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Condo developer tries rent-to-own, auction
Nov 11, 2008 (Omaha World-Herald - McClatchy-Tribune Information Services via COMTEX) --
As a result of slow sales, developers of a downtown condominium project are offering unsold units as rent-to-own or as corporate rentals.
The units at 902 Dodge remain available for sale, but the rental option provides more flexibility in a tough housing market, said Todd Moffett, one of the developers.
"The market hasn't been really favorable for sales for some time," he said. "So we really looked at the alternatives we had available to us, and we felt like the prudent decision would be for us to make the additional capital investment (to finish the units).
"It's a matter of either standing around and doing nothing or being progressive and looking for answers in a slow market."
The project at Ninth and Dodge Streets dates to 2003, when Blackthorne Real Estate Development Co. bought the six-story building with plans to turn the former warehouse into 15 luxury condominiums.
The units, each with about 2,000 square feet, were to be available in 2004 for prices starting at $250,000. However, the developers decided to rent the units because of competition in the market.
Trinity Partners, an Omaha real estate investment company, bought the property in June 2006 and decided to sell the units as condos. The partnership offered four floor plans, with sizes ranging from 1,120 square feet to 1,540 square feet and prices starting at $236,000.
The first floor sold in early 2007 to a company that opened Farrells Sports Bar and Farrells Ninth Street Deli and Market.
The developers sold basically a shell and allowed buyers to select finishes such as countertop materials and flooring. Five of 16 condos sold and are occupied.
The developers finished another six units and started using them several months ago as models and corporate rentals, which are basically apartments for traveling business people, Moffett said.
"We've had pretty good success with our corporate rental program," he said. "We've found that that demand is fairly sound downtown."
That left five units unfinished. About a month ago, the partners decided to finish the five and add the rent-to-own option, he said. The units were completed Oct. 31.
Developers used lower-priced finishes -- laminate countertops instead of granite, for example -- and dropped the price, he said.
"We may have gone with a very nice hardwood maple floor in one unit (previously), and now we've gone to carpet throughout, with the exception in some areas where we've gone to ceramic tile."
Whereas the lowest-priced unit was at one point $236,000, it now is $207,200.
The most expensive unit is a former model with high-end finishes, priced at $320,000. It has 1,453 square feet, two bedrooms and a view of the Missouri River.
Moffett said developers plan to aggressively pursue their rent-to-own program.
The program will, in general, allow developers to apply a percentage of the first year's rent, perhaps up to 75 percent, toward the purchase price if a renter decides to buy.
Rents will range from $1,400 to $1,965 for the one- and two-bedroom units, which range from 1,120 to 1,453 square feet, said Dave Davis at Blackthorne Real Estate Development Co. Inc., which is now managing the homeowners association and the rental units.
Renters also could change finishes if they decide to buy, he said.
The developers also are auctioning one condo, a model unit, at the suggestion of CBSHome Real Estate, which opened an auction division this summer.
The auction is scheduled for Thursday at the unit, 201.
Bids must hit a reserve, or established price, for the property to sell. Moffett declined to disclose the reserve price.
Anyone interested in the properties may call 884-6200.
--Contact the writer: 444-1183, christine.laue@owh.com
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