The Washington Business Journal reported this week that 75% of the new Montrose condo (FKA the Hurt Home) has already been sold.This is remarkable for several reasons. First, the building is not even done yet. Second, the one and two bedroom units are priced between $1.65 to $2.39 million. Finally, it’s most remarkable when you remember that the developer bought the building from the city for only $450,000.
The story of the Hurt Home condoification is long (just read here) but here are the quick facts:
- DC announced its intention to surplus the former institutional building way back in July 2009.
- The only bid that came in was from the Argos Group, and they originally proposed to build 41 units.
- The neighbors lost it.
- Eventually Jack Evans stepped in and negotiated the number of units all the way down to 15.
Negotiating the number of units down also meant lowering the price that the developer would pay. Originally the price was somewhere around $1.5 million. Part of the rationale was that the cost to remedy decades of structural neglect of this historic building was a relatively fixed cost. The developer argued that the fewer units it could build, the less it could recoup the construction costs, and thus the less money it was willing to pay up front.
(You might ask, “Aren’t you just talking about how many slices a pizza has? If they had to build fewer units, wouldn’t they get that money back by selling larger units?” Yes and no. They originally planned a large wing off the back which would have returned a lot more money. So it was in fact a matter of a smaller pizza, not fewer slices, so to speak.)
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