The last unit of the Pearl District’s 114-unit condominium tower just sold last week. The 937 tower hit the market just as condo sales dropped to an incredible low.
The high-rise condo project was started in October 2006 by developers Patrick Kessi and Geoff Wenker. The project was started when condo sales were still high. However, when the building hit the market in 2008, condo sales had dropped. Only 10 percent of the units were pre-sold, and the developers took a loss on the project.
Instead of converting their condos to apartments, Kessi and Wenker kept their condos and avoided the temptation to auction units or send the building back to the lender. According to OregonLive, Kessi said, “We are one of the few that actually started out as for-sale condominiums by the developer and ended as for-sale condominiums by the developer.”
Their lender, Wells Fargo, had an agreement with the developers that allowed them to close their pre-sales without meeting a pre-sale requirement. Therefore, although most condo projects’ lenders required 25 percent of units to be pre-sold before finalizing purchase loans, Kessi and Wenker kept the building with only 10 percent sold.
The in-house sales team then became more competitive about the price, and the style of the building, with red balconies and a scattered window pattern, set the building apart from the rest in the Pearl District. The building’s best-selling units were those priced between $300, 000 and $500,000.
Many of the units became cheaper after owners moved into them; hence, the developers offered to buy back those units for the price the owner had paid. About 10 owners took the move-up option. This move-up option increased their sales, and in the last year of sales, “the rate of purchases kept up at two or three a month even as the average sale was a pricey $700,000,” says Oregon Live.
While The Encore in the Pearl District still has unsold units, Kessi and Wenker’s condo tower has just sold its last unit successfully.