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Tacoma Condo Market Rising From The Grave

Tacoma Condo Market Showing Signs of Revival

Two still-born condominium projects, completed and leased as apartments, gave notice this month they will convert their units to condominiums.

A failed downtown waterfront condominium building, completed just as the housing bubble burst is nearing a sellout, and expensive waterfront condominium units at Point Ruston near Point Defiance Park are rising from the shoreline.

“The condominium market is coming back,” said Loren Cohen, legal affairs advisor for the billion-dollar-plus Point Ruston mixed unit development. Point Ruston is building two high-end condominium buildings on the Commencement Bay shoreline adjacent to the development’s waterfront trail. The majority of the units in those two buildings are already sold.

Market activity remains far below that in the adrenaline-powered times before the recession, but developers and realtors say they’re seeing once again seeing conditions returning that enable condominiums to once again become part of the housing mix.

Tom O’Connor, developer of downtown’s Midtown Lofts on Fawcett Avenue, said he decided to begin converting his building back to condominiums from apartments because he saw signs that buyers were once again interested and able to finance condominium purchases.

Midtown Lofts’ construction was halted in midstream during the recession when the bank financing the project ran into difficulties.  O’Conner put together other financing to finish the project, but when it was done, the condo market was dead. He rented the units as apartments instead.

O’Conner said he was encouraged to convert Midtown’a 52 units to condominiums because of the success he saw at the Esplande condominium project in selling its units.

The Midtown units will be priced between $192,000 and $580,000.

Just 13 of the 162 units in that building remain to be sold, said a sales agent for the Esplanade. The Esplanade on the west shore of the near-downtown Thea Foss Waterway, was the largest condominium project in Tacoma to enter foreclosure.

At Ruston’s Commencement development overlooking the Ruston Way shoreline, executive sales manager Karen Kostner said 29 groups of people ranging from two persons to half-a-dozen toured units at the high-end building during a recent open house.

Three buyers appear ready to close sales in the 62-unit building, she said.

Most of the buyers appear to be empty nesters who want to move from their large homes in Gig Harbor, Federal Way or Tacoma’s North End into a condominium where maintenance issues are not part of their weekly routine, Kostner said.

The 44 units that are part of the initial sales block are not inexpensive ranging from $550,000 to $1.1 million.  That price, however, represents a significant discount from the building’s original condominium asking prices, $950,000 to $1.6 million, before the structure’s second developer lost the building just before it was to be completed.

A Minneapolis company, Onward, bought the Commencement two years ago from the bank that inherited it, completed construction and offered the units for lease.

Wendy Foster, the building’s leasing manager, said that at its peak, some 70 percent of the units were leased with an average monthly rent of $3,100.  All units have expansive views of Commencement Bay, Brown’s Point and Mount Rainier.

Existing leasees have been offered the first right to buy their units.  All existing leases will be honored with tenants living in the building on a month-to-month basis once their leases expire.

The Commencement changed ownership last fall, and the new owners, a Colorado company, decided to convert the majority of the units to condominiums.  Eighteen of the building’s units remain in the leasing program.  Those units ultimately will be available for sale, probably by next year.

Kostner said many of the people who originally had shown strong interest in living in the Commencement are coming back for a new look.

Many of those prospective buyers own large homes. Selling those homes had been a major obstacle in getting buyers to downsize to condominiums when the housing business flatlined.

Kostner said many of those buyers have told her their real estate agents are telling them now that they expect their homes will sell relatively quickly.

“This building still has the attributes that made its so attractive to begin with: the views, the high-end finishes, the local ambiance are still here, and the prices are lower,” she said.

This article was originally published by the Tacoma News Tribune here.

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