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Vulcan Ridiculous @ 2200

Ah, the joys condodebtorship.

When Jerry O’Leary, 54 and retired, put down over $100,000 dollars toward a new million-dollar condominium in February 2005, he thought he was buying his way into an innovative downtown lifestyle proposed by Vulcan Inc. Vulcan Real Estate’s $200 million 2200 project on two and a half acres at Westlake Avenue…

However, on March 26, 2007 O’Leary filed suit…after a series of delays and construction disputes left him with a condo that…was “substantially [different] from the scope, nature, and extent of the project as it was described”…O’Leary recounts, “The quality, as promised, sounded great.” Instead, he describes the building to The Stranger as “basically a Motel 6.

Oh, snap!

…some of the problems include irreparably damaged door and window frames; a poured concrete deck that sloped toward his apartment, causing leaks in the unit below; mounting construction delays; and unmet expectations. …O’Leary is not the only person to encounter problems with 2200.

…tenants have dealt with minor annoyances such as low water pressure and leaky shower doors and pipes, as well as major design flaws like incorrectly positioned halogen lights that threatened to ignite kitchen cabinets. The problems were compounded, they say, by promises of room service from in-house restaurant Marazul, a rooftop “garden”—which according to a third resident is nothing more than “a big cement area with a couple of trees stuck in it,”

As of press time, several real-estate websites list 38 condos being resold in the building, and Craigslist reveals at least a dozen units available for rent or sale. … according to John L. Scott Real Estate agent Ben Kakimoto, the number of units being flipped by investors “seem[s] like a lot” when compared to other condo projects of similar scope. Some of these units have sat unsold for months, with several of the pricier units remaining on the market even after $100,000-plus price reductions.

While Vulcan would not release information on its vacancy rate, anecdotal evidence hints that 2200 currently isn’t the bustling urban utopia it was supposed to be. Resident Chris Tanaka notes that he “never see[s] that many people” in the buildings, and Dierst remarks that “the building is not full.”

Matt Goyer, the operator of Seattle condo blog Urbnlivn and a program manager at real-estate website Redfin…believes the problem is oversaturation. “It feels like they’re overbuilding in the higher-end market…. Goyer faults vacancies at 2200 to “people trying to make a fast buck. A lot of [these] people [have] unreasonable expectations.”

Huh? What’s so unrealistic about purchasing overpriced downtown condos during the peak of the greatest real estate asset bubble in history and expecting to flip them for an easy buck?

…units [at 2200] for sale have seen price reductions ranging from $1,000 to $175,000. And one seller is even throwing in a 42-inch flat-screen TV to sweeten the deal.

Is that 1080i or 1080p?

Addressing the O’Leary lawsuit, Jeffries states, “I don’t know why Mr. O’Leary feels like that’s something he needed to go to the media about.” She would not respond to anonymous complaints about the development (nor did she return several calls after a few residents put their names by the complaints). “We’re doing everything we can to take care of our homeowners. The vast majority of people at 2200 are really happy,” she originally told us. We asked Vulcan to put us in touch with some of those tenants, they did not respond to the request.

On a recent Saturday night, as 2200’s three concrete and glass towers loomed in the night—the downtown skyline to the southwest…many of the windows were dark, save for the glow of several flat-screen TVs large enough to be viewed from the street.

During 2005 in downtown San Diego, I noticed much the same. At the time I just assumed that everyone was simply still working at 10pm each night, desperately trying to make their $4500 mortgage payments.

When I am ready to purchase my next house after the crash, it certainly won’t be a condo. I probably won’t buy anything made after 2000 as they’ve likely been built of balsa wood and bailing wire.

While it’s difficult to tell if Seattle will be hurt as badly as other bubbly areas such as San Diego (and this is only the beginning), it certainly won’t be pretty. Be patient – a sixteen year speculative bull market in housing doesn’t land quickly – and certainly not “softly”.

As they like to say on HB, “got popcorn?”

(Jonah Spangethal-Lee,The Stranger, 04.12.2007)

  

10 comments:

  1. 1
    MisterBubble says:

    In the immortal words of Nelson Muntz:

    Haha!

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  2. 2
    Luke says:

    The correlation between sales per default and the home price index (from the “San Diego” link) was amazing. Has anyone seen something similar for Seattle? Anyone know where to the sales and default numbers by week (or even month would work).

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  3. 3
    Grivetti says:

    As I recall, I think there’s a blogger on seattlebubble who actually rents there… wonder what her/his take is on the construction of the place…. probably considerably different expectations if you didn’t buy the lemon, but who knows…

    I’ve noticed much the same, windows all dark, visitor parking lot empty… I got into a PI sound-off arguement with some one talking about how “everyone hasn’t moved in yet”…. hmmm, yeah, like the ghost-investors that bought up the joint…

    This just goes to prove, Seattle wages/incomes what-have-yous CANNOT SUPPORT the 500K condo market, never will. And all these projects coming on line are luxury condo projects… what are people thinking?

    Everything under 400 seems to sell fairly quick but that’s because they’re the only thing affordable…

    2200 is the flag-ship turd leading the Seattle bubble off the edge of the housing map…

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  4. 4
    Lake Hills Renter says:

    I believe you mean “coup999″. He has a blog about it here:

    Fast Times at 2200 Westlake

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  5. 5
    Puget Sounder says:

    Pardon me if I’m off the mark, but I thought Vertigo was a conversion of an existing (hideous) apartment complex. My cousin & her husband live a couple blocks away from there, and I distinctly remember the pre-conversion apartment as being fairly awful — and now it’s a “premium” Capitol Hill condo. What laughs! What person would part with 400K for a 2 bedroom there when better options exist!

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  6. 6
    christiangustafson says:

    Told you so … told you so … told you so … Schadenfreude all the way to Lake Union on the new toy trolley!

    SPAM == Spending Paul Allen’s Money

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  7. 7
    EconE says:

    You guys should read what the person who filed the suit had to say over at the urbnlivn website. He goes into much more detail…if it’s truly the same person and not someone trolling making up stories.

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  8. 8
    synthetik says:

    >Vertigo

    I linked it because I live near that building. It’s got to be one of the biggest steaming piles of poopie yet.

    The sign posted out front reads something like “The city is your playground. This is home base.”

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  9. 9
    T,V & Mr.B says:

    When I first moved to San Diego in 1991, which was in the middle of the last downfall of SD housing, Some big company built a HUGE luxury condo building. I can’t remember how many units, but it was around a couple of hundred. It sat for 6 months with no takers. Finally one person bought a unit there. He was quoted in the paper as saying, he walks around the hole building naked, as if the hole tower was his home. I guess that is one benefit of slow sales and being the only buyer. He ended up doing quite well 10 years later though. I bet He’s glad he didn’t buy at the peak. He more than trippled his money, and got to treat the whole building as if it were his own.

    the Door-men were still getting paid full time for only one tenent.

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  10. 10
    BanteringBear says:

    While late to the party, Seattle won’t be late for the hangover. With the funny money disappearing, Alt-A included, the Puget Sound area will now be joining everyone else. How about some skyrocketing inventories to start?

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