Olive8 Condo – Midtown Seattle
The Olive8, at the edge of downtown and Capitol Hill, is in the mix for urban living. It’s steps away from the Paramount Theater, the downtown shopping district, close-by the new Whole Foods and a short hop over to Capitol Hill. This area of downtown is generally less active, aside from the cars on Olive heading to the I-5 at rush hour.
Olive8 follows the lead of The 2200 and Madison Tower by incorporating a hotel and many upscale amenities. The Grand Hyatt will reside on the lower 17 levels with residences from the 18th thru the 36th level.
The project includes more than 180 one-, two-, two + den and penthouse residences. The homes come with upscale interiors including Pedini italian cabinets, stone countertops, hardwood floors, stainless Leibherr and Bosch appliances, A/C, 10’+ ceilings and private balconies.
Residents will have access to the Hyatt’s amenities, including a full-service spa, fitness center with a 65 foot lap pool, housekeeping, 24-hour room service and concierge services.
Back a little on it’s location. It sits right next to the 33-story Qwest Plaza which blocks most of the west-facing views except from the “00” NW corner units. And, expect to spend at least $1,000,000 for those units. On the north, you need to be on or above the 28th story to have a view that’s unobstructed by the 720 Olive Way building (red brick). Finally, towards the east are additional projects that are proposed or under construction. Over the long-term, residences may feel boxed-in, but that’s fairly common for downtown living. The point is, just because there’s some open spaces now, doesn’t mean it’ll be there in 4-5 years.
Homes are on sale now and range from $500,000 to well over $2,000,000. Amazingly, many of the homes that face directly into Qwest Plaza have sold. At this time, most of the available homes are on the east and north side of the building. Visit Olive8.
I am looking for a presale loft or 1 bedroom unit!
Thanks for your assistance,
Dave
ibedroom,1 bath 500-600 sq.ft, 200-250,000/cash?????
Don & Olga, currently in Olive8, one bedrooms start at the $500,000 level. The most affordable option close in the downtown area would be Tobira. I’ll run a list of available condos in the $200-250 price range and will send them to you.
Does anyone currently own a condo at Olive8? If you do, are you nervous as much as I am? how do you feel about this economy? does it make you want to drop out and get your earnest money back? Does it make you feel that the price at Olive8 will be reduced and that you will get a better price than what you bought originally? Does anyone have any honest update on current Seattle market and especially Olive8, is it a good buy? please let me know of your thoughs.
Condogirl – review your purchase contract and addenda in respects to terminating the contract as you may forfeit the earnest money payment. Some contracts have tight language regarding buyer back outs and forfeiture of EM. Buyers at Gallery, Brix, and I believe 1521, will lose their EM if they’re unable to close. Escala’s contract is pretty tight as well. As an alternative, check to see if they will allow assignments. A smart developer will allow buyers to seek assignment of their purchase contract rather than having another unsold unit in their inventory.
I personally believe it may be at least another year, maybe two, before we’ll see values improve in the city core areas. If you intend to hold the property for awhile (5 or more years), you’ll be ok. If you anticipate re-selling within the next 2-3 years, you may not realize a net gain. The downturn provides at least one advantage, it has kept competitive projects out of the market. With the exception of Escala, we may not see another new condo building completed in downtown until 2011.
I currently own a condo in Olive8 and although the real estate market is terrible, there was still a big enough price increase from when we purchased in 2006 that we should be ok if we look to sell our unit immediately. The unit below ours just sold for much more than we paid when we originally signed docs. The problem is closing the home now. I know for a fact Olive 8 will not let you out of your contract without forfeiting earnest money, I tried. So now we are hoping to close, and sell immediately.
Thanks much for sharing your thoughts!!! I love this blog!!!
Any buyer’s at Olive 8 who are nervous about closing should look at my posting on craigslist. I’m actively seeking to take over an assignment on a unit currently under contract at the development.
http://seattle.craigslist.org/see/rew/847381063.html
I am also a buyer at olive8 and I am also nervous, “08 owner” you said you tried to back out, what made you change your mind from when you originally pre- purchased? is it the market condititions. and did you just ask for your deposit back or did you try and find a loophole in the contract?
reselling a unit at olive8 may be difficult as there will most definately be many flippers, flipping was still a good idea back when olive8 presold ( in 06 )and IMHO there will be a alot of people desperate to unload. just my 2cents
CondoBoy,
I totally agree that it will be very difficult to sell my unit at Olive8. I wouldn’t say I am trying to “flip it” because I feel that has a sense of greed to it. I would be happy just getting the deposit back and the 15k in upgrades we purchased. Anything on top of that would be just a bonus.
