Is this the first sign that downtown Bellevue has reached its condo saturation point? Seattle Times: Bellevue condo project, European Tower, put on hold
The housing slowdown has claimed another local high-rise, high-end condo project.
The developer of 16-story European Tower, a downtown Bellevue project whose design features just one unit on each floor, said Wednesday that it won’t start construction until the market turns around.
Eugene Gershman, chief operating officer of Bellevue-based GIS International Group, attributed the delay to reticence among prospective buyers whose current homes are taking longer to sell.
He said buyers indicated that if construction started now, the tower might be finished sooner than they could close on their units.
…
Buyers have reserved six of the project’s 16 units, he said.
The article also mentions some of the other projects around the Seattle area that have recently been “postponed.”
European Tower’s delay is the latest in a string of postponements. The Insignia Towers project in Seattle’s Belltown neighborhood recently announced a delay, citing the market slowdown.
And earlier this year, work on the luxury 1 Hotel & Residences in downtown Seattle was postponed until at least late summer while developers redesign the project to make it more appealing to lenders.
Gershman said availability of financing was not a major reason for European Tower’s delay. But Dean Jones, of the Seattle marketing firm Realogics, said tight credit is taking its toll on a number of downtown Seattle and Bellevue condo projects.
“If they’re not under construction now, with a few exceptions, I would doubt we’ll see any break ground this year,” Jones said.
The question is, are enough projects holding off to keep the market from experiencing a severe oversupply in the next few years?
(Eric Pryne, Seattle Times, 05.22.2008)
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7 responses so far ↓
1
budbrad
// May 22, 2008 at 9:34 am
Speaking of oversupply, I heard a statistic yesterday on the commercial RE market. Last year, there were $250 Billion in deals done in commercial RE nationally. Year to date, there have only been $5B in deals done.
That’s gonna have a tremendous ripple effect in the markets.
2
Jonny
// May 22, 2008 at 3:01 pm
budbrad: holy moses! source please?
3
Joel
// May 23, 2008 at 12:10 am
But but but, I thought rich move-up buyers were going to prop up the market.
4
db
// May 23, 2008 at 8:16 am
I’ve been predicting this one will be the canary in the coal mine for Bellevue. It was obviously the most vulnerable to cancellation since its one floor per condo all well over the $1M mark. Bellevue Towers have only sold about 1/3 of their units, and there are many many more projects coming online. I see Bellevue Tower flippers on the MLS too and some of the prices indicate some desperation (higher floor larger units at lower prices than lower/smaller units).
I live in Bellevue and its a rich, rich town. However there really are only so many people who can afford to live in units like that. They are mostly people who lucked out with options or retiring boomers who are downsizing and have cash.
The great condo collapse is coming to Bellevue real soon now as Bellevue Towers completes and 200+ units come onto the market.
5
Jonny
// May 23, 2008 at 8:21 am
So I take it the 5 million versus 250 million thing was just a rumor?
6
Jonny
// May 23, 2008 at 8:21 am
may be a rumor from January?
7
afferent input
// May 23, 2008 at 1:33 pm
There was a building on the corner of Campus Pkwy and University Ave that was torn down last year. Workers have been very busy prepping it for a new building, so it seemed. All of a sudden, everything was covered over. To me it looks like it’s been mothballed, but I don’t know much about the intricacies of construction.
Weird.
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