2121 Belmont was built to be sold as luxury condos at the peak of Portland’s real estate market. Nearly nonexistent sales dictated a conversion to apartments but the income from the rentals is not enough to service the debt. The bank has issued a notice of default to the owners of the 123 unit building.

The John Ross is at 74% occupancy but that still leaves 84 unsold units (some are pending).  There is talk of an upcoming auction, similar to the  Atwater Place auction, but that is not confirmed.  The John Ross lowered prices almost immediately after the Atwater auction and brisk sales were reported but a handful of sales per month will draw the project out for a long time.  Accredited Marketing Partners had accepted bids for 40 of the 41 units on offer at the Atwater in 80 minutes when they ran the auction.

There are 37 John Ross units listed for sale in RMLS.  Picking one randomly:

• Original asking price $1,074,800 on 3/1/06
• Reduced to $1,069,000 on 2/6/07
• Reduced to $899,000 on 7/24/08
• Reduced to $819,000 on 1/22/09
• Reduced to $749,000 on 7/10/09
• Reduced to $579,000 on 10/2/09 which is the current asking price (1PM 2/27/10)

Scott Aster writes in PSU’s Quarterly & Urban Development Journal 2010 First Quarter report, “Housing Market Analysis“, that housing units in Portland are currently selling for 91.68% of original asking price. The John Ross building falls well short of today’s market.

The only unit that did not receive a bid was the penthouse.  First listed for $1,300,000 it did not garner the $899,000 minimum bid.  It was not the most expensive property available.  The previously offered at $1,539,000 unit sold for $897,000 (58% off asking and 128% of its minimum bid).  At the lower end, four units sold between $240,000 and $242,000 that all had minimums of $169,000.

The luxury condo auction featured property previously valued at$29,076,125.  It grossed $18,821,000 (66%) or $235,000 a second for 80 minutes.  My tracking of final selling prices may have been off slightly on one or two of the properties.

What were the expectations?  At September 13th’s REDC Auction property sold for an average of 44% of their previously valued prices so yesterday’s average was considerably higher though for the most part, the properties on offer were very different.

Will we see more auctions like this in Portland real estate market or in the building itself?  I would not be surprised to see another auction like this in either the South Waterfront or Pearl District.  The ability for a developer to rapidly raise cash has to be very appealing.  The downside is that a certain percentage of units must remain owner occupied in order to be financed down the road and there is a clear monetary hit to the bottom line (though some may be better than none).  I did not see any occupancy requirements in the terms and conditions for this auction.  If they can keep occupancy levels reasonable, it would not be surprising to see another Atwater Place auction.  Previous reports stated that even if all 4o units close escrow the building will still be less than half sold.

Pearl District condos (59 Active):

• High Price: $2,500,000
• Low Price: $215,000
• Average Price $752,900
• Median Price: $599,900
• Average Cost Per SQFT: $548

South Waterfront condos (35 Active)

• High Price: $2,499,000
• Low Price: $189,950
• Average Price $570,879
• Median Price: $424,000
• Average Cost Per SQFT: $361

The Pearl’s current asking price per square foot is $187 higher than the South Waterfront.

Flash back to 2006.  Both areas had 12 sales recorded in RMLS of 2005 or newer construction.  The average sold $/SQFT in the Pearl was $470.  In the South Waterfront it was $451.  Nineteen dollars per square foot separated the areas.  The asking price in the Pearl District is now 116% higher than the cost per square foot in 2006.  In the South Waterfront, it is 80% of the 2006 sold price!

We can’t tell what is for sale through other sources.  The Awater Place auction has a low bid price of $169,000.  There is a reserve-not-met auction at Realtybid.com that closes today priced at $232,000 for a loft in the Elizabeth in the Pearl District.

Disclaimer: I lived in the Pearl District, in an apartment built as condos, for five months at the beginning of this year.  We have never sold to the buyer in the South Waterfront but have in the Pearl District.  I have shown property in most but not all of the buildings that fit into this search criteria.  I took the photograph in 2005 as part of a post on new construction condos,  The cranes are working on the Meriwether Towers, the first condos completed in the South Waterfront.  The second photo is the Pinnacle in the Pearl shortly before move-in.

The South Waterfront was not insulated from the real estate market decline.  The Adrea (the far left building in the picture above) was converted to apartments (as was the Wyatt in the Pearl and 2121 Belmont in SE).  From there, we have Atwater Place, the John Ross, the two Meriwether Towers and OHSU’s building on the far right.  This is a great picture of the proposed build-out of the area.

The site is known as the Cronin Block
The condo complex to be named The Wyatt
15 stories – 244 condominiums
Pearl District/Hoyt Yards – NW 13th & Marshall St. The block next to the site is the home of the new Pearl District Safeway (which will be a mixed use space with residential space on top)
Completion: Summer to Fall 2007. I’d lean towards the latter.
Architects: Fletcher Farr Ayotte Architects
Developers: Robert Ball

The following is an artist rendering of the site. When we were down there last week looking at the large hole in the ground it is hard to belive what is still to come.

The block is named the Cronin. Previously, rumors had the tower being called the Coplin. Now we have the Wyatt.

Perhaps someone can shed some light?

The Strand just released the West Tower for sale over the weekend. The first sales will go to people already on the “priority list.” Once they have filtered through those offers, the remaining units will be opened up to the public for sale.

The Meriwether is the first development in the South River Blocks. Move in is scheduled for April.

The John Ross is the forward crane in the picture. When it is completed in 2007, it will be the tallest building in Portland.

The release is for those already on the Priority Wait List. Units that are not sold to those already on the list, if any, will be opened up to the “public” for sale at a later date.

Last night the Benson Tower sales office opened. You’re too late if you want the top floor penthouse. It is already reserved. 360 degree views from the 26th floor? $1129.03 a square foot for the 3100 square foot unit.