Wednesday, July 23, 2008

DC Condo Sales: Union Row, Flats and Warehouses

Union Row (2125 14th St NW, 20009) is a PN Hoffman project comprised of two complexes: the Flats and the Warehouse. The latter is a renovation of two pre-existing warehouses. The project won the National Association of Home Builders (NAHB) 2008 Pillars of the Industry award in the category of "Best New Loft Condominium Community."

As described by these folks, the Flats at Union Row:

...is new 8-story, 216-unit condo building in the heart of the U St. corridor, starting at $270k for a studio, to $1.2m; one-bedroom condos from the high $300's, two-bedroom condos from the low $500k's, though the project has seen several drastic price cuts since the building was finished, most recently in January '08. Some units will offer floor to ceiling windows and glass bays in a glass-dominated facade, which should offer city views. The sales office reports that the project has sold more than 80% of its units, the first delivery took place in Fall 2007.

Moving to the Warehouses at Union Row, my same friends tell us that:

Now selling, the Warehouses at Union Row features 52 split-level and single level 'townhouse style' condos in a converted and expanded warehouse - 2 parallel buildings separated by a courtyard, with some 3-level condos featuring floor to ceiling windows. Condo prices ranged originally from $495k to over $1m, with the multi-level upper units starting at $864k, but prices dropped in early 2008. Sales began in early 2006, the first deliveries took place in November 2007.

According to these peeps, the estimated project cost for these two buildings was $90MM. If I read the Recorder of Deeds records correctly, the land cost about $12.3MM

Sales, Resales, and Rentals

Sales

According to the District, 115 of the Flat's 216 units have sold through April 2008; 16 of the Warehouse's 52 units have sold in that time. Not quite the 80% puffed by the sales office. The table below lists all sales recorded by the District (use the scroll bar on the right to browse the table).

Resales

The original owner of unit #703 has met the greater fool. After having purchased the unit, a 1/1 with 700 square feet, for $398,900 in January 2008, someone actually bought it from her for $425,000 in April. Granted, this unit includes one of the fifty parking spaces available in a building with more than 200 units, but does that warrant a $26K bump in less than four months when 100 other units in the same building are still available? I can imagine what many other would be DC condo sellers who are reading this are asking: does he have any friends?

My new BFF tells me that one unit, #304, is listed for sale [MLS #DC6814242]. It's a 1/1, 700 sq feet with a parking space. Originally purchased for $352,634 in September 2007, this Union Row pioneer thinks $425,000, a $72,366 profit after a 10 month holding period in a DECLINING market, is a reasonable price. Too bad the greater fool has already purchased #703.

Rentals

I've not found any units listed for rent. A parking space is available for $280/month.

14 comments:

Heath said...

I couldn’t imagine living there without a parking space.

U street is a little late to the party. Given this huge and undersold building, along with the recently finished Magdaline, the almost finished Floridian and the Solea being built, they need to drop their prices a little more.

I’m actually looking in this area, U street or Columbia Heights. I saw the Magdaline three weeks ago and you could tell it was rushed onto the market, most the units were hadn’t been cleaned from construction. I’m going to look at the Floridian this weekend. I’m very weary of newly built condos, I imagine they are cutting a lot of corners to get them onto the market fast. And I don’t think the exposed ductwork and concrete ceilings will be keep the resale value up, but I like to look anyway.

I'm thinking to buy probably in the spring, I'll see how the market is then.

Jamie said...

Keith, good post. As far as the 80% sold, I agree that they definitely aren't there. But, theoretically they could have some % under contract and not yet settled. Seeing how the building is completed I doubt that makes up the difference, but they probably have a few under contract that are trying to get approved for a loan or trying to delay settlement until they sell another home, etc. This is probably a handful of people at best, but it is still the unknown.

Good site, keep it up.

Jamie said...

Keith, I also recently got my hands on the price lists for both Union Row projects. The Flats price sheet showed I think 78 units remaining. So that would be about 65% sold.

You can see the PDF file at http://www.condoauthority.com/flats-union-row

JohnN said...

