While we broke the news last week with respect to Artani (818 Van Ness) unsuspending their sales efforts, apparently Symphony Towers is doing the same for 26 (out of 130) units they ended up leasing out over a year ago.
Artani (818 Van Ness) Scoop Redux: Unsuspending Sales [SocketSite]
Developers give condos second shot [Business Times]
Symphony Towers Transitions To Their Second Movement (Rentals) [SocketSite]

23 thoughts on “Symphony Towers Moves To Sell Twenty-Six Leased Leftover Units”
  1. Another vote for “the market isn’t coming back anytime soon”.
    Too bad that they lost money on that optimistic bet last year.
    At least they are bailing out while there are still government subsidies in place: buyers credits, the fed buying mortgages which keeps interest rates low, etc.
    Boy, when the optimistic pros bail out, it’s time to run for the hills!

  2. Well, the buyers will not have that new condo smell that commands the 10% premium…
    2 questions:
    1 – Are all 104 non-rental units sold? How many are still for sale?
    2 – What were the rental rates?
    If the developer is stuck with a bunch of unsold/empty units, they must be bleeding cash. If the rented units are the only ones left for sale, that’s a different story but I doubt they’re very happy with the return on investment.
    I suspect they’re bailing out. They probably see cash flow staying negative for a while and prices/sf not coming back up before a few years. Rental rates are still going down. They should cut sale prices by 20% and get it over with.

  3. To the contrary, the sellers think the market has come back enough to put a bunch of condos on the market

    Anyone stupid enough to buy a condo right now deserves to live in the Symphony towers…

  4. “To the contrary, the sellers think the market has come back enough to put a bunch of condos on the market.”
    No evidence of that whatsoever. This is clearly cutting their losses. They rented for a while (or let them sit empty), taking a significant cash flow hit as rental rates are still very low compared to sales prices. They hoped sale prices would bounce back to make up for the losses, and they haven’t. And they won’t any time soon. So they are cutting their losses by getting out now in the face of continuing declines in selling prices. Smart move. Would have been smarter to just sell them earlier.

  5. I know of one development in Jack London Square in Oakland (200 Second) that went the rental route after selling just under half the building in 2007. (BTW, they stubbornly stuck to bubble prices because the building was considered one of the best in the east bay and won mutiple design awards. A big mistake!) Anyway, the developer then tried in early fall last year to sell some of those former rental units and as far as I know were not able to move a single condominium.
    A few things that were problematic in my mind. One, the new condo smell has gone. Two, prospective buyers are automatically concerned if a building goes from condominium to apartment building and then back to condominium. What’s the true identity of the building? Three, I think financing is going to be restrictive when more than 20% of the units are rentals. Four, buyers are now a lot more discerning than they were in terms of location, finishes, amenities etc. than the were in 04-07 because there is so much supply.
    The moral to the story…developers should either discount remaining units significantly (aka Infinity Sales Strategy) to move inventory (unfortunately that ship has sailed for Symphony Towers), or rent the remaining units and then wait until the market has significantly turned. I think by so quickly returning these units back for sale the developer is really going to find it hard to sell them without substantial discounts. Maybe there is a market for existing renters. It also doesn’t help that they are selling a somewhat mediocre product.

  6. Can I just say, as an agent, I love this site. Not just for the tremendous amount of information put out, but for the consistently bearish tone taken by the posters on here. I’m not kidding – it serves as a great counterpoint to the rhetoric you here at sales meetings or company “kick off events”. Our sales managers have data point upon data point to reflect exactly why the bottom has hit, but you guys keep the balance.
    So with the group hug taken care of – I really look forward to seeing how these returned units at Symphony Towers play out. I have two sets of clients, both very anxious, in the sub-$475K price range. I cannot have them write until I see how both this building and the second phase of Esprit Park progress. Although One Hawthorne will also come on with some prices in this range, I don’t consider it quite “entry level” new construction. These two buildings are. They either set the base, or we slip a little further. The recent strength of the $500-$750K range will have trouble persisting if the lower end doesn’t hold (in my opinion).

  7. New condo smell? In Oakland maybe, but I suspect multiple factors in examples cited. There is a big difference between recent construction with good quality and rickety old wooden buildings with hidden water damage, termites, and weak if any foundations. Most new buildings even have insulation. Imagine that! Insulation! That is the kind of attention to detail that commands the new unit premium.

  8. Sambo,
    Esprit Park seems to keep postponing the release of the north building for quite some time. First, it was July. Then, it was November. After that, it was January. I’ve decided to stop following up with them. The units are nice, but they are overpriced, especially for the location. I personally don’t think the 1br units there will be worth more than $420K by the time they get around to releasing the next batch, whenever that is.
    I haven’t seen Symphony Towers in person. Aside from being relatively centrally located, the location leaves much to be desired.

