Philadelphia Inquirer
Section 2-L
Where the action is: $48 million
In Shore condos sold in 4 weeks
Special to The Inquirer
ATLANTIC CITY – A super salesman named Studnicky and some slick southern moneymen from South Carolina have just set what could be a new American real estate record here.
In barely four weeks, they’ve sold $48 million worth of Boardwalk condominiums to buyers who won’t see their units – much less put a sandal inside them – until 1985.
Even in this casino-gambling, gold rush city, where Monopoly has been played with real real estate for years, a $48 million sellout, sight-unseen, in 30 days has heads spinning.
Not only did Studnicky and the southern moneymen sell $250,000 and $300,000 condos like well, like saltwater taffy – in September, they did it with no major advertising splashes, no fancy model units, no giveaways and a modest staff and marketing budget. Their color brochures for the condo project didn’t even arrive from the printer until nearly three-quarters of the units had been sold.
Who is this Studnicky? What’s going on in Atlantic City to produce a record like this? Who’s plunking down $250,000 a clip for 1,000-square-foot condos with Jacuzzis in the living room? And who are the Southern slickers helping pull in the money?
Some of the answers were on display here at a celebration bash that Jack Studnicky and U.S. Capital Corp. threw for 500 “close friends” and condo buyers at the Sands Casino Hotel.
A smooth-talking 46-year-old who describes himself as just “a Polish kid born in Newark,” Studnicky specializes in boom town real estate. He sold condos in Miami and Washington when those markets were hottest. He shifted to Atlantic City three years ago to catch the beginning of the gold rush.
He’s on top of it now. Not only did he sell out the 232 luxury units of the Enclave on the Boardwalk in a month, but he and his associates sold $40 million worth of condos at the nearby Ocean Club – where prices range from $180,000 to over $1 million – earlier in 1983.
“This city’s real estate is so hot right now it sizzles,” said Studnicky, with his usual dose of sales hyperbole thrown in. “There is no place in the country where people are pouring in so much money, so fast, as Atlantic City.”
He may be right. With its nine casinos now pulling in more than the combined take of Las Vegas’ 90 casinos (nearly $200 million a month), Atlantic City finally looks like a long-term winner to big investors on Wall Street and individual investors in real estate.
Construction and renovation projects are under way all along the Boardwalk and are beginning to spread into the less swanky parts of town as well. At least eight new casino- hotels have broken ground or are on the drawing boards, including a 2,000-room Hilton and huge projects by Harrah’s, Caesars, Resorts International and Golden Nugget. Twenty-three million tourists arrived in the past year, and the city is bracing for 28 million in 1984.
Numbers like that convinced Studnicky and U.S. Capital Corp. – a Columbia, S.C., resort development company – that they could sell pieces of the Atlantic City action retail to individual condominium buyers, despite the prevailing 14 percent mortgage rates.
U.S. Capital was particularly well suited to overcome buyers’ financial inhibitions: It pioneered the concept of raising mortgage money for second-home buyers on Wall Street via mortgage-backed bonds. The company’s bond techniques allow the firm to offer buyers 90 percent financing (10 percent down) on jumbo loans from $100,000 to $300,000, plus long-term rates that are typically below those available on ordinary mortgages from banks or savings and loan associations.
The combination of U.S. Capital’s financing savvy, Studnicky’s sales pizzazz and Atlantic City’s high roller economy produced the $48 million sellout on the Boardwalk.
But who were the buyers? The purchasers who crowded Studnicky’s bash at the Sands were a fascinating mix of upper-income professionals, a mixture that offers insights into an emerging new force in American real estate investing.
Many of the buyers were physicians, dentists and businessmen who have emigrated from countries such as India, Iran, Hong Kong, Taiwan and Korea. They are highly educated, earn big incomes and are passionately interested in latching on to prime American real estate as a base for their families’ financial futures.
Said a physician from India: “What could be more solid and American after all, than this piece of the Atlantic City Boardwalk?”
Studnicky had an answer: another piece of the boardwalk, which he’s working on but can’t announce yet.
