Thursday, March 8, 2012

Charlotte's Vue condos turning into rentals?

Two foreign insurance companies that control some of the debt on the Vue luxury condominium tower in uptown are trying to sell the project's troubled loan to investors interested in changing the condos into apartments, an industry publication is reporting.

The insurance companies control $130 million of the tower's $195 million balance on its construction loan, according to the March 7 issue of Real Estate Alert. The developer, MCL Cos. of Chicago, defaulted on the loan in February 2011, the alert says. A buyer would also have to pay off the loan's remaining $58 million portion, held by Goldman Sachs.

The $275 million Vue at Fifth and Pine streets overcame fierce challenges when it became the only new luxury condo tower to survive the recession.

As sales agents struggled to sell condo units in the weak housing market, developer Dan McLean repeatedly said he would never turn the tower into rental units. In an October 2009 interview, McLean told the Observer there was "no way" the Vue condo tower would convert to apartments, as other unsuccessful condo projects had done.

McLean personally guaranteed the Vue's construction loan when it was restructured in late 2009, Real Estate Alert reported. The loan maturity was extended to late 2012, "but the cashflow woes worsened, as new sales dried up and some early buyers successfully sued to be let out of their purchase agreements," the report says.

Between the time the luxury condo tower was announced in 2005 and when it was finished in fall 2010, the economy has blossomed and then burst, uptown condo projects have sprouted and then fallen out of favor, and buyers have gone scarce - either unable or unwilling to commit money toward a new home purchase. Some buyers have said appraisals came in below contracted sales prices, making it difficult to get financing.

McLean refused to lower the sales price and said he was betting on buyers looking for second homes.

The Vue has said roughly 60 percent of the 409-unit building was presold. But relatively few of those units have closed. The Vue's condos started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit.

But the Vue suffered significant legal blows last year as buyers sued to get out of contracts or recover deposits.

In April, a Mecklenburg County Superior Court judge ruled the developer can keep only a deposit from buyers who signed contracts, but can't force them to close on their units. MCL Cos. had sued at least 10 buyers, claiming they breached their contract to buy units.

And in November, a federal judge ruled that a couple who tried to get out of their contract should get their $145,485 deposit back.

U.S. Chief District Judge Robert Conrad Jr. ruled that a proper description of the property had not been provided with the sales contract as required by the Interstate Land Sales Full Disclosure Act. The buyers, therefore, were entitled to cancel the agreement within two years and get their earnest money back, the ruling said.

Charlotte's apartment market, meanwhile, has been booming as occupancy rates and rents rise. While commercial construction overall remains at a standstill, developers have announced plans for new apartment complexes. Existing projects have sold at a premium.

The 51-story Vue offers studios, one-bedroom units, two-bedroom units and penthouses. It features an Olympic-size pool, tennis court, fitness center, dog-walking area and a wine cellar.

For more information about Real Estate Alert, go to http://www.realert.com

54 comments:

TC said...

Section 8,here we come!

Anonymous said...

where are the yougn people who say it is so great to live uptown. why aren't they buying these condo's. same with the crva that touts uptowns greatness. why haven't they picked up a few.

Anonymous said...

^ all the rental space is occupied. The prices at the Vue are far too high for these 'young people' to purchase.

Anonymous said...

As young person, never thought Uptown Charlotte was all that grand to begin with. Its a dull, bland boring city with no culture. And yes so outta here, as soon as the house sells.FACT -For anyone that is relocating, I advise to please visit first.

Anonymous said...

Until Charlotte replaces the High Paying Center City Banking Jobs with New High Paying Center City Jobs the Burbs will spread ever outward. Unless Charlotte Stops building an ever expanding Toll and Beltway system, just look at any other Major City and see what happens until the population reaches over Five Million.

Anonymous said...

@Anon MARCH 8, 2012 3:23 PM - Have you tried getting a loan for a condo? It's 10x more difficult than getting one for a home. As far as rentals go, they are hard come by. The demand in and around uptown is extremely high with a small amount of inventory. Thankfully there a number of apartment projects that are set to kick off or are already under construction this year.

