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Who is going to buy all the Condos, (Part II)


monsoon

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LOL, I'm not breaking any news, but demand for condos is on the upswing, inventory is selling well at least from what I've gathered from Friends in Real Estate in Charlotte.

 

I can confirm that this is the case as well. My wife has several friends in real estate and they've seen a big uptick in closings, for both single family homes and condos, in Charlotte over the last few quarters. The inventory of homes has really shrunk in the past year, to the point where many residences only lasting a few days max on the market (sound familiar?). Of course the price point is not quite where they were in 2006-07, especially with condos, but they are selling at prices where sellers aren't losing any sleep on the price.

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This may not be as big an issue in Charlotte as it is in hugely oversaturated markets like Miami, Las Vegas, and Phoenix, but individual buyers are competing against big institutional purchasers.

http://www.washingtonpost.com/business/economy/wall-street-betting-billions-on-single-family-homes-in-distressed-markets/2013/04/21/ac4bdefc-a2e1-11e2-9c03-6952ff305f35_story.html

A friend looking to buy in DC recently discovered that foreign firms are buying foreclosures in bulk and renting them out as market prices continue to rise. I have a feeling The Vue and Park Condos could benefit from this phenomenon because the respective owner are in a tough enough position that bulk discounts may be in order.

Edited by carolinagarnet
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The Vue is not a for sale product any longer. It is 97% rental.

This may not be as big an issue in Charlotte as it is in hugely oversaturated markets like Miami, Las Vegas, and Phoenix, but individual buyers are competing against big institutional purchasers.

http://www.washingtonpost.com/business/economy/wall-street-betting-billions-on-single-family-homes-in-distressed-markets/2013/04/21/ac4bdefc-a2e1-11e2-9c03-6952ff305f35_story.html

A friend looking to buy in DC recently discovered that foreign firms are buying foreclosures in bulk and renting them out as market prices continue to rise. I have a feeling The Vue and Park Condos could benefit from this phenomenon because the respective owner are in a tough enough position that bulk discounts may be in order.

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^^ I'm aware that the company is renting, but I thought they were still trying to sell units that would in turn be rented by their owners.

Not that i know of, there are about 16 condos that are owned in the building the rest of the 400 or so are 100% rental. At least thats the impression I've always been given.

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  • 4 weeks later...

http://m.charlotteobserver.com/charlotte/db_97739/contentdetail.htm?contentguid=jsWEFzdv

Interesting thing in this article. It suggests there are 17,500 apartment units either under construction or planned. I knew there was a lot, but Jesus that many?

And not to nitpick, but that number breaks down to 7,500 under construction and 10,000 planned...or, the vast majority only planned and perhaps might not get built.

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  • 4 weeks later...

The condo market continues to show signs of firming up. Royal Court has sold out.

 

Gosh, it only took 4 years....

 

http://www.bizjournals.com/charlotte/blog/going_green/2013/06/succession-sells-out-royal-court-condos.html?page=all

 

Does anyone have an idea of how much intown condo inventory remains? (not counting the Vue)

Edited by kermit
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The condo market continues to show signs of firming up. Royal Court has sold out.

 

Gosh, it only took 4 years....

 

http://www.bizjournals.com/charlotte/blog/going_green/2013/06/succession-sells-out-royal-court-condos.html?page=all

 

Does anyone have an idea of how much intown condo inventory remains? (not counting the Vue)

MLS has about 83 listings and between The Madison and SKYE there are about 45 unlisted units available.

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The fact that those Madison and SKYE units are still sitting around is a big indicator that we are still in a market where people will rent apartments but not purchase condos.   The Madison is luxury, but isn't SKYE more affordable?   Maybe SKYE will have less trouble when they are done construction, and I did see some activity of people in the small sales center next to Emerson Joseph the other day, but it seems that they are perpetually between 50-60% sold. Perhaps just like The Park, it is very hard to sell the units that do not face the skyline.

