3rd Ward Midrise Projects

[WestCoastNC]

What happens if someone wanted to own, but did not want to pay the premium for a high floor. Will their contract price be honored, or will they have to make up the difference? Kind of like when an airline bumps you to business class because they over sold coach.

I have not seen the pricing sheet yet, but according to the Observer the new pricing for floors 15-27 start at 170k. Catalyst sold originally last summer starting at 180k on the 2nd floor. Coupled with the 12% discount they are offering to those who held contracts, the same unit on the 15th or higher floors should be much cheaper. For example, say someone bought a $180k base unit on the second floor this past summer. That same unit should in theory cost $170k - 12% discount = $149.6k on floor 15. That said on top of the new 12% discount there should be plenty of room for negotiation considering the market.

Edited February 6, 2009 by WestCoastNC

[Charlotte_native]

This is what they are doing. Novare will own up to floor 14. Condo sales are floor 15-24.

Very interesting. I guess two phases -- will be a lot of eyes watching this pan out. Oviously they've worked something out for financing, I'm sure they didn't do this on a lark without figuring out how buyers will obtain loans.

Edited February 6, 2009 by Charlotte_native

[CLTMichael]

Also, don't forget with these prices you don't get a deeded parking space. A space uptown goes for generally 20k. Anyone who is looking to buy should strongly consider The Avenue as you have owners looking to offload "bad investments."

Edited February 6, 2009 by CLTMichael

[monsoon]

According to the paper, and I realize we are talking about the Observer, they only managed to sell 60 units which is right at 13%. This would be less than the 17% posted here a few months ago. Presumably all of those contracts are invalid now given the reduced price, the fact they have changed the building and people had contracts on the floors that will be apts now. i.e. They can walk away without financial penalty.

So what will be more interesting will be to see how many of those 60 they can hold onto. Right off, there has been an apparent 12% decline in prices in this building which isn't the direction that a potential buyer might want to buy into. If it falls 12% the first year, how much further will it fall? While some might consider this a nice discount, I can't help to notice that neighborhoods that are going down in value are not exactly big sellers.

No doubt that people who bought units downtown in the 2003-2008 period don't welcome this news.

[Charlotte_native]

No doubt that people who bought units downtown in the 2003-2008 period don't welcome this news.

Maybe not them dropping the prices, but to have less 'for sale' units on the market isn't a bad thing at all for those that already own in the area. Tipping supply/demand a little less on the supply side is good right now.

[dubone]

I moved this question to the Economic Effects on Charlotte topic "Does any one have numbers of how many high rise units are selling per month uptown? (not the townhouse type units over in 1st ward or 4th ward) The fact that they are taking 200+ units off the market seems to me like there is way too much supply. When are other large developments scheduled to go "on-line"?"

http://www.urbanplanet.org/forums/economy-...arl-t48284.html

Let's keep this about Catalyst and the other Novare projects on this land rather than the big picture. There are other topics for the big picture.

[2hearts]

I don't know the ins and outs of residential mortgages, but could they not essentially create 2 separate entities, just as they would with the Twelve product? Essentially condo the building up so that one condo is 13 floors of apartment owned by "Catalyst Apartments LLC" or whatver, and the remaining building is individual condo units.

I assumed they'd go that route but I still question whether or not that will enable the building to get FNMA approved. I understand that there are unsold projects everywhere that can't offer conforming loans. If it were as simple as legally carving up the building I would think that every one would do this to qualify, regardless of how serious they were about renting. For example, a 460 unit project needing to show 50% presales (and related rental restrictions) could legally split the building in two (rental and for sale) and immediately lower their 50% presale hurdle by half. Or why not make it 90% rental and 10% for sale ? Then they'd need only 23 contracts to be 50% "sold" (and qualify) rather than 230. Even better they could then convert small rental sections (as they achieved 50% sold) in order to keep the conforming loans coming from FNMA. My sense is that the Agencies won't allow this kind of manipulation.

To your point about Twelve, I don't think the agencies view sharing a condo with a hotel use the same as sharing it with rental apartments since hotels are considered a commercial use like office and retail. They don't specifically attempt to avoid having these uses in a mixed-use project like they do rentals. On the other hand, if this were a two tower development, one rental and the other for sale, I think that would probably be ok.

