Saturday, November 16, 2019

End of an Era: New Construction Sales

Last week, the final developer owned condominium was sold at the Syndicate, which is the last building actively selling inventory built before the great recession in downtown.

In 2006, an article was written in the Post Dispatch about the number of loft projects scheduled to be completed in 2007 at that point.   I was reading it with my wifebosspartner at Flannery's pub, when we saw a loft developer walking down the opposite side of the street.   With abnormal courage, my lunch date left the table and walked across the street to confront said loft developer on the insanity of what we had just read.   

2006 was a great year for loft sales.   The MLS states that 230 lofts were sold, and there were about 100 more that were sold directly through the developers for a total of about 350 total closed units.   In 2007, there were approximately 2,200 slated for completion according to the article.   The loft movement was in full swing, but that was CRAZY!  

Overall, the real estate market started to level off somewhat in
April of 2006, the recession officially started in 2007, and the market overall was steady until the stock market crash of September 29, 2008.     At that point, new loft projects, including the Syndicate, really began to suffer.  Property values all over began to slide, and buyers, planning on selling the big home in the burbs, backed out due to diminishing home equity and 50% drops in their stock portfolios.  Luxury lofts were suddenly not fashionable as the market for real estate became foreclosure happy.   Many developers lost everything and folded.   Some, with no regard for their clients, converted the remander of their inventory to rental units (Ely Walker, Ventana, Bogen).   Many projects just never happened (Chemical Building, Skyhouse, Jewel Lofts, Switzer Lofts, etc.)   

The insanity stopped when developers stopped building condos in favor of apartments.  Banks got wise to the games (aka fraud) taking place on condominium construction loans across the country and started protecting themselves.  

I've always admired the Syndicate developers, both for the product they delivered and how they always kept focus on maintaining their buildings value with their previous buyer's in mind.   Condos at the Syndicate (floors 9-16) remained on the market the entire time.   Despite having 53 out of 102 units remaining, only a portion were rented (23).  Prices had to be lowered, but were never 'fire sale' pricing.  The building virtually sold out of its regular inventory in December 2013 (except 2 penthouse units), and began converting the condos in the rental pool the following year.  

The units that had been converted to rental were two by two, taken out of rental circulation, 'cleaned up', repaired, painted and sold as the market called for them, until last week on Friday, when the 102nd unit was finally sold.   In addition to the Syndicate, the same process just took place at the substantially smaller Packard Lofts in Downtown West. 

This has a major personal twist, since we were
Alive Magazine Ad for the Syndicate --2011
hired in September 2010 as the last of the salaried sales team left for greener pastures.   Having represented 10 buyers in the building previously, we were given another amazing opportunity.   Representing Sherman and Associates for 9 years, caring for and selling 44!   While the building was always more than half full, starting out in a building with 20 listings was a lot to wrap our minds around.   We had represented other builders in the same way, selling out Moon Brothers Carriage Lofts and Westgate Lofts, but those buildings, the process was much smaller and much faster.  

In this case, the era that is ending, though personal, mainly focuses on the last of the "for sale" units described in that article in 2006 finally being sold.  It was unfortunate, after that article, and the ensuing financial crisis, caused a panic about downtown that was never accurate.   I'd hear people talk about the glut of unsold new construction in downtown St. Louis.   There obviously was a fair amount.   It was never as many as the public perception.  The most dramatic sale took place at the Dorsa building when Pyramid shut down, then Premier Bank, the note holder closed.   The FDIC took over and sold the building out quickly and with huge discounts.  Otherwise the number of unsold units was manageable.  

What's been good in regards to downtown, is that:   

  1. Downtown continues to progress with major improvements
  2. Whenever a building becomes 100% owner occupied, values improve.
  3. The downtown market has reached equilibrium, and sanity returned a long time ago.

Monday, November 11, 2019

New Vision for Downtown West

The evening view from ground level looks like an art museum.  

Very few people are as excited about the impact on St. Louis that the current plans for the MLS Stadium presented last week.   For anyone plugged into Downtown St. Louis, its self evident.   While downtown overall has seen an amazing re-birth over the past 15 years, there are still a few spots overlooked.  

