Anyone Want to Buy a Condo?

As the detritus of the Great Recession clears, stalled projects awaken

Vantage Lofts. Photo by Ryan Olbrysh

Vantage Lofts.
Photo by Ryan Olbrysh

The conversation sounded so promising. Late in 2012, Richard Crighton, a principal with local real estate investment firm Rothwell Gornt Cos., had plans for revitalizing the stalled Vantage Lofts development in Henderson. His company had just purchased the buildings for pennies on the dollar. The goal was to invest about $15 million to finish the once-$160 million condo project and then sell the units.

Fast forward a year, and Crighton has flipped Vantage without lifting a paintbrush. To its credit, the new owner, Seattle-based Goodman Real Estate, is now moving forward with Vantage. The name remains, but the 110 units will now rent from $1,200 to $4,500 a month when construction is completed later this year.

Vantage and the west side’s Gramercy (formerly ManhattanWest, another boom-day shell bought on the cheap in 2013) are finally seeing construction work again. Meanwhile, banks are more open to lending on condominiums than a year ago; sales have picked up from the doldrums of 2011, when only 186 luxury units were sold; and 2013 sales should top 300 once the final tally comes in, according to SalesTraq. But those numbers still aren’t sufficient for filling up the inventory built on the eve of the Great Recession, and more than a few properties have shifted strategies from selling to renting.

Exhibit “A” is the Modern, formerly Luxe Lofts, on West Flamingo Road. Investors purchased the project for $6.8 million in early 2012 with the intention of selling units. But today, of the 83 condos, only about a dozen are owned by individuals, or in some cases former owners’ lenders. The rest are rentals.

Because of their suburban locations, urban pocket-projects such as Vantage and the Modern must compete with traditional suburban homes, which until recently were priced at below $100 a square foot, says SalesTraq’s Brian Gordon.

Most of the recent individual luxury condo sales have been on the Strip or near it. In late 2012, a New York investment house shelled out $119 million for 427 units at City Center’s Veer Tower. About 90 of these Veer Tower units have been sold in the past year, estimates James Brooks, a high-rise agent with Realty One.

Brooks sees pricing on the Strip in the $450- to $600-per-square-foot range; some higher-end units have hit $1,000 per square foot. He estimates if a unit were sold at Vantage today, it might fetch between $200 and $250 a foot. Vantage units were originally marketed at $450 a square foot in 2006. But Brooks says pricing doesn’t need to hit those peak levels to spur some selling activity.

“If you can get a 25 to 30 percent price recovery,” he says, “you’re going to see some people have some nice paydays.”

And some suburban luxury condos are showing signs of life: Summerlin’s Mira Villa condo project, which was bought out of foreclosure in 2011, has only a few of its 93 units left. Sales prices are between $200 and $300 a square foot. Ironically, Mira Villa’s concept lacks the slick modern feel of Vantage and the Modern.

Instead, it goes for the classic marketing method of plunking stucco buildings near a golf course.