Bloomsbury Estates perches high over downtown Raleigh, a brick edifice so imposing that it has garnered over-the-top comparisons to Cinderella's Castle at Disney World's Magic Kingdom.
Indeed, the seven-story building at the corner of Boylan Avenue and Hargett Street may have to work some magic as it opens amid the region's biggest housing slump in a decade.
Four months ago, buyers at the long-delayed project got the go-ahead from city inspectors to move into the seven-story building. But so far, none of Bloomsbury's 56 units have been filled. And some prospects have taken Bloomsbury's affable developer, John Bruckel, to court, hoping to get out of contracts.
Now the condo-gazing community is paying close attention to when and how many reserved units will be inhabited in the months ahead.
It's easy to understand the anticipation. The striking structure -- with a bold copper-and-slate mansard roof and 30 types of brick -- has evoked critiques ranging from awesome to awful, but rarely in between. What has unified both sides is curiosity about who would make Bloomsbury home.
That was supposed to be known by now. Bloomsbury's foundation was poured in October 2006. And at the time, Bruckel expected to finish the ornate units -- which feature limestone from Israel, marble from Italy, custom cabinets from Indiana, gold-gilded bookcases and aged-oak doors leading to trash chutes -- by the end of 2007.
But construction delays, including extensive changes to the building's fire-suppression system, pushed the opening back, Bruckel said. Sales also have been delayed as he has tried to settle a dispute with a contractor.
Bruckel also blames delays on the complexities of building some of the ritziest condos in downtown. The units, which have lavish bathrooms wired for cable television, range from $329,900 to $1.12 million.
"Let me put it to you in the best way I know how: Our building is one of a kind," Bruckel said. "One hasn't been built like that for 100 years. ... It was a challenge for us to achieve the quality level that we wanted."
Things appear to be moving ahead this week. Bruckel said Wednesday that he filed papers with the North Carolina secretary of state, forming Bloomsbury's owners' association this week. He said 34 of the units are under contract. And he assured that he'll begin closing sales next month.
Moving ahead is one thing. How fast is another. Because of the delays, Bloomsbury is arriving in the teeth of a brutal credit crunch, which has limited prospective buyers and threatened developers.
Since the end of 2007, lenders have tightened mortgage standards, particularly for those who want to buy in new condo buildings. They are requiring bigger down payments and better credit ratings from most borrowers. And the tightness is further stalling buyers who must sell another home before closing on a new one.
Other downtown projects have felt the pinch. Highwoods Properties partnered with Dominion Realty to build 139 condominiums atop RBC Plaza. All but two were under contract by the middle of 2007, a year ahead of schedule. But when the building opened last year, more than one-third of the contracts had been delayed or canceled. Dozens are expected to still be available at the end of the year.
Although that is not the best scenario, the RBC building can survive because most of the building is occupied by rent-paying commercial tenants.
Bloomsbury, however, doesn't have any other income stream. The condo sales could determine its fate. Its delays may make closing harder for some expectant buyers. And impatient prospects have options in competing properties such as RBC or the Quorum Center.
That competition could pose a problem for Bruckel. To build Bloomsbury, he took out at least $13 million in construction loans starting in 2006. If the debt comes due, he may be forced to refinance. If he can't, he may need to unload Bloomsbury condos on the cheap.
Bruckel declined to say when the debt comes due, but said he has a good relationship -- his words: "hunky dory" -- with his lender, Fifth-Third Bank. He said he isn't worried about debt related to the project. He also said many buyers will be able to take advantage of "preferred financing," but he didn't elaborate.
Regardless, neither time nor momentum seem to be on Bloomsbury's side. Contracts there have been signed at a rate of less than one a month since marketing of the units started in February 2006. And the number of units under contract hasn't grown in the past year.
Luxury condos, in general, are slow to sell downtown. There were just three luxury condos sold inside the Beltline during the first quarter, according to a Triangle Area Residential Realty report that tracks sales of homes listed at $500,000 and above. That's up from none during the same period a year ago. More than half of the unreserved condos at Bloomsbury carry price tags north of $500,000.
It appears some initial prospects are falling out. Buyers of at least five condos filed lawsuits in Wake County, hoping to recoup deposits on units that they expected to be built by now.
Even if those buyers are allowed out of their contracts, Bruckel said he is buoyed by activity at the building.
"We've got many active prospects that are in the process of making deals," he said.
Asked how soon he thought the project would sell out, he said: "Those that forecast do not have knowledge. Those that have knowledge do not forecast."
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