It’s Official! The Vue to Become Luxury Apartments

Although MCL said it would never happen, it has. Northwoods has decided the best option for the Vue Charlotte in today’s economy is to rent the units as luxury apartments.

Kerry Singe reports this in today’s Charlotte Observer in an article entitled Mostly-empty Vue uptown condos turning into luxury apartments.

What does this mean for the current owners? Based on reports I have received, I think they will be presented offers near current market prices to be bought out. My guess is some will elect to do so and some won’t.

For those that stay, I think they will find the same clientele they would have found had all the contracts closed. Prices according to the article will run between $1250 and $5000 per month. My guess and hope is the building will fill up quickly. By many reports, there is much pent-up demand to move into the Vue.

We are in the final stages here of the Vue Charlotte blog. Let’s get our mind around this news, enjoy the 4th of July, and do a final recap.

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The Vue Will Now Be Different

Yesterday marked what pre-sales buyers had feared would happen when this blog began 2 years ago: that the condos would be auctioned off to the highest bidder just like they were at The Vue Orlando. There was of course a lot of kicking and screaming from MCL at the time saying that this market was different, but it turned out Charlotte was no different from most markets around the country. The Real Estate bubble was not just a Florida phenomenon.

At this point in the process, the fact that the condos were auctioned off for 103M yesterday must come as a relief to all parties: the pre-sales buyers, the folks that did go ahead and purchase a unit, and MCL. The big mystery now is will these units be offered for sale at discounted prices or will they be sold as apartments. The big money seems to be betting on apartments, but we’ll see.

For the pre-sales buyers, there are still questions begging to be answered. First and foremost, why couldn’t MCL negotiate and offer fair market prices for the units, or at least meet somewhere in the middle? Clearly there must have been reasons, and it would bring some closure to all of us to know why. There is no question they did send olive branches here and there to certain buyers, but for the most part there was never any comprehensive effort to reach out and to communicate to buyers that they wanted to work with us as a group. MCL maintained throughout they would only work only one-on-one.

The problem with this? That started the rumor mill. “They offered me this…what do you think?” “They sued me for that, isn’t this outrageous?” “They are going bankrupt next week, don’t buy.” ” These are made up quotes but in the spirit of what this blog has been fielding over the course of its short life. We have tried here to publish the facts but because we got very little direct communication were left to speculate more than we would have liked to. In the end, I think though we got things basically right. And the reason this was so is because we got so much expert help from readers who were kind enough to share their expertise and what they knew.

Here are some links that will get you all caught up on the Vue Charlotte auction proceedings yesterday.

The Charlotte Observer Kerry Hall Singe reporting

The Charlote Business Journal Susan Stabley reporting

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Vue Charlotte Foreclosure Auction Date Set

The Charlotte Observer and the Charlotte Business Journal are both reporting that the Vue Charlotte will hit the auction block on June 12th. This is of course a very sad ending for MCL and the pre-sales buyers. For those that are in the building for the long-term, this may just be a temporary blow. Speculation is that the building will change to apartments, but we’ll have to wait and see. Links to the articles are below.

Kerry Singe, Charlotte Observer Article: Vue Condo Tower Hits Auction Block

Susan Stabley, Charlotte Business Journal Article: The Vue Charlotte Faces Foreclosure Auction on June 12th

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Residential Prices Fall in Uptown as Vue Charlotte Hearing Looms

Susan Stabley is reporting in the Charlotte Business Journal that the foreclosure hearing for the Vue Charlotte is set for May 21. Read about the current state of real estate trends in Uptown Charlotte and more about the Vue in her post: Uptown Charlotte Residential Sales Prices Drop 31% in March.

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Charlotte Observer Headline: Vue Headed For Foreclosure

Kerry Singe, business reporter for the Charlotte Observer,  jumped back into the Vue Charlotte fray with an informative article for us pre-sales buyers but unfortunately the news was not good. According to the article and lawyers Kerry has talked to, pre-sales buyers are probably out of luck as any new owner has no obligation to pay them back.

Our very own Rob Cummings is quoted as saying the current owners are worried about the building turning to rentals. I think that is a worry, but I hope not too much of one. As I have mentioned before, folks very knowledgable that have contacted the blog on real estate matters believe the building will command high-end rents and the clientele will be the same as it was originally intended to be. These high rents will tide things over for a few years until buyers come back.

It’s mentioned that Dan McLean of MCL promised the Vue would never go to rentals. For the current owners this may turn out to be the final of several promises that he simply was never able to keep.

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VUE From Home Plate: MCL is Going, Going, Gone!

Susan Stabley in the Charlotte Business Journal this morning that foreclosure proceedings have begun against the Vue North Carolina LLC and Dan McLean of MCL. How the Vue stayed in the game this long amazed many of us. It feels like we are in the 18 inning when finally Northwood Investors has ended the game with a blast over the center field fence.

