Condo owners at the Village at Idlewild were surprised to learn that the developer of the project is planning on converting half of the buildings to luxury apartments for rent. In a letter sent to homeowners last week, Chris Nelson of Capstone Partners, LLC, explained that recent sales have not met original projections. “We anticipated sales in the range of 12 – 15 units per month at that time. Since January of this year, the current pace of sales has been about 4 sales per month,” wrote Nelson.
The six unreleased buildings include 108 units just finishing construction. The original development plan called for 216 condominium units. The letter went on to say that the new strategy is to maintain an aggressive sales and marketing approach for current released buildings, and concurrently begin leasing the units in the remaining six buildings as soon as possible.
A meeting has been scheduled for June 27 at 5:30PM at the Village Lodge to discuss with the homeowners the decision to rent the remaining units.
smarten
My point precisely! And if you can rent a new Toll Brothers $900K 4,000 square foot “luxury” home for $3,150/month or a near new Montreux $1.5M 3,200 square foot “luxury” home for $4,000/month, what do you think these “luxury” condo units are going to rent for? And is the Reno “luxury” rental market so strong it can absorb another 108 units without adversely impacting an already soft rental market?
When prospective purchasers compare the cost to own versus to rent, they’ll opt to become renters [at least for now] unless and until sales prices are drastically slashed.
Furthermore, this decision is the kiss of death for “the new strategy [of]…maintain[ing] an aggressive sales and marketing approach for current released buildings.” I know of no institutional lender who will provide purchase money financing for a condo in a complex where 50% of the units are not owner-occupied.
I wouldn’t want to be one of the 20 or so owners since January who opted to buy into one of these units.
BanteringBear
It is neither surprising, nor remarkable that Capstone Partners will be leasing their sea of vacant units at the Village at Idlewild. Rather than spend time and money on quality market research to accurately gauge demand prior to breaking ground, they instead chose to rely upon hopes and dreams, blinded by their own greed. They are merely the first of a long list of braindead condo developers who will enter into the property management business, or BK, or both. And for those who have already purchased units at the Village, how do you like your new apartment now? There’s a sucker born every minute.
MikeZ
RE: “planning on converting half of the buildings to luxury apartments for rent”
Very interesting. Any idea what the rent will be?
eldiablo
Ha Ha Ha Ha, I wonder when the Montage, and the Belvedere are going to put out the same memo: “We are now going to rent our units because we cannot sell them.”
Heck, the Village At Idelwild was a much more attractive place to live than downtown. I will put $50 down that Wingfield Towers, Arterra and Waterfront Towers never get built.
I would be angry if I paid $250 dollars a square foot plus HOA’s to live in a glorified apartment complex.
And if anyone is paying attention, there are still many units available in the Palladio (and what happened, I thought they were moving in on June 15)there are units for sale in the Riverwalk, Park Towers and Arlington Towers. WHO is going to buy all these condos????
EyesWideOpen
I’m one of the nearly 60 owners surprised by this latest development. I love living at The Village; the location and the views are incredible. Luckily, I negotiated one of the best prices paid so far and have one of the best views in the complex. I’m also at the far end, away from the soon-to-be rentals. I’m not really worried for myself since I made a substantial downpayment and carried the rest on a traditional fixed mortgage. However, several of my neighbors who put very little down, and paid a much higher price, are already underwater. My biggest fear is that defaults become rampant and I end up living in a ghost town.
Also, it should be noted that the Village was originally conceived as luxury rentals and later converted to condos.
Grand Wazoo
I would guess this marks the beginning of the end of the Reno downtown condo craze.
Wingfield & Waterfront Towers must surely be DOA. If Arterra gets built I would be floored.
I wonder how sales at The Montage are doing? Anyone know? MLS shows 22 units at the Palladio still available.
Lindie
Pulte drops to $122 sq.ft. effectively hosing all the resellers in Somersett.
