A look at what's going on in Trinidad, on H Street, and in the larger area north of Capitol Hill.
Monday, December 17, 2007
WP: Condo Crunch
The Post considers the unpleasant position of some condo buyers why purchased at the height of the market. The story begins with a would-be buyer at the now rental Senate Square.
25 comments:
Anonymous
said...
slightly off topic, but when are they people going to start moving into Senate Square anyway? Everyone I've talked to who looked to either buy or rent there has had a hard time even talking to the sales/leasing office. Apparently they aren't very responsive. It's a shame because they look beautiful, and we all would like to see them full.
I occasionally drive past SS and it always seems to have lights on onside but ZERO people inside. Have yet to hear of anyone actually seeing the inside or being brought in for a tour of the apts. (with an intent to rent).
How do these people stay in business by letting the property just sit there? The whole thing seems a bit fishy...
I actually found the staff in the sales/leasing office very responsive. I just went and looked through a few apartments last week. Construction is still wrapping up and they said that the first people will hopefully be moving in sometime in January. As a sidenote, their rooftop deck is spectacular.
Looks like the City has something to say about the reversion from condos to apartments.
This was in the Voice of the Hill's report on ANC 6C minutes - "voted to send a letter to the Zoning Commission about the Senate Square development projects at 4th and I streets NE. The commissioners said they felt that the developer’s project was approved on the premise that its units would be condominiums. Now they are being marketed as rentals."
i walk past senate square every day. they had the underground parking lot doors open today, and they look pretty clean. there are a few leftover construction stuff, but it looks like their ready to 'go live'.
good things take time, folks.
i would have loved to see them open two months ago, but they're working out the detail.
quit complaining, and be happy when they start moving folks in over the next two months.
the 'something fishy' comment cracked me up.
there's nothing fishy here, if you've ever dealt with real estate transacations on a large scale.
that was one of the most naive comments i've heard on this blog (and that includes my own - sometimes).
a year from now, and y'all will be praising the venture.
Your comments add nothing to the discussion here. In fact, it appears you post more just to start arguments or make fun of other poster's opinions than actually contribute anything. Everyone commenting on this post expressed their opinion without criticizing the other posters until you showed up.
Are you seeing a pattern? B/c you do the same thing on just about every other topic that gets posted on Frozen.
Stop it. Its juvenile. And you're not helping the community when you do it. If you can't post respectfully then don't continue to bother us with your lame attempts at socialization.
RE: the comment about the building being approved as condos, not rentals...don't they actually keep them as condos that are all owned by Abdo and rented by a management company in hopes of selling them later once the market improves?
I'm curious if anyone has an answer to Rob's question about the Abdo devlelopmen reverting back to condos after the market improves. I do hope this will be the case.
I also agree completely with Anonymous 11:40 p.m. about Poo Poo. Why couldn't you just simply leave your post at:
"i walk past senate square every day. they had the underground parking lot doors open today, and they look pretty clean. there are a few leftover construction stuff, but it looks like their ready to 'go live'." PERIOD - nothing else was relative.
You then had to go add (waste) 20 lines with mean spirited and meaningless sarcasim. You add a negativity to this blog that is unwelcomed. I think you must be a sad, lonely person. Here's wishing you happy holidays, Poo Poo - I don't think you have much cheer, so I'm offering you some of mine.
if they do a condo conversion later, the renters have right of first refusal. which may be a marketing point to prospective renters (e.g. 'stick around till the market improves and get in at a lower price than whatever's the prevailing price in the improved market'). maybe that will sway some folks with money to burn who also want to be near either Captiol Hill, the SEC building, the new ATF building or maybe hopes H Street's revival will continue apace (or accelerate, as we all hope).
any word on whether trader joe's or any other grocery anchor store has committed to be part of the long-delayed 3rd & H project?
Thanks Soul Searcher for your helpful comment. It explained to me that there's still very much the possibility for something positive to come out of having renters in place there.
I think most of us would agree that renters are better than an empty building - whenever it gets finished.
