The 51-story Vue condo tower in uptown sold at auction Tuesday for $102.75 million to the group that had bought its debt earlier this year, possibly marking the end of an era for residential high-rises in the area.
The group that bought the debt was identified in court as NR Charlotte LLC, an affiliate of New York-based Northwood Investments. It placed the only bid at the auction at the Mecklenburg County Superior Courthouse.
The group had earlier paid around $100 million for the projects $195 million construction loan after the developer defaulted, it has been reported.
Real estate experts have speculated that the luxury Vue is ripe to be converted to apartments because of growing demand by renters and continued weakness in the for-sale condo market. Others say the units, if repriced for todays market, could be big sellers.
The uptown condo market is healthier than many people think, said Maggie Collister, head of research with The Littlejohn Group, a real estate consulting firm in Charlotte. Charlotte got lucky in that a lot of proposed projects didnt go up.
Collister also said that more people have taken their condos off the market and rented them out, reducing supply.
The person who placed the bid on behalf of the debt holder left the courthouse immediately after the auction without comment. More than two dozen people attended the sale, including two local real estate investors.
MaryLou Davidson went because she was curious. She and her husband recently moved to Charlotte from Tampa, Fla., and are renting uptown while they look for a home to buy.
She became interested in the Vue after seeing the sleek, blue-tinted glass skyscraper when she moved to the center city.
While my heart goes out to the developer, she said, I think if they could turn this around, it could breathe new life into this city.
Two years ago, the Vue was lauded as one of the few proposed uptown high-rises that made it up out of the ground despite a crippling economic recession and weak housing market.
Since then, the project has become a highly visible sore spot for uptown boosters as it experienced a work stoppage, struggled to close sales and became entangled in lawsuits.
When sales started in the mid-2000s, the 408-unit project was touted as one of uptowns most luxurious residences. But the poor housing market flatlined condo sales, especially for luxury units in the center city.
The project at Fifth and Pine streets fell into foreclosure earlier this year after the Vues developer, MCL Cos. of Chicago, defaulted on its loan, and the current owner of the debt, identified in court documents as NWSF LLC, accelerated the loan and started foreclosure proceedings in April, according to court filings. NWSF assigned the loan to NR Charlotte Monday.
On Tuesday, the entire building and its contents were sold, excluding condos and parking and storage spaces already sold to individual buyers. Individual buyers have closed on fewer than two dozen units.
NWSF LLC lists its address as New York-based Northwood Investments. The real estate investment firm has spent more than $150 million on Charlotte properties recently, buying the Blakeney mixed-use project, The Apartments at Blakeney; and The Arbors apartment complex and the Latta Arcade in uptown.
A call to Northwood Investments wasnt returned.
As with all foreclosure sales, the sale isnt final for 10 days, during which time people can submit upset bids, or bids that exceed the current amount.
Trouble from start
Despite a gloomy housing market that pushed down uptown condo prices by as much as 30 percent, MCL Cos. chief executive Dan McLean insisted he would neither lower prices nor turn the building into a rental, which other developers had done with projects they couldnt sell. He had said he was counting on buyers looking for second homes.
At least two uptown condo projects, though, converted to rentals, as the economy weakened.
Condos at the Vue started selling from just under $200,000 to more than $2 million. Buyers paid 10 percent of the contracted sales price as a deposit. Most people are not likely to recover their deposits because of the foreclosure.
The project ran into a snag in fall 2009, when general contractor R.J. Griffin halted work, saying it had not been paid for two months.
The Vue struggled to close sales after the project was finished in 2010. Some buyers wanted out of the contracts they had signed in better economic times. Others could no longer get the financing. Some people sued to get released from their contracts. The developer, in turn, sued some buyers to force them to close on their units.
Last fall, a judge ruled against the Vue in a case that could dampen future condo development, particularly for large projects, because it could shorten the time a developer has to finish a new project.
Jayme Infanzoh with Main Street Homes said he went to the sale because he has a private investor who is interested in the Vue. But the investor was looking to pay $60 million to $80 million, he said.
Infanzoh said he thinks the condos could sell if prices were slashed. He also thinks it could be lucrative to rent out units to visitors who come to town in September for the Democratic National Convention, which is expected to bring 35,000 people to the area.
Blake Okland, principal with Apartment Realty Advisors, said projects like the Vue are expensive to build, so he doesnt expect to see a similar project proposed for many years.
I dont know if anyone will do a 50-story high-rise in Charlotte again, said Okland, whose firm was not involved in the Vues sale. These days, projects of that magnitude are a lot harder to pull off. That means it will stay unique for a longer time.