President Bush's dream of an owner- ship society took another blow this week. Okay, it probably won't make the State of the Union, but the Monarch Condominiums in Old Town Alexandria are now the Monarch Apartments. Apparently Diamond Properties was struggling to keep the project in the black, selling a frustrating 16% of the 169 units since McWilliams Ballard began sales in July, 2005. Diamond is now adding Kettler to the mix.
This week's conversion continues the unremitting process of developers retooling projects that won't sell, into apartments, which generally do better in a market of skeptical buyers and skeptical lenders. Because they originally organized Monarch as a condominium project, Diamond has the legal ability to hawk individual condos at a later date, but buyers looking for homes in Old Town, Alexandria now have one less option - the supply is reduced to the Prescott, Cromley Lofts, Abingdon Row, and the Royalton. This trend mirrors the greater DC area, which has witnessed a large drop in condo supply due slowing construction and an influx of conversions from condos to rentals. Within the last 18 months, the DC (proper) condo pipeline has shrunk from an estimated projection of 18,000 units over the next two years, to a more modest 5,400 units, many of which are conversions of dated apartments and therefore fail to increase the housing supply.
Little is known about what will happen to the 28-or-so condo-owners that have purchased. A representative from Kettler indicated that a condo board is in place, and current owners would continue to occupy their units. Whomever they are, they can't be ecstatic about owning a home in an apartment building. Maybe the 17,000 s.f. of ground floor retail makes up for the loss, or perhaps the convenience of living four blocks from the Braddock Metro, or even the rooftop garden deck and in-house cinema room.
Kettler, who seems to be running the leasing side, will try to make up for lost time; a one bedroom, 700-s.f. apartment starts at $1885.