Old Town’s new Monarch condo development, one of the landmark projects in the redeveloping Braddock Road Metro area, has fallen prey to the dismal real estate market and is temporarily converting to rental units, the project developer said.
“This is a really tough market, and we were hoping that we would have more settlements,” said Ahmed Alhussein, president of Diamond Properties, the project developer. “But people in this market walk away from their deposits, and we’re faced with a problem making this project work.”
The developer sold only 28 of Monarch’s 168 condos between August 2005 and last week. Seventy-nine other potential buyers walked away from their contracts, Alhussein said.
Diamond Properties’ switch to rental echoes moves made by many other developers in the D.C. region as the downswing in the housing market has made buyers and financing scarce.
Between January and September 2007, area developers canceled 2,900 condo units and converted an additional 8,400 condos to rentals, according to real estate research firm DeltaAssociates.
Few new condo projects are planned for the next two years, said Ken Johnson, chief executive of DCRealEstate.com.
“In the next 24 months, there’s nothing going in, in the highest-priced neighborhoods, because nobody is financing,” he said.
Alhussein said he rejected the idea of slashing prices at the Monarch because he felt it would be unfair to those who had already bought. He decided not to sell the building to an apartment operator for the same reason.
“We take a lot of pride in this project – even if it takes additional capital, we want to hold all our 140 units that are unsold and go for the rental program temporarily, for one or two or three years,” he said. “When the market comes back, we are willing to resume sales of our condos.”
In the meantime, Alhussein has brought in Kettler as the leasing company and said he has developed a maintenance program to preserve the quality of the building.
