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Soleil Center I & II at Crabtree

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Lending pullback stalls Soleil tower

Developer seeks more financing for project that drew criticism for edgy look and top-tier prices

Jack Hagel, Staff Writer

The News & Observer

http://www.newsobserver.com/business/story/1144214.html

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There's nothing 'edgy' about the design, unless being unfashionably tall and poorly located counts as edgy.

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To a degree it is inherent in malls to do this since they turn their back on their surroundings. I think the more out-parcels a mall has the more likely you will see surrounding development like at TTC and Southpoint. Crabtree is also physically squeezed by the valley and could never have sprouted the type of sprawl adjacent to it that the other two have, though farther west on Glenwood it did sprawl....

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I don't have much confidence after reading the details of the article. Sure we owe tons of money to people and face many uphill challenges in the market. No problems here! Move along, people.

I'd love to be a fly on the wall in the Wesin corporate offices. Certainly they are not looking to expand their portfolio right now, and maybe they saw all of this financial stuff coming, but certainly you'd like to have a project in place in less than 5 years from when you commit.

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I don't have much confidence after reading the details of the article. Sure we owe tons of money to people and face many uphill challenges in the market. No problems here! Move along, people.

I'd love to be a fly on the wall in the Wesin corporate offices. Certainly they are not looking to expand their portfolio right now, and maybe they saw all of this financial stuff coming, but certainly you'd like to have a project in place in less than 5 years from when you commit.

This is almost eerily reminiscent of what happened with the Hannover Square development downtown--recession hits, really nice luxurious downtown hotel proposed by out-of-town investors gutted to something that was a pale shadow of what was originally proposed, both inside and out (although the multi-million dollar renovation about 10 years ago remedied the interior shortcomings to some extent). In the case of Hannover Square, IIRC it was a Canadian company, and they ended up going belly up completely at some point in the development process.

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I remember someone in this thread asking about another tower that looked like Soleil going up in another city. Was it the Elphinstone Mill Tower in Mumbai, India? That tower looks very similar to Soleil...well Soleil plus a Dior store. I wish Soleil was not in a flood plain so they could add retail to the ground floor. That would be a nice area to add some really upscale stores to the Crabtree area.

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This morning the N&O reports that the Soleil Center is jettisoning the condo portion of its design.

Indeed, the condos have been the project's biggest hurdle. To get financing, Soleil needed to pre-sell half of them. But their initial price -- starting just under $1 million -- was a tough sell.

In the entire Triangle, only six condos sold for $500,000 or more during the first nine months of 2008, about half the total sold during the same period last year, according to a Triangle Area Residential Realty report that tracks the luxury home market

And you can be sure that those $500k condos sold in urban locations. All this talk about the condo market imploding shows that Mr. Walia still cannot grasp what many on this board pointed out from the beginning-- that if you're going to live in a suburban location in a high-dollar residence, you're going to choose an estate home with a nice yard, not a condo with a view of the roof of the Crabtree food court. Soleil Center's residences were always the wrong place for the concept, and they still don't get it. Soleil was always a high-dollar, low-value proposition.

Greenbridge is going forward in Chapel Hill with several units north of $500k, many have already sold, and they will have no problem selling the remainder.

Write it down. There will be a hotel here one day, but there will never be luxury condos until Crabtree is completely razed and filled in with a better than average (and better than North Hills) quasi New Urbanist development, because until then, there's nothing urban at the foot of a big urban building to attract people who want an urban lifestyle at over-the-moon prices.

Edited by transitman

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One cannot say that we should extend the city's agreements for people like Greg Hatem and for the Reynolds (who were not able to sell condo portions of their projects downtown) due to the "rough economy", while also saying that Soleil isn't being built as-planned because it is a flawed concept.

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One cannot say that we should extend the city's agreements for people like Greg Hatem and for the Reynolds (who were not able to sell condo portions of their projects downtown) due to the "rough economy", while also saying that Soleil isn't being built as-planned because it is a flawed concept.

Why not? You can't throw a highrise in suburbia and call it urban living and expect the same consideration from the city as we try to build density in our urban core.

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How can a prjoect with all its pieces in place -- land acquired, plans approved, blueprints drawn up, financing, etc. -- at a time when obtaining credit was easiest in decades (if not ever) with projects that only obtained the land to build on *after* the credit markets had started to tighten?