I actually went and toured the building. It's very nice inside, but I don't think it's worth what they are asking in rent. Studios start at $2000, 1 bed at $2400, 1 bed/den at $2800, 2 bed at $3000. Plus, each unit goes up $50/floor for each floor up that you go. So an 8th floor studio is $2400, and an 11th floor 2 bed is $3550.
Basically they're charging in rent what the cost would have been to buy with a 30 year fixed mortgage at the inflated prices that they tried to sell (unsuccessfully) at. If people were interested and able to spend that kind of money per month on a home, wouldn't they have bought in the two years that the units were for sale? Also, most people were using I/O ARMS when they were buying, so if people had bought they would have been spending less to own than the current asking rents.
I forsee prices drops on the rents in the future, especially with rental housing coming on line at 2nd and K and elsewhere in the area over the next few years.
I have little sympathy for those who purchased condos at clearly inflated values during the past two years, and have watched as their "investment" either stayed put or lost value. It's these buyers who helped sustain the inflated prices for most properties throughout the area (such as the $2000/month rental studios at Senate Square).
My initial reaction to the rental rates for Senate Square is . . . they seem high to me. After running a search on craig's list for rentals on Cap Hill and seeing what you can get for between $2500-3500 . . . they seem really high to me. I realize that Senate Squate is new, quality construction. Most units have a view. You don't have to fool around with a yard (if that's not your thing). There are many amenities, such as a gym (right?) and the roofdeck. Security is excellent. You get covered parking. Still, even listing all that, it's hard to see how those prices compete with what is out there to rent. For $2500, I found a 2br row house two blocks from Eastern Market - high ceilings, wood floors, working fireplace, yard, presumably more space, etc. Of course, that location might not be right, but there were other places listed right next to Union Station. Bottom line - I think those prices are going to have to come down if they want to fill the building. But hey, what do I know?
I'm not going to comment on the inflated/non-inflated status of the prices. I will point out that many of the people who purchased such condos weren't investors, but homebuyers who intended to live in them. Homebuyers who bought at the height of the marker may have been unwise, or unlucky, but I think they are still a sympathetic group.
I don't know about this particular one, but typically when a condo development reverts to apartments they are still legally condos, just all owned by the development company. The primary reason is that DC wants it's condoization fee, which I think is about 4% of the the value of each condo (that's in addition to any sale fee). Also, it does allow the developer to sell them at a later date with a minimum of legal mess.
And, yes, I think renter's first right of refusal attaches once they are rented.
The view - I once toured this development, and I was pleasantly surprised when the sales person admitted that the most spectactular views, going West toward the Capitol, will eventually be blocked by the massive development going over the air rights over the Union Station tracks.
But I actually liked the views overlooking H Street better, and they are less likely to be blocked by future development (to some extent).
As for having no sympathy for those that bought 'overpriced condos', that's a fairly hard-ass statement. Yes, some investors contributed to the high prices. But not all investors are tremendously wealthy. Some can ill afford any future losses. And a good many condos were bought by first time homebuyers.
Senate Square does indeed have a gym, movie theatre, HUGE rooftop pool, and a runner's track, in addition to other amenities.
That makes it quite different to a stodgy old rowhouse on Capitol Hill. And, in fact, that's their angle.
Will that angle work? I guess we'll see. You'd be suprised at what younger folks are willing to pay for a close commute, combined with very cool amenities.
I've rented one bedrooms for more than they're asking, and received significantly less.
I don't mean to bother the stodgier folks on this wonderful blog, but I must beg to differ on many of the points of view that wonderful folks have taken the time to type on this fabulous forum.
The place will be wildly successful, there's no doubt.
Put it this way, I know someone who works with the Commerce Dept.
She is 26 and makes around $120k a year. Yes, that's right, and according to her, it's not unusual for that Dept. And no, she's not legal counsel.
Anyway, courteous readers, she wants to rent there. As do a couple of her friends.
I find that somewhat reassuring, interested readers.
Don't you?
Thank you for taking time to read my post, and my apologies for offending anyone with an opinion that differs from mine. I express the utmost in regret and humility, and beg for your forgiveness.
Thank you kindly for entertaining my (likely stupid) point of view, and may many holiday blessings be bestowed upon you and yours.
