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Market catches up with Monarch condos
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The fading local real estate market means more new projects turning to the rental market. The Monarch condos in Alexandria is the latest prey.
Washington DC (Map, News) - Old Town's new Monarch condo development, one of the landmark projects in the redeveloping Braddock Road Metro area, has fallen prey to the dismal real estate market and is temporarily converting to rental units, the project developer said.
"This is a really tough market, and we were hoping that we would have more settlements," said Ahmed Alhussein, president of Diamond Properties, the project developer. "But people in this market walk away from their deposits, and we're faced with a problem making this project work."
The developer sold only 28 of Monarch's 168 condos between August 2005 and last week. Seventy-nine other potential buyers walked away from their contracts, Alhussein said.
Diamond Properties' switch to rental echoes moves made by many other developers in the D.C. region as the downswing in the housing market has made buyers and financing scarce.
Between January and September 2007, area developers canceled 2,900 condo units and converted an additional 8,400 condos to rentals, according to real estate research firm Delta Associates.
Few new condo projects are planned for the next two years, said Ken Johnson, chief executive of DCRealEstate.com.
"In the next 24 months, there's nothing going in, in the highest-priced neighborhoods, because nobody is financing," he said.
Alhussein said he rejected the idea of slashing prices at the Monarch because he felt it would be unfair to those who had already bought. He decided not to sell the building to an apartment operator for the same reason.
"We take a lot of pride in this project - even if it takes additional capital, we want to hold all our 140 units that are unsold and go for the rental program temporarily, for one or two or three years," he said. "When the market comes back, we are willing to resume sales of our condos."
In the meantime, Alhussein has brought in Kettler as the leasing company and said he has developed a maintenance program to preserve the quality of the building.
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9:00 AM MST on Tue., Jan. 29, 2008 re: "Market catches up with Monarch condos"
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Examiner Reader said:
Here we go again... For the sake of stopping the spread of misinformation, the Monarch development was never intended to have a Harris Teeter, that was the Madison project two blocks away. Some people are just aren't happy unless they're complaining.
36 agree | 38 disagree
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Examiner Reader said:
He's smoking crack if he thinks the market is going to "come back" and support 1,400 square foot apartments for $700,000. That's ridiculous. As to not lowering prices out of fairness to owners, that's more BS. Just rebate current owners and sell the remaining units. Not rocket science...
38 agree | 33 disagree
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Examiner Reader said:
The monarch is the ugliest condo building I have ever seen. The neighbors all hate it. And the retail promised has not materialized. It was supposed to have been a Harris Teeter. Now only has a Starbucks, a carryout Chinese restaurant, and some low rent gym. No wonder they can't sell any units.
38 agree | 41 disagree
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Examiner Reader said:
You have to wonder why places like Alexandria permit so much development when the condo market was obviously saturated.
43 agree | 38 disagree
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