Hat tip to kwaping for sending this along, from the U-T:
The developer of downtown San Diego’s largest residential highrise said today that it is giving up on trying to sell any of the 679 condos and is returning deposits to dozens of buyers who had been awaiting the close of escrow.
“We’re not able to meet the Fannie Mae or Freddie MAC or FHA requirements in this marketplace because we can’t get enough sales,” said Randy Klapstein, CEO of Pointe of View, developer of Vantage Pointe, which completed construction last year in the midst of the economic downturn.
“We’re not getting the traction we’d hoped for, and we don’t want our customers to stay in limbo, so it’s best to move on.”
It is now likely the East Village condo project will remain a rental complex for the foreseeable future, said Klapstein, noting that there are now roughly 200 renters, about a dozen of whom are buyers who were waiting for the sales contracts to be finalized.
“At this point, we’re going to continue renting,” Klapstein said.
Over the last several months, the Pointe of View loan has been marketed for sale, but no deal has been finalized yet. When asked whether it was possible that the condo project might be sold, Klapstein would only say, “It’s always a possibility.”
The developer is in the process of returning deposits to buyers, and purchasers who are living in the complex as renters have the option of remaining or working with the Pointe of View sales team to find a condo to purchase elsewhere in downtown, said Klapstein.
I bet those potential buyers are so freakin’ happy to have their sales canceled and deposits returned! I predict there are going to be lots of parties thrown there over the next week.
This is where their problems started:
http://www.youtube.com/watch?v=0IGydkYjkDY
*Chuckle* Jim, you called it over a year ago… “If they have Ritz crackers and cheese…”
Those potential buyers must think they won the lottery with the announcement!
A guy fixing my fence last week told me he was employed building that place a couple years ago. They had him working overtime every day, 12 to 13 hours a day, 6 days a week. Said he was making $3000 per week. That’s a good $150K a year…working basic construction.
So much for controlling costs – they just had to meet that insane demand! No wonder they needed $500/sq. ft.
When even Fannie & Freddie, the lenders of last resort, won’t touch you. The stench has to be pretty powerful.
Requirements for the government agencies on condo developments are actually pretty strict. Basically, they won’t touch it until a large percentage of the development is already sold. So you get circumstances like this, where the development only gets 20% sold or something, but nobody can close until that percentage gets a lot higher, but it never does, so…
Bahahaha…
Look what I found in my local paper today…
http://www.pe.com/localnews/riverside/stories/PE_Biz_D_raincross31.1a6fa56.html
Lack of sales spurs developer to lease
07:14 PM PDT on Monday, August 30, 2010
By LESLIE BERKMAN
The Press-Enterprise
After two months of marketing his 141 luxury condos with not one sale, Mark Rubin said he has given up wooing buyers to the Raincross Promenade project in downtown Riverside that cost him $40 million to build.
…
But he said prospective buyers kept trying to beat down his prices, even after he shaved $30,000 off the initial list prices ranging from $240,000 for a one-bedroom, one-bath condominium to $475,000 for a two bedroom, 2 ½-bath townhouse.
…
Leasing out 141 condos also could be a challenge, the experts said, especially at the monthly rents that Rubin says he wants for the one- to three-bedroom units, which range from $1,250 to $1,925.
“He will have to test the market,” and lower the rents if necessary, said John Kalmikov, a senior vice president and apartment specialist with Lee & Associates in Riverside. Kalmikov said the $1,850 monthly rent Rubin plans to charge for a two- bedroom unit is $200 to $300 higher than the average rent of newer two-bedroom apartments in Riverside. Also, he said, the typical one-bedroom apartment in the city rents for less than $1,000.
——
For comparison, I paid $675 monthly for a one bedroom apartment 2.1 miles away (granted, it was a total dump) until I bought my current 4 bed/2 bath house for $150k. And downtown isn’t a premium neighborhood in Riverside, although it would be nice if you worked downtown.
Website:
http://raincrosspromenade.com/ (no pricing info as far as I can tell)