CHARLOTTE, NC - The Atlanta developer of uptown's Catalyst condos might convert the 27-story tower to apartments before it's ready for occupancy in January. "We are looking at the possibility of conversion with our financial partners," said Tony Skillbeck, president of Novare Group's Carolinas division. "We hope to make the decision fairly soon."
Novare started the 462-unit building on speculation in August 2007 and signed 71 purchase contracts after beginning sales this summer. An uncertain housing market and tighter restrictions on lending are causing many developers to reconsider. Three uptown condo towers have been postponed, and legal disputes halted two others.
Fewer than 1,000 condo units are under way in the center city; buyers are reluctant to commit, said multifamily housing analyst Emma Littlejohn of The Littlejohn Group. "In every segment, people are looking, but until they can sell their homes, be sure about their jobs or gain confidence in the overall economy they are not going to make a decision," she said.
Novare's corporate strategy is to launch residential developments with the flexibility to go condo or apartment depending on market conditions. Some real estate watchers are surprised that Novare hasn't switched already to apartments. Wells Fargo's planned acquisition of Wachovia Corp. is casting doubt on an uptown employment market that has helped fuel condo demand.
That's a concern, Skillbeck said, but "the urban way of life is not going to go away. We see it in Charlotte and other cities." Novare views the current situation as "how we give those people the opportunity to reside uptown, in either condos or apartments," he said.
Littlejohn believes uptown apartment living has appeal, but the challenge, she said, is keeping rents competitive with suburban projects. Real Data's Charlotte Apartment Report pegs the uptown average monthly rental rate at $1,153, the city's highest. About 1,575 apartments are in the center city, less than 2 percent of the overall market.
The uptown vacancy rate is about 7.2 percent, excluding a project due to be redeveloped, according to Real Data. The marketwide vacancy rate is 9.1 percent. Only one new uptown apartment development has been announced in recent months.
Crosland plans an eight-story, 400-unit project with street-level retail on the James K. Polk Building site at 500 W. Trade St. But officials disclosed last week that it's moving slower than anticipated. Instead of starting this fall, Crosland expects to be busy through the end of the year selecting a demolition contractor and completing permitting.
Source: CharlotteObserver.com