With only five of the 124 condominiums at Town Square sold to date, more than five months after the grand opening of this complex in June, prospective buyers and those anticipating future downtown development in Burien wonder if condo prices might be lowered.
This question has been raised in the weeks since Chicago-based Corus Bank â€“ the construction lender for Urban Partners, the private developer of the condo/retail complex in Town Square â€“ was seized by the Federal Deposit Insurance Corporation (FDIC) on Sept. 11.
Corus Bank’s deposits were sold, then the FDIC conducted a private auction for the remaining assets. Now Starwood Capital Group, TPG Capital, Perry Capital and WLR LaFrak have acquired an equity interest in a limited liability corporation that will hold the construction loans and real estate-owned assets of Corus.
“The $4.5 billion portfolio consists of more than 100 loan and (real estate-owned) assets linked to high-quality condominiums, multi-family housing, office properties, and land representing nearly 23 million square feet,” according to a recent news release from this investment consortium.
Urban Partners, however, has yet to comment publicly on whether it might reduce the prices of its Town Square condos’ phase one of the planned Town Square project. A primary reason for this is that it’s not a simple matter of lowering those prices, despite the fact that the investment consortium purchased the construction loans of Urban Partners and others well below their original value.
Two or three or even more banks usually are involved in large construction and real estate loans, notes Burien Economic Development Manager Dick Loman. This, in turn, creates a slow and involved process for a developer to obtain permission from lenders before it can make a corresponding reduction in its housing prices.
In the meantime, Loman says, Urban Partners is “hanging in there. They’re not leaving town. They’re trying to do the right thing. I know that Urban Partners wants to meet the market, but they can’t act until they receive a green light for moving forward. This means that (Town Square condo) prices aren’t going to go down without permission from the bank.”
Burien City Manager Mike Martin emphasizes that “no public money is involvedÃ¢” in the Town Square condo-retail complex. “There is no financial to the taxpayers” because the Urban Partners’ development is privately financed.
But, he adds, “We do want to see them fill up sooner than later.”