The Village announces it can’t sell enough condos to keep the development viable and “coverts” to rentals.
R&B is getting ready to drop prices in Wingfield Springs effectively hosing all the resellers there.
It must about time for Diane to post some of those kool-aid drenched charts and graphs “independently produced” by her broker showing us that the market has hit bottom and prices are on their way back up any day now.
SkrapGuy
This is the kiss of death for this project. There is no way anybody buying with 10% down and 90% financing at 6.75%, plus taxes, plus HOA, can get even close to what these places will rent for. Owning is going to be at least one-third more expensive than renting, and as an owner you can watch the value of your “investment” sink into the sunset as the new “FOR RENT” banner adorns the entrance to the project.
Turn out the lights, the party’s over for this one.
Mike Van H
A couple of important points to make here. This project was conceived, and drafted on paper as an apartment complex originally. They REALLY should’ve just kept that concept, and I bet these places would’ve rented like crazy.
Second, they are using the term ‘luxury’ very loosely. The condos were selling in the $180,000 to $210,000 range, if I am not mistaken, not a bad price for a NEW condo across from a park and the river. A drop in the bucket compared to Montage and Palladio.
Third, while I am sure it will hurt their home values, if you look up ‘condo/apartment hybrid’ into google, you’ll find a surprising number of projects that mix both.
According to the letter to condo owners, they really don’t have a choice but to do this, in order to finish building amenities and buildings they promised.
I know quite a bit about the other projects..
As for Arterra, according to Chris Nelson, the project is on hold, as they underestimated the amount of empty-nesters wanting larger units, and overestimated the number of young professionals in town wanting the slew of one and two bedroom units. So he told me they are ‘recasting’ the project to create larger units…groundbreaking date unknown….the positive side is his building (Museum Tower) is the highest-leased tower downtown, and he can sit and wait, for years even if necessary, for the market to improve to fit his project. They are still breaking ground on their Capstone Center inside the building, so he isn’t going anywhere anytime soon.
Wingfield Towers is bizarre. before, their web site at http://www.wingfieldtowers.com said ‘coming soon’. now it just leads to a recently puchased domain page. They still don’t own the land yet according to assessor data, which isn’t that the first step typically? They haven’t changed their groundbreaking date yet which is still October 2007, so we’ll know soon enough. I will be really surprised if it moves forward. Didn’t they claim bankrupcty? I remember their spokesman saying a few weeks ago we’d know within the week when they close on the land.
Waterfront Towers, I have heard from more than one source that they are focusing on the retail mixed use portion of the project first, and not the tower. They own the land, and I presume paid the city the $12,000 per parking spot fee to close first street on top of owning the land. They may not do a condo tower but they are poised to do something with the land…the term ‘Waterfront District’ is thrown around a lot, including their web site. They too, can afford to sit and wait for a couple years if necessary for the right time to build their project, and which phase to build first.
So that’s what I know about those. Sales are going well at Belvedere Towers, there is strong interest in Grant’s Landing.
OH and hey! Kings Inn is up for sale on the courthouse steps July 12 at 11:00 a.m. for $3,500,000 cashola. Anyone wanna buy the ultimate pigeon coup?
Steve Watts
I never understood the draw for this project. Too far to walk to work downtown, and they LOOK like rental apartments. EyesWideOpen, is your beautiful view of the powerline station, Reno HS or the hospital?
EyesWideOpen
Hospital? Steve, are you not familiar with the site? My view is of the Truckee River (which I can hear at night), the gorgeous greenery of Idlewild Park and the casino lights of downtown from a very short 8 blocks away. The mountains make a beautiful backdrop as well. Of course I usually just sit and watch the ducks and geese across the street. Perhaps you’re referring to the Idlewild Amusement Park in Ligonier, PA.
