The first Starwood/FDIC unit at the Montage closed on 7 May 2010. Loft 320 sold for $155,782. Officially 1348 SF per the Assessor (1368 per the Montage site). $115 psf in what looks like an all cash deal. The lofts were listed at about $295 psf in the January 2009 pricing sheet, about a 30% reduction after the project went back to Corus. Not to gloat too much, but I made my psf predictions over 6 months ago on the Highrise Condo Edition post.
You can track some of the Montage contract holders feelings on this at MontageBuyer. And there is more to the story, which will be up at REreno tomorrow.
To see Montage units moving is a great thing for downtown. The price has to be devastating to the existing Montage contract holders,who are in limbo trying to be released from their purchase agreements. Or maybe just more cannon fodder for the attorneys.
I don’t know why the Montage isn’t airing their current price structure more publicly, but this sale looks pretty attractive (add the $.42 psf per month HOA dues).
Thoughts?
A quick update based on the comments here at renorealtyblog, montagebuyer, and now Downtownmakeover. Montage appears to be offering selective blocks of units for sale at drastically reduced pricing. Pricing, terms, concessions, unit choice, and financing are non-negotiable. It’s cash, these units only, and take it or leave it. The current batch of 20-25 units seem to be fully subscribed, though only one has closed to date. This unit Loft 320 was one of the original contract holders, so there is a big question among the other original holders if their deposits can be converted to sales at the current asking prices. (at a 70% drop in pricing, their 10% deposit represents a 33% down payment). I’m in contact with about 40 of the original group, and none has indicated that they have been contacted. Montage’s strategy is to release units incrementally, and raise the price at each issue. If they hit the current ceiling, they will wait it out. There is an undertone to the comments that Montage is being very snotty on who is on their "preferred" list to get in on the various levels of the fire sale. Another law suit waiting to happen, in my opinion.
Hope this helps cut through all the cross platform comments.
Martin
Personally devastating to the contract holders? The worst for them is that they lose their deposits.
How about personally devastating to the 33 or so who actually bought in at more than twice this price psf. And who thought they made such a great deal beacuse they got 30% off of Leal’s bubble absurdo pricing.
Walter
I just read the comments at the Montage Buyer site. Too bad Grand Wazoo felt compelled to hold back from really expressing his thoughts.
Robert
So is this sale about 80% off of Leal’s original “everybody wants to live here” pricing?
Carney
I think this price is a little high. But maybe the buyer here is like Mr. Herschbach who just had to have it and doesn’t care that he overpaid by about 10%.
Reno Ignoramus
Mike,
This was a loft unit that sold at $115 sq. ft.? Not a tower unit?
Long time readers of this blog may recall that back in 2006 I said that I never thought the concept of selling downtown condos was a flawed concept. I thought the concept of selling them for $450 a sq. ft. was flawed.
If a loft unit just went for $115 sq. ft., this is a significant development.
New to Reno
First time post on this site but I have been lurking for a while due to all of the great info. The prices are around 70-80% off from the prices listed on this website and are fixed. http://www.myrenorealestate.com/renocondos.html
There is no financing and the HOA is set at $0.42/psf/mo. The only person that can tell you what units are available and at what price is Ron who does not work on Thursday and Friday. Without going into details I did not buy a unit because I felt that Ron did not care at all about selling a unit to me. I had cash in hand and was begging to purchase to the point where I put the 5k hold down and moved 110k into the bank.
The prices though for all of the units are great compared to units being sold at other high rises in the area.
Montagery
I won’t deny it, I am tempted by Montage at these prices. What I can’t get over, though, is paying $155k cash, and then paying $1000/month in perpetuity for HOA and taxes.
I can’t even figure out how to rent it with a reasonable return. Surely, no one would pay $1500+ for those places. Would they?
Those better be some darn nice amenities for the HOA fees…..
DonC
A few months back there was a lot of discussion — maybe lead by Smarten — about how the property taxes were going to be based on replacement costs not actual selling prices and were therefore going to be quite significant. The conclusion was that the tax issue was going to prevent a Montage condo from penciling out as a rental. Does anyone have more information about this?
