Friday, March 28, 2008

The Monterey: A Condo Odyssey Ends


The Monterey, which once threatened to add 432 condo units in North Bethesda, has been passed on to a fourth owner this week, to a team comprised of DC-based Federal Capital Partners and New York-based Angelo, Gordon & Co. The team purchased the site for $97 million, or roughly $225,000 per unit, from CBRE Realty Finance.

The 550,000-s.f. building, originally dating from the '60s as the Pavilion Apartments, underwent a condo conversion and began selling units in early 2006, under the leadership of Annapolis-based Triton Real Estate Partners, which purchased the 16-story property in 2005. But in 2007, before having settled any of the condominium sales, Triton defaulted on their loan and CBRE obtained full ownership. After getting the 40-something condo buyers to relinquish their contracts, CBRE's Paul Martin told DCMud last December that his plan was to position the building as a rental property and eventually sell it.

Now, with the title in hand, Federal Capital Partners is planning to complete the unfinished renovation work that Triton began in its attempt to pitch the building as a condo, and convert the building back to apartments. Triton's addition of granite countertops, hardwood floors and stainless steel appliances obviously weren't enough, so FCP and Angelo Gordon, plan to "re-establish The Monterey as the premier Class-A apartment community on Rockville Pike." Prices initially ranged from the low $300's to the mid $800's, and together with the planned facade renovation reportedly drove the price tag of the whole project up to $45m the last time around. In its current incarnation, the new owners will add a slew of "luxury" finishes, including upgrades to common areas and a host of other "Class A amenities." The developers plan to finish within a year.

“The Monterey is an outstanding asset in a proven location. Access to capital and experience repositioning highrise apartments allowed us to structure a deal that appealed to the senior lender, the mezzanine lender, and contractors left stranded by a failed condo conversion. It helped that none of the apartments ever sold as condominiums and that a substantial part of the property was renovated to Class-A condo standards," said Lacy Rice, a partner at FCP.

North Bethesda real estate development news

7 comments:

erin*carly on Mar 28, 2008, 5:00:00 PM said...

forty buyers in two years? how many units in this building? that doesn't sound promising. if this building didn't sell the first time around, what makes this company think *it* can market these? for those prices, i'd think people will look to purchase within district lines or nearer to a metro.

dagmarhugo on Apr 3, 2008, 11:24:00 AM said...

What does this mean? Is the building going to be rental or condo? The grammer is poor saying "FCP is finishing the work Triton started in its attempt to go condo".
A little clarification please?

Anonymous said...

This project will be run as an apartment building. FCP is not selling any units.

Ken on Apr 3, 2008, 4:14:00 PM said...

Dag;

The new owner will finish the remodeling work that the prior owner started; that just applies to the actual remodeling construction. The building will be a rental building, not condo.

Jeff Annis said...

The old Pavillion had large rental units at relatively low prices. It was the most space you could get for the money. The building, while older than the glossy new junk we too often see, was well maintained, well managed, with pleasant, intelligent and responsive on site management serving some very long term residents. It was likely profitable for the owners, who IMHO could have raised the rents a bit and still maintained high occupancy.

It's a shame Triton blew it on the condo conversion. The resulting rents will likely reflect the "luxury" of the new dryvit over styrofoam skin, and granite countertops atop pressboard cabinets.

I frequently referred rental clients to Pavillion (and skipped the paltry referral fee). I read the condo docs and learned there was a well run asbestos management plan, and a problem with an abandoned formerly leaking 10,000 gallon underground fuel storage tank (the inspector who sniffed the test holes for fumes had a nose cold and needed to postpone the sniff test until after the initial condo doc filing. Talk about a Superfund size risk to the condo buyers).

The building is very close to both the Twinbrook and White Flint metros. Hopefully the new rents will reflect the same value the Pavillion used to offer.

Jeff Annis Real Estate, licensed broker in DC MD and VA with headquarters in Bethesda.

Anonymous said...

I have lived in this building for the past 3 years, and it has been in a a flux the moment I moved in. I don't understand the fascination of turning everything into "luxury" apartments. Most people renting, just want a safe, clean place to live, and could care less if there are granite or Formica counter tops. With all these luxury amenities, they of course jack up the rents....hard to find affordable places to rent in this area.....this is a nice building, good location, good people, I wished they just left it alone....

Anonymous said...

Looks Great! plen t

 

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