Condo Report: Intown market shows signs of life
With the real estate market showing signs of life again, we decided to take the pulse of Atlanta’s loft and condo market, which was booming just two years ago before the recession made sales dry up and prices plummet.
“In the late 1990s and early 2000s Intown Atlanta was flooded with new condos, built on the prospect of 7,600 new city residents every year,” said real estate broker Drew Levine, MBA. “But that rate has been slowing for a couple of years, and at roughly 3,400 last year, there is now a vast oversupply in the market.”
Properties that opened before the worst of the recession seem to be faring better than the newer buildings. Aqua Midtown (www.aquamidtown.com), a 25-story luxury condominium development that opened in October 2007, is 95 percent sold, with only four units still available. Although Tivoli Properties President and CEO Scott Leventhal admits the company had to become “more considerate of the limited availability for financing,” that affects Aqua’s buyers.
Similarly, Plaza Midtown (www.plazamidtown.com), a high-rise condo building located between West Peachtree and Spring streets near 8th Street, opened in 2006 and its 418 units were filled at the start of 2007. Yet, due to the economy, associate manager Kevin Assari said he’s seen a rise in foreclosures in the building.
“Ninety percent of the sales recently have been foreclosure purchases; these properties are usually scooped up within 30 days,” he said. “Plus, the fact that 1010 [a luxury condo on 10th and Peachtree built last year] isn’t budging on their prices is bringing us additional traffic.” Furthermore, Plaza Midtown allows a quarter of its 418 units to be rented – and Assari said approximately 100 people are on the rental waiting list.
Other properties, like Mezzo (www.mezzoatlanta.com), Atlanta’s first wellness-inspired condo property, which opened in September 2008, have become for-rent only. The $63 million, 20-story boutique property with 94 one-, two- and three-bedroom homes and penthouses was originally intended to be for-sale, but is now 90 percent leased. Tivoli Properties’ Leventhal added that Mezzo will continue to operate as a rental building “for the foreseeable future.”
Another property that opened in the fall of 2008 is 10 Terminus Place (www.terminus-atlanta.com), a 32-story luxury condominium tower in Buckhead. Of the 137 units, 50 are still for sale. This success may be partly due to Cousins’ “Easy As 1,2, 3” program, which was launched in August to offer savings for qualified buyers: $100,000 in savings for a one-bedroom unit, $200,000 off a two-bedroom unit and $300,000 in discounts for a three-bedroom unit.
“The positive response to these values at 10 Terminus Place is encouraging,” said Cousins President and CEO Larry Gellerstedt. “While an excess amount of inventory continues to weigh on the Atlanta housing market, this is the most positive sign we’ve seen in this environment.”
The Aberdeen (www.theaberdeenatl.com), an $80 million, 55-unit luxury condominium development in Vinings, was completed in fall 2009 and had its first move-ins in December. “The Aberdeen is doing well, considering the economy and challenges facing the housing market,” said Geoff Anderson, president of Taz Anderson Realty Co. “We recently began a partnership with Atlanta Fine Homes Sotheby’s International Realty and have since experienced a huge jump in traffic. Our Cobb County location is a big tax benefit.”
Likewise, units at Twelve Centennial Park (www.twelvecentennialpark.com) are selling. The Downtown condo building adjacent to the Twelve Hotel opened in August 2007 and thus far 394 of the 517 units have been sold. However, according to Twelve realtor/salesperson Gina Barnabo, the price of the units was reduced by almost 40 percent. Plus, the development was originally intended to have two condo buildings joined by a hotel, but plans for the second building were put on hold when the market crashed, and there’s no word on when this might change.
At least Twelve management can rest assured that its current building has residents; The Brookwood (www.thebrookwood.net), a two- and three-bedroom LEED-certified building with 219 units, was completed in the summer but is currently empty. Starwood Capital purchased the assets of Corus (which previously owned the building) late last year and is declining all interviews.
Furthermore, Ben Carter Properties’ much-awaited Streets of Buckhead development (www.streetsofbuckhead.com) is at a standstill. As reported in The Atlanta Journal-Constitution in late January, Carter needs $200 million to continue with his vision of the Rodeo Drive of the South. Planned to be eight acres, Carter now hopes to open the project in 2011 with just 375,000 square feet of shopping, dining and entertainment space. He hopes to do this with private investment money, since traditional bank loans have become near-impossible. Six restaurants, two retailers, two entertainment concepts and a spa are said to have leased space.