Montage prices will doubtless have a cascading effect on other condo prices, making the condo market ugly. This is not just a price drop for the Montage.
As for the amenities that your HOA fees get you, the first big pop in HOA fees is the elevator. The next is a pool. So to a great extent that’s what you’re paying for.
KingBud
Montagery, these units might cash flow as rentals at 0.42 psf HOA plus taxes/insurance. About 560/mo. for HOA, estimate 200/mo in taxes, another 150/mo in insurance. Add a maintenance allowance, if you could get about 1200/mo you’d be okay, don’t think you would need 1500/mo.
But there’s no rush to invest at Montage. In another 12 months, you might see another 25-30% discount in pricing in remaining units from the 155K current price level depending on sales volume at the current price.
Don’t let the 450K bubble pricing be a psychological anchor as to what these units are actually worth. At the end of the day, the units are worth what people are willing to pay for them. You know when the prices are discounted enough when you start to see sales volume.
Reno Ignoramus is right that this unit sale is significant because it represents a large discount from bubble prices, but it’s most significant to me if we see several similar units sell closely in time at a similar price. Otherwise I’ll regard it as an isolated event and not representative of a market-clearing price.
New To Reno, you wouldn’t happen to actually “be” Ron or one of his sales associates, would you ???
Denial
Downtown Reno is a slum!
Buy them up suckers!!
Denial
Are they walking distance to the shuttered casinos? How about the new baseball stadium and beautiful 2nd street?
What a deal!
DownButNotOut
GreenNV – I’m interested in your take – there were a number of Montage sales subsequently posted on ‘after Corus’ once the first sale was reported. Any truth to those? The $75K area is a whole nother ball game.
Rory
Denial – If you think Downtown Reno is a slum, what do you call Oakland?
New to Reno
Nope I am not Ron or one of his associates and they also have not figured out the tax issue yet. I was actually very displeased with Ron’s service as mentioned in prior post. I have never lived in a high rise and thought it would be fun but the HOAs at all of them almost meet rent at a nice place.
GreenNV
Posted on the Montage Buyer site:
“#1510 sold for $73,928.86, #1614 sold for $77,508.98, #1501 sold for a little over $83,000 and about 20 more have sold in the last few weeks to all cash buyers. Many units were sold to current residents. There are some good deals to be had for those who can scrape together enough cash.”
Those would be $116, $130 and $141 psf respectively.
Down, I’ve been hearing rumors of cash sales going on for a couple weeks, but #320 is the only one that has recorded as yet. If they are letting people apply their deposits to the current market price of a unit, it might be a better risk than dealing with the arbitration / law suit path!
inclinejj
Who is Ron???
Martin
Where, oh where, is Bantering Bear?
4 years ago, when Leal had the Montage units priced in the 700K, 800K, 900K and $1 million price range, Bantering Bear said the day would come when they would be selling for $70K and $80K.
As much as it absolutley galls some people here, once again the Bear was right.
Denial
I would call downtown Oakland another slum..
Im sorry i don’t find anything desirable about living in downtown Reno.. But to each his own…
inclinejj
Downtown Oakland isn’t really a bad area. West Oakland and the area around International Avenue are bad.
Plus a broker in Oakland tells me that the hard core Oakland ghetto areas. The Reo’s and foreclosures are being bought up by SF investors. Yes the ghetto areas are going rainbow!!
slapshot
I heard that Harrahs and circus may shut their doors in reno within the next couple years.
DownButNotOut
Green NV – as always thanks for keeping us informed. If the price goes any lower that complimentary condo may be within reach :)Which makes me wonder if deposits can be transferred? After all, ownership was.
FWIW – #320 was one of the few loft deposits at the same time we began looking at lofts. I suspect the new buyers are the original depositors and were able to use that money in the sale, thereby ‘only’ putting up an additional ~$85K to pay for it outright.
Downtownjunkie
New,
What is Ron’s last name?
New to Reno
Ron was the only sales agent at the montage when I was considering a purchase. The sales team consists of him, a secretary and a financial person. Only Ron has the list of units and pricing. His email is ron@themontagereno.com. I threw away his card after I decided not to purchase.
