Book Cadillac's condos to come down in price.

**bailey** · July-30-09, 02:18 PM

Book Cadillac's condos to come down in price

Most units still unsold

BY JOHN GALLAGHER â€¢ FREE PRESS BUSINESS WRITER â€¢ July 30, 2009

Faced with the worst residential real estate market in decades, the developers of the Westin Book Cadillac Hotel are relaunching the sale of the condominiums atop the hotel with a new campaign and price cuts on remaining units.

Prior to the hotel's grand reopening last October, Cleveland-based developer John Ferchill had taken purchase orders on almost all of the 64 condominium units on the hotel's upper floors, including the priciest at $1 million or more.
But the collapse of the economy, which led to a nationwide credit crunch, prevented many buyers from closing on their units. Only about 12 deals closed.
To jump-start a new sales effort, Ferchill said Wednesday he is putting all the unsold units back on the market and cutting the prices 10% to 35%. A few units that had been priced at $289,900 when first offered for sale in 2006 are now listed at $199,900.
Jeff Glover, manager of agent development for Keller Williams Real Estate, the listing broker for the project, said a by-invitation-only reception will be held at the hotel this evening for potential buyers.
For more information about the sale, visit the Web site www.BookCadillacResidences .com.

Wasn't there a bet on the site about how many of the 64 would actually close? I seem to remember some folks getting pretty testy at the suggestion that the sales the builder was claiming a few years ago were exaggerated.

**Detroit500** · July-30-09, 02:26 PM

But look at how foolishly they are continuing to market this project. They tried the "invitation-only" route, and no one wanted to buy them. Now, they're trying it again and not holding a general event which might find some prospective buyers.

EastSider · July-30-09, 03:05 PM

Originally Posted by Detroit500

But look at how foolishly they are continuing to market this project. They tried the "invitation-only" route, and no one wanted to buy them. Now, they're trying it again and not holding a general event which might find some prospective buyers.

Perhaps this should be cross-posted to Crap Journalism, but John Gallagher's usually more careful than that. If you go to the BookCadillacResidences web site, you'll see this

Call 734 259 1110 today or register on-line to schedule your private tour of the most luxurious hi-rise in Detroit.

The link to register for the shin-dig on the 30th is online. It's "invitation only" but anybody can request an invitation.

**bailey** · July-30-09, 03:11 PM

regardless of the "how" of the marketing, it's fairly obvious to anyone that has opened a newspaper that there is no "market" for these right now. 12 out of 64 managed to close in three years might be another hint. Do they lose tax credits if the builder rents them out? Why take a bath [[and screw the 12 that did manage to buy them by killing the comps) right now in this market?

**Detroitnerd** · July-30-09, 03:15 PM

Jesus. What dreary attitudes. I'd hate to see you guys when Henry Ford started marketing the motorcar. You'd be the guys shouting, "Get a horse!"

**lo_to_d** · July-30-09, 04:59 PM

Originally Posted by bailey

regardless of the "how" of the marketing, it's fairly obvious to anyone that has opened a newspaper that there is no "market" for these right now. 12 out of 64 managed to close in three years might be another hint. Do they lose tax credits if the builder rents them out? Why take a bath [[and screw the 12 that did manage to buy them by killing the comps) right now in this market?

Three years??? The units have only been available for closing for nine months. That's 1.33 units a month. Not great, but I have to bet that this is better than any new subdivision around the metro area.

**lo_to_d** · July-30-09, 05:02 PM

And as for the tax credits, no they won't lose that, and they won't loose the NEZ, but by next spring, they will lose the homestead status and the property taxes will triple until someone buys it as a primary residence. I believe they will rent some of the units.

**bailey** · July-31-09, 07:42 AM

Originally Posted by lo_to_d

Three years??? The units have only been available for closing for nine months. That's 1.33 units a month. Not great, but I have to bet that this is better than any new subdivision around the metro area.

They've been for sale since 06. Furchill reported that deposits were in on almost all 64 way before October of last year [[when people could actually start moving in). the challenge raised here was that those numbers were bullshit and no where near that number would actually close. and that was prior to the finance world implosion.

Quote:
Originally Posted by McIPor

A $650,000, 3500sf live work unit in Bham just sold for $210,000 last week.

