For the fourth time in little more than a year, units at a swank Philadelphia condominium building will be offered at auction.
The 35 condos set to go on the block Nov. 21 are in a new high-rise at Waterfront Square Condominiums & Spa, in a gritty, formerly industrial area, near the foot of Spring Garden Street, on the Delaware River.
The condo's nearest neighbor is the SugarHouse Casino.
Lest you think the casino is the reason the 22-story Reef tower has not sold more quickly, residents who live there say SugarHouse is, so far, a plus - they like it for the vitality, restaurants, and community it adds to what had been a wasteland.
"We are happy to see development. It's exciting to feel we live in a neighborhood now," said Shari Karpo, a dental hygienist who moved with her husband four years ago from a large single home in Huntingdon Valley.
They got a place with water and bridge views, lots of green space, parking for guests, enough room, and at an affordable price, she said.
The Karpos' apartment, on the 17th floor of the Regatta building, looks north directly onto SugarHouse. "I walk in my front door. I have floor-to-ceiling windows, and my main view is SugarHouse," she said. "I am very excited to have the casino for lots of reasons. It's a nice modern building. They spent $4 million on landscaping. The casino executives are thoughtful and very receptive. They seem to want to be good neighbors."
"I look out my window and see green grass, trees, bushes, and flowers. That was not there prior to SugarHouse arriving. There was certainly talk in the condo about worries of traffic. It has not come to fruition. Because the casino is open 24/7, there is no particular rush of people at any one time," she said.
"Now we have security all the time. Police are always visible. The casino has built a beautiful brick promenade along the river. Myself and other residents have a new place to stroll. We feel like we are in the middle of all the fun and activity now."
Stephen Schachman has lived in Waterfront Square 31/2 years, and he thinks the casino "is a great plus. I can walk out my door now and get a hamburger, if I want. There's been no change in traffic whatsoever. They've done some nice improvements with the road - it's easier to get off I-95."
Schachman, who runs a Center City lobbying firm, said the casino made that stretch of north Delaware Avenue "more of a community. There are more people around. Things are happening. There is no traffic, no noise from the casino that's at all noticeable.
"I love to sit on my balcony at night and smoke a cigar," Schachman said. "You don't notice anything at all out there, from the noise. It's so peaceful and wonderful to sit by the water, and yet you are in Center City in a matter of minutes. I could not be happier with the location and the amenities."
The first two towers at Waterfront Square, completed in late 2005 and early 2006, are sold out, except for one unit.
The newest 179-unit high-rise, called the Reef, was 72 percent presold when Wall Street financial markets tanked in September 2008. One of the lenders was Lehman Bros. Holdings Inc., which collapsed.
Completion of the Reef was delayed more than a year, until April 2009. During that time, 60 percent of buyers who had signed contracts backed out, said developer Doron Gelfand.
"We had a big success with the first two towers, and 72 percent presales with this building," Gelfand said. But with the credit crunch and delay, only 12 percent of the original buyers closed.
Gelfand said he saw success with the recent auctions of condo units at the Murano, at 21st and Market Streets, and the Phoenix, at 16th and Arch Streets.
"We are going out to auction, with a minimum price that is about 60 percent off the original selling price" - $200 a square foot vs. $500 a square foot several years ago, Gelfand said. "It's a big risk, but on the other hand I cannot fight the market. The people will come, and at the end of the day, they'll decide the real price."
Thirty-five condos will be auctioned, including four one-bedroom, 11/2-bath units; 16 one-bedroom-plus-den, two-bath units; five "junior" two-bedroom, two-bath units; and 10 two-bedroom-plus-den, two-bath units.
Minimum bid prices will range from $195,000 to $415,000.
The auction will take place at 4 p.m. Sunday, Nov. 21, at the Hyatt Regency Philadelphia at Penn's Landing, 201 S. Columbus Blvd.
Waterfront Square is a gated community on 10 acres. It boasts the largest green roof in Philadelphia - grass covering the parking garage - and has round-the-clock security, a clubhouse, fitness center and spa, swimming pool, and 24-hour concierge in each tower building.
Jon Gollinger, East Coast chief executive officer of Accelerated Marketing Partners of Boston, will run the auction. He ran prior actions at the Murano and Phoenix.
The hope is that auctioning off 35 condos will establish lower price points and spur sales.
"We specialize in the marketing of high-rise luxury condominiums, typically developments like Murano, where the reasons for the auction are either saturation or a stalled real estate market - or a market that doesn't know what to price things at," Gollinger said.
In April, 54 condos at the Phoenix were auctioned. In June 2009, 46 condos sold at auction at the Murano. Nine condo units at 257-59 N. Second St. in Old City, known as Cu257, were put up for auction in May.
Real estate auctions are becoming more common. The idea is to reduce unsold inventory and help create interest in the real estate market as a whole.
Broker Paul Lipowicz with Keller Williams Realty, which is selling the newest Waterfront Square condos, said feedback from prospective buyers about SugarHouse "has been either ambivalent - a nonissue - or slightly positive. There's been very, very little negative feedback. I've had maybe two people in five months remark about the casino."
"The reason there's been a problem with selling is, the real estate market has tanked," Lipowicz said. "We cannot get people loans because of the Fannie Mae lending requirements. The developer was behind in delivering the project. There are many reasons for this auction. The casino, which is a month old, is not one of them."
Center City real estate broker and developer Allan Domb said, "The lesson here is that peripheral locations are great in booming times, but in recessionary times they suffer most."
"There were a lot of projects developed on the fringe of the city," he said. "In a booming market, the fringe areas do pretty well. In the market we are in today, you better be in the bull's-eye of your target, if you want to sell real estate."
What's the bull's-eye? Rittenhouse Square, Washington Square, Society Hill, he said.
"The potential of Waterfront Square was there, but due to the recession and to the pullback of development, everything was halted," Domb said. "Philadelphia is doing much better than every other place in the world, but the whole economy has adjusted downward. There's no place in the United States that hasn't adjusted down."
Tours of the 35 condos to be auctioned will be available daily, starting Thursday - from noon to 7 p.m. Tuesdays and Thursdays, and noon to 5 p.m. on other days - through Nov. 20. Waterfront Square is at 901 N. Penn St., just off Delaware Avenue, near Spring Garden Street.
For more coverage of the Center City condo market, go to http://go.philly.com/condos
Contact staff writer Linda Loyd
at 215-854-2831 or firstname.lastname@example.org.