All of this is to say that buyers should understand this issue very clearly before jumping in. Attractive teaser loans available from the developer's preferred lender today will be little consolation at refi or resale time if the building can't deliver conforming loans. Since yesterday's post it sounds like somebody has confirmed that they're indeed offering discounts and/or outs. Given the growing risk of very steep price reductions (see below), or even an auction, on the last 10-20% of the project's units, this would seem warranted. Time will tell whether or not the current prices are sweet enough to move buyers under the circumstances. Good point by someone about the lack of parking in those prices. Need to adjust for that too.

http://www.ajc.com/business/content/printe...d%3Dinform_artr

Edited February 6, 2009 by 2hearts

[WestCoastNC]

Here are some more pictures of the project taken this past Saturday.

Link to full gallery

Edited February 10, 2009 by WestCoastNC

[Charlotteman]

Terrific pics as usual West Coast N.C.

Kudos and THANKS.

Edited February 10, 2009 by Charlotteman

[Andyc545]

The exposed concrete or stucco turned out much better than expected.

Edited February 10, 2009 by Andyc545

[U4ick]

Another couple shots of 440 S Church rising..

So we can expect a rendering from Novare for TWELVE any day now, right?!

Probably smart to sit back and watch how Aloft and Ritz-Carlton perform before making any rash construction decisions!

[Andyc545]

Probably smart to sit back and watch how Aloft and Ritz-Carlton perform before making any rash construction decisions!

Ooh, I wouldn't count on seeing TWELVE anytime soon. It's half hotel and half condos as of now, but I'd imagine there is no justification to starting a building as both condo sales and the hospitality business have slowed a great deal. Plus with the way things have gone for Catalyst so far...

On a positive perspective however, I wouldn't call TWELVE dead by any means, just delayed. It was the true 'catalyst' (no pun intended) to the completion of this block, plus Novare already owns the land. Give it two years before we see a new rendering and a start on construction.

[nonillogical]

Ooh, I wouldn't count on seeing TWELVE anytime soon. It's half hotel and half condos as of now, but I'd imagine there is no justification to starting a building as both condo sales and the hospitality business have slowed a great deal. Plus with the way things have gone for Catalyst so far...

On a positive perspective however, I wouldn't call TWELVE dead by any means, just delayed. It was the true 'catalyst' (no pun intended) to the completion of this block, plus Novare already owns the land. Give it two years before we see a new rendering and a start on construction.

i peeked through the catalyst window at the new sales office, where they have a model of the whole complex, but twelve was not included

[Spartan]

18k of retail, a grocery store and 300k sq feet of parking to replace all the lost surface parking will be great as well.

Does anyone know the latest on the shops that will be in this parking deck, specifically the grocery store, but the others as well?

[DMann]

Does anyone know the latest on the shops that will be in this parking deck, specifically the grocery store, but the others as well?

I believe Novare has an issue with a grocer going in. More to do with the truck traffic than anything else. I toured several of the units yesterday, and found them to be very impressive. Somewhat Avenue like, but slightly better. The views from both north facing corners are wonderful, my guess is the night views will be great.

12 is officially on hold at this point. The corner it will occupy will become essentially a park, just a grassy expanse.

[dubone]

Why on earth would they oppose a grocery store on the grounds of truck traffic? Harris Teeter is physically inside a residential building, where as this is inside a deck. A grocery store would do help their sales and renter satisfaction if announced and put in.

[Spartan]

I biked by Catalyst this afternoon, and its a really good set up. They have what I assume is a "sample" facade for Twelve right off of MLK in their parking/street entrance thing.

As for the truck traffic- a grocery store would do wonders for that location, and if its a parking issue, I would hope that the city could work something out with them to allow temporary truck parking on Mint or MLK or something. To not have a grocery store because of a minor logistical error is ridiculous. To not have it because of the traffic itself is even worse.

[krazeeboi]

I know that Novare's buildings are known for their raw exteriors, but Catalyst still looks unfinished to me. There's gotta be something else left for them to finish on the outside.