Don't tell them that.... it takes away some of their smug "I told you so"....

apples to apples? a live work space isn't exactly the same thing and appeals to a different buyer and whole different niche. but for the sake of argument, I wonder who will make their money back first? Someone who just lost 35% of the value of their purchase in the Book Caddy...or someone who over the last year lost 35% of their value in their condo in B'ham?

spiritofdetroit

what is your source for the information that the hotel is failing miserably?

http://www.portfolio.com/business-tr...Hotel-Doldrums

"The statistics are scary," admits Shannon Dunavent, general manager of the Doubletree Guest Suites hotel that was lovingly carved out of the carcass of the Fort Shelby. "I've been working in Michigan for 20 years and I won't lie to you. There's no new business in the market. We're all trying to steal from the other guy to survive."

maybe not "failing miserably" but struggling mightily?

EastSider · August-02-09, 01:56 PM

Originally Posted by EastSider

Perhaps this should be cross-posted to Crap Journalism, but John Gallagher's usually more careful than that. If you go to the BookCadillacResidences web site, you'll see this

Call 734 259 1110 today or register on-line to schedule your private tour of the most luxurious hi-rise in Detroit.

The link to register for the shin-dig on the 30th is online. It's "invitation only" but anybody can request an invitation.

My guess is that since anybody could call and register for the event on the 30th, maybe you could call them and see if they have any more planned.

**bailey** · August-03-09, 08:14 AM

Quote:
Originally Posted by bailey

I don't think anyone on this thread is advocating why people shouldn't invest in these places, what is being pointed out is the reality that people aren't. And those who did, just got screwed by the builder deciding to fire sale the condos.

The fact that there's a NATIONAL deep recession and real estate prices in ALL of SE Michigan have been in a severe tailspin... seems to be lost somewhere in your argument, doesn't it Bailey?

reading comprehension seems to be lost in yours G. As noted in multiple postings, the condos have been for sale since 2006. There was a discussion way before October of last year that the builder was touting unrealistic numbers for that entire time...as Croweblack confirmed. IIRC, things like the pricing being way out of whack with reality, the end of exotic mortgages and the further contraction and loss of jobs in auto industry [[due, at that time to 4.00+ a gallon gas) were support for the position that the claims Ferchill was making about sales numbers and the market supporting the development were clearly bullshit, had no basis in reality, and would not be realized. Someone should pay up on the bet, is all I'm saying.

My observation here regarding the Book's fire sale is that if Detroit is such a "great" investment for the long term as many keep claiming here [[but few actually buying in...strange), why isn't the builder holding on to the places and renting them out instead of slashing prices and burning those 12 [[out of 64) that bought one? If they don't sell for a few years, it's not going to break the project. At least renting them out will cover some of the costs. The money maker is and was always, the Westin. It seems like a strange decision to devalue and knock out the "prestige" of a "premier" property so soon. $199,900 sort of kicks the chic right out of the development.. no? I mean, what's next? An auction like at the Ellington?

There are a couple of things I see; a) Ferchill has reversed course and has no long term optimism about a recovery in Detroit condo prices so Ferchill wants out now before further collapse, or b) He never had it in the first place and the condo side of the development was a sop to those who held the purse strings on those tax credits and subsidies that made the hotel possible. Now with what little market there was for this type of development long since tapped out, Ferchill wants out as fast as possible.

Either way, doesn't really bode well for any adaptive re-use of similarly situated buildings.

**3WC** · August-03-09, 05:06 PM

Ferchill has little, if anything, at risk, as a practical matter, as a result of the failure of the condo project.

The ultimate losers are MI taxpayers. Ferchill borrowed $6 million from MSHDA to develop the condos [[after having been turned down for a grant in that amount.) MSHDA does not have a lien on the condos; it has however, a lien on Ferchill's "equity" in the entire project. The equity is presumably worthless as he has only $3 million in cash invested [[virtually all paid to Butzel Long for legal fees probably.) Ferchill also borrowed $20 million [[as I recall) which he put into the deal, but the lender on that tranch has a lien superior to anything MDHDA has for security.

It's called social investing; MI is good at it.

**ghettopalmetto** · July-30-09, 03:08 PM

Originally Posted by bailey

[b]

Wasn't there a bet on the site about how many of the 64 would actually close? I seem to remember some folks getting pretty testy at the suggestion that the sales the builder was claiming a few years ago were exaggerated.