What I recall from my conversations with him is that the current holder of the building will not budge on the price and will rather hold onto the units for a few years until prices rebound to what they are asking for. They plan to release around 20 units at a time with each release going up in price. The current holder also is trying to redo the tax on the units. Ruth Chris was mentioned to have pulled out.
If you want a certain type of floor plan that is not available he will attempt to call you when it is available but he more or less stated that he will be calling his preferred clients first.
Other minor things that I recall:
Only the 2+ bedroom units have a bath
The bike storage room has a nice 8×8 ft cage for each unit. Each cage is first come first serve. Whoever puts a lock on it gets it.
Dog Park on roof
Due to construction technique all of the floors are wavy (have areas that dip down). I thought it was poor construction and it is really noticeable in bigger units but I was told it was purposely done that way.
The demo loft that I saw had an unfinished ceiling that is really unfinished and not “urban”. There was literally a strip of ceiling/paint/something hanging on the ceiling.
My two favorite floor plans are the one bedroom +den D unit and the 2 bedroom +den F unit in the corner of the buildings. At approximately 1100 sqft the HOA is comparable to surrounding high rise buildings. I have no clue how anyone can afford the HOA on the townhomes which start at 2500 sqft (HOA of ~1050/mo)
The HOA included all building upkeep and utils except for electricity.
DownButNotOut
Funny how a good price at the Montage shuts up all the ‘down on Downtown Reno’ talk. Correlates to the ebbs and flows of the blog writers I suppose.
So speaking of which – Martin- if you’re hero is Bantering Bear you need to get a life. Few credible writers opposed his predictions, many opposed his style. Being a Monday morning quarterback isn’t a good look for you. Especially since BB himself ‘can’t find the time’ to write in.
Although I’m sure we’d all have to agree he most likely still reads the blog regularly.
Denial
A good price to you isn’t always a good price to someone else..
You couldn’t pay me to live in downtown Reno !
Raymond
Oh please Down. They can sell the Montage units for $20K and it does not change the fact that the place is bounded by a urine soaked dive bar to the east, a 1960s era hooker flop house motel to the west, the decaying Kings Inn to the north, and the the rent by the week never quite happened Longs drugstore motel to the south.
4 people got shot in a gun battle just down the street the other night. The fact that Montage units are now selling for less than what a 800 sq. ft. 1950s era run down track house on Greenbrae Dr. in Sparks costs pretty much says it all.
But then, the Greenbrae subdivion is safer.
Carleton
Down would not know about the gun battle at the West Second Street Bar. He does not live in Reno.
And the West Second Street bar is not down the street from the Montage. It is across the street. Just another one of the fine establishments in the neighborhood where handguns are not required, but always fashionable.
Stanton
The bouncers at the West Second Street Bar are very tough actually. They allow no automatic weapons to be carried in. Not even semi-automatic. The only kind of weapon they allow in is one where you have to pull the trigger one time for each bullet fired.
Residents of the Montage can thus sleep soundly for two reasons. First, they can know that no automatic fire will be allowed,thus decreasing the liklihood of mass casualities, and second, single fire action is not nearly so loud as automatic fire.
Montagery
$20k would tempt me. It’d make the $1k/month (+electricity) payments easier to swallow. Still, that’s a lot of overhead to pay to own the finest apartment in a lousy neighborhood.
Didn’t know about the “undulating” floors, either. The sales pitch that “it was designed that way” leaves me a bit wanting.
It feels like Reno wasted its bubble. If it got around to the business of gentrifying a pretty shabby downtown area, the community would be left with a cool town, even during the bust.
Now, however, the downtown core is a depressing as ever, with the market showing no signs of zooming back up to the old highs anytime soon.
Walter
“According to police data, officers last year were dispatched to the (West Second Street Bar) 57 times from an outside source and 107 times from someone at the bar who called them.”
Reno Gazette Journal
May 7, 2010
Right across the street from the Montage.
Damn fine neighborhood, Down.
Polly
At $20K I would not live across the street from a place where the cops get called to 164 times a year. That’s almost every other day. Are you kidding me?