If Soleil's inability to sell *half* of its condos:

- in an "unserved market" that won approval because it didn't need TIF financing*

- in a "signature building", the tallest in the Triangle

- sharing services, a Reebok Fitness Center, and a signature chef's restaurant with a Westin Hotel

- at the premier address in the Triangle

- with the fast and loose credit market

- with reservations for all condos, leaving the sales center for picking out floors, walls, and other upfits

- with large ad buys on the local and national level

is not a sign of it being a flawed project, then nothing is.

The Lafayette and Hillsborough have not had those calling cards; lumping the three projects together is wrong.

* and then later decided that if North Hills East received a TIF then they should get one too (added via edit)

Edited by ncwebguy

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They never claimed "urban living". It was not going to be the tallest building in the Triangle, much less the tallest in Raleigh (we've detailed this plenty of times in the RBC tower discussion).

You make good points about many pieces being in place, however the entire story has not been told publicly from the developers side. That's a variable many are forgetting.

Nevertheless, it is quite fair to "lump these three" because RFPs for Site 4 and for 301 Hillsborough were settled over two years ago. Also, don't forget the mostly empty West building, the poorly selling-going-to-apartment Hue, and other downtown condos that did not get sold. Let's discuss Site One's status? Shall we? It is patently unfair to not consider the lack of high-rise condo sales in downtown when criticizing the lack of a market at Soleil. Keep in mind, too, that the condos at Soleil were priced extremely high. Perhaps the building design warranted the high price.

Now it looks like the Crabtree area will be stuck with a forgettable, flat-topped building that is still in the flood plane. It will sit back from the street, not have an urban base, and will contribute only slightly less traffic to the area as a few more condos (not even close to the number that have been built behind the Marriott) would have.

Now are the critics happy? Let's all celebrate. Now downtown will be the only place in Raleigh with a glut of unsold, built condo units. There will not be a "competing" high-rise outside of the boundaries of downtown. Yes, downtown just got a huge shot in the arm. I fully expect The Edison, Lafayette, Hillsborough, Bloomsbury Estates Phase II, The Glen on Peace, Site One, 615 Boylan, 111 Seaboard, CAM Condos, and 630 North Street (among other never-realized downtown projects) to get built and sold in a matter of days now that those pesky 54 condos next to Crabtree are out of the mix.

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^Dana I see the parallels, but the product being offered was still quite different. We can choose to talk about the impacts of factors that applied to all (market) or muse about things that set a product apart (downtown vs crabtree). Its harder to say the product caused the failure of Soleil because the market swamped lots of projects. But bad product existed downtown too 111 Seaboard, Boylan Flats, 630 North coming to mind. Its easy enough to dissect what goes wrong on any given site....just talk to people. Imagine yourself as a buyer, or talk to others who did and why. The factors in buying a particular product become themes. The failed projects in Raleigh, seem to have failed due to these themes being ignored. Its easy for a developer to hide his incompetence behind a universal sledge hammer of credit market failure.

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^Dana I see the parallels, but the product being offered was still quite different. We can choose to talk about the impacts of factors that applied to all (market) or muse about things that set a product apart (downtown vs crabtree). Its harder to say the product caused the failure of Soleil because the market swamped lots of projects. But bad product existed downtown too 111 Seaboard, Boylan Flats, 630 North coming to mind. Its easy enough to dissect what goes wrong on any given site....just talk to people. Imagine yourself as a buyer, or talk to others who did and why. The factors in buying a particular product become themes. The failed projects in Raleigh, seem to have failed due to these themes being ignored. Its easy for a developer to hide his incompetence behind a universal sledge hammer of credit market failure.

Yes, but this theme (high-rise condos in suburbia) has sold well in nearly every large southern city. There is nothing urban going on here, here, here, or even here. It is pure suburbia.

Just as a philosophical question: If a hotel/condo that is 500ft is inappropriate for the Crabtree area, then what is? 400ft? 300ft? 200ft? 100ft?

Another problem with the project could be that it was a condo in a hotel, and maybe people want more privacy than that. Lafayette as a combo building may be a tough sell, too.

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Yes, but this theme (high-rise condos in suburbia) has sold well in nearly every large southern city. There is nothing urban going on here, here, here, or even here. It is pure suburbia.

