Wednesday, October 17, 2007

Senate Square Closes Sales



Broadway's ambitious Senate Square Towers project, which closed its sales office doors last month vowing to reopen in a few weeks, has quietly revealed that it will cease to sell condominiums in its 432-unit project, and will now finalize the construction to turn the project into a "luxury" apartment building. The 12-story towers at 201 I Street began sales in September of 2005, but as of the date of closure had no more than 150 units under contract, and was at least 6 months behind schedule for project completion. The first settlements had been anticipated to take place in November.

As the first residential project on H Street, NE, the New York-based developer had faced the daunting hurdles of selling a "luxury" building in a scrappy, low-density location that had yet to feel the effects of revitalization now taking place, just as the condo market was beginning to wane. Broadway eventually hired Shvo, a Manhattan-based condo marketing firm, to bolster the marketing efforts of McLean-based Mayhood, but sales remained lackluster, inevitably forcing prices down. Speculation had long pointed toward the project converting to a rental apartment building, and the developer had entertained offers to sell the entire project, and has now quietly changed its website to reflect its new status. And while other residential projects queue to break ground in the immediate neighborhood, Senate Square joins a long and well documented list of projects that could not garner sufficient selling prices to justify construction, turning instead to the fast-growing rental market, taking yet another whack at the shrinking supply of condos.

7 comments:

roarkdc said...

"taking yet another whack at the shrinking supply of condos"

Are you joking? When almost 10,000 units were being built or marketed in the District just a year ago, 400 units off the market still makes the District explode with new condo supply growth. City Vista can't sell their units. Union Row is only 35% sold. The DC Condo bust is here to stay.

Developersagent.com on Oct 18, 2007, 8:08:00 AM said...

They had been talking about this for a while...isn't one of the buildings already rental with this being the second conversion back to rentals? Its a great building but it was built at the wrong place & at the wrong time. In my opinion the best time for sales here would be no earlier than the construction and completion of the Trolley Line down H St NE in mid 2009. The increased traffic caused by the trolley taking two of the lanes should increase the transition back into the city.

Ken on Oct 18, 2007, 12:10:00 PM said...

Roarkdc - Nope, really not joking. Its clear that public perception is that the market is saturated with condos, because that's the easy story to print, and all the media has jumped on it. DC is way behind other major cities in terms the number of units being built, and the interesting story that is not as headline-grabbing is that developers stopped initiating new projects 2 years ago. There are some small exceptions, such as the ballpark area, but even that is 90% rental. As the current supply sells, there is nothing coming behind it to replenish or accommodate the expanding population of the region. I can't say that condo sales are great now, but the problem with the market now is not oversupply; population is growing, incomes are rising, inflation is lessening the relative price of condos, and rents are trending strongly upward - all positive factors in the condo market. The problem is consumer confidence in the housing market, which for many reasons is very weak now.

Keep in mind that 2 years ago we calculated a projected two-year pipeline in DC alone of about 17,000 units on the market, which shrunk to under 9,000 early last spring, and is now at 7,300. So yes, the supply line is actually shrinking.

Anonymous said...

This is somewhat of a shame in that the building really does look like a higher standard than the usual rentals. Probably means that the owners of the unimaginitive-looking Capital Square will clean up in a few years time as being the only large condo complex (compared to rentals)in that area

roarkdc said...

Ken - thanks for your cogent reply. I guess the point remains that while the growth rate is shrinking, the actual supply is still growing. Dozens of projects are still under construction and will add to the supply when completed.

Sick of the H St. Shuffle said...

This has more to do with the absolutely tragic mismanagement of the entire H St. corridor than anything else. Who the hell would want to pay top dollar to live next to the cesspool that is H St. I mean until the city starts forcing these specualting slum lord scum bags into either selling or renovating their property H St. will continue to go now where fast. Additionally, why as an investor would you even want to invest on H St. when another potential investor (Capitol Place Project) has had to endure two and a half years of project review (thats right it is not a misprint 2.5 bleeping years) by any one with an opinion. If H St. is to be reviatalized by community committee...God help us all ! It is simply more of the Berry years anti-progress let's keep our constituency down and continuing to vote for us mentality that in many ways still holds this city hostage. This section of the city is a developers worst nightmare ! I live in this community and I am not even sure I'd invest here any more !

Anonymous said...

Hey h st. shuffle - you sound pretty impassioned about the plight of investment & community re-development in your neighborhood . . . now do something about it! The zoning commission hearings and ANC meetings for projects like Capitol Place and Senate Square are open to the public, but the only people who usually attend are those in opposition (sometimes, it seems, just for the sake of opposing something, anything new can't be good) and as we all know, "the squeaky wheel gets the greasing." No development project is perfect and they all benefit from community input and scrutiny, but it's up to the "village" to make it clear to our elected and appointed representatives that their job is not to satisfy everyone, but to review, revise and approve (or reject) new projects as quickly as possible. Let 'em know we want progress or we'll vote the bums out! It's human nature to respond (or give in) to the person standing in front of you pointing their finger in your face - get out there and point your finger toward cleaning up H St!

 

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