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DJC on 1111’s Bulk Sales Approach

October 13th, 2009 · Comments · By Matt

I don’t have a subscription to the DJC but I hear they wrote about 1111’s bulk sales approach recently, Kundig-designed lofts: Justen tries bulk sales. Fortunately I was forwarded the article. Here are the interesting bits:

First on Eleven Eleven:

Nine units are in the first release. They are between 612 and 793 square feet and are priced between $255,000 and $379,000 in the bulk program. That’s 20 to 25 percent lower than the initial list pricing, according to Dean Jones, president and CEO of Realogics, which is marketing the project.

Under the bulk sales approach, buyers get a volume discount depending on the percentage of homes that are sold within each release. Buyers can join the bulk sale with a refundable deposit of $500 through the end of the month. Units must close by Nov. 30.

And the second on how it’s appraisals that is driving condo prices down:

He said the appraisal process is driving the market now, and that is hurting niche projects designed by acclaimed architects. Kundig’s firm, OSKA, won the American Institute of Architects’ 2009 Architecture Firm Award, the group’s highest honor for a firm.

“It doesn’t seem to matter what a buyer is willing to pay anymore, it only matters what an appraiser thinks because that affects what a lender is willing to lend,” said Justen. “The reality is that our industry is being commoditized by the lender community, and that means that a niche development like Eleven Eleven East Pike, which was never designed for the masses, is nevertheless being held back by a homogeneous appraisal market.”

For more check out the Realogics press release, Living Art – New Capitol Hill Lofts Designed by Nationally Acclaimed Architect Tom Kundig Open for Sales.

Update: Emailed with Dean from Realogics. No sales yet but they have had two offers in the last week. Sales center will be open this weekend from 12 to 6 if you want to tour the place.

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Tags: Eleven Eleven East Pike

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  • Mark W
    "I'm still proud that we assembled an extraordinary team and brought an innovative new kind of urban living to Seattle" and "Cunningham says that besides the price, the ''celebrity'' design and preferred location [of 1111] will also help nudge homebuyers off the fence" were in the 1111 feature in today's Times' New Homes section.

    Except for the puzzle wall - which will probably get parked once the novely wears off - the interior photos make it look as routinely bland and boxy as many other sites featured. I'll chalk up the outside as a difference of taste, other than the worthless decks shows yet another design sacrificing function for form.

    I can't say I see how the "new kind of urban living" they claim to offer differs from any other place in the neighborhood. And as for the "celebrity" design, I suspect that I'm like most people when I say, "So what, I've never heard of these guys before."

    This is the kind of marketing that really turns me off about a place.
  • The MD
    Ummm, Matt Goyer, there is a person posting as "The MD!" but this person is not ME, the person that has been posting as "The MD" for quite a while now on your site. Granted, I agree with this person's statements completely, but can you please verify this is not from my IP address and confirm with your readers. I don't appreciate people with very similar posting names as it can quickly get out of hand. Thank you!
  • Guest
    This project has been sitting on developer’s table since 2000. Not until the height of the last cycle did someone have the balls to build it. Acclaimed architect or not, it is a mid block infill project with minimal views, tough parking, and little to no balconies. I remember in the 2000 dot com height, nonconventional was in; balconies, closest, bathtubs, kitchens, drywall, flooring…. Were all so conformist… the new dot com urban buyer doesn’t need or want them….. We sold a few boutique projects then wised up. People want closets, kitchens, parking, and balconies. They will no longer be lead by the nose into an engineered “hip lifestyle”.

