Eastside Designer Condos Feel The Heat
A number of mid-sized, high-end, infill condos have been added to Portland’s east-side in recent times. Some of these developments such as the Belmont Street Lofts have been featured in dwell and are widely considered among the most progressive design stuff Portland has to offer. In the wake of the downturn, more recent additions such as 2121 Belmont or the Hakoya Lofts on N Williams have been converted to apartments. Others have stuck to their guns, but are now increasingly feeling the heat…and dropping their prices, creating bargain opportunities for design shoppers.
Here’s a snapshot of what’s happening behind the scenes at two designer developments:
Clinton Condominiums – the brainchild of Developer Rappaport and Holst Architecture – is situated on SE Division and 26th. This close-in neighborhood is arguably the heart of Portland’s local-organic-sustainable movement, buzzing with creativity and a magnet for the hipster crowd. There’s a New Seasons Market just a couple of blocks away and pretty much everybody commutes to work by bike.
Here’s how Portland Architecture describes the Clintons:
Looking upward at the condos on floors two through four, the signature element is an assortment of translucent green glass panels that are placed in a somewhat random pattern and at varying widths. It gives the building, especially at night, the look of a jewel or prism with organic sides and angles glimmering in different directions.
Of the building’s 27 units, 70% has been sold – on paper. Only a handful have actually closed so far. In most cases developers will need to unload a min. of 75% to break even, that’s assuming they sell within a year and can pay off the loan. In this case that 70% is a moot point – every dollar counts. Thus in an effort to pay-off the outstanding loan balance, the developer has been accepting increasingly lower offers:
- Unit #307 , 1092 SF started out at $419k, SOLD for $389k
- Unit# 301, 1227 SF closed at $439k, 10k less than what both parties had agreed on
- Unit #202, 895 SF started out at $299k, NOW priced at $260k
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SUM condos on 45th and SE Stark – This new development consists of three townhome-style condos designed and developed by Matt Loosemore and Eric Hoffman’s SUM Design Studio. The two end units each provide three bedrooms and 2.5 baths, roof decks and private parking. Although not LEED certified, the project includes numerous green features: a bioswale (with native plants) collecting rainwater runoff from the building, added insulation with dual-pane windows, low-VOC paint, bamboo floors, permeable driveway pavement, and a 94% efficiency HVAC system.
Here’s what the design critics say:
Like the work of many emerging small firms, SUM have created a nice little fabric building, something modern that nevertheless fits well into its surrounding context of neighborhood single-family homes[...] Lots of modern housing projects in Portland’s historic neighborhoods earn criticism because neighbors don’t like the extra height or the look of the design. This project ought to earn kudos.
These three-level town-homes range between 1500 and 1650 SF in size and are priced in the low to mid 500s. Sales started in early 2008. So far the developer hasn’t seen any bites and thus no means to retire the loan. Much of the developers flexibilty on pricing depends on the size of these loan payments, so here’s my back of the envelope calculation:
- Development value: $1.6M
- Developer profit margin (target): 20%
- Development cost: $1.3M
- Loan amount (at 20% down): $1.1M
- Terms: 7%, 15-year fixed
- Monthly payments: $10000
That’s about $3500 in mortgage payments per unit every month – possibly more.
Interested in finding out what kind of discounts these circumstances translate into? Drop me a note!
