The Edge sells 37 condos in one day—with help from a gavel and discounted sales prices.
West Palm Beach, Fla.— More than 100 potential condominium buyers crowded into a room at the Crowne Plaza Hotel here Nov. 15 to hear the latest sales pitch for the unsold condos at The Edge. It was an auction.
Before the afternoon was over, Jon Gollinger of Boston-based Accelerated Marketing Partners had banged his gavel and buyers had signed contracts for 37 condominiums at this 15-story tower overlooking Clear Lake with views of downtown and the Intercoastal Waterway.
Ten additional contracts were signed in the three weeks following the auction, all at prices hovering around $200 per square foot.
That's fast action for the condominium market here, where at least six properties that finished hundreds of condos apiece in 2006 and 2007 are still struggling to sell units.
“The Edge is a little bit ahead of the curve,” says Brian Saver, sales agent at The Edge. “We are now leading the market.”
Today, leading this market means cutting prices. For example, a 1,200-square-foot one-bedroom at The Edge, originally priced at $511,000, was offered at the auction with a minimum bid of $190,000. It sold for $225,000, less than half the original price, according to Saver. Original prices at The Edge ranged between $300 and $400 per square foot.
In comparison, another condo community, Landmark at the Gardens, also held an auction in November. Its minimum bids started at $350,000, and according to local news reports, no buyers signed contracts.
“Low prices are our biggest selling point,” says Saver. Atlanta-based developer Wood Partners has been able to cut prices in half at The Edge because there is no senior debt on the property, which was financed with equity from Wood Partners and ReCap Partners, an equity firm based in New York City.
The Edge's Web site prominently displays the tag line, “Live on the water, without getting soaked.”
Wood Partners, which also has experience in the multifamily rental business, is renting out some of the apartments at The Edge for as low as $1,275 a month for a 1,099-square-foot loft studio with a terrace, and up to $2,875 a month for a 1,875-square-foot townhouse.
With the sales from the auction moving to close, The Edge will have sold 189 of its 307 condominiums.
In early 2007, all 307 condominiums in the tower were under contract, and Wood Partners was signing sales agreements for condominiums in a planned second tower next door. That tower would have brought the total number of units at The Edge to 572.
The first tower received its first certifi cate of occupancy in August 2007. By then, the condominium market in South Florida had started its long descent. Less then half of the buyers at The Edge showed up to the closing table, and Wood Partners adjusted to the new reality of the market.
“Plans for the next tower have been scrapped,” says Saver.