And please wish me the best, as I'm about to purchase a third house in the area.
But what the heck do I know?
Best regards for your tolerance,
Poo Poo
Please give your family my best.
(there, is that what you want from me? B.O.R.I.N.G.......)
would it be rational to hope that a fully rented-out senate square would increase the likelihood of a grocery tenant committing to the 3rd & h project so that can finally get off the ground?
do the rents charged at senate square parallel rents at other luxury apartment buildings near metros?
is there a possibility (zoning?) for people to use those luxury units for office space? are such rents appropriate for office space at such a size/location as SS? CNN, Blue Cross, Union Station, DC government headquarters are all nearby but most of these folks' salaries seemly would be strained paying 2500 for rent (30% of annual income is considered a good ceiling for rent expenditure, thus someone should make around 100k a year to rent at SS, then? does that sound right?)
poo poo just answered my question about fed gov't salaries
so, perhaps a sizable number of area gov't employees COULD afford senate square then?
between the ATF building, the SEC building, CNN and blue cross, surely some folks could be convinced to hop on board, eh? luxury apt walking distance from the j-o-b? right near multiple transportation options? (395, amtrak, marc, metro, x2, 80, and further away 295 and 50)
i think so. when you look at the fed's salaries (including their retirement accounts, from which they can take loans) it's totally viable.
considering that the fed gov't pays for metro transportation, it's almost a given.
if you are a fed (i am) you can actually save money renting. i know. that's how i saved up enough money to buy a few places in dc.
i've get off the metro at the NY station. you can't believe how full it is at 'closing time'.
many of those folks spend countless hours per day driving from their suburbanite homes to a 'kiss and drive', park (which is NOT paid by the feds), and then metro in to dc.
i can't tell you the number of folks that just want to get up, roll out of bed, and walk/metro to work.
check the demographics. SEC, ATF, CNN, etc.
baby boomers are retiring and being filled by young professionals with lots of disposable income.
and short attention spans, lack of discipline, etc.
senate square will fill up, and soon.
mark my words.
watch and see.
you think developers are breaking ground all over this area because they have nothing better to do?
nah...
demand and supply, baby.
it's only getting started.
(you can quote me later, but please use "poo poo", and not "poo" as some gutless tangent anonymous poster used earlier)
Good lord, $120k/year is SES and just below (GS-15). My sister made that much working for GSA -- after 25 years of service and working her way up to running an organization with a multi-billion dollar budget. How'd your friend get to a position like that at age 26? That's phenomenal.
I agree with inked, leave those poor people alone who are fighting to get their deposits back. They were buying into an association that was linked with THE developer in DC. I don't think those were outrageous prices if those condos were a long term home/investment for the buyers.
As for the rentals, I too think they are very high. I drove a friend by them yesterday who had never been on H Street. "Uh, I wouldn't buy a condo here" was his reaction. We know great things are coming to H Street, but right now it be ugly, folks. And SS is asking tenants who do not have an ownership interest in the neighborhood for some of the highest rents in the city? That is an optimistic strategy. Would you live there at those prices?!?
Thanks Poo Poo for your recent MUCH more informative comments - though still a good deal of sarcasim in one. That was exponentially better and much more useful. I think you're learning how to communicate on a friendly neighborhood blog.
- Santa
P.S. In return, here's wishing you and your family the best during this Holiday season.
I just called the toll free number and renters have to pay an additional $200 for a parking space in the building.
For the record, Abdo did not develop the towers. He sold the rights to a NY developer. He is only developing the old Children's Museum building into lofts. The plan was to have them share the amenities, but I do not know how this will work now that some are rented and some are purchased.
I live in the neighborhood and work at one of the aforementioned companies off 1st St NE. There are people (higher ups, not us young folks) who can definitely afford to live there. We get Metro money (not much), and a free shuttle to Metro (which is nice when it's late at night). If there are a significant number of employees living at SS, the shuttle would be able to stop there, too.
As for rents, I looked at the Mass Court apts off 3rd and H. The studios there were slightly less. And they weren't very nice. It was something like $1650 for the barest of bare studios. So if the amenities are better, yeah, people will live there.