This is simply not correct, at least for the two locations I can discern. These other locations are different, even if those differences are not readily apparent. Just for fun, I ran the Arlington, VA River House street address and "miami beach, fl" through walkscore.com, and then ran the address of the hotel that was destroyed to make way for Soleil.

Here are the scores:

Arlington: 85 out of 100 - Very Walkable.

Miami Beach: 80 out of 100 - Very Walkable.

Soleil Center Site: 57 out of 100 - Somewhat Walkable

So it's clear that the mixed-use nature of Arlington and Miami Beach is much greater than the Soleil area's mix of uses. But beyond that, look at the street networks in the walkscore links. Soleil is surrounded by cul-de-sacs, stub streets, and a few major arterials. The other two have gridded street patterns nearby. Arlington also has the Washington Metro very close. Zoom in on the satellite photography of the 1400 block of Joyce St, and you'll see two nice brick sidewalks crossing a two lane street to link the apartments with Pentagon City. Creedmoor is a seven lane auto sewer, and is much more of a barrier to pedestrians.

Urbanity is a multi-faceted thing; it is not always easy to describe. But from both Miami Beach and the 1600 Joyce St Arlington location, it is a short WALK without having to cross a deadly road to reach mixed-use buildings with storefronts that pull right up to the sidewalk, rather than sitting in the middle of a massive parking lagoon.

Edited by transitman

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You are missing the point. I-95 thru Arlington, VA and Miami are dotted all over the place with high-rises that require car trips for just about everything. (Most of those in Arlington aren't anywhere close to a Metro stop.)

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I think the high rises you refer to are in Alexandria, not Arlington. Most of the high rises in Arlington are near Metros such as Ballston, Clarendon, Courthouse, Virginia Square, and Clarendon metros, with very few in non-Metro areas such as South Arlington/Shirlington.

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We're getting way off topic here... but there's not much of anything that could be considered high-rise in Alexandria. What could, is very close to the city's three or four Metro stations, and the mid rises that aren't close to the metro are nevertheless located in one of the oldest, most walkable cities in the country.

Fairfax is another matter; there are numerous residential high-rises scattered throughout Fairfax county. Many are in new-urban developments near existing or long-planned transit (Reston, for example). Some aren't, but the ones that aren't certainly aren't in the 40+ story, $1 million dollar price range.

I think the developer's thought process was "hey, this sort of thing works in Buckhead, which is anchored by a mall, so why not Crabtree as well?" Well, I'll tell you why. Though transit and walkability are playing an increasingly important role in 2008, that's not what it's really about. It's about the neighborhood, and what it isn't - which is upscale. There are about 100 times as many high-end amenities within a mile or two of the center of Buckhead compared with Crabtree. For Crabtree, there's the mall - and that's pretty much it. And it took years for Buckhead to get to where it is - where a project like Soleil could make it there. Crabtree is a nice mall, but like every other mall in the Triangle, and in fact pretty much the entire Triangle, it's very much mid-market, especially compared to, say, Buckhead or Miami Beach. Very little glamor. Few people are going to want to shell out $1 million for a condo in a high rise in an area that might become upscale in a decade or so. Even somebody who came from somewhere like New York, or Hollywood, or Buckhead, who has the money to spend, wouldn't - why pay the same price for a condo at Crabtree as they would in Miami Beach, or Century City, or Buckhead, when the neighborhood and the amenities just don't justify the price.

If Soleil were, say, a 15 story tower with condos averaging $400k and a couple penthouses coming in at just over $1 million, I could see a market for it. Such a project might also push Crabtree down the road towards becoming a more Buckhead-like destination. But it will be a decade before the area can support anything like Soleil -- if ever.

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Good point that Soleil sort of tried to leap-frog over middle and upper-middle class and went straight for ultra elite status. Get Saks, Nordstrum and Nieman Markus (sp x3?) all in Crabtree somehow and you start to stamp the area as something set apart. I am very curious to see what the next up-cycle does to Raleigh...if there ever is another like the .com and real estate booms.

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They never claimed "urban living". It was not going to be the tallest building in the Triangle, much less the tallest in Raleigh (we've detailed this plenty of times in the RBC tower discussion).

You make good points about many pieces being in place, however the entire story has not been told publicly from the developers side. That's a variable many are forgetting.

