Goodstein said.

According to Goodstein, his company was the first to do a New York auction with the Hotel Taft on Fifth Avenue, which they converted into the 460-unit Executive Plaza condominium. They sold 400 units very quickly, Goodstein said, and then sold the remainder at auction.

"We like to do things first," Goodstein said.
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Article Details
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Title Annotation:Profile: Andrew Goodstein
Author:Fitzgerald, Therese
Publication:Real Estate Weekly
Date:Mar 25, 1992
Words:1089
Previous Article:Patience triumphs in boroughs.
Next Article:Professional management: new importance in '92.


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