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News & ArtsWednesday, April 29, 2009
Boom The First
Posted by Dominic Holden on Wed, Apr 29, 2009 at 9:03 PM
Condo-to-apartment conversion:
Citing slow sales, Vulcan Real Estate is converting its Rollin Street Flats condo project in South Lake Union to apartments. Vulcan sent a letter to buyers this week indicating it would refund deposits.
Here's what I wrote about Rollin Street's problems earlier this month:
Government-controlled lender Fannie Mae established regulations in March that block most condo developers from closing deals with buyers if the developer has sold fewer than 70 percent of the units in a building. (Previous rules only required a presale rate of 51 percent.) The new rules—which fellow mortgage giant Freddie Mac is expected to adopt as well—will apply to most condo loans in the United States."Rollin Street is not 70 percent presold, nor will it be by our originally projected closing dates," a Vulcan representative wrote in the letter. [...]
If developers can't presell 70 percent of a building's condos before opening—a steep expectation even in a strong market—market forces may push developers to convert their buildings into apartments or drastically reduce prices.
4
Hmm. Use as a rental hurts your eventual sale price, I think. Renters, even high-price ones, fuck up units.
5
Seattle: 2009
NYC: 1972
West side apartments renting for $200 per month.
As junkies mill outside and cops like Kojak prowl the streets...
This is all your...sabotage!
http://www.youtube.com/watch?v=-sbqIyeed…
Seattle: 2009
NYC: 1972
West side apartments renting for $200 per month.
As junkies mill outside and cops like Kojak prowl the streets...
This is all your...sabotage!
http://www.youtube.com/watch?v=-sbqIyeed…
7
Not the first one. Right as the market started to tank, the building next to mine was set to go condo. They evicted the old tenants, rehabbed the units a little bit, then wound up turning them into "luxury" rentals.
9
They're going the apartment route because nobody can get a mortgage these days, but when things change, even slightly for the better, they'll give those renters the ol' heave-ho. I've seen it time and time again.
Don't believe me? Ask for a two-year lease.
Don't believe me? Ask for a two-year lease.
10
@ 8) Technically, you're right; Fannie Mae buys. But it's not buying those properties to keep them. Fannie Mae buys mortgages--i.e., loans--to make sure that banks can keep lending money to home buyers. So they are part of the lending end of the deal.
11
yeah it's definitely not the first, but possibly the biggest (completed) to convert so far. The 37-story Aspira, for example, was converted to apartments but is still under construction.
12
This is not anything new. Seattle has had real estate cycles in the past. When ever there is a down market, half completed projects that were intended to be condos are instead rented as apartments for a couple of years until the market turns around. I've seen this cycle at least twice in the last 20 years.
With the new 70% threshold, and a more panicked economy, I suspect we'll see more conversions like this in the next six months that I remember in past cycles. But they will all probably be converted back to condos again in 5 years.
With the new 70% threshold, and a more panicked economy, I suspect we'll see more conversions like this in the next six months that I remember in past cycles. But they will all probably be converted back to condos again in 5 years.
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