25 comments:
slightly off topic, but when are they people going to start moving into Senate Square anyway? Everyone I've talked to who looked to either buy or rent there has had a hard time even talking to the sales/leasing office. Apparently they aren't very responsive. It's a shame because they look beautiful, and we all would like to see them full.
Anon. 11:54 makes a good point.
I occasionally drive past SS and it always seems to have lights on onside but ZERO people inside. Have yet to hear of anyone actually seeing the inside or being brought in for a tour of the apts. (with an intent to rent).
How do these people stay in business by letting the property just sit there? The whole thing seems a bit fishy...
I actually found the staff in the sales/leasing office very responsive. I just went and looked through a few apartments last week. Construction is still wrapping up and they said that the first people will hopefully be moving in sometime in January. As a sidenote, their rooftop deck is spectacular.
Looks like the City has something to say about the reversion from condos to apartments.
This was in the Voice of the Hill's report on ANC 6C minutes - "voted to send a letter to the Zoning Commission about the Senate Square development projects at 4th and I streets NE. The commissioners said they felt that the developer’s project was approved on the premise that its units would be condominiums. Now they are being marketed as rentals."
i walk past senate square every day. they had the underground parking lot doors open today, and they look pretty clean. there are a few leftover construction stuff, but it looks like their ready to 'go live'.
good things take time, folks.
i would have loved to see them open two months ago, but they're working out the detail.
quit complaining, and be happy when they start moving folks in over the next two months.
the 'something fishy' comment cracked me up.
there's nothing fishy here, if you've ever dealt with real estate transacations on a large scale.
that was one of the most naive comments i've heard on this blog (and that includes my own - sometimes).
a year from now, and y'all will be praising the venture.
chill, and get real, please.
no drama needed, cuz there ain't none.
but it does make me giggle a bit. :o)
Poo,
Your comments add nothing to the discussion here. In fact, it appears you post more just to start arguments or make fun of other poster's opinions than actually contribute anything. Everyone commenting on this post expressed their opinion without criticizing the other posters until you showed up.
Are you seeing a pattern? B/c you do the same thing on just about every other topic that gets posted on Frozen.
Stop it. Its juvenile. And you're not helping the community when you do it. If you can't post respectfully then don't continue to bother us with your lame attempts at socialization.
RE: the comment about the building being approved as condos, not rentals...don't they actually keep them as condos that are all owned by Abdo and rented by a management company in hopes of selling them later once the market improves?
I'm curious if anyone has an answer to Rob's question about the Abdo devlelopmen reverting back to condos after the market improves. I do hope this will be the case.
I also agree completely with Anonymous 11:40 p.m. about Poo Poo. Why couldn't you just simply leave your post at:
"i walk past senate square every day. they had the underground parking lot doors open today, and they look pretty clean. there are a few leftover construction stuff, but it looks like their ready to 'go live'." PERIOD - nothing else was relative.
You then had to go add (waste) 20 lines with mean spirited and meaningless sarcasim. You add a negativity to this blog that is unwelcomed. I think you must be a sad, lonely person. Here's wishing you happy holidays, Poo Poo - I don't think you have much cheer, so I'm offering you some of mine.
-Santa
if they do a condo conversion later, the renters have right of first refusal. which may be a marketing point to prospective renters (e.g. 'stick around till the market improves and get in at a lower price than whatever's the prevailing price in the improved market'). maybe that will sway some folks with money to burn who also want to be near either Captiol Hill, the SEC building, the new ATF building or maybe hopes H Street's revival will continue apace (or accelerate, as we all hope).
any word on whether trader joe's or any other grocery anchor store has committed to be part of the long-delayed 3rd & H project?
Thanks Soul Searcher for your helpful comment. It explained to me that there's still very much the possibility for something positive to come out of having renters in place there.
I think most of us would agree that renters are better than an empty building - whenever it gets finished.
I actually went and toured the building. It's very nice inside, but I don't think it's worth what they are asking in rent. Studios start at $2000, 1 bed at $2400, 1 bed/den at $2800, 2 bed at $3000. Plus, each unit goes up $50/floor for each floor up that you go. So an 8th floor studio is $2400, and an 11th floor 2 bed is $3550.