Nevertheless, it is quite fair to "lump these three" because RFPs for Site 4 and for 301 Hillsborough were settled over two years ago. Also, don't forget the mostly empty West building, the poorly selling-going-to-apartment Hue, and other downtown condos that did not get sold. Let's discuss Site One's status? Shall we? It is patently unfair to not consider the lack of high-rise condo sales in downtown when criticizing the lack of a market at Soleil. Keep in mind, too, that the condos at Soleil were priced extremely high. Perhaps the building design warranted the high price.

Now it looks like the Crabtree area will be stuck with a forgettable, flat-topped building that is still in the flood plane. It will sit back from the street, not have an urban base, and will contribute only slightly less traffic to the area as a few more condos (not even close to the number that have been built behind the Marriott) would have.

Now are the critics happy? Let's all celebrate. Now downtown will be the only place in Raleigh with a glut of unsold, built condo units. There will not be a "competing" high-rise outside of the boundaries of downtown. Yes, downtown just got a huge shot in the arm. I fully expect The Edison, Lafayette, Hillsborough, Bloomsbury Estates Phase II, The Glen on Peace, Site One, 615 Boylan, 111 Seaboard, CAM Condos, and 630 North Street (among other never-realized downtown projects) to get built and sold in a matter of days now that those pesky 54 condos next to Crabtree are out of the mix.

:good:

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The Westin Raleigh Soleil Center Residences website claimed to be in "midtown", then changed its tune to "uptown" when North Hills took the mid prefix. During the planning commission approval process, the developers said they should build tall because the Crabtree area was one of the "city's focus areas" in the comprehensive plan. That leans more to selling it as "urban" than "suburban" to me.

And it *was* going to be the city's tallest building when it was approved. RBC had announced its HQ move to Raleigh a few months before but had not selected a location, let alone a building. And the pole and crown are not occupied height, only a way to claim to be taller than Wachovia and BB&T's buildings.

The City of Raleigh still owns 301 Hillsborough and the three properties of site 4. And Site 4 had worse than expected contamination issues. Glen Tree has owned the hotel site for five years, the office site for two and had city council's blessings and a list of people waiting to reserve condos for three years. That is a lot further along than the RFP process, which didn't include site plan approval which came in the last year or so for 305 and Site 4.

It *would* be patently unfair to not consider the lack of high-rise condo sales in downtown when criticizing the lack of a market at Soleil *if* the high-rise condos in RBC Plaza condos did not sell. But they did, showing there is a market for high-rise condos in the city of Raleigh, just not at Soleil. The devlopers designed the building and set the price for the units. Those features *defined* the development -- if that is what led the project to failure, then it was a "flawed concept" from the point the Soleil Group abandoned their initial plans of converting the existing hotel into a Westin.

The parking garage under Site One is currently under construction. The half closest to One Hannover/BoA is starting to poke out of the ground, continuing the parking deck already built under Fayetville Street and the Marriott. The half closest to Raleigh Memorial Auditorium is an empty hole, with maybe the footings poured. The Soleil Center had a lien placed against it for construction work already completed.

I don't think a Westin Hotel would be "forgettabale" by any means. Supposedly the Crabtree area *had* to have a luxury hotel, even with the Umstead, the soon to open Rennisance, and the City Center Marriott a few miles away in different directions. It will have as urban a base as the tower was going to have, making the mall look more urban by comparison.

West was built and Hue is under construction because there is proven demand for condos downtown. The downtown condo market is not only West and Hue -- it includes the Cotton Mill, Park Deveraux, the Dawson at Morgan, Quorum Center, 222 Glenwood, 510 Glenwood, the Paramount, the Hudson, and Palladium Plaza. Once Hue is built, there won't be any other "glut" under construction. The market has not absorbed the glut from the Kidds Hill project and Former Steak-and-Ale Town Center because those projects have yet to break ground.

While projects like Campbell Law, additional office towers, and the potential for a rail line to RTP will create demand and reduce the glut. Meanwhile, there is nothing on the horizon for the Crabtree area that will make condos in Soleil look more attractive. The airport, art museum, and RBC Center are not any closer, and only the three new restaurants make the Crabtree area any more "upscale" than it was three years ago.

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They needed to do an update to tell us nothing was going on? Anybody who goes past there could have told them that...must have been a slow news day. In other news today, Sir Walter Raleigh is still dead.

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