From Olive Street on the North, there are mostly smaller, under developed buildings and street level parking lots.  The biggest exception is the Police Headquarters to the north east of the stadium site.   The surface lot from the above pic 🙄shows the metropolitan police parking lot, which is going away.   My first question was, where are the police going to park.   My second question is, where's everyone else going to park?

The satellite view shows the current footprint.   HOK developer website doesn't mention parking.  Downtown has an abundance of parking spaces, but as a rule, they are several blocks east,  mostly near Busch Stadium and the Enterprixe Center. o.   This section of town has never really had people density requiring much parking.  The largest draw, historically, was Union Station, which has a fairly small enclosed lot for patrons.  With all the great improvements there, my guess is it will be filled.    

Despite any questions, this is still an awesome move for downtown, and for major league soccer.   St. Louis has always been a soccer hotbed at the youth level, but sort of fizzles after that.   Having it as a recognized sport once again at the major league level is huge.   

The impact on Downtown West has me hopeful.    My clients that closed on their great new space at the Lofts at 2020 we’re thrilled.  When we sold our first unit in that building in 2005, Downtown west was a wasteland in that area.   After all, they filmed the post apocalyptic drama “Escape from New York” around there.   Other than Schlafly’s and some office renovations, it was scary.   The buildings across the street looked like they had been bombed, and most of the prospective buyer’s we toured through the area were creeped out by the condition and tenants of the Tudor Building:   all of which have undergone total renovations.  

Tuesday, August 13, 2019

Downtown Style, Downtown

1015 Washington Ave. #305 kitchenDorsa Lofts for sale1015 Washington Ave. #305 Dining Room

1015 Washington Ave. #305 balcony1015 Washington Ave. #305 master bath1015 Washington Ave. #305 Living room

Dorsa Lofts #305

This loft came on the market recently, and has a great vibe, great location and is part of a really nice association.  

As a Dorsa Lofts owner, I feel very fortunate that the building fared so well with its history.

Being built out in 2006-7, this building hit the market just in time for the great recession.   Most of the units were unsold, and several units that had been reserved by Pyramid never made it to the closing table.   Pyramid ended up folding and so did Premier Bank, the bank that took over.   

No one purchased this asset in the sell-off of Premier Bank by the FDIC, so all the units were sold by the FDIC one by one (Thankfully) to owner occupants ONLY.   This was the saving grace of the Dorsa Lofts.   Premier Bank had been trying to broker a deal with a real estate investor, which ultimately would cause the building to be non-warrantable.   Other buildings with large investors in them have fared poorly, most notably so, for the original purchasers.  

The FDIC didn't mess around when it came to selling.   Lofts were on the market for a few weeks, then incremental, large price drops of 5-10% on each unit, almost every week, until the building was sold out.  While this initial strain caused fear with the original owners, it paid off in the long run.   

Today the Dorsa Lofts have maintained a stable group of residents, maintained their building expenses, and have improved their reserves annually.   They will benefit tremendously from the up coming improvements to the streetscape and surface lots to the north when the Convention Center is upgraded

Thursday, June 13, 2019

Welcome to Lord Stanley... Downtown's newest resident!

This playoff season has been an awesome reminder of all the amazing St. Louis Blues teams of the past, how hard they worked, and how in many cases they still support the team and want great things for our city.    

It was also a reminder of the many disappointments and fears through the years, like when they were being sold and relocated, or when they had amazing regular seasons only to loose quickly in the playoffs.   Celebrating today brings a ton of gratitude for the people in Blues history that did what they could to keep hockey in St. Louis.   Winning the Stanley Cup, and just having played in the finals after this cinderella season is just what the doctor ordered for this franchise and for St. Louis.   See you all at the parade downtown!!!           GO BLUES!!!  #playGLORIA 

Some Awesome Places in and around downtown to Enjoy Blues Hockey in 2019-2020 Season
(click on image for details)

 Downtown Deluxe Penthouse

 Coming Soon!
Coming Soon!