[nonillogical]

I know that Novare's buildings are known for their raw exteriors, but Catalyst still looks unfinished to me. There's gotta be something else left for them to finish on the outside.

yeah, i think the street level feels and looks pretty good, but from a distance all i see is concrete, even though its stucco i guess.

[dxartist]

Why on earth would they oppose a grocery store on the grounds of truck traffic? Harris Teeter is physically inside a residential building, where as this is inside a deck. A grocery store would do help their sales and renter satisfaction if announced and put in.

I'm back (at least for a few posts here and there).

good point dubone. Pretty lame excuse if you ask me.

A grocery store would definitely do wonders. I'd rather see that than another coffee shop, eating joint, or some lame store. As a matter fact, a grocery would be an ideal fit for that location. Think about it. Not only would you have the Catalyst residents, you have a lot Duke Employees who park in the Mint Street Parking deck, under the Energy Center, in the 400 South Tryon deck, and not to mention other uptown employees who park within the vicinity. For these workers, it's about convenience, convenience, convenience. Instead of having to go a store along the way home, they can stop by and grab whatever they need before heading home. For me personally, I despise having to stop off at a grocery store after getting in my car or getting on my scooter for the commute home.

I think this spot can do well if given half a chance.

[ScottCLT]

I'm back (at least for a few posts here and there).

good point dubone. Pretty lame excuse if you ask me.

A grocery store would definitely do wonders. I'd rather see that than another coffee shop, eating joint, or some lame store. As a matter fact, a grocery would be an ideal fit for that location. Think about it. Not only would you have the Catalyst residents, you have a lot Duke Employees who park in the Mint Street Parking deck, under the Energy Center, in the 400 South Tryon deck, and not to mention other uptown employees who park within the vicinity. For these workers, it's about convenience, convenience, convenience. Instead of having to go a store along the way home, they can stop by and grab whatever they need before heading home. For me personally, I despise having to stop off at a grocery store after getting in my car or getting on my scooter for the commute home.

I think this spot can do well if given half a chance.

I agree - as a former Fifth & Poplar resident, the one thing that I really miss where I live now is having a grocery store downstairs. I don't currently (and didn't then) work uptown, so not having to stop at a grocery store on the way home from work was great - I got spoiled. Now, I live in South End, and though it's not that much of a hassle, I still hate stopping by the HT on East Blvd on the way home a few nights a week. I usually don't go on the once-per-week massive shopping trip that some people do because my plans are unpredictable. There's nothing that can beat a grocery store in walking distance from your work or home IMHO.

[WestCoastNC]

A quick update regarding Catalyst. The first renters are moving into the building this week. Contracts signed for purchase (all condo units on floors 15-27) have a closing date of end of August. There is another financing contingency which allows Novare to cancel contracts and make the entire building rental should they not sell enough units. Novare is paying the HOA dues for all renter units and unsold condominiums.

Edited February 16, 2009 by WestCoastNC

[Charlotte_native]

A quick update regarding Catalyst. The first renters are moving into the building this week. Contracts signed for purchase (all condo units on floors 15-27) have a closing date of end of August. There is another financing contingency which allows Novare to cancel contracts and make the entire building rental should they not sell enough units. Novare is paying the HOA dues for all renter units and unsold condominiums.

Are the setting the building up as two entities? How are they going to get buyers closed with such a high percentage of rentals to owned units? Is there a lender they've set up that can do this? Obviously they've thought this through since a building with 50% rentals won't pass for FNMA -- at least not with their stated guidelines. Is the building FHA approved?

[WestCoastNC]

They do not have specific lenders set up for buyers to use. They have somehow legally separated floors 15-27 as a condominium. The amenities on floor two are jointly managed somehow. The sales staff did not seem to have all the answers. I am in the process of confirming financing with a major bank and will let you know what I hear about whether it is a viable property for a commodity mortgage that can be sold off to FNMA.

Edited February 16, 2009 by WestCoastNC

[2hearts]

^ I'll be interested to hear what you find out. There seems to be a lot of confusion about this issue even though I think it will have a very big impact on the future values of these condos. Here is some additional relevant info:

http://cincinnati.bizjournals.com/atlanta/...16/story10.html

I'm not sure how/whether this change in FNMA underwriting will impact projects in NC but, again, it seems like a big issue.