With Pre Sales At 25%, Rollin Street Going Apartments

Just had this forwarded to me. Here’s the email from Vulcan to people who had signed purchase and sale agreements for Rollin Street, a 197 unit project, at Denny and Westlake. Here’s an old fact sheet [pdf] since they’re taken down their website.

Dear [homeowner],

As you know, we have been exploring how the financing environment and changes to Fannie Mae pre‐sale requirements will impact Rollin Street condominium sales and closings. Our goal has been to ensure that you would be able to complete your purchase and move into the building in a reasonable timeframe after construction completion. Unfortunately, pre‐sales at Rollin Street are at approximately 25%, which is below the 50 – 70% threshold Fannie Mae and most mortgage lenders require for buyers to obtain financing. Market conditions tell us we will not achieve the required minimum 50% pre‐sales in a short timeframe. As a result, we have decided to convert Rollin Street into a rental apartment building. We will refund your earnest money deposit (currently safely held in an escrow account) and any deposits you made for upgrade finish options.

We had expected to be able to communicate this decision earlier, but the process of getting permission from our construction lender took much longer than we had hoped. John L. Scott will be calling each Rollin Street buyer in the coming days to set up individual meetings. At these meetings, you will be able to rescind your purchase contract using a standard Form 51 Rescission Agreement (sample form enclosed for your reference). Below is an overview of the rescission process.

1. A member of the John L. Scott team will call you to set up a meeting at your convenience. We expect these meetings to take place starting 5/04/09.
2. At your individual meeting, you will be able to rescind your contract by signing a standard rescission agreement (Form 51).
3. John L. Scott will notify the escrow office, Chicago Title, that your purchase contract has
   been rescinded.

4. Chicago Title will then mail you a check for your earnest money deposit. Since all Rollin Street buyers filled out a form W‐9 for the title company at the time of the earnest money deposit, refunds from escrow will include any interest accrued. Alternatively, you can arrange to pick up your check at their offices.
5. If you pre‐purchased upgrades for your Rollin Street home, that deposit will be refunded to you by Rollin Street Venture, LLC in the form of a check and will be sent directly to you about 2 weeks after you sign your Form 51.

We appreciate the commitment that you have made to the South Lake Union neighborhood. Recognizing this, we will offer you a credit to apply toward a purchase at either Enso or Veer Lofts–our other two condominium projects in South Lake Union. You are also eligible for a lease credit to apply toward renting a home at Rollin Street. We look forward to presenting the details of these programs at our individual meetings. We hope you will take advantage of one of these opportunities and continue to choose to live in the South Lake Union community. Although the property will no longer be delivered as a condominium, we are very excited about Rollin Street as an apartment building and the vibrancy that it will still bring to the South Lake Union neighborhood.

My colleague, Luke Brown, will be calling you soon to follow up on this letter. You can also reach Luke directly with any questions you may have at [removed] or [removed]. We appreciate your continued patience throughout this process, and look forward to speaking
with you.

Sincerely,
Ada M. Healey
For Rollin Street Venture, LLC

I’m sure this is good news to all the Rollin buyers looking to get back their deposits. The question is, will they rent? I’m curious to know how much the credit will be.

It is probably no surprise that I hear that Vulcan is looking to replace John L Scott for Veer and Enso. Perhaps they’ll even bring it in house like Schnitzer has done. Which really makes the most sense since Vulcan already does all their own marketing.