  9. I read socketsite everyday and i have a few things i would like to say:
    Regarding socket site: why are socket site posters always so negative and pessimistic?
    Regarding Developers: Often times developers are hard working, middle class people who build real estate for a living. Without developers you wouldn’t have a roof over your head. They are trying to be successful just like all of you miserable nay sayers.
    Regarding neighborhood: Some people like living on the Van Ness corridor. Some people like living in Soma. Some people like living in Pacific Heights. People choose where to live based partially on where they work, where their friends or family live, where they need or want to be near (bars, freeways, stores, green space, etc). All locations are perfect for different people for different reasons.
    that’s all. i hope you all have a nice day.

  10. Connor – I am enjoying the irony of someone complaining about negativity by making further negative comments.

  11. Connor. I also read socket site every day. Thank you for your post. Truth be told, I agree whole heartily with all your observations; which is why I hate myself for reading socket site every day.

  12. “New condo smell?…”
    Mole Man: It’s pretty straightforward. All other things being equal a brand new unit versus a equivalent newer unit will sell at a premium. Not so?

  13. @Conner: Don’t take it personally, and please don’t make personal attacks: you miserable nay sayers
    The fact is that if you ask any unbiased expert, it is not a good time to buy a condo in sf. It’s getting better, but still has some ways to go.
    And I’m sorry if it upsets you, but I’ve been in the Symphony and I think it is awful. My opinion.
    Three years ago I talked two employees out of buying condos. They still thank me all the time. They’ve continued to save their money and will be ready to buy when the time is right.

  14. Joh – appreciate the feedback. Last I spoke with Esprit Park, they said phase 2 would be released in February. Guess I’ll just have to wait on that…
    Willow – Reagarding your comments about 200 Second in Oakland, I was wondering if you have any thoughts on The Ellington in Jack London Square. I have a client who is also looking in the East Bay (I have referred her out to an East Bay agent for those properties) and they are looking into the Ellington. The price points, while cheaper than SF for sure, haev raised questions for me. 11th floor, terrific view, great ammenities, nice building, 1 BD/1 BA – but at $445K I’m hesitant. Anybody with feedback on The Ellington?

  15. Sambo – Oakland condo prices have been decimated over the past two years so I would tell your client to tread very carefully. The Ellington is a very good building and will eventually end up a top tier development despite it’s Jack London location but I suspect anyone who buys now will not get in at the best price point. That may not be such a big deal for your client if he or she is set on a particular floor plan and view. But he or she should be prepared to take another 20% decline in prices. Oakland is a bit of a basket case at the moment with an ineffective city government and still ongoing crime problems. (Although JLS is pretty safe.) Also, the Sales staff are having a really difficult time moving the units because they are generally priced higher than equivalent units in existing buildings; (partially because they are brand new) so potential buyers have lots of leverage. Another strike against the development is that the HOA fees are on the high side for Oakland but the amenities are excellent. There is also one not so remote possibility (note: I have no official inside information either way) that these units may end up rentals.
    To cut to the chase, I would advise your client to wait and rent a stellar 2BD/2BTH in a better neighborhood (Rockridge, Lake Merritt or Montclair) and pocket the savings…Or buy a house. Housing prices in Oakland (outside the flat lands) have been surprisingly resilient.
    Disclosure: I own a condominium in Oakland and have watched as prices continue to plummet so I take no pleasure in this prognosis.

  16. Willow – Great info, really appreciate the feedback. I let him know that despite what the sales office is saying about holding strong on the 4 units he’s interested, he should wait until one of them actually moves. They were moving at a good clip in the $390K range, which gave them enough confidence to lift prices another $55K – and I’m feeling like that’s an overshoot on their part.
    Obviously, we have to way the trade off of waiting for potentially lower prices vs. extremely low rates and the $8K credit now. I’ve calculated out in ten different ways, I still don’t see the $445K price point as something I would be comfortable on having him move forward on. I can’t have my guy setting the bar for higher list prices.
    Thanks again, really valuable to me.

  17. “I hear you guys. Many of these posters are probably not risk takers in general. ”
    That’s sort of a nonsensical response. Plenty of folks take other risks, e.g. in the stock market. But the reward needs to be high enough to compensate for that risk. It’s hard to look at today’s market and be as confident in the risk/reward curve.
    Moreover, housing shouldn’t be an “investment” for most people. For most people, housing just functions as a place to live and as forced savings (through paying down a mortgage and gaining some nominal appreciation). Certainly there are some people who are good at making housing investments, but that’s not by any means the majority of the population. I don’t consider most people who bought during the boom to be “investors,” but rather more as gamblers.

  18. Many of these posters are probably not risk takers in general.
    LOL! I am a risk taker and am successful at what I am doing. But I am not going to listen to a salesman using such a weak argument. Like “This car is fine. Who needs brakes anyway? Don’t listen to the wife, you sissy boy!”
    So much is at stake when you purchase Real Estate. We don’t need snake oil salesmen to tell us what to do!
    Go back to salesman school. The rah rah you are singing is not very convincing.

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