The 679 unit condo complex located at 1281 Ninth Ave, is going through some difficult times, to say the least. According to the Daily Transcript, the Canadian developer, Pointe of View, had to give back the first 71 buyers of Vantage Pointe their deposits. The building failed to get their certificate of occupancy last week, due to financing issues. Fannie Mae now requires new developments to have at least 70% of new construction buildings to be sold before theyll lend on it, opposed to the old 51% requirement.
With less than 300 sold, Vantage Pointe wasnt even close to making it. As a result, the developer is working with the Department of Real Estate to sell the development in phases, allowing them to reach the higher occupancy restrictions. Vantage Pointe is also going to be renting about 250 of its condos, lessening the amount of inventory it has to sell.
According to Russ Valone of MarketPointe Realty Advisors, theres an 11% vacancy rate in San Diego rentals. Valone feels that Vantage Pointe rentals will give prospective downtown buyers a good feel for what true condo living feels like, opposed to less quality, apartment buildings. My problem with this, is that Vantage Pointes location isnt that great and a huge part of downtown living is the convenience factor, which renters wont get there.
Regardless of what happens, Im sure that there are 71 very happy people out there who just got out of, what I think, is probably a terrible investment. Buyers need to remember that location, views, price and uniqueness are key factors in a good investment “ none of which I think Vantage Point offers. I guess well have to wait and see.
Click here to see some great downtown San Diego real estate deals.