Severed Dreams

[monsoon]

OK so 2 years ago, there were announcements and rumors of 4 different towers in Charlotte that would exceed 50 stories and the 40+ story condo tower that Wachovia said it would put up.

Where we are today:

• The Vue - dirt being moved around, project spec level reduced.

• 210 Trade - As noted in other topic, appears to have halted construction and no construction loan.

• Unnamed 50 story tower rumored for N. Tryon by the CBJ - disappeared into thin air

• Trump - Also seems to have disappeared into thin air.

• Wachovia - no announcements?

Did Charlotte bite off more than it can chew with these places? As we noted in other topic in another forum on UP, there are serious sacrifices that one must make to live in a condo higher than 30 floors. This gets lost in the marketing here of course, but it it really only works in places where people are willing to pay insanely high prices and put up with the livability issues to have a place that wouldn't exist no other way. That does not seem to describe downtown Charlotte which still is mostly parking lots.

Furthermore in even the more modest buildings such as the Avenue, Trademark, etc. there are still unsold units. These are the same places a couple of years ago that people gleefully stood in line to get into a lottery to buy one of these places.

So have we seen the end of the supertall residential projects in Charlotte and a return to proposals that actually make more sense for the community?

[RiverwoodCLT]

I think you have only seen a big bump in the road. We are now in a recession if Bush knows it or not. Money is going to get tight and for a while you can see some projects on hold. We have a problem with the dollar going down the drain. Gas is climbing to $4.00 a gallon and I can see many developers stepping back on projects and wait out this recession.

[RaleighHeelsfan]

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When was the Vue reduced? I thought it was still 50 stories???

[atlrvr]

I think he meant the total overall quality of The Vue was reduced.

The Wachovia Tower is 99% happening.....there just has been no need for Wachovia to begin marketing admit the glut of other condos given it is still 3 years from completion.

As far as the general question, is supertall living over in Charlotte? I think for now it is.....several years ago, it was a rapid delivery system for a large quantity of condos (as opposed to building 2 separate towers) that was perceived to have a marketing advantage. Now, I can't imagine anyone would want to build that many condos in this market. We may see another supertall again, but not for at least a decade (Trump aside if he truly is considering it)

[tozmervo]

Depends on how much gas/energy costs over the next few years. If we do indeed see $4 or $5, I think these condos are going to find themselves doing very well.

[Appetite for Construction]

Don't know that we have seen the end, but agree that it will be awhile before another supertall is proposed ...

Even if The Vue has not announced that the number of stories is going to be reduced, if that were to happen, I for one would not be surprised.

I have mentioned to some of my neighbors here at Avenue how fortunate we were to pick the right tower two years ago when picking a highrise ...

[Charlotte_native]

I don't think any of this is a statement about Charlotte in and of itself, but a reaction to what has happened across the country. Banks are in a mess, we are sending billions of $'s to Iraq, we have entered a recession by the feelings most have, it should be no surprise that all kinds of projects have been stopped or put on hold. Basically this is how an open market should react. Economic slow-down, development slow-down.

It doesn't surprise me either that there are unsold units at completed buildings -- they have been completed in a rough year for lending and real estate. I would suspect the 40+ flip units at Avenue that are not selling will have an impact on how many speculators want to buy to flip new condos. On the other hand, those that I've seen put out for rent in these buildings are snapped up quickly -- it seems demand to live downtown hasn't dried up, perhaps just the ability to buy for some.

I believe that we'll see a return to all types of developments that have been put on hold, including high-rise living, when the local and national economy is back in good shape and moving along. As for when...? Who knows, doubtful anytime really soon. But the land is still there, people are still moving to the region in droves despite the economy (it is much worse elsewhere and many are moving to place like here that are perceived as being 'good'), and those that I know that do live downtown are quite happy being there. Lower priced units in uptown (those under $250,000 which represent about 60% of uptown condos and townhomes) are selling just fine and in 30 - 60 days on average.

[monsoon]

^This isn't a topic about the demand for downtown condos, but rather demand for condos that are located in 50 story or more buildings. I don't want to restate the forum topic again, but I can see where there might be plenty of opportunity to build stuff less than 10 stories, but not more than 25.

[uptownliving]

I don't think any of this is a statement about Charlotte in and of itself, but a reaction to what has happened across the country. Banks are in a mess, we are sending billions of $'s to Iraq, we have entered a recession by the feelings most have, it should be no surprise that all kinds of projects have been stopped or put on hold. Basically this is how an open market should react. Economic slow-down, development slow-down.

[joshuacc]

This could really drive the prices of uptown condos to the freaking moon. I'm sure a lot of these people with units under contract in these on hold projects will be looking for a new place to live.

[Charlotte_native]

^This isn't a topic about the demand for downtown condos, but rather demand for condos that are located in 50 story or more buildings. I don't want to restate the forum topic again, but I can see where there might be plenty of opportunity to build stuff less than 10 stories, but not more than 25.

[Spartan]

I think its just a sign of the times that these arent going as well as people thought they would. More super tall highrises will come with time. First, Second, and Third Wards still have tons of room to grow.