Lindie
Eyes,
I hope you do enjoy that view. No doubt it is a nice view. No argument there. But the conversion of this project to apartment rentals really is the kiss of death to your purchase as an investment. Why would anybody buy and pay one third more than it costs to rent? You get the same view. Because of the long term potential for appreciation? You yourself say that lots of your fellow neighbors are already underwater due to falling value, and that was BEFORE the place becomes overrun with renters.
Let’s see. Renter to the right of me. Renter to the left of me. Renter on top of me. Renter underneath of me. Why is it, exactly, I should BUY this place?
EyesWideOpen
Lindie, I have no idea why you, or anyone else, should buy anything. I can only speak for myself. When my wife and I signed the sales contract, we needed a place to live. Not a place to flip in a few years, not an investment, but a place to live. Before purchasing at the Village, we rented a studio in the Riverwalk, which cost us $12,000 a year, FOR A STUDIO. Now we have a large bedroom, an incredible view and twice the square footage. Yes, it costs us more than renting. And yes, we put a lot down, about 35%, but we also have a tax write off that we didn’t have before. We also have the freedom to paint any color we choose, modify the walls to install a murphy bed for guests, upgrade the appliances, or even the lighting and flooring. Not to mention the security of knowing that it can’t be sold out from under us. It’s our home! This all seems to make perfect sense to me. Am I missing something here?
EyesWideOpen
Lindie wrote: “Let’s see. Renter to the right of me. Renter to the left of me. Renter on top of me. Renter underneath of me.”
Not so. They divided the complex in half, east/west. Six buildings on each side.
Lindie
Eyes:
You got this representation from the same people who represented to you that you were buying into a condominium complex, right?
Surely they would never deceive you twice. I can see why you are not at all worried about the declining value of your purchase. My mistake.
NVMojo
This is getting interesting, to say the least.
Reno Ignoramus
To Eyes Wide Open,
You are right, it is a nice project. It sounds like you have a great view of the river/park. I hope you and your wife find much happiness there. I also hope that the decision to divide the property half into rentals results in an infusion of money to the developer so that he can build out the project with all the amenities, which results in more people deciding to buy there.
The best to you and your wife!
DixieUNR
I work at UNR and have been saving for a downpayment for the past two years. I’m hoping to buy something (house or condo) in the $200 – $250 range. Two years ago that meant $20K down, now it means $40K which has delayed my estimated purchase time by at least 6 mos to a year. I have been keeping my eye on the Village for almost the entire 2 years ever since I went to a beautiful wedding ceremony held in the park across the street. I’m from the Bay Area and the whole biking, river walk, art museum, but still near to downtown community is what I’m accustomed to. I too, thought the outside of the complex looked like apartments but I am very fond of the craftsmen style architecture inside. I’ve always been impressed that many of the standard features at the Village are upgrades at other places. Some of the first questions I asked the agent at the Village were; What the renter to owner ratio is, when the other units would be completed (I like the general location, I have a kid going into Reno HS, but I don’t like that power plant thing) so I want a top corner unit with a river view. Like “Eyes”, I too am looking for a home, a place to enjoy living while I work the remainder of my career years at UNR, not property to flip, of course an investment is always a consideration when one purchases a home, you’d like to think you’ve made a sound investment even if you’re not planning on cashing it out anytime soon. I am SO ready to buy my own home after renting for so many years, (and I’m getting very impatient) but I was very dissappointed to read that the Village will convert half to rentals. On the other hand, this opens a lease option possibility that may enable me to go ahead and move in before I’m actually cash ready to buy. I’ve seen everyone’s comments about the value going down for existing Village homeowners and don’t want to sound like a vulture but isn’t this an advantage for me, the potential buyer who may get a lease option on a lower price or even get a “short sale” from one of the existing homeowners? You all sound very experienced in your opinions of the condos around Reno so I’d like to get your opinion on my comments. How bad would it be to purchase a condo in the Village with its new situation? And I would love to hear from “Eyes” about whether or not he likes his community outside of his “four walls” and his view?