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I don't know how many "affordable" units Skye really has. I know they start in the low-200's, but they get considerably more expensive. The fact that the building is really ugly probably doesn't help matters either. I think once the restaurant is open and people go there and become familiar with the building and its amenities, the units will go pretty quick.

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The Madison only has 5 units available.... a jr penthouse (which was sold but just fell through a few weeks ago) and all of the 12th floor penthouses (which im told one will go under contract soon) The rest of the building sold considerably well especially the units in the 400k-500k range... I personally think the issue with the penthouses at The Madison is the fact that they are so large and don't have the amenities normally associated with a project of that scale in addition to the fact that they are all 999k +. I do however think that once 1 goes, others will quickly follow.

 

I'm told SKYE will have 30 contracts within the next week or so... That's edging up to 50%, which I think is great considering new construction and the fiascos that went down with previous new construction. And you're right in saying the prices get considerably more expensive, the building is atrocious, and will probably see quick sales sooner rather than later..

 

Anyway... all that to say this... I'm told by everyone I know in the market that inventory is way down and cannot meet current demand. From everything I've seen, I tend to agree. I'm honestly surprised we haven't heard of a new condo development at this point.

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I took a client up in the SKYE on Thursday of last week. She loved the unit. They have one 2 bedroom nearly finished that they plan to use as a model. It faces away from the city. The actual units are going to be very nice and different than other condos Uptown. The finishes will be similar to Royal Court but in center city. I think they will sell out as soon as they are finished out. 

 

The only negative I can see is that the owners share the pool with the guests staying at the hotel. On a busy weekend, there is not that much room up there. 

 

The restaurant is going to be awesome. The views from the roof are the best in the city. You have the whole skyline in front of you. 

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  • 1 month later...
  • 1 year later...

http://www.bizjournals.com/charlotte/print-edition/2015/06/05/can-condo-projects-rise-again.html?ana=sm_clt_ucp87&b=1433424605%5E17402621

 

Interesting article about the current state of urban condos in Charlotte. We have one proposed project right now and I think it would be healthy for the to have a couple more 20+ floor condo buildings pop up. The article also addresses many of our beliefs that some of these apartment buildings will be converted, and dispels that belief. Its for a pretty shady reason, apparently you can sue for defects in construction for up to 7 years. I feel like developers shouldn't be buildings buildings that might have "Defects." Remind me not to buy one of these apartments in 7 years when they are eligible to be converted. 

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Should we rename this thread to "Who is going to be able to find a Condo" thread or "Who is going to rent all these apartments" :D

A couple of condo towers. That would be a nice addition after this wave of apartment towers die down

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http://www.bizjournals.com/charlotte/print-edition/2015/06/05/can-condo-projects-rise-again.html?ana=sm_clt_ucp87&b=1433424605%5E17402621

 

Interesting article about the current state of urban condos in Charlotte. We have one proposed project right now and I think it would be healthy for the to have a couple more 20+ floor condo buildings pop up. The article also addresses many of our beliefs that some of these apartment buildings will be converted, and dispels that belief. Its for a pretty shady reason, apparently you can sue for defects in construction for up to 7 years. I feel like developers shouldn't be buildings buildings that might have "Defects." Remind me not to buy one of these apartments in 7 years when they are eligible to be converted. 

 

Furman quoting 40-50 unit buildings is a great start. Since they are smaller in scale they will take up undeveloped land and really add to the landscape in Uptown, if they're built. 

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If the Brevard 1 Condo does get going, it will be interesting to see how (or if) other developers respond. I agree with dccharlotte, the 40-50 unit buildings (maybe mixed use like SKYE) would be a good measuring stick though. Given how I was bit by the condo bust, I certainly have no appetite at least from an investment standpoint, but I'm sure there are others who do. 

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  • 1 year later...

I follow Atlanta development and doubt this will be built and in fact it may signal the end of the current boom.  the condo projects built recently in Atlanta have been very modest but a few mid rises here and there. The Atlantic was converted back to condos after being built for condos then turned rental now back to condos. Related was going to build 4 high rise towers and those never materialized. We will see but I highly doubt this tall a residential building would work there. 

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