    Cramming style down the throats of the populace in the name of acclaimed architectural vision, is as crazy as feeding them Bulk Buy Bullxxxx (BBB). The smoke and mirrors philosophy of Real Logics no longer works in the new world of transparency. If you want to sell condos; here is the formula:

    1. Be honest: The public no longer believes your tag lines “tomorrow’s prices today”. Don’t hide your prices and sales numbers it only makes you look scared.
    2. Be open: You have 10 units to sell, make available 10 units. People resent engineered scarcity (see #1 above)
    3. Be realistic: Price your units against the competition. Your competition is the last 30 days closings, not the over inflated perceived value of the actives. If your Performa doesn’t work at market prices start negotiating with your bank now or eat the difference. Your customers won’t buy you out of this one.

    Do these things and properties will sell. This is the real “sales solution”.
  • The MD!
    Come on condo buyers, this is crazy! it's a new way to bring us back to the gold rush days of condo marketing & sales of behemoths like Escala & Bravern (Oh, same marketing company) when we were all so whipped up about it people bought before they broke ground. This is what they're asking us to do again, except in an elaborate test of wills they want us to buy it as if there's a limited availability even though it's FINISHED & STTING VACANT......... with no sales. Fair price for fair values. Nothing more or less. With 1,000 condos on the market there's plenty to choose from, you don't control the flow & can't shut it off on us if we decide not to follow your pied piper of scarcity. Ask Escala how they feel with over 200 condos available after 4 years. they're dropping their drawers & offering free whatever you want. We aren't going to queue up like pigs at your trough begging to be fed this condobulkbuy slop.
  • nsr
    Interest in the 1111 project died when they opened the doors back in summer and people saw exactly what $500/sq ft would buy.

    With the unsold downtown condo's (Schnitzer, Olive 8, Escala) at or approaching auction stage under $400/sq ft, I doubt 1111 is going to generate much interest, unless they slash prices dramatically.

    The 'bulk buy' approach is completely inane. I'm skeptical it will generate any interest.
  • SovietBot
    I think it's an attractive building (certainly better looking than so many ultra-generic monstrosities that have gone up over the past few years) with nice floor plans. But name-brand architect or not, it's still a woodframe & MDF condo with a conspicuous-lack of amenities. They should just price the units fairly rather than playing the usual marketing games and then they'll actually move some inventory.
  • siegerrebe
    ...Eleven Eleven East Pike, which was never designed for the masses, is nevertheless being held back by a homogeneous appraisal market...

    What an aggressively self-serving and delusional narrative. The project is niche, maybe, if you define niche to be cheap, eminently reproducible, and poorly appointed. Personally, I think that they targeted a self-consciously hip neighborhood, chose an unoriginal modern design aesthetic, and tried to tap into a "this neighborhood is ascendant" meme to market a product that, ultimately, underwhelms.
  • Name
    I've toured the place, it's crap. Low quality material, subpar construction skills and lack of design skills. Really, just by throwing in bigass sliding doors does not make this a niche for the rich project, just more of a sucker born every day who wants to buy into this crap design.
  • stone
    oh snap, old timer! I will said I'm glad Justen said that because I had long wondered why their website was so horrible, no floorplans, no current photos, etc. And given the amount of condos on the market even the target market for the project probably would have appreciated some effort on the part of the marketing team; which had ample time to change its strategy given the market. And yes it doesn't matter what the buyer is willing to pay for things that may be overpriced, because its ultimately not the buyer's money. A lot of buyers would like to pay less for what's out there but we don't get to see that happening either - so much for the "market" running things. I mean the entire market it depressed - oversupply, economy, etc. appraisers may be a contributing factor. But honestly, this whole thing with this particular project would be a great case study - because there were a lot of good folks involved and it still went kaput a bit.

    OSKA won the award and it there is an Olsen, a Sundburg and an Allen, in there with Kundig.
  • old timer
    If the project was not designed for the 'masses',
    maybe the project should not be relying on a financing
    mechanism that is.
  • Interesting point on the appraisals. If we're limited to months-old sales for current values, isn't that an automatic restriction on the appreciation of prices? It's the catch-22 of "I can't appraise it for $X until someone else buys it for $X, and then that buyer can't get an appraisal of $X either."
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