KB
For any place that has the cops called to 164 times a year, it is only a matter of time before something bad, really bad, happens.
And I would want to move into that scene….why??
Norton
Places selling in the 70K-80K range are essentially low income housing. Most low income housing is in relatively marginal to poor neighborhoods. Like across the street from a scary bar (or two) with a lot of trouble.
skeptical
See Mike, Montage always brings ’em out of the woodwork. Keep up the good work.
I do love me some Montage…
BanteringBear
Bwahahahahahahahaaaaaa!!!! Glad I checked in this morning. Oh, the carnage! Seems things have transpired exactly how we thought insofar as the Montage is concerned- at least the thinking people around here. That excludes Downer- he’s one of the fools who bought into the Montage at the peak. It’s no wonder he’s full of piss and vinegar. He doesn’t even live in Reno, nor has he ever. He’s just one of those ‘tarded out infestor’s who helped create the bubble, believing such foolish utterances as “trees grow to the sky”, “real estate always goes up”, “buy now or be priced out forever”, “great investment”- you know the type.
Speaking as someone who was raised in the area a good portion of their life, here me when I say downtown Reno will NEVER be a highly desirable place to live due to things such as the gun battle across the street from the Montage, pimps and crack dealers setting up shop late at night, thugs just hanging around looking for an easy target, and an overall sleazy environment.
Fernando Leal, and his ilk, should have talked to real locals before they EVER dreamed up these stupid fantasies, not just the bought and paid for shills who approve the plans. They could have saved their money, but instead were completely unable to see through their blind greed to the absurdity of their ideas. The Montage NEVER made sense from a financial standpoint. EVER. I don’t care if it was finished and sold out a year before the collapse, this was destined to happen. It wasn’t a timing issue- it never penciled out to begin with. Apparently, poor math skills and a gross lack of intimate knowledge of the market is a pre-requisite for being a developer.
ACH
Skep, perhaps the reason Montage threads attract more posters is because it offers something different from the same 9-or 10 people on the RRB saying the same things over and over about the same topics, ie, “the bottom is in” “no it isn’t” “yes it is” “no it isn’t” yada yada yada. Have you noticed that 90% of all comments on this blog come from the same 9 or 10 people? The inbreeding is getting boring. I would think the blog would welcome some new blood.
ACH
There is nothing that I would enjoy more than going out to my balcony, hearing the sounds of weapon fire, and then seeing how long it takes 8 squad cars to arrive.
When places are selling for 45% of the median, which itself is down 55% from the bubble high, you are going to get something that resembles Neil Road.
Actually, Neil Road is safer these days.
Carlo
So if I understand, these places first came on the market under Ferrnando Leal and his absurd bubble delusional pricing. A few dozen people bought into the hype, including Diane Cohn, and put down deposits at these deluded prices.
Then the place basically went belly up and went back to the bank, which then failed, and the FDIC took over, which then sold the place to some investment group on a no interest loan.
Then about 30 people or so bought units for about 30% off the original bubble prices, not being able to pass up such a great deal, while most of the deposit holders went on to take legal action to get their deposits back and are now stuck in legal purgatory paying legal fees while nothing happens.
Now the new owner is selling units for about 70% off of the original bubble deluded pricing, which means the people who bought at 30% off are being hosed royally.
Meanwhile, gun battles continue across the street at the neighborhood bar.
This story has all the human elements: greed, arrogance, folly. Isn’t there a budding novelist on the blog?
inclinejj
So being the new owner is selling units for 70% off the bubble pricing does this mean the gov’t lied to us when they said the Corus loan portfolio sold for 50 cents on the dollar??
DownButNotOut
Glad my comments could bring forth the real Downtown Reno issues. And bring BB of course out of his hole. Didn’t expect anything different when I made the comment. Predictable? I should say so. But it’s still fun throwing up that softball and watching it happen.
Mike McGonagle
Unit 401 http://themontagereno.com/montagereno/town01.htm should be an interesting sell. 2855 SF, so the monthly HOA is $1200. It literally overlooks the defacto shooting gallery that the West 2nd Street Bar has become. Is bullet proof glass part of the amenity package?
