By John Schaffner
Mark Riley, founder of Urban Realty Partners, says he is simply being a realist in the present economy as he faces the opening in May of The Brookwood, the 219-unit, 18-story condominium project he has co-developed with Regent Partners at 1820 Peachtree Road, in the south Buckhead neighborhood named Brookwood.
Riley knows he needs to get people moving into at least a quarter of those units quickly — despite the economy and tight lending standards that are keeping many potential homeowners from buying now.
So Riley, his development partner and his sales partner, Atlanta Fine Homes/Sotheby’s International Realty, think they have two ways to get buyers to move in:
• Deep discounts — The Brookwood is offering special purchase prices for a limited time for the first 50 homes sold through a Founders Club program. The price reductions are as high as 40 percent off the “retail price” for the first 50 units sold on the first 12 floors.
For instance, the smallest two-bedroom, 2.5-bath condo, which measures 1,231 square feet, had a retail price of $527,637. But the Founders Club price is $316,582. The cheapest unit right now is $276,447.
On the high end of the price scale, excluding the penthouses, the two-bedroom, 2.5-bath plus den, 2,174-square-foot Andrews had a retail price of $931,831 but now has a Founders Club price of $559,098. The Prado, a 2,574-square-foot, three-bedroom, three-bath unit, had a retail price of $967,073 but has a Founders Club discounted price of $580,244.
• Available loans — The Brookwood’s construction lender, Corus bank, which many in the real estate field feel has overextended itself on condo construction loans, is offering primary home buyers at The Brookwood the choice of 30-year fixed mortgage or 5/1 ARM jumbo loans with interest rates at 5 percent and 4.75 percent, respectively.
“We are confident not only that now is a great time to buy, but also that The Brookwood is a very special place to make a housing investment,” Riley said. “The only way we can continue to build confidence in the marketplace and our product is by providing consumers access to funds directly, and we are proud we can do so through our partnership with Corus and other banks.”
In addition to the 219 condo units, The Brookwood has 20,000 square feet of street-level restaurant and retail space. Riley said the Brookwood staff is working on signing a top restaurant for part of that space and is trying to sign retail shops and possibly a drugstore of sorts.
The Brookwood’s sales office opened March 19 across the street at 1833 Peachtree Road. Lead sales agent Mike Riley (no relation to Mark), a founding partner of Atlanta Fine Homes/Sotheby’s, said traffic through the center and building has been very good, especially on weekends.
“Many of those looking are residents in the Brookwood area and want to stay in the neighborhood but downsize from their homes with lawns to care for,” the agent said. “Virtually everyone who came in was a qualified buyer, which is very unusual.”
But even with the deep discounts, the sales have not been there yet.
Novare Group also is offering substantial discounts of 25 percent to 30 percent at the Atlantic, a 47-story condominium tower at Atlantic Station with 400 units that is scheduled to open this summer.
Pointing to a market deflated by plunging sales and prices and by a glut of inventory, Novare CEO Jim Borders said, “None of the high-rises that are delivering right now are able to deliver where the developer is able to make a profit.”
Contracts have been written on 27 percent of the Atlantic units, but you can’t be sure they will result in actual sales because those deals cannot close until the building is completed.
Novare, the leading condo developer in Atlanta, partnered with AIG Global Real Estate on the Atlantic. AIG is a company that has its own deep problems in today’s economy and has been the recipient of large, controversial subsidies from the federal government.
Novare also is developing the Ritz-Carlton Residences at Peachtree and Peachtree-Dunwoody roads and in the past developed The Realm and Eclipse and co-developed The Gallery in Buckhead. The newest of those condo projects, The Gallery, which was completed in December 2007, has sold at least 50 units, even in the real estate slowdown that started in 2007.
Cousins Properties has rejected the idea of discounting its condo units at 10 Terminus, at Peachtree and Piedmont roads, in favor of offering home buyers a 4 percent loan the company will finance for three years. The company also will guarantee the unit’s value at the end of the three years.
Cousins CEO Tom Bell said that cutting prices is bad for the market’s health.