We tried to back out and get the deposit back, but were told that would not be possible. We could back out, but not get the deposit back. So now we hope to close and sell it immediately. We are obviously hoping to have a buyer before closing and I am sure what we would offer our unit at would be much less than they would offer. The reason we (my wife and I) are changing our mind is mainly due to market conditions and our personal financial stability. Things in ’06 are much different than they are now, which is unfortunate, because we think the building is amazing and the views from our unit are unbelievable!
Seattle29,
Are you still looking to take over an assignment at Olive8?
I agreed. I confirmed with them and yes you will lose your earnest money if you try to back out. But I just remember, if one’s loan application does not go through for some reason, for instance job lost; will this person get their earnest money back since this is not their wish to break the contract? Does anyone know the answer?
I hate to say it, but that’s the risk in buying presale. Think about this: if the value of the unit goes up, does the developer have the right to back out of the contract since he could sell it for more? Certainly not.
I really believe this will be a tough one to flip since there are so many investors in this project. I know several people from Williams Marketing alone that are planning on flipping. My guess is that 1/3 of the people bought a unit there to flip.
Just curious – when did you guys reserve your unit? As long as you reserved in the first month you should be alright, since some prices rose 25% after that.
It all depends on what is in the Purchase and sale agreement that was signed. If there is a contingency based on a loan approval, should get deposit back. If the contingency is not there or was waived…up to the developer. It will be interesting to see how all these buildings coming on line in the next few months will close and fill or not fill. Rollins, Veer, Gallery, Olive 8, etc.
O8 owner,
I am. You can use this craiglist post to contact me.
thanks for the interest.
http://seattle.craigslist.org/see/rew/869105488.html
Kent – Gallery and Brix are about 1/2 sold and both have a few pre-sale buyers who are not able to close on their contracts. I’ve heard from about 6 people in both projects who can’t close due to financing; they’ll loose their EM deposit if they don’t find an assignable buyer. The tough thing for them is that they’re competing with the developer who still has 50% of the inventory left unsold. Plus, it’s difficult to market/advertise assignments. Enso, Veer and Rollins, I believe are between 40-60% sold and I suspect those buyers may have issues with financing as well. Unfortunately, there’s still a lot of unsold new construction inventory on the market.
Condogirl – that depends on the contract. I haven’t seen Olive 8’s contract, but I suspect if it’s like other new developments, financing was waived early on, usually within 2-4 weeks of mutual acceptance.
Thanks Ben. You’re right about the approve financing in the begining. There is absolutely no way out without losing the earnest money. The market is looking pretty bad right now. The bank is afraid to give out loan to borrowers. We got the pre-approve in 2006 but that doesn’t mean they will approve it again in 2008 or 2009. It may take a while for the market to recover and stablize the banking system. This market obviously doesn’t help at all.
I apologize for not being more specific regarding my original post. I am looking for a one bedroom unit on floors 18-21. Anyone who is interested in transferring their contract, please use my craigslist post.
http://seattle.craigslist.org/see/rew/869105488.html
quote: O8 owner 2 says:
“I hate to say it, but that’s the risk in buying presale. Think about this: if the value of the unit goes up, does the developer have the right to back out of the contract since he could sell it for more? Certainly not. ”
actually you are wrong. The Developer can choose NOT to sell the unit to you for almost any reason (a developer canceling contracts and selling at a higher price has actually happened in newyork city condos), I had a lawyer go over the contract for me, and they have many options, the buyer has almost none.
Did anyone attend the buyer’s get together last night? Anything worth noting?
I attended the buyers event, they really seemed to gloss over the whole financial crisis, They pretty much just said that good loans could still be attained and not to worry ( wow… I feel sooo much better after that, because they have no bias! ) they also covered the many steps of the closing process, and continued to claim they were going to deliver the condos ontime and the hotel would open end of december or 1st week in jan. great food too!
Ditto what condoboy said.
The health clue fees will be $50 person/$90 couple.
Move-ins will only be two per day.