Yeah, I'm constantly astounded the stubborn refusal to adjust prices. I'm about to have my second contract expire for lack of 50% sold in developments that utterly refuse to cut prices. First the Axis on Cap Hill, and now a different place in Columbia Heights. The Axis is stuck at 30% for months (the site is utter bollocks for what is marked "sold", as they still have my contracted unit marked that way).

Insane. Its like they don't actually want to sell anything. They'd rather have a full price empty building.

Anonymous said...

"they probably have a few under contract that are trying to get approved for a loan or trying to delay settlement until they sell another home, etc"...

or trying to get their deposits back. They would be fools to close. As at other buildings, many investors walk and seek legal advice to get their money back.


"I’m going to look at the Floridian this weekend." Although they say they are taking offers, the person who was on site when I went was ridiculous, claiming a high portion was sold (how many of those are going to close?), and with discounts off of prices approaching $700 psf for some units. Would you spend $870,000 for a unit in that location? The unit is nice but not at that price. He will also tell you that if they were to rent the units, they would rent at $3500 for a two bedroom unit, so buying makes sense!

RIDICULOUS.

Keith said...

Thanks for the comments.

Jamie: trying to determine market reality right now is nearly impossible since the folks who know the true situation, the developers, aren't saying. All you can do is triangulate based on District data and "reliable sources".

Heath: I was near the Floridian last weekend and wished I had my camera so I could photograph the "Realtors: Stop Here!" sign. The tales in the Fennessy Lofts blog are sure scary.

chelledc said...

How small do you think the one that sold for $177,000 is? They say they started at $270K for the studio. How would you account for the $100K price difference?

Keith said...

According to the District, that unit has 696 sq ft and is a 1/1. I can't explain the pricing discrepancy. However, I sure like the idea of condos selling for less than $260/sq foot!

Mark said...

As of this past weekend, Union Row Flats showed 67 units available.

There were a fair number of people looking.

The Union Row Warehouse units were very well done though. I like PN Hoffman's work.

I just wish they didn't cost an arm and a leg.

fourthandeye said...

I'm very late to the party on this posting... but I would suggest that the sales less than $200K are possible signs of affordable housing. Perhaps PNHoffman was given a mandate to include some such units in exchange for zoning variances. I hardly believe that they just chose to cut prices in half for a few folks that lowballed them. If these are indeed affordable housing sales then they provide no usefullness to market rate real estate analysis.

When I visited this spring the price point for this property was about 50K out of my grasp. But it is a fantastic property. I was very impressed with the choices the developer made on the features and finishings.

Keith said...

fourthandeye: I thought the same thing, but there's no information to confirm the suspicion so I left it as is.

fourthandeye said...

Hi keith - i understand that. I'm not sure what public records if any will tell us which are affordable.

But I felt I had to respond with this after reading "I sure like the idea of condos selling for less than $260/sq foot!". Condos with this in demand location and this caliber of construction/finishes cannot sell that without developers losing major money on the units. They would take dramatic losses on certain units to fulfill a larger obligation to the city for the project on the whole.

I think what you're doing is a great resource. The community of buyers needs more information as their disposal. However sometimes information without context is harmful. Some potential buyers or recent buyers may see these units sold for $177K and not connect the dots properly and misinterpet what it means for them.

Not everyone is a real estate junkie who reads DCMud and Washington Business Journal feeds daily. They may not understand that certain developments have affordable units. I don't think you want to get into the slippery slope of scrubbing out data observations. I am not suggesting that. But I do think you can add some of that contextual information in your analysis rather allowing potential misinterpretations of the data.

Anonymous said...

As far as I understand the low price unit is affordable housing. There are a total of 3 such designated units in the Flats.

Mina said...

Actually i just purchased one this month that i am moving into on Tuesday the 28th. I purchased one of the 3 level units on top for 695 including a parking space and all closing costs included. Considering what i am reading, it sounds like i got a heck of a deal.

Also, the warehouses are 92% sold. This is a fact because my lender would not lend us the money otherwise.

I can't wait.