Basically they're charging in rent what the cost would have been to buy with a 30 year fixed mortgage at the inflated prices that they tried to sell (unsuccessfully) at. If people were interested and able to spend that kind of money per month on a home, wouldn't they have bought in the two years that the units were for sale? Also, most people were using I/O ARMS when they were buying, so if people had bought they would have been spending less to own than the current asking rents.
I forsee prices drops on the rents in the future, especially with rental housing coming on line at 2nd and K and elsewhere in the area over the next few years.
dear anon 11:40:
it's poo poo, not "poo".
thanks for you interest in other folks opinions,
poo poo
I have little sympathy for those who purchased condos at clearly inflated values during the past two years, and have watched as their "investment" either stayed put or lost value. It's these buyers who helped sustain the inflated prices for most properties throughout the area (such as the $2000/month rental studios at Senate Square).
My initial reaction to the rental rates for Senate Square is . . . they seem high to me. After running a search on craig's list for rentals on Cap Hill and seeing what you can get for between $2500-3500 . . . they seem really high to me. I realize that Senate Squate is new, quality construction. Most units have a view. You don't have to fool around with a yard (if that's not your thing). There are many amenities, such as a gym (right?) and the roofdeck. Security is excellent. You get covered parking. Still, even listing all that, it's hard to see how those prices compete with what is out there to rent. For $2500, I found a 2br row house two blocks from Eastern Market - high ceilings, wood floors, working fireplace, yard, presumably more space, etc. Of course, that location might not be right, but there were other places listed right next to Union Station. Bottom line - I think those prices are going to have to come down if they want to fill the building. But hey, what do I know?
I'm not going to comment on the inflated/non-inflated status of the prices. I will point out that many of the people who purchased such condos weren't investors, but homebuyers who intended to live in them. Homebuyers who bought at the height of the marker may have been unwise, or unlucky, but I think they are still a sympathetic group.
I don't know about this particular one, but typically when a condo development reverts to apartments they are still legally condos, just all owned by the development company. The primary reason is that DC wants it's condoization fee, which I think is about 4% of the the value of each condo (that's in addition to any sale fee). Also, it does allow the developer to sell them at a later date with a minimum of legal mess.
And, yes, I think renter's first right of refusal attaches once they are rented.
The view - I once toured this development, and I was pleasantly surprised when the sales person admitted that the most spectactular views, going West toward the Capitol, will eventually be blocked by the massive development going over the air rights over the Union Station tracks.
But I actually liked the views overlooking H Street better, and they are less likely to be blocked by future development (to some extent).
As for having no sympathy for those that bought 'overpriced condos', that's a fairly hard-ass statement. Yes, some investors contributed to the high prices. But not all investors are tremendously wealthy. Some can ill afford any future losses. And a good many condos were bought by first time homebuyers.
Hello, nice folks!
Senate Square does indeed have a gym, movie theatre, HUGE rooftop pool, and a runner's track, in addition to other amenities.
That makes it quite different to a stodgy old rowhouse on Capitol Hill. And, in fact, that's their angle.
Will that angle work? I guess we'll see. You'd be suprised at what younger folks are willing to pay for a close commute, combined with very cool amenities.
I've rented one bedrooms for more than they're asking, and received significantly less.
I don't mean to bother the stodgier folks on this wonderful blog, but I must beg to differ on many of the points of view that wonderful folks have taken the time to type on this fabulous forum.
The place will be wildly successful, there's no doubt.
Put it this way, I know someone who works with the Commerce Dept.
She is 26 and makes around $120k a year. Yes, that's right, and according to her, it's not unusual for that Dept. And no, she's not legal counsel.
Anyway, courteous readers, she wants to rent there. As do a couple of her friends.
I find that somewhat reassuring, interested readers.
Don't you?
Thank you for taking time to read my post, and my apologies for offending anyone with an opinion that differs from mine. I express the utmost in regret and humility, and beg for your forgiveness.
Thank you kindly for entertaining my (likely stupid) point of view, and may many holiday blessings be bestowed upon you and yours.
And please wish me the best, as I'm about to purchase a third house in the area.