Anonymous said...

I doubt they would even be able to rent them out as Apartments. Charlotte is slowly going to lose population as no one really wants to live there and jobs will leave. glad i got out.

Anonymous said...

I agree with the previous posters. Charlotte is geared more toward families...It's great if you are at that point in life. As a young person who relocated here, there's just not much going on here. Yes it has a nightlife, but for the most part it is severely lacking. _ I too am on my way out of this city. - Denver Colorado here i come....aka A REAL CITY.

Anonymous said...

Hey we are glad you left as well

Anonymous said...

Anyone want to take bets that the 'anon' posters who took their shots at Charlotte are actually all the same person? If they actually had a clue, they'd know the city is actually booming with young people moving here still. Hence the need for more apartments. If the Vue does go rental, I doubt they'd have any problems filling it up. It's worked out quite well for projects like the Catalyst.

Anonymous said...

"McLean refused to lower the sales price and said he was betting on buyers looking for second homes."

Yeah because if I were going to spend 1500 a month or more on a second mortgage it would definitely be in Downtown Charlotte. No where else in the world. (insert sarcasm)

"Hey we are glad you left as well"

Yes because god forbid you actually listened to all of the complaints about this city (which are always the same) and actually did anything about them. Counting you and me, 3 out of the last 4 posters have either bailed on this he11 hole or are on their way out. Dont snub your nose up so much unless you want this place to become Birmingham 2.0

DistrictSix said...

We should spread out the public housing, and since we do not have a real high rise downtown......

DistrictSix said...

4:19 we are all aware that Charlotte is becoming a mecca for young people. We had an occupy movement on the court house lawn that proved that to us.

Anonymous said...

What I find interesting is all the people who are so "glad to get out" yet feel the need to check the CO everyday for chances to post on a blog. I've moved multiple times, some places good and some not so great. Never felt compelled to go back and shove it in anyone's face. Also, I'm young and live in Elizabeth...and I love it.

Anonymous said...

Anon 4:19pm

Please, please, please explain your likening of Charlotte to Birmingham. I've got to hear this....

Dave Johannson said...

Anon March 8, 2012 4:00 PM:
"I doubt they would even be able to rent them out as Apartments. Charlotte is slowly going to lose population as no one really wants to live there and jobs will leave. glad i got out."

CHARLOTTE POPULATION BY YEAR
1990 (Census) 395,934
1991 427,695
1992 437,769
1993 460,768
1994 470,842
1995 480,916
1996 493,555
1997 503,629
1998 513,703
1999 523,777
2000 (Census) 540,828
2001 555,262
2002 567,179
2003 592,297
2004 604,215
2005 626,245
2006 641,163
2007 663,181
2008 678,099
2009 711,717
2010 (Census) 731,424
2011 750,124
2012 772,627

Looks like a pretty consistent 3% or so growth rate over the past 20 or so years.

Also, here are vacancy rates for the following months:

Aug. 2009: 12.2%
Feb. 2010: 13.0%
Aug. 2010: 10.3%
Feb. 2011: 8.3%
Aug. 2011: 7.2%

Charlotte rents also increased by an average of 5% from Aug. 2010 to Aug. 2011.

In summary, it appears that the facts don't exactly support your two tiered argument about the apartments not being able to be rented and that nobody wants to live in Charlotte. On the bright side, I will not argue that I am glad you got out...

Anonymous said...

White men will begin to flee Charlotte because the male female ratio is bad plus more white women are with black dudes, just look at the Obs party pix.

Anonymous said...

The negative nellies and their asinine statements of "Glad I got out" and "Charlotte losing people or whatever statement" are always comical to me. Statistics prove otherwise. Yea, the housing market isn't what it was, but what metro area hasn't had pains there? The economy is slowly changing from a financial center to a much more diversified one (think Duke Energy, Siemens, Chiquita, CHS, etc) which is HEALTHY. If your whole goal in life is just to trash the place you live or used to live, then you really have your own set of problems. Don't like something? Well, then do something about it and quit complaining! And regarding the Vue, if these do become apartments it would actually finally fill up that building because the rental market is so tight... I know because I own a few rentals and have no problem keeping them rented while moving the price up.

