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3rd Ward Midrise Projects


UrbanCharlotte

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So while I'm sure buyers wouldn't necessarily want to live next to renters, what forces them to completely cancel ALL of the contracts? Would it not make more sense to let it be up to the buyer or are there many more underlying issues that would arise from having a mixture? I guess I'm not well versed enough on the differences outside of financing and contracts.

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So while I'm sure buyers wouldn't necessarily want to live next to renters, what forces them to completely cancel ALL of the contracts? Would it not make more sense to let it be up to the buyer or are there many more underlying issues that would arise from having a mixture? I guess I'm not well versed enough on the differences outside of financing and contracts.

If they forced those who already have put 3% down into a unit then a couple of things take place. For one, the rental to owner ratio is capped at 25%, meaning, no more than 25% of the units can be rentals per the buyer contract. Basically the more rental units, the lower the value of the primary residential units. So if Novare breaks this then they would almost certainly have to adjust the prices of the units as the values of the primary residential units would be lower. Second, because of a mix of rentals and owned units it would be extremely difficult to price these at a "market rate" due to the speculation of when and how the complex would be converted 100% into a primary residential property. This not only puts more risk at the buyers end but we should also begin to see lenders become mor active in verifying property values before closing and I would speculate lenders might shy away from this.

Of course, if you were able to get the condo at a lower price now, then 2 years down the road there are >75% primary residential units, Romare Bearden Park is complete, and the Knights Stadium is complete then the risk would pay off. Decisions....

Just my .02

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I called the Catalyst sales office to inquire about a possible conversion to rentals. Their response was that yes this is a contingency written into the contract that they are considering exercising. Because of January closing dates for the bottom floors of the building they will need to exercise this option within the next 30 days (end of November). If they do this all earnest deposits will be refunded. When I posed the question there wasn't any attempt to act surprised or to deny the rumor so I suspect they are leaning towards rental conversion. Right now they are sitting at about 70 units spoken for. The contract allows Novare to cancel the project if less than 150 units are sold up to 60 days before the first closing date.

I'm trying to get facts here and I have an update. Okay, not THE update, but I can confirm that Catalyst has stopped advertising using Google AdWords. As of yesterday if you typed in "Charlotte Catalyst" they were paying for paid advertisement spots under the sponsored links. Unless they just temporarily turned it off, this is probably a good sign that they have stopped spending advertising $$$ since they know they will be unable to fill enough units to move forward with Catalyst as a primary residential complex for now.

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At this point, I think its pretty clear it will be rental....now I think the question is, do they officially announce TWELVE as a condo/hotel with a 2011/2012 completion, with prerequisite pre-sells of 50% or so?

I maintain it would be the best strategy. With the 3rd Ward park issue starting construction in the next few months, and the worst of the credit crises SHOULD be resolved in the next 3 months boosting confidence to potential buyers that they will be able to qualify for mortgages at completion.

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I ran past (and biked past yesterday). The facade of the deck isn't great, but it isn't as bad as some which are purely utilitarian.

I don't know exactly what they are doing, but the stench of VOCs, with the smell of glue, is overwhelming and can be smelled a block away. It is awful.

It also appears that a crane is going up or down today.

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Does anyone know if they are still working on the tower or have the workers started to disappear? That would be an indication on what is going to happen.

I don't think we'll be seeing a change in the construction schedule. Either way they have a vested interest in either closing the units for sale or finishing them so they can rent them faster and pay off their construction loan.

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I was amazed when looking from Tryon through the closed section of 1st Street at the new canyon that has sprung up on 1st St. Between the Knight, 440 S. Church and the parking deck on Mint, the one dimensional wall of Tryon highrises is now growing out.

Also, look at google maps at this section. What is Wachovia Center (street?) between 1st and MLK. Is that new or old? I've never seen it before.

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The alley connection has always been there, but it is definitely new as far as being included on electronic maps. Perhaps they did it so that there would be a street on the public records with that name to help guide people to the area, just as was done with J&W. However, they'll need to change the name in 45 days.

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  • 2 weeks later...

I called in to check up again on Catalyst. No decision on whether the rental conversion will happen, hopefully will know by the end of the month.

Dec 1st and I have yet to hear from their office, although I have not called myself. I wonder how much of the 30 day notification period they will excercise.

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I called in today again. Got the same story, decision is still being made. They reminded me they have a 30 day notification period and that they are also considering the option to extend everyone's contracts out while the decision is made. Theoretically we could be looking another another 150 days for people on the bottom floors who were supposed to move in in January. If they can keep it as a condominium the sooner they move people in the better of course. If they are going to go rental, the longer they hold onto the deposit money the more interest they earn on it.

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I called in today again. Got the same story, decision is still being made. They reminded me they have a 30 day notification period and that they are also considering the option to extend everyone's contracts out while the decision is made. Theoretically we could be looking another another 150 days for people on the bottom floors who were supposed to move in in January. If they can keep it as a condominium the sooner they move people in the better of course. If they are going to go rental, the longer they hold onto the deposit money the more interest they earn on it.

If they are holding onto people's money to earn interest, then I am very concerned about the chances of actually getting it back. I put down $7k and at most they may be earning 5% (which would earn them $30/month) or $2100 a month on the 70 contracts that have been signed.

From my discussions with Catalyst people, the real holdup is Wachovia (their primary lender) who is dragging their feet on approving Novare's request to change the project to rentals. Novare wants to move forward as fast as possible, but with all the uncertainty within and surrounding Wachovia they aren't really too focused on Novare's request (especially considering the size of the loan involved).

With that said I do expect Novare to leverage the 60 day extensions in their contracts and expect a decision sometime in late January and early February.

By then Novare would have earned almost $6000 ($4000 after taxes) in interest on our deposits. Punks.

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