Condos come off the sidelines and into the market

By Michelle E. Shaw and J. Scott Trubey

The Atlanta Journal-Constitution

After more than a year in housing bubble limbo, units in two high-profile metro Atlanta condo towers are about to hit the market.

ST Residential, an asset management company led by Starwood Capital Group, this month will open sales centers at The Atlantic, in Atlantic Station, and The Brookwood, in south Buckhead. The Chicago-based company will also open a sales office in Serrano, a 150-unit Mediterranean style condo in Sandy Springs.

All three buildings were taken off the market before a single unit was sold.

“We think these projects will be in high demand,” said Wade Hundley, chief executive of ST Residential. “And we don’t think this will upset the current environment in the marketplace.”

The trio of projects, which include more than 800 units, are not the only ST-owned condos on the market.

ST Residential co-owns and manages seven properties that were once part of Corus Bank’s Atlanta portfolio. The Chicago-based bank, which had no branches in Atlanta but was the lender on nearly a dozen condo projects, failed almost a year ago. Corus was one of the nation’s most prolific backers of condo projects in fast-growing Sun Belt areas. But the real estate bust brought on huge losses.

A group of investors led by Starwood bought a 40 percent stake in the buildings from the Federal Deposit Insurance Corp.

In addition to The Atlantic, The Brookwood and Serrano, condo projects Luxe, Horizon at Wildwood, One River Place and Mezzo, were also funded by Corus loans and are now all marketed by ST Residential.

Horizon at Wildwood, Luxe and One River Place already have a number of residents and have about 415 units to sell.

ST’s decision to release more than 1,200 units to the public doesn’t change supply estimates released earlier this week, according to a data analyst from Haddow & Co., an Atlanta-based real estate consulting firm. The firm’s mid-year report listed condo inventory at 7,950 units. Those numbers already include ST Residential’s portfolio because the construction has been complete for some time, according to Haddow.

Backed by private equity investors and the FDIC, ST Residential has the resources to be patient with sales, industry experts say. ST plans to offer financing to help properties move.

David Green, a principal and co-founder of Mountain Seed Advisors, said the re-emergence of the former Corus portfolio is likely good for the market. Condo sales are so stagnate, any added stress from the new supply would be insignificant, he said.

“The supply-demand fundamentals didn’t even out with these products off the market,” Green said. “The supply curve is still way out of whack.”

The three empty buildings will have a grand opening Aug. 26, which will also serve as a kickoff for ST Residential, Hundley said.

“This is a relaunch of several well known properties and an introduction to who ST is,” he said. “We felt like this would be a great opportunity to do both.”

Hundley said ST officials are still working on pricing for the three vacant properties, but expects their offering to be “competitive in the current market.”