While “slashing prices” by up to 30% might have been a “smashing success” late last year, according to the Polaris Group, with roughly 120 out of 130 units sold Symphony Towers has closed their sales office and is going the rental route with remaing inventory.
Symphony Towers Update: Slashing Success And Words On The Street [SocketSite]
Price Cuts Of Up To 30% At Symphony Towers (750 Van Ness) [SocketSite]

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Comments from “Plugged-In” Readers

  1. Posted by Willow

    Why bother renting the remaining units? Just discount them until they sell.

  2. Posted by condoshopper

    how does it affect (if any) the dynamics and character of the HOA board when the developer owns a significant number of units? there is a building in soma that is currently suing its developer, but as i learned from this board, the developer actually owns some units in the building, so it’s like they are suing themselves. if the developer has ownership stake in the building, could they put people on the HOA and thwart such efforts, for example?

  3. Posted by RSVP

    Willow –
    I agree. When the market returns and they decide to sell, the units that were rented will not be considered new constuction anymore. Worse, they will be in rental condition. The sellers will have to put money into them after the tenants vacate to bring them back to market condition. I’m sure that they know what they are doing but I think it might be better to give a decent discount now to get them sold and pay off the lender.

  4. Posted by Miles

    Generally your construction loan is paid off at an accelerated rate with the unit sales, so it’s mostly paid off after 75% to 80% of the units sell out. Sometimes a developer will hold units and rent them to shift the tax gain from these sales into another year, or if they own them roughly free and clear, some developers prefer the steady income of the units rather than one big chunk of money.

  5. Posted by Poor in PacHeights

    I would agree with Miles comment except for when this builiding was likely financed, money was cheap and easy so the building is likely 85-95% leveraged and the Units likely sold for far less than orginally anticipated. The developer has probably cleared his loan at this point. I doubt a bank would let him drag out a construciton loan by servicing the debt with a rental stream. The Bank would make him sell out the remianing units so they could move on.

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