The Auction Block: Senate Square
2 02 2010The latest property to be up for auction is the 432 unit luxury apartment building in Northeast right behind Union Station at 2nd and Eye Street. Senate Square is going up on the auction block at the end of this month under the threat of foreclosure.
This is unfortunate news for the folks at Broadway Capitol who are all too familiar with the threat of foreclosure, having just gone through the process last year with the massive Dumont Condo building (which is still sitting empty).
We guess the view and the amazing rooftop pool were not enough to entice people to live behind Union Station. We hate to see things like this happen because these massive residential developments that were planed at the peak of the real estate boom are going to take years to become fully rented or be converted back to condos. Right now… supply definitely is exceeding demand!
[Photo: HexBlock]
Does supply really exceed demand? I thought we were now under 6 months of inventory. There hasn’t been any new developments coming onto the market in over a year and with nothing planned the inventory is dwindling quickly.
Those inventory numbers are deceiving because think about all the condo projects that were converted to apartments. Vacancy rates in some of these buildings (including Senate Square) are as high as 40%, There are just to many apartments, so when they get changed back to condos as originally planned you will have a huge influx of “new” inventory, it is going to take years to fill these projects up.
Do you think they’ll really transition back to condos?
Even more problematic is that the ownership/management company is attempting to charge rents that seem to indicate that they have all bumped their heads on the same rock. There aren’t that many people in the city who are willing to live in a less than metro convenient area (how many people really want to walk across that bridge at night or down that section of second street that is equally desolate) at rates that are equal to mortgage payment on a nice condo in a more settled hood.
Recent article about just this @ urbanturf.
http://dc.urbanturf.com/articles/blog/mb_report/1741
During up swings in the housing market they always start converting apartments into condos, should only be a mater of time.
Thought that were at 85% rented. Apparently many people have hit their head on the same rock- and are willing to pay 2k a month for a 1 bedroom apartment.