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Luxury Buildings Still in Trouble

The John Ross graces the cover of this week’s Portland Business Journal2121 Belmont is on the cover of today’s Oregonian.  Neither story tells a happy tale.

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.

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