After two years of marketing and sales, the Carlyle Group of DC and Bethesda-based Ross Development have ended sales for Vaughan Place condominiums at McLean Gardens on Wisconsin Ave and 38th Street, NW, and have turned the project back into rental apartments. The 574 units included three living options – “The Tower” which offer 1 and 2 bedroom units, townhouses, and terrace homes that included studios and 2-bedroom, 2-bathroom units. Less than half of the units were reported sold as condos before the decision to revert the remaining units to leases. Sales by McWilliams Ballard began in the winter of 2005 and were halted in April of this year. Rents are now starting from $1,750/month.
Several condo projects in DC have gone rental in the past months in and around the DC area. While institutional lenders have continued to impose pre-construction sale requirements on residential projects, often demanding the same sales quotas considered reasonable only two years ago, public perceptions about the market have meant increasingly fewer buyers are willing to sign contracts up to two years before a project’s completion. The gap in between lenders' requirements and actual sales volume has been the catalyst for many of the post-sale conversion to apartments recently, often against the judgment of the development team.
Past projects have also converted to leased apartments for developers’ fear of buyers walking away from their deposits at the last minute, particularly in projects that had higher levels of investors. Representatives for Vaughan Place would not comment on the decision.