Oh Vantage Pointe…what were you ever thinking…
Yesterday, Vantage Pointe announced that it “halted sales on the 679–unit condo project and is returning deposits to dozens of buyers who had been waiting to close escrow.” The San Diego Union Tribune also noted that this was the second time in the last year that Vantage Pointe has had to give deposits back – Vantage Pointe previously had refunded deposits to about 300 buyers due to new lending guidelines that required a higher pre-sale percentage. It’s hard to say that I’m shocked of the news, rather I’m shocked it took this long.
Currently there are approximately 200 tenants, with plenty of room for hundreds more. The UT reported that the $280 million project has defaulted on its $210 million construction loan earlier this year and that it has not been successfully sold to any investors.
The developer, Point of View, is a Canadian company that has never built anything outside of its native country(aside from Vantage Pointe obviously), but appears to be working on a project in Maui. And while I feel bad for them, I honestly have no idea what they were thinking when they built this development. The building is in a less than ideal location, it’s far larger than anything else downtown, they didn’t phase the building or sales and the timing was terrible. As Peter Dennehy, the VP of John Burns Real Estate Consulting, stated, “urban projects are tough with this number of units, they’re tough to pull off unless you have smoking market conditions”….I’d say that’s putting it lightly.
However, I do have to commend Pointe of View for returning the deposits and for paying buyers an additional $8000 since some can no longer qualify for the federal first-time buyer tax credit. I’m not sure if they’re doing this for everyone who would have qualified, but the UT reported that Pointe of View was doing this for at least one buyer. Hopefully, someone can come in and turn this project around, but it’s going to be tough. In my opinion, in order to sell it, an investor/developer would have to come in and restructure the development with fewer, larger condos and lower prices. I guess only time will tell.