Interesting that all 3 unit cited by MB2 are B or B1 units. These are “convertibles”, about the same size as the studio A units, but with 2 window bays instead of 1. Montage must think these are the dog floor plans. It will be interesting to see how many of the next round of closings are these footprints. It speaks a lot about the Montage’s original vision that they created so many of these “weekender” units instead of combining the A and B plans into a livable 2 bedroom plan.
1510 faces east – $116 psf. 1501 faces SW over the pool – $140 psf. 1614 faces NE – $130 psf. That may give a little guidance on the pricing structure for those of you who mobbed the sales office today!
Cousin ITT
Down, not all of us are sure that BB has crawled out of his “hole” just yet, if you know what I mean and I think you do.
Downtownjunkie
I think the downtown will be a great place to live one day. I owned a Palladio and loved being there. The problems described above are common in every major city. You will find that once we have more bodies in the Montage the surrounding area will get better.
I stopped by today and it looks like the new prices are moving units. They have one or two out of 20ish units left in the second release and the third will probably be in a week. Take the unit size and divide by half and add a dollar sign for assoc.- so it is still relatively expensive.
Denial
Like is said.
Downtown reno is a JUNKHOLE!
The montage? Hahahaha junk!
DownButNotOut
Interesting information GNV. I suppose it makes sense. Sell off the cheap(er)studio units first at whatever you can get. Get bodies in and create interest. It’s all cash sales after all. Then move up the line to (hopefully) selling off the more prime spots for more jing. End with Penthouse suites. Once you realize the mandated pre-sales of condos for financing (is it 80%?), your 5 years goes by and you make your profit. All the total time you’ve have a 0% government backed TARP loan, and now your bucks up.
And those of us that pay taxes were the bank for this! – hah! What a country.
In reality it’s what Leal should have been doing. His downfall was building a signature building rather than marketing and worrying about sales. We all have seen the ‘build it and they will come’ routine. There was a definite disconnect in his business plan. Ego I suspect drove this for his downtown statement. But then all you have to do is pick up the paper to find where ego and the pursuit of power has brought people down.
DownButNotOut
Lest I forget – Denial (Derrick) Glad to see you and BB finally agree on something – the downtown district. I figured it would only be a matter of time before you two allied.
Tell you what, I’ll buy you two a beer at the local bar of your choice anytime you both feel comfortable coming downtown. I’m there once a month for 3-4 days at a minimum.
What’s that I hear?? two self proclaimed locals won’t go downtown? Yeah I figured. But the offer still stands.
DownButNotOut
After re-reading my post for accuracy and then re-reading BB’s post, I can only apologize to everyone reading. Being sucked in to the vitriol spewed by BB should not warrant a response. To you that have read previously when he & I disagreed, and more recently his self absorbed spat with Smarten, it’s is clear he takes himself as some type of both real estate savant and life commenter extraordinaire, yet all the while lacking the tact to enter into any meaningful discussion without criticism.
That no comment goes without an attack on the writer and no statement is said without putting down a group (buyers? delusional sellers?) to make his point doesn’t give me the right to call him a narcissistic idiot.
His comment ‘Glad I checked in this morning’ would normally mean to me it’s transparent excuse to reply to my calling Martin on the carpet for his ‘missing BB’ comment.
But I’ll take him at his word and figure he doesn’t check here very often. In which case we won’t hear from him for awhile.
lurker
DBNO,
Been lurking on the blog for a while. Judging from all you’ve written, and the many and varied attacks you’ve make upon various contributors, I’d say your comments regarding BB are nothing more than the pot calling the kettle black.
Have you made any single comments without referring disparagingly about another poster? Please provide the link, if so….
DownButNotOut
Lurker -Scroll up, by my count, four paragraphs. Scroll up further where I comment on unit #320. Or again further where I actually question some of the sales and thank one of the contributors.
Didn’t like that? Stay a lurker. After all by you’re very name you don’t contribute right? Now who is calling the kettle black?
I don't believe it
Dowtownjunkie
When are you going to realize that downtown Reno is a joke? It will be better when people start moving in? Please that made my side split from laughing