Memphis REIT buys Hue condos for $33.6 million

A Memphis real estate investment trust has bought the Hue condo building in downtown Raleigh for $33.6 million.

The buyer, Mid-America Apartment Communities, plans to turn the 208-unit project into rental apartments.

The new pricing sheet for the property say a 2 bedroom, 1,337 square foot apartment will rent for $2300.

Mid-America owns four other apartment communities in the Triangle: Hermitage at Beechtree and Waterford Forest in Cary and the Preserve at Brier Creek and the Providence at Brier Creek in Raleigh.

The Hue shut its sales office in May without selling a single unit. Two weeks layer the property was handed over to the lender.

CityView, the Los Angeles group that developed the project along with Trammell Crow Residential, turned the deed to the property over to iStar Financial.

CityView had borrowed $36 million from iStar to build Hue, the largest condo project ever attempted in downtown Raleigh.

The price Mid-America paid is impressive considering the company’s plans to convert the project to rentals.

With its royal-blue-and-mustard exterior, Hue was a bold bet in a largely unproven condo market.

By the time the building opened last year, demand for downtown condos had fallen dramatically and most lenders were reluctant to issue mortgages to condo buyers.

Hue was never able to get enough units presold to qualify for government-backed mortgage insurance programs, something that has become essential in today's market.

Even buyers who wanted to close on units were frustrated by the continuous delays and uncertainty surrounding the project.