In my last post, I mentioned sales at the Montage were so-so. Well, that got the attention of Montage staff real quick! They invited me to their sales office to have talk about their progress, what they are up to, completion dates, and more. This was my first trip to their sales office, and I was impressed. The lobby is spacious, with the progress of downtown Reno's makeover plastered all of the walls. A model of the Montage sits in the middle of the lobby.
1. Sales - In the current real estate market climate, sales are what everyone wonders about. So here's the skinny. They have 40% of their units sold. That's SOLD, not reserved, which is an important distinction between the two. Last year, people either had to convert their reservation to a sale or forfeit the unit and get their reservation deposit back. When that happened, most of the investors and flippers backed out.
I asked Carol Griseto if she felt comfortable with the 40% sold number, considering the current market, and she said they were very satisfied with that number thus far, and that there is a consistent stream of traffic through their sales office, and consistent sales every week. During my visit at their sales office, there were quite a few people touring the model. The majority of their buyers are empty-nesters, people of tired of suburban life and wanting to trade it in for city life.
Their sales have picked up significantly after they were able to begin taking prospective buyers into the building tower, while under construction, and have them 'pick out their view'. Every day during the construction workers' lunch hour, they give tours of the tower units, and on the weekend as well. She mentioned it's very difficult to sell something when it doesn't yet exist. Even as construction is underway right in front of their faces, many prospective buyers would still ask 'is this project happening for real?'. Perhaps this is due to other certain projects being put on hold.
2. Progress - I received quite a few emails regarding the progress of the Montage. According to Carol, if people don't see construction workers hanging from the sides of the buildings, they think nothing is going on. Construction is humming along on all levels of the tower. All the 'mechanicals' of the building are complete.
All windows for the tower should be up within the next two months, and at that point balconies will be installed.
No major designs changes are planned so what you see in the renderings is what the building will look like, although they have made some changes to the two decks; they redesigned the pool to have more shade (being from Chicago and only living here two years, Fernando didn't quite anticipate the amount of sun we get haha) and they scrapped the desert plant-theme landscaping on both decks for a more green, grass-and-tree landscaping concept. Their sales staff promised me updated renderings of the two desk so I'll post those as soon as I get them.
The Tower should be completed by the first quarter of 2008, and the loft/rowhouse/retail area (the 2nd-street-facing side) will be completed by late 2008. Carol commented that area of the building is more complex, as they actually have to put in flooring, ceilings, and other major support mechanisms and of course the pool deck on top.
So there you have it! Montage is still humming along on track, and it sounds like some of the more dramatic exterior changes will happen in the coming months, with all the windows installed and balcony installation beginning.
According to Carol, L3 Development somewhere has updated renderings of the 10 North Virginia Project, their own flair added to the existing canopy and building, however I can't find them anywhere, and she also mentioned the City Council already made their decision on who got the project, but I couldn't find any record of it, and from the tone of her answer it sounded like L3 Development and their Chicago partner go the deal, but I don't want to call that out officially until I find some verification. Geez was I asleep at the wheel a few days and completely miss the final decision of 10 North Virginia? Sounds like it. Can anyone of City staff confirm this?
UPDATE: City Staff confirmed "The Redevelopment Agency Board approved three "finalist" development teams in May of this year to continue in the developer recruitment process, those are 10 North Virginia, LLC (which is L3), Union Property Capital, and Inverness Equities. At this time, each team is working to refine their proposed concepts for the site. Agency staff anticipates narrowing the process to a single, successful development team this month (July), with a report and agreement for the Council/Board's consideration upon their return in August. At that time, the Council/Board may approve the staff recommended development team to construct the retail portion of the plaza. No decision has been made yet.
L3 Development still plans to close on the Fitz in October of this year, however no firm plans are yet set for the property regarding rehab/renovation.
Next week I'll get the opportunity to interview Fernando Leal himself, which I am excited about, because he is the one that carries the vision of a new downtown Reno in his head, and I'll be pulling that vision out of his head and onto this site for you guys. Stay tuned!
Comments:Post your comments
Posted by: Steve - 6/30/2007 4:47:33 PM
Great summary. I can't wait for the interview. A lot of questions come to mind... 1) How will the trench covers be designed? Will they contain retail? 2) How many blocks will be covered (1, 2 or maybe even 3???) 3) How will the plazas interface with the Montage and the Fitz and ??? 4) How large will the "remodeled Fitz" be? How might its ground level footprint change? 5) What changes might be in store for the old Fitz Parking garage? Upgraded ground level retail? Possible skybridge to the hotel casino? 6) What is up with 10 North? Does L3 really have the project? And, if so, what do they plan? 7) Are there more projects that Leal might undertake? How about our "favorite" eyesore (Kings Inn) - :-) There are so many great changes that "could" happen. Give us a hint :-)
Posted by: SteveJ - 7/14/2007 9:06:24 AM
"40% Sold" is no suprise! Last year I worked at the City of San Diego. I can't speak for Reno, but here is the skinny on San Diego. The city won't all builders to built downtown condos unless they have a construction loan. Banks will generally fund construction loans until the builders have pre-sold 40% of the units. It is common knowledge that in San Diego these buyers are contractually "locked-in" and can't resell until the their condo is completed. At that time the builder or the bank will repossess many units if the decline in condo value exceeds the value of the homebuyers original downpayment. Consequently you see a flood of for sale signs at final completion of the project. Conclusion: "Good luck Montage, but "40% sold is nothing to brag about, unless it is the only thing to brag about!"