Sunday, May 30, 2010
The ongoing land development crash is filled with amazing anecdotes. I've followed many of them as part of my research and writing. Recently, though, I ran across one that shocked and awed me more than any other before.
It's the story of a infill mixed-use project that, since it could not obtain enough presales, could not tap into the massive amount of federal monies floating around out there:
Hue wasn't able to get the presales needed for Fannie Mae or FHA approval, something that two of its downtown Raleigh competitors, the RBC Plaza condos and Bloomsbury Estates, have achieved.
Highwoods Properties, the developer of RBC Plaza, has sold 105 of the tower's 139 condos, but just five in the past four months. Bloomsbury has sold four of its 56 units, according to Wake County property records. Hue's units were priced between $147,000 and $388,000. The entire project, including a parking deck, has a tax value of $33 million.
New condo projects have a reservation period in which they accept commitments from buyers before they can actually sell units. Hue frustrated many prospective buyers because its reservation period dragged on longer than expected. The project began selling units only in January, and it offered a variety of perks to get people in the door.
Instead of buying a unit outright, a resident could sign a contract to lease one and live in it until the building reached the presale requirement that made it eligible for federal loan assistance. Buyers were offered a free washer, dryer, refrigerator and parking space.
This is really pretty startling that a project of this size and cost is essentially sitting empty across from Raleigh's city hall.
--Chad Emerson, Faulkner U.