Marlborough House going back to Apartments
October 6th, 2008Posted by Jim Reppond
I was showing a client condos on Capitol Hill yesterday and we stopped by the Marlborough House in the early afternoon to look at some units. There were several potential buyers standing around waiting for someone to show up. The signs on the door say they open at noon and it was close to 1pm. Finally someone got a return phone message from someone at the sales office. She told them that Live Historic was no longer selling units in the Marlborough House and that the building would be rented as apartments again. The prospective buyer was told that they could not get financing so they were forced to suspend sales.
I was kind of surprised to hear this because I know the preferred lender (Trevor Bennett) at Countrywide well. I gave him a call and he said that because pre-sales had been weak, it looked like the developer was going to be renting the units out, rather than selling them at this time.
The Marlborough House had only garnered about a dozen sales since their grand opening and about half of them had decided not to convert their reservations to purchase and sale agreements when the time came. It probably didn’t make financial sense to continue marketing the property with only 6 out of 88 units sold. These days lenders usually require at least 20-25% down from buyers until 51% of the units in a new development have closed. That makes it very difficult for developers with projects that have a large percentage of studios and one bedroom units in thier projects, like the Marlborough House. These types of buildings typically attract a lot of first-time buyers that don’t have the resources for larger down payments.
Update: A phone call this morning to Live Historic confirmed that they took the property off the market as of last Thursday, October 2nd, and they are in the process of figuring out what the rents will be and returning earnest money deposits to those who had exercised purchase and sales agreements.
8 Comments Add your own
1. Live Historic Project Bac&hellip | October 6th, 2008 at 9:18 am
[…] Jim has the scoop that Live Historic’s Marlborough project is no longer a condo conversion based on poor sales. Oh well, it will make nice apartments too. See photos from my visit earlier this year. […]
2. Seth | October 6th, 2008 at 9:36 am
I wonder how the other Live Historic properties are doing????
3. More repartmenting and co&hellip | October 7th, 2008 at 9:53 am
[…] Thanks to Jim and Matt who reported that Live Historic’s Marlborough conversion project is reverting back to apartments. Matt also noted that Maris condos on Shilshole made available their unsold units as rentals. Marlborough and Maris joins other developments which reverted back or switched to apartments or are now leasing unsold units - Max, WestWater, Carbon 56, Domaine, Expo 62, Landes, Strata. I’m sure we’ll be seen more of these. […]
4. Karen | October 9th, 2008 at 3:42 pm
Live Historic is in the financial crapper. They have fired almost all of their staff and have creditors and lien holders lined up. Do not be surprised to see all of the Live Historic properties up for fire sale within the next few months.
5. Jim Reppond | October 11th, 2008 at 5:49 am
I’m sorry to hear Live Historic is having a hard time. They are one of my favorite condo-conversion developers. I think they are truly committed to developing a quality product that enhances the communities that their projects are in.
That being said, it doesn’t surprise me to hear they are having a difficult time. It’s brutal out there for new or newly converted condo projects. Few buyers and extremely tight lending restrictions. And most buyers don’t want to get tied into a pre-sale commitment right now.
6. Eric | October 25th, 2008 at 1:03 pm
What recourse is a available to owners who buy units in a condo, that go to partial rental status. In my building, the purchase agreement limits rentals to 20% of the units, but over 40% of the units are available in my building at this time. This concerns me as I really don’t want to live in a hybrid condo-apartment comlex.
7. Jim Reppond | October 27th, 2008 at 11:38 am
Obviously you’ll want to go over the CC&Rs (covenants, conditions, and restrictions) and see how it addresses this issue. But I recommend you speak to a real estate attorney to get some legal advice.
It seems that you could make a strong argument that by allowing more than the previously agreed to number of rental units it could adversely affect the value of your condo. Whether there is recourse or not is another matter.
8. Charles Richey | November 5th, 2008 at 11:17 am
We’re seeing some of this in Las Vegas. There are some condo conversions that went back to being apartments and new properties being pulled off the market and turned into rentals.
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