This blog began in April 2010, over 225 posts ago, with this article:

Vue Condominium in Charlotte Buy or Walk Away

The units at the Vue Charlotte floors 1-25 will be ready in August. Are you going to follow through with your purchase? Much has changed since we placed our down payments in mid-2000. I am a purchaser who is facing the same dilemma you are: are the units worth what we paid back then? Given the change in the economy, let’s be realistic: there is no possible way. Despite current published prices that show we have “made money” it is unlikely that any are selling at these published prices or ever will in the near future. Will the Vue Charlotte work with the current purchasers and adjust the prices to a more realistic price level? So far from buyers I have heard from the answer is no. I personally asked if they would work with me to find an alternative buyer and they said there is too much inventory. Another question will be the banks. What will these units appraise at? And what happens when the banks most certainly appraise at a lower rate? The Vue is unlike any condo in Charlotte so there are probably no true comps but it certainly would command a premium over other Charlotte condos that are priced far less. So what are you going to do? Share your thoughts and concerns and hopefully enough people will come together so we can create a win-win situation at the Vue. We all want to see the Vue succeed but we don’t want to lose our shirts in the process!

As it turns out now almost 2 years later, very few of us bought. Less than 20 of us in a condo with 400 units. Those that did are by most accounts pleased with their units but certainly worried about what is to happen. I think over time, the value will return to what they paid.

As I re-read the article I think about why MCL really never compromised with buyers om price and shared in some of the losses so that more units would close. I am decently certain when all the facts do come out that they probably had no choice per the legal agreements with their lenders.

This filing is a painful end for MCL but a new beginning for the Vue Charlotte. Northwoods will be able to now do what MCL seemingly couldn’t: offer luxury units at fair prices either for rent or to own. Either way, it is going to be THE PLACE TO LIVE in uptown Charlotte.

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Many Vue Charlotte Questions that Await Answers

The blog has been pummelled with questions basically asking…”what does this all mean?” I have put out several queries on this subject and there are no definitive answers. No one can tell me: here is what is about to happen based on reliable sources.

Having said that, there seems to be a likely scenario, based on what has taken place at similar projects around the country. Again, I have zero evidence this will happen, so this must be interpreted as a best guess.

If MCL had the means to buy the note at the huge discount that it was sold for, would they not have done so? Whatever the reason, means or otherwise, they didn’t buy it.

So unless we hear otherwise, and again, I am speculating, MCL for all intents and purposes is gone. A foreclosure proceeding will take place and the title will move to the new owners.

Assuming this is the case, what will these new owners do? Will they spend time trying to sell the units or will they virtually instantly rent out hundreds of them to the high demand that is out there? Again, a best guess based on other projects that underwent a similar fate is that the Vue will become a rental community.

The blog is open to other views! In fact, I hope there is a rosier one! This is only a guess, but I think an educated one. The only wildcard is that MCL has so much experience in this business that if anyone can forge for themselves a different fate than similar projects have faced in other cities, it is them. No one would have guessed they’d have even been in the game this long. So that is the one bit of hope I can give to the current owners at the Vue and to the pre-sales buyers.

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Vue Charlotte’s Debt has been Sold!

Susan Stabley has just posted in the Charlotte Business Journal Real Estate Roundup blog that Northwood Investors has purchased the debt  both junior and senior for 100M.

This is a breaking story and I am sure we’ll find out more in the coming days, including the significance of this transaction on the future of MCL and the Vue Charlotte.  MCL is under a confidentiality agreement according to the article so is unable to comment.

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MCL in Default

The Charlotte Business Journal is reporting that the Vue is in Default on its 4 million dollar loan for the Vue.  R.J. Griffin (renamed Dunn Souteast), the contractor, has secured a court judgement according to the reporter, Susan Stabley.   The site is pay only, so this is all we can report so far since we are in default of our Charlotte Business Journal subscription (not really!)

I believe this is a huge setback for the current owners, several of which I have come to know over this period and are huge fans of their condos. What comes next we’ll have to see as we get more reporting in the coming days.

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The VUE Denies It’s Moving To Rentals

The Vue Charlotte is now denying that their mortgage is in default and that they are moving to rentals. Looks like there are some facts to sort out and that the drama of the Vue will just not die.

The Charlotte Business Journal is now also in the game, reporting in an article entitled ‘Vue Lender Marketing Loan’ that a company, HFF, began marketing the loan last week and there is interest by investors both in Charlotte and Miami.

Based upon what I have read in the press so far, and sources that have contacted me, I believe the Vue could be truthful in its statements that its intent is to not move to rentals, hoping that whomever buys these loans is able to sell the units as condos at certain (lower) prices. Those prices would obviously have to be significantly lower than they are now given that we haven’t seen a sale at the Vue in quite some time.   This would almost certainly require a good number of folks who have deposits at the Vue agreeing to jump back in and close, something the courts determined awhile back they are not required to do but may elect to do if able to buy closer to market prices. The price points would then have to be attractive enough to draw in many new buyers as well.

Is this possible? I simply don’t know. Is what I am saying above correct? I can’t say that either. It is just my best guess based upon what I know so far.

The Vue’s denial can be found here in the article entitled: Vue Developer Says Condo Won’t Turn Into Rentals.

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