Said "testiness" was before the bottom fell out of the banking system in October.

EastSider · July-30-09, 03:28 PM

Originally Posted by ghettopalmetto

Said "testiness" was before the bottom fell out of the banking system in October.

But is the inability of the BookCadillac to sell these properties because of the banking system's problems or because the downtown market can not support them, regardless of the insolvency of the banking system?

**bailey** · July-30-09, 03:28 PM

Said "testiness" was before the bottom fell out of the banking system in October.

IIRC there were plenty of cancellations prior to that, which is what predicated the bet. could be wrong. cant find the thread.

**Meddle** · July-30-09, 05:19 PM

A million bucks? Downtown Detroit? What the hell are they smoking?

$200K for the top unit and $80-$100K for the others and they'll be fine.

crawford · July-30-09, 05:50 PM

Originally Posted by Meddle

A million bucks? Downtown Detroit? What the hell are they smoking?

$200K for the top unit and $80-$100K for the others and they'll be fine.

Exactly, THIS is the correct pricing.

Until we see this sort of pricing, they can do as many "exclusive events" as they like. They are just wasting money. Even 400K for a penthouse unit is insane.

croweblack · July-30-09, 06:29 PM

Those 13 poor bastards that bought at those laughable prices.

God, I feel sorry for them [[there may even a couple of them on this board)

Now just wait till the hotel goes out of business or when Westin pulls the flag, then the prices will really fall

Imagine having paid 300K for a condo on top of the Pontchatrain!

Detroit_ExPat · July-30-09, 06:58 PM

I believe they will rent some of the units.

Give it another three years, and the lower floors will be let out to Section 8 tenants. [[Guaranteed rental income is better than nothing.)

Now just wait till the hotel goes out of business or when Westin pulls the flag, then the prices will really fall...Imagine having paid 300K for a condo on top of the Pontchatrain!

Yep. That's gonna suck hard for those unlucky 13.

**McIPor** · July-30-09, 08:25 PM

Its probably the view of the Holiday Inn, ATT and McNamara Buildings thats keeping buyers away. Tear those things down for a better view.

A $650,000, 3500sf live work unit in Bham just sold for $210,000 last week. Not much hope for the Book units no matter what they tear down for better views

**softailrider** · July-30-09, 08:42 PM

From what I understand, mortgages are very tough to get for condos these days. Way harder then for freestanding houses. Selling those remaining units is going to be difficult.

A friend of mine bought a condo in Las Vegas, at one of those highrises just off the strip. He paid just over 500000.00 about a year ago which he said was a steal. Since then the devolpers have lowered the price on his style unit by 150000.00. Nobodys falling over themselves to buy them either.

MIRepublic · July-30-09, 08:47 PM

Originally Posted by McIPor

Its probably the view of the Holiday Inn, ATT and McNamara Buildings thats keeping buyers away. Tear those things down for a better view.

A $650,000, 3500sf live work unit in Bham just sold for $210,000 last week. Not much hope for the Book units no matter what they tear down for better views

You have got to be kidding me that you think it's the views that are holding back buyers. I really hope your screenname doesn't indentify you as working for McIntosh Poris. That's be embarrassing, for them.

**McIPor** · July-30-09, 09:42 PM

. [quote]

Originally Posted by MIRepublic

You have got to be kidding me that you think it's the views that are holding back buyers

That is the reason being given for wanting to demolish the Lafayette Building. Look at the Holiday Inn, ATT, McNamara Fed, and Lafayette Buildings and let me know if you think I'm kidding or not

**Trumpeteer** · July-30-09, 10:08 PM

Incredible the number of real esate EXPERTS on this forum. Your attitude really shows well..as in half empty

**spiritofdetroit** · July-30-09, 10:30 PM

what is your source for the information that the hotel is failing miserably?

**Gistok** · July-30-09, 10:36 PM

Originally Posted by MIRepublic

You have got to be kidding me that you think it's the views that are holding back buyers. I really hope your screenname doesn't indentify you as working for McIntosh Poris. That's be embarrassing, for them.

MIRepublic... go to thread "Lafayette Buildings Top Two Floors Subsiding"... read pages 3 and 4 of said thread... and then come back here and you may want to "rephrase" your post....