Loft Condo Auction: A Sign of the Times?
At least eight downtown loft condominiums in the Carlyles Watch development will be sold this Sunday at auction. The unusual sale could be the result of a bottomed-out real estate market, faltering downtown redevelopment or a glut of condos perceived as overpriced.
Prospective buyers and investors packed the Carlyles Watch open house Wednesday evening. They heard about terms of the auction before they were allowed to walk through the units originally priced between $200,000 to nearly $800,000. One floor above street level, Unit 202, originally priced at $450,000, offers either a bird's eye view or life in a fish bowl.
"You've got a wonderful corner unit view where you can see right down Gay Street or down Third Street," says auction executive Michael Berland. "Mitchell's steakhouse is right there."
Construction began in 2006 after demolition of another building at the site. But even as Mayor Coleman was swinging the first ceremonial wrecking ball to make way for 56 new housing units in the eight-story building, the housing market continued to free-fall. A 10-year real estate tax abatement for new city center dwellings has done little to boost buying. Michael Berland with the auction company Chartwell Group says Carlyles' owners are simply making a prudent business decision.
"They are using the auction as an alternative marketing technique to move a bunch of units in a slow market," Berland says. "As opposed to carrying these units and selling them off one at a time. It could take another two years to sell out this project, maybe longer."
Developer Ken Gold who heads the Real Estate Center at Ohio State University's Fisher College of Business, says the sale is a way for the owners to generate excitement and jump start interest in a building where only 20 units have sold so far. The problem is not the building Gold says but the lack of things to do nearby.
"The City of Columbus and the mayor and his team have said we want people to live downtown and so they've given great incentives to developers to build residential opportunities," Gold says. "But downtown there's not much for these people to be doing."
Advertising for Carlyles Watch lists the almost defunct City Center Mall as a main attraction. But there are no grocery or other retailers of the kind found in the suburbs. The issue has become part of the mayoral campaign. Challenger Bill Todd says the lack of such neighborhood basics is a "tragic flaw" in Mayor Coleman's downtown revitalization plan.
"They need an urban living experience where on a Sunday morning they can find a jug of milk or a loaf of bread or even a cup of coffee," Todd said during a mayoral debate. "We're not going to have a downtown neighborhood; we're not going to revitalize the center city unless we're capable of bringing back retail, commercial and residential."
Mayor Coleman points out that the most vital element, the infrastructure, is already in place. OSU's Ken Gold believes the next step is to tie it all together with a master plan that links the disparate parts of downtown.
"We have hospitality, theaters, we've got the Short North that's close to it, and we've got The Cap, German Village, very positive things. But there needs to be a way to pull it all together. The streets cannot close down at 8 o'clock in the evening," Gold says.
Gold says he thinks the same tax incentives housing developers receive should also go to restaurants and other retailers.