Also had the restaurant menu, $17 for a club sammich+fries during lunch. Yikes….
Countrywide rep – “as long as you’re not a janitor saying you make 150k and have no documentation of it you’ll be fine getting a loan”. Umm, ok.
Fitness center is 24 hours (cool!) with the exception of the “wet areas” which is 5:30-10:30PM. Hotel patrons will not have access to the wet areas unless they want to pay. Keeps the kiddies out.
A bike locker that will only fit two dozen bikes. For 229 units. That’s about one spot for every ten units. Something tells me that’s not going to cut it.
183/229 units have been “sold” – a couple units have been combined. I don’t get why they kepy saying they are sold when they’re only reserved.
Thanks for the update on the Buyers Event. I missed it, but it sounds like the same stuff from the previous events. I find it hard to believe that they will be closing condos on time. They last told me that the crane was going to be removed in August because they needed to make up some time. Well, last week the crane was removed (October).
I walked through the building a few weeks back and the amenities are top-flight, but the price of the restaurant is ridiculous! They said they wanted to price it so you could eat there all the time. My idea of a Wednesday night isn’t blowing $50 on a burger and fries for 2. Anyways, I am sure it will be very nice and it will be nice to have a place to grab a drink.
Did anyone else have anything more to say about the buyer’s event? Did anyone ask the developer if they will do anything to compensate buyers whose units have realistically dropped 5% or more in value? No sense in closing if you have lost 6% or more in value.
The developer would probably give the same reaction I’d give if they asked how I’d compensate them since my unit went up in value more than 5% – a chuckle.
If your unit went up in value, you wouldn’t think of compensating the developer, would you? Of course not. Why would you expect the same from him?
Pre-buying a condo can be a risk. Just happens this time it didn’t work out for you.
Frankly this set of postings sounds like passengers on the Titanic worrying if they’ll get a full or partial refund, vs. a voucher for a new cruise.
O8 owner 2 [said] If your unit went up in value, you wouldn’t think of compensating the developer, would you? Of course not. Why would you expect the same from him?
Here is the thought. If the condo went down in value more than 6% it is prudent for the buyer to walk from the earnest money. Let’s say the value dropped 10% or even 14% which is likely for today’s pre-sales that were sold over 12 – 18 months ago and are scheduled for delivery in the next 3 – 12 months. It would be wise for the developer to attempt to keep their buyers and negotiate with them. If the buyer walks… the developer is left with 5% earnest money and an unsold unit from which the developer will have to sell at the current market rate which could be 10% to 15% less (maybe higher is some cases such as units over $850,000). The developer and buyer each would have to perform their due diligence in determining the “real” market value. Somewhere in the middle could be a spot where the developer is not losing the sale and the buyer is not paying the inflated value from the crazed pre-sales of yesteryear. The price would be somewhat higher than market value… say 2% – 5%. This will get the developer a higher sale price than if the buyer walks and they have to re-sell. The buyer is paying a small premium to stay in the transaction, however, the buyer is not losing their 5% earnest money. This is a “Win – Win”… otherwise the alternative is that the buyer walks from their earnest money (LOSE) and the buyer upset for all sorts of reasons and the developer is stuck with having to re-sell the unit at the current market rate which nets the deveoper less than if they would negotiate (LOSE).
Please give your comments on this idea, especially if you are currently a buyer in one of the pre-sale projects.
CondoCow – I can see what you’re getting at and you’re right, developers don’t want to be stuck with unsold inventory. Though, given that the majority of buyers are either buying a principal home or an investment it may not be all that applicable.
If a buyer intends to reside in the unit, which most pre-sale buyers do, then the drop in value at completion may not matter. Every buyer’s circumstance is different, but it’s difficult to realize a situation where someone forfeits earnest money and walks away from their primary residence simply because of a drop in market value at closing, which is essentially a paper loss. Now, if someone is buying it as a second home, then it’s possible. From the developers standpoint, it’s a good bet that those buying a home will attempt to close, so the risk that buyers will walk away will be small. Most that do, have done so because they’re no longer able to secure financing, and even if a developer is willing to renegotiate it’ll have little impact, if any, on a buyer’s ability to obtain financing.
Over time (how ever long that is), the market will bottom out and rebound and the buyer will have a great place to live in the meantime. Depending on how long they hold the property, they can recover the initial drop and realize appreciation.
