How bad is the condo market in Tacoma? Pretty bad.
Recall this article from June: Tacoma Luxury Condo Project Headed for Foreclosure
The Esplanade, a nine-story condominium on the west side of the near-downtown Thea Foss Waterway, has until Aug. 21 to escape from the imminent foreclosure, said sources close to the project who were not authorized to speak publicly.
Just 10 of the 162 housing units in the building at 1515 Dock St. have been sold, and none of the retail spaces on Dock Street or facing the waterfront walkway has been leased.
According to the the Notice of Trustee sale filed with Pierce County (pdf), the developer (Thea Foss Holdings, LLC) has outstanding obligations of $48,532,793.62 on the project.
Saturday, the Tacoma News Tribune reported that the “winner” at Friday’s courthouse auction was the bank: IStar Financial wins Esplanade
…when the short bidding was done, the lender for the eight-story Esplanade condominium, IStar Financial Inc. of New York, emerged the auction’s winner with a price of $7 million.
Some two dozen spectators watched as attorney Greg Fox read the lengthy auction documents in a light rain outside the second-floor entrance to the government building and then began the auction process about 10:15 a.m.
The sole outside bidder, Northwest businessman Chuck Tomas, halted his bidding at $6.1 million as the bank successively topped each of his bids.
Take a minute to let that sink in…
There was one bidder. The maximum bid was $6.1 million. In other words, the true open market value on this condo project is roughly 87% lower than the outstanding debt. Of course, with over $48 million debt owed on the project, the bank refused to sell for what the market was willing to pay, and bought the project back themselves.
The units that have sold so far went for an average price of $532,350. An open market value of $6.1 million for the whole project puts the average value of the 151 remaining units at just over $40,000 each.
In somewhat related news, Mike Mastro agreed over the weekend to move into Chapter 7 bankruptcy (previous Mastro stories) which most likely means that the dozens of projects his company has fallen behind paying for will not end up in a similar public foreclosure auction situation, thus continuing to mask their true market values.