Anonymous said...

Charlotte is growing city, with good nightlife, great climate, and recovering economy. Its a great place to be young, raise a family, or retire. I am from DC, and although I do miss the culture, I don't miss the "grit" DC has. Our downtown is like candy land here in Charlotte. We have great local restaurants, wonderful neighborhoods just outside of uptown that character and culture to the city. Denver? Are you serious? Denver SUCKS. The only thing is has going for it is its 2 hours from Vail. Thats it. LODO this.

Nameless said...

If they open more apartments, then who will rent the homes that people can't sell?

Anonymous said...

Here's an idea that our City Council is certain to jump on: Let the taxpayers buy the condos, raising taxes as they see fit, and allow 'the poor' to stay there rent free. That should make us all 'feel good.'

Anonymous said...

To the poster that wrote that Denver sucks.... You need to get out more or you havent been recently. Gotta give the point to Denver. Denver reigns supreme compared to Charlotte. Nice city, that Denver.

Anonymous said...

You guys make Charlotte sound like its the bomb-diggity or something...Charlotte is a nice place to live and its a liveable city, but definitely needs a lot of improvement on 1. Nightlife 2.Diversity 3.Companies(more of them.)Once the city works on those 3 things, you might get more people to move here then the Vue wouldnt be vacant. Personally on my way out of Charlotte. Lucked up on a job in Houston. Work on those 3 things -then it will might actually materialize into a great city.

Anonymous said...

All you folks bashing Charlotte please leave! Atlanta is nice and roomy. Enjoy :)

Anonymous said...

Anon 2:49pm, sounds to me like people are just defending the city they live in, I see nothing wrong with that. While I disagree with the statement about Denver sucking (it's a great city) I will say enjoy Houston...and it's heat...and it's traffic...haha.

In the mean time, I'm going to try real hard to attract more people here. /sarcasm

My point is I like Charlotte the way it is. I've lived in cities larger than Houston (Toronto) but I like Charlotte's pace. It's also fun to be a part of a city without an identity yet, I actually enjoy following it's development. And to your surprise you'll find out, there are plenty others like me!

Anonymous said...

Denver don't have a thing on Charlotte. Visited both cities. Downtown Denver is not as alive as Charlotte's Uptown, and Certainly not as fine. The mountains west of the city are nice. But, what Charlotte don't have in the way of mountains, Denver don't have in water lakes, and near by ocean and mountains. Like both cities, but in Denver one could field isolated. BTW, I live in West Los Angeles.

Anonymous said...

I spent my 20s in Charlotte. Huge mistake. Nice place, but there are many American cities with SOOO much more to offer young peolpe. I love Charlotte, but that's a cold hard fact.

Anonymous said...

That is a wonderful building and I would jump at the opportunity to rent in it. I am young and happen to love Charlotte. I think there is plenty for young professionals to do if you look for it.

Anonymous said...

To all the posters stating my city is better then your city, charlotte sucks, glad I left, you sound like idiots!!! Completely childish, high school behavior!!! And this is supposely our young and educated folks????? Be very afraid America!!! Very!! Charlotte is a grest city. It doesnt need to have the amenities of a NYC, Miami, Chicago ...etc but she is unique in her own way! Who wants to be an Atlanta for instance with all the crime, traffic problems and in the summer lack of water b/c of too many residents???? Please keep all of that! Charlotte.....yeah, she's just fine! Signed a true Charlotte FAN!!!(-;

Anonymous said...

"Who wants to be an Atlanta for instance with all the crime, traffic problems and in the summer lack of water b/c of too many residents???? Please keep all of that! Charlotte.....yeah, she's just fine! Signed a true Charlotte FAN!!!(-;"


Charlotte will be just like Atlanta in 20 years. Crime in Charlotte is more spread out than Atlanta. The sprawl will happen here. Its foolish for Charlotteans to knock Atlanta because its Charlotte will replicate Atlanta.