[asulaura]

I would have to agree it really comes down to money. It is not the demand of living downtown that has changed much but rather the ability of most people to afford and finance it. Cutbacks in projects are not just happening in the tall condo categories...but across the board of all housing types in Charlotte. But to get back to the specific question about supertall condos I would have to say that Charlotte never got to the category of building a supertall condo...even with the Vue and 210 Trade which don't break the magic 50 story number. So I would make the argument that an era that never started can't come to an end. Will Charlotte ever build a super tall condo tower? Probably someday.

[rockhilljames]

If you look at the cities in America that have 50+ story condo towers, it's a pretty short list. New York, Houston, Chicago, and Miami are all that come to mind except for resort towns. Does anyone know if LA, San Francisco, Seattle, Boston, Philadelphia, or San Diego even have them? I'm sure a few of those do but I'm not sure.

The fact that Charlotte is on the cusp of having two of them, the Vue and TTT, is pretty amazing to me.

Sure the Vue and TTT have taken longer to go vertical than most projects. Given the size and the scope of them, I'm certainly not surprised. The BofA project you mention was never a solid proposal, the Wachovia tower seems to be going up, and the Trump project was always speculation, there was no announcement other than the speculation that you read in the media and on these boards.

Given those projects I don't see your point, other than financing, planning, and building projects of that size is amazingly complex and hard to do.

[1979Heel]

...long quote of previous deleted....

San Francisco has One Rincon Hill. It's 60 stories. It's also built hard-by the approach to the Bay Bridge, aka where I-80 meets 101.

[monsoon]

Lady Celeste (a resident of Atlanta) said it better than I in another topic of a similar discussion on a stalled super tall condo.

Now let me discuss the Signature Tower.

I will have to counter Plasticman's assessment and say that a building of the Siggy's size would be a serious mistake for the Atlanta market. This is my belief before or immediately after the credit crunch. I have a listing in a high-rise and a dear friend who lives in another high-rise. Having visited him on many occasions I will be the first to say that livability starts to seriously decrease after 30 floors. Only out of necessity will people tolerate higher floors. As Monsoon said, there are very few cities that really validate such height. Even in those cities are such high living is rare...look at New York, Mexico City, Tokyo and Sao Paulo. How many 70 story residential buildings are in those cities? .....

[ChiefJoJo]

I hadn't realized 210 Trade and the Vue were in jeopardy. I wouldn't count the unnamed N Tryon Tower or Trump, as nothing has ever moved out the rumor stage. Did One Charlotte ever submit a site plan to the city? To me, rumors do not constitute a project so unless the developer submits a site plan and obtains permits, it never happened.

What is the tallest condo tower U/C or completed now? Avenue at 36 stories? I think you had too many towers competing for the same market, and in an impending real estate crash/recession. That's a hellva lot for any market to absorb. A highrise has a niche that other projects can't provide, but the associated cost would seem to limit the numbers of buyers somewhat. I would guess the Vue, 210 Trade and Wachovia towers will eventually be built, but perhaps not quite at the levels initially proposed. One Charlotte, maybe not--too pricey.

[Bynocerus]

Clearly, this is no place to foment rumours re:specific banks, but I think lost in all of this is just how ugly it's going to get for a lot of financial institutions.

Part of the cash crunch is not so much that the sales aren't going so well as the banks simply don't have the money to lend to bridge project completions. Part of Bernanke's reasoning process for cutting so dramatically a few months ago was that, had he not, we would have seen a run on banks not seen since the Great Depression. And, despite all his manoeuvering, we may still see just such a run.

CNBC may need to do some backpedaling on just how much damage Bear has absorbed, but the fact that Bear has taken such a tremendous blow when, for many years, it was THEE most admired firm on The Street, is telling. KKR and Carlyle's margin calls aren't especially encouraging either. Finally, there is strong reason to suspect that at least one - if not a few - super-regional banks will go down before all is said and done.

Long story short, unless you've got a crap-ton of cash on hand, it's hard to get a bank to lend you large sums of money right now, to say nothing of $500m. Certainly, the appetite for super high-rises has waned, but even had it not, how do you build a tower when you can't pay for that tower's construction?

[Charlotte_native]

I hadn't realized 210 Trade and the Vue were in jeopardy.

[Charlotte_native]

Part of the cash crunch is not so much that the sales aren't going so well as the banks simply don't have the money to lend to bridge project completions.

Long story short, unless you've got a crap-ton of cash on hand, it's hard to get a bank to lend you large sums of money right now, to say nothing of $500m. Certainly, the appetite for super high-rises has waned, but even had it not, how do you build a tower when you can't pay for that tower's construction?

[Bynocerus]

In case you missed it, Nat City - one of the country's fifteen largest banks by deposits - is trying to shop itself to other banks. In my lifetime, I've never heard of such a thing. And this from what many viewed as the next Wachovia (albeit of the Midwest).

If Nat City and Caryle are going down, look out below. More germaine to the topic, when one of the country's largest banks is up crap creek to the point that it has to hire Goldman to shop it around, no wonder stuff can't get built in a timely fashion.