Wolf Depner - Penticton Western News Published: July 02, 2009 6:00 PM
Alysen Place, the financially troubled condominium development in the south end of Penticton, is once again selling units, albeit slowly. The project has been in receivership since the end of the March after running into financial difficulties late last year. Receiver D. Manning and Associates last month announced that the remaining 35 units would go on sale at deeply discounted prices, with Vancouver-based MAC Marketing Solutions handling sales. Partner John Ryan said his company has so far sold eight units, including two of the most expensive ones. That leaves 27 units up for sale. Another 34 units sold before the project ran into difficulties. When the receiver announced the sale last month, expectations ran high. The accompanying press release dated June 9 billed Alysen Place as “Penticton’s Signature Real Estate Development” and Ryan predicted strong and immediate sales at the time.“With prices far below replacement cost we expect a very rapid sellout,” said Ryan. “With concrete construction, quality finishes, and incredibly low interest rates, this is likely the most affordable opportunity to own a prime Okanagan condominium.”
Two weeks into the sale, Ryan acknowledged that numbers so far have lagged behind expectations, noting that the Okanagan is a “little behind the curve” when compared to the real estate market in Vancouver, where comparable sales have drawn more interest thanks to a still relatively strong real estate market. “It (the Okanagan) is definitely a different market,” he said. Yet, Ryan also added, the sale has generated a lot of interest. “We have had a good response, as far as people coming through the doors,” he said, expressing confidence that his company will be able to move all units, possibly by fall. “Will we see a sell-out? That is definitely our marketing plan,” he said. Early marketing efforts so far have focused on the Okanagan, Ryan said. They will now expand to seek out buyers from the Lower Mainland, southern Alberta and the Prairies. Ryan noted that the units represent an unprecedented mix of quality and price, noting that the concrete-built units could not even be constructed for the price, for which they are being sold now.
Discounts range from 20 to 55 per cent, with prices starting as low as $249,900 to a high of $699,900 for the penthouse. The average discount exceeds $200,000 per home. The units, in other words, are selling for far less than their actual construction costs and it appears highly unlikely that their prices will come down further. “We feel that we priced it to sell and see no need to discount any further,” Ryan said. The sale became necessary after the project under the guidance of developer Jake Bergen ran into undisclosed financial difficulties towards the end of last year. The project eventually went into receivership at the end of March as it got caught in the real estate downturn in the wake of the current economic crisis. Bergen had first proposed his three-tower project more than three years ago as part of a broader scramble for development opportunities in the south end of Penticton near Skaha Lake.Developers had identified the area as an attractive and affordable alternative to the northern end of Penticton, where development opportunities along Okanagan Lake have dried up. The area also attracted other developers, including Mel Reeves, who was planning an even more ambitious project near Alysen Place. Yet it turned out to be a harbinger of things to come when Reeves announced last year that he would stop his project because of financial difficulties without ever having broken ground.
The demise of Reeves’ project and the receivership of Alysen Place has not only hurt many local trades and sub-trades, who are still waiting to get paid, but also forced City Hall to re-evaluate its financial books. Mayor Dan Ashton, commenting on the situation last month, said he expects Penticton to weather current trends. Yes, some proposed developments have not gone ahead, said Ashton. But does this not mean that the city does not remain an attractive place to live and do business, he said, pointing to a host of new developments on the northern and southern end of Penticton such as 100 Lakeshore Drive and the Waterford respectively. Ryan echoes this point in his sales pitch. The current receivership sale is an opportunity to buy into an area that will look very different five years from now.
No comments:
Post a Comment