Is this Cosmopolitan Condo Too Good To Be True?

I received a call from a great friend of mine from Portland last week.  She wanted to connect me with some buyers from New York.  They were here for the weekend and nothing more.  My goal was to show them as many good units as possible in less than 48 hours.  We saw a number a great units, but one of them stood out and I’m not quite sure why it is still available.  Is this one of many good deals that have gone un-noticed?

I think by now you are pretty familiar with The Cosmopolitan.  This a steel and concrete building that sits at 8th and Virginia in the Denny Triangle.  It is 34 stories, has a concierge, workout facility, roof-top deck, business, spa and much more.  When doing my research for the couple from NY, I noticed this 2 bedroom on the 27th floor.  As you can see (listing here), the price is set at $464,900.  The unit is bank owned and when I went through it, there were a few walls that needed to be touched up, but overall it was in good condition.  Keep in mind that this building is only 3 years old.

Now, you obviously want to know why I think its a good deal:

  1. First and foremost, I think its safe.  (Even with the Cosmo’s storied past, its a steel and concrete building with good upside).
  2. The view is amazing.
  3. It’s less then $400 per square foot. ( just ran an analysis yesterday for a client wanting a 2 bedroom CMA.  The average cost per square foot for 2 bedrooms were $535psf).  The analysis only included sales in the last 120 days in buildings that were 2005 or newer. That is a big difference.
  4. It is bank owned.  I would write an offer at $399,000.  If they say no, they you can determine what they will take. Even at $464,o00, this condo is a good deal.
  5. In August of 2008, 2804 which is the neighbor one floor up sold for $715,000. Now, can you convince me that the market reflects a $250,100 drop since 2008 for these units?  No.
  6. This unit originally sold for $735,000 in September 7th of 2007.  Does it matter what happened 2-3 years ago?  Not really, but to think that values should be down almost $300,000 dollars for this unit is absurd.

So the real question is…..Why do we think this unit is still on the market?  Your thoughts?

Learn more about the Cosmopolitan:

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  • Mike

    Re: Bullet points 5 & 6.

    Sadly yeah, the peak prices back in 2007 and 2008 are no longer a reality.

    Recent comps have shown a such a drop. #1604 sold on Mar 29, 2010 for $395,000, an appreciation of -12.7%/yr from it’s last sale price of $575,950 on Jun 18, 2007.

    #1204 sold on Mar 01, 2010 for $385,000, an appreciation of -15.1%/yr from it’s last sale price of $623,950 on Mar 23, 2007

    What is absurd is the 37.8%/yr appreciation that #2704 was able to sell for in less than 6 months when is sold for $735,000 on Sep 07, 2007 from $649,950 on Apr 20, 2007.

    An offer of $399,000 is a reasonable one for the bank to accept considering the recent comps of #1604 and #1204 since they’re probably the same floor plan, albeit on a higher floor.

  • http://www.urbancondospaces.com admin

    @Mike Thanks for the feedback. Times have definitely changed. Both 1604 and 1204 were distressed bank sales. Essentially they went to auction, were not purchased and were put on the market as REO’s. Much like those sales, 2704 is facing the same issue. The debt was too high for the bank to make the property attractive at auction. When you compare these prices to non-distressed units on the market, it makes them look like very attractive deals. One could argue that other 2 bedrooms in the building will sell for a higher price. Especially when they are non-distressed. When the REO’s and auction purchases decrease, the market should naturally allow for a higher price for these types of units. #2704 is much higher with big views. In most new construction sales, each floor comes with a $8,000-$15,000 increase. If we use the minimum at $8,000 (1604 sold for $395K, 11 floors x $8,000 would make unit 2704 $483,000).

  • Gabriel

    hi. just read all your messages and realize this should be a good buy. Less than 400/s.f. where can you buy one with a good view like this now. Good.!! Do you guys know there is any restrictions for rental and how much it’s usually be? I am quite interested and shopping around for this building for a long time. Don’t know it there is any for sale in the mkt right now?