Anonymous said...

@4:35 PM

Ha Ha Ha

We makin ya'll more irrelevant every week.

LOL!

Anonymous said...

Well I have been all around the world, Paris, London, Cairo, Mexico City, Rome, NYC, Chicago, Miami, Los Angeles, Portland, Seattle, Atlanta, Houston, Balitmore, and more. Work and Military related.

Charlotte, is perfect for anyone looking for a good, southern town to relax and raise a family. It is what you make it. I like Charlotte.

Southernboy JJ

Anonymous said...

I like living in Charlotte very much and I have also lived in New York, Atlanta, Los Angeles, San Francisco and other places as well.

I have loved them all and would return to all except Atlanta, which I no longer see as markedly different from Charlotte except for its greater size.

BTW: One of the posters above I've identified as someone who has threatened in the comments sections to leave Charlotte for years. Obviously, he's never going anywhere-it just makes him feel better to threaten to leave.

And you others who can't wait to leave sound like me at 25. You should leave and live in many places and experience a lot of things. That's a life well-lived.

Anonymous said...

To all you tools who are bashing Charlotte and saying "I'm outta here." It is only SO obvious that you were part of the young and dumb that thinks they should be able to get a job and just keep cashing paychecks. The economy has been perfect for companies looking to finally fire (lay off) all the lazy ilk that brings the bottom line down. We can read between the lines. Sorry you lost your job and can't find another one here...now LEAVE and don't let the door hit you on the way out.

Anonymous said...

People...why all the bitterness in these posts. People have the right to state their opinion whether it be negative or positive...As a native of Charlotte who now resides in Minneapolis, Charlotte has a lot of growing to do if it wants to compete with other cities. In order for the Vue to not stay vacant, the city needs to work on attracting more businesses to the area. Yes, there are more companies moving to CLT, but not nearly enough. "Options" - Charlotte does not provide a lot of options as far as "things to do" I will say this about my hometown, its a great city to raise a family and the cost of living is doable. - Charlotte is coming...it just has not arrived yet.

Anonymous said...

Hey Dave Johannson. Do you know how much land (and people) Charlotte has gained through annexation since 1990? It's pretty ridiculous. If most major cities implemented this type of growth plan and had a land area of over 297sq. miles, their numbers would be bloated too.

Anonymous said...

Anon 10:13pm

If you have ever ready any article...ever...on "up and coming" cities in the united states, you will always see Charlotte along with cities like Nashville, Austin, Indianapolis ect. Here, I'll make this easy for you:

Charlotte - 297sq miles
Nashville - 475sq miles
Austin - 297sq miles
Indianapolis - 361sq miles

Let's even go further:

Phoenix - 516
San Antonio - 460
Dallas - 340
Fort Worth - 340
San Diego - 325
Memphis - 315
Kansas City - 315
OK City - 606

So above you see we are right in line with those same mentioned cities. And below you'll find other large cities throughout the United States that have at some point in the past utilized this same aggressive growth process. (obviously I'm ignoring the likes of the Chicago's, LA's and NY's because we aren't even in the same realm and we know it)

Hmmm....

Anonymous said...

Every fucking city in the southeast is up and coming and growing. Asheville, Charleston and Nashville are more expensive than Carlot. That says a lot. Carlot is just another high growth Amurican city, nothing special about it at all.

If all the southeast cities were afforded an airport hub and Carlot wasn't then Carlot would be like Van Wyck, SC. Charlotte is full of ignorant hicks.

Anonymous said...

Anon @4:35.I hear ya bro.Just look at all the fat and ugly,toothless white women who are with black dudes.Makes you wonder if they go black because white dudes don't want them! Maybe the black dudes are gay and white women hang with them because they are safe and it makes the women look like they are diversified!

Anonymous said...

When the VuE prices come back down to earth, 200-250 sq/ft people will buy, 300-500 is just plain stupid. I guess Dan is hoping he can find ~400 people with more money than brains.

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