But what the heck do I know?
Best regards for your tolerance,
Poo Poo
Please give your family my best.
(there, is that what you want from me? B.O.R.I.N.G.......)
would it be rational to hope that a fully rented-out senate square would increase the likelihood of a grocery tenant committing to the 3rd & h project so that can finally get off the ground?
do the rents charged at senate square parallel rents at other luxury apartment buildings near metros?
is there a possibility (zoning?) for people to use those luxury units for office space? are such rents appropriate for office space at such a size/location as SS? CNN, Blue Cross, Union Station, DC government headquarters are all nearby but most of these folks' salaries seemly would be strained paying 2500 for rent (30% of annual income is considered a good ceiling for rent expenditure, thus someone should make around 100k a year to rent at SS, then? does that sound right?)
poo poo just answered my question about fed gov't salaries
so, perhaps a sizable number of area gov't employees COULD afford senate square then?
between the ATF building, the SEC building, CNN and blue cross, surely some folks could be convinced to hop on board, eh? luxury apt walking distance from the j-o-b? right near multiple transportation options? (395, amtrak, marc, metro, x2, 80, and further away 295 and 50)
soul searcher:
i think so. when you look at the fed's salaries (including their retirement accounts, from which they can take loans) it's totally viable.
considering that the fed gov't pays for metro transportation, it's almost a given.
if you are a fed (i am) you can actually save money renting. i know. that's how i saved up enough money to buy a few places in dc.
i've get off the metro at the NY station. you can't believe how full it is at 'closing time'.
many of those folks spend countless hours per day driving from their suburbanite homes to a 'kiss and drive', park (which is NOT paid by the feds), and then metro in to dc.
i can't tell you the number of folks that just want to get up, roll out of bed, and walk/metro to work.
check the demographics. SEC, ATF, CNN, etc.
baby boomers are retiring and being filled by young professionals with lots of disposable income.
and short attention spans, lack of discipline, etc.
senate square will fill up, and soon.
mark my words.
watch and see.
you think developers are breaking ground all over this area because they have nothing better to do?
nah...
demand and supply, baby.
it's only getting started.
(you can quote me later, but please use "poo poo", and not "poo" as some gutless tangent anonymous poster used earlier)
cheers!
Good lord, $120k/year is SES and just below (GS-15). My sister made that much working for GSA -- after 25 years of service and working her way up to running an organization with a multi-billion dollar budget. How'd your friend get to a position like that at age 26? That's phenomenal.
I agree with inked, leave those poor people alone who are fighting to get their deposits back. They were buying into an association that was linked with THE developer in DC. I don't think those were outrageous prices if those condos were a long term home/investment for the buyers.
As for the rentals, I too think they are very high. I drove a friend by them yesterday who had never been on H Street. "Uh, I wouldn't buy a condo here" was his reaction. We know great things are coming to H Street, but right now it be ugly, folks. And SS is asking tenants who do not have an ownership interest in the neighborhood for some of the highest rents in the city? That is an optimistic strategy. Would you live there at those prices?!?
Thanks Poo Poo for your recent MUCH more informative comments - though still a good deal of sarcasim in one. That was exponentially better and much more useful. I think you're learning how to communicate on a friendly neighborhood blog.
- Santa
P.S. In return, here's wishing you and your family the best during this Holiday season.
I just called the toll free number and renters have to pay an additional $200 for a parking space in the building.
For the record, Abdo did not develop the towers. He sold the rights to a NY developer. He is only developing the old Children's Museum building into lofts. The plan was to have them share the amenities, but I do not know how this will work now that some are rented and some are purchased.
I live in the neighborhood and work at one of the aforementioned companies off 1st St NE. There are people (higher ups, not us young folks) who can definitely afford to live there. We get Metro money (not much), and a free shuttle to Metro (which is nice when it's late at night). If there are a significant number of employees living at SS, the shuttle would be able to stop there, too.
As for rents, I looked at the Mass Court apts off 3rd and H. The studios there were slightly less. And they weren't very nice. It was something like $1650 for the barest of bare studios. So if the amenities are better, yeah, people will live there.
Post a Comment