If they are purchasing as a flip investment, in this market, it may very well be advisable for the buyer to cut their losses and forfeit the earnest money. If they attempt flip in a down market, they’ll also incur carrying costs and closing/transaction costs which will only increase their losses. Plus, they’re competing with developer’s unsold units which at many projects could be a high as 50% of the building’s inventory. I know of someone who backed out of a Bellevue project leaving behind a $50,000 earnest money deposit on the table because the expected losses from trying to flip was greater than the earnest money amount. Gallery has a few investors who are waking away from their deposits as well, though they’re mostly due to financing reasons. In these cases, there’s very little the developer can to do to entice investors to close their purchases.
No offense, but that’s lunacy for several reasons. I get what your saying but you’ll never EVER see that happen.
How do you determine what the unit’s value is on an entire project of new condos that have never been sold before. O8 is a fairly unique project, you can’t really compare it to anything else in the immediate area. Expecting the buyer and developer to determine a “fair price”?
And I can’t imagine the headaches they would get from all the other owner’s who would be crying for a reduction in their price if they started giving them out. Can you imagine 183 different buyers haggling with the developer to detemine a fair price?
Say I reserve a unit at 500k. A year later, someone reserves the same floor plan, a floor higher, for 600k (this happened often at O8, I’m in at a price that is 110k lower than the next higher floor).
You honestly think that the guy that got it at 500k won’t make a fuss about the 600k guys unit being dropped to a much lower price? It’d be an absolute disaster. I’d be knocking down the door if the developer started lowering other units PSA prices. Not to mention that if they actually did the price drop I’d be screaming to be let out of mine.
Bottom line, you signed the PSA agreeing to purchase the unit at a set price. Walk away, lose your 5%, and hope the same unit comes back up for sale at less than 95% of the originally agreed sales price. I can’t see the developer going through all this work and headaches to squeeze an 2%-5% out of a few units.
One thing to remember is that in this banking environment, at the time of closing, if the unit is worth significantly less than the agreed on sales price, a bank WILL NOT MAKE THE LOAN ( washington mutual anyone? this scenerio is playing out in manahattan,and deals have fallen apart as a result). the developer is going to be hoping/praying that the appraisals come in at the asking price. I can only hope the appraisers will be honest.
Don’t most PSAs have a clause that allows you to get your earnest money back if you can’t secure a mortgage? I know mine does.
CondoCow – I think you make a good point. Developers can’t be thrilled collecting a deposit and having another high priced piece of inventory on their books.
08 owner 2 – I think it may well happen. If 2 parties are motivated to find a win/win they will. This is negotiation. Everything is negotiable in these markets. You are right about people making a fuss, but every condo owner for themselves. Get what you can. The developers will want to talk with qualified buyers, and 2 to 3% reductions (or more) are not likely to get in the way.
condoboy – great point, which makes CondoCow’s suggestion more likely.
chris – you are lucky or smart or both. Good for you.
What is really going on out there in the trenches? Does anyone have any real data or stories on this subject? All of this crazy conjecture (mine included) needs some fact based examples.
chris says: “Don’t most PSAs have a clause that allows you to get your earnest money back if you can’t secure a mortgage? I know mine does.”
Chris – Where does it say that in your PSA? I believe Olive8 have all their buyers waive and approve financing in the beginning to avoid sales failing apart while under construction. Can anyone review your PSA again and provide fact about getting earnest money back if cant secure a mortgage?
Most purchase agreements used by developers either do not have a financing clause, identify that financing conditions are waived, or have one with a very short fuse (e.g. 10 days). Every contract is likely different and it would be best to have yours reviewed by a professional.
In case anyone has tried to use my craigslist post, here it is again for anyone interested in getting out of their contract at Olive 8.
http://seattle.craigslist.org/see/rew/908736357.html
FYI – this guy is only looking to take over a low 300k contract on a one bedroom
I would be willing to take over any contract on the lower floors where the pre-sale price is reasonable and, yes, I would prefer a one bedroom. I apologize in assuming that my post on October 7th was not a sufficient explanation of what I am looking for.
I am looking to sell my assignment for the price I paid back in April 2006. This is a 26th floor unit with NW views and we have 2 parking spots. It is the “00” floorplan and has views of the Olympics and of Lake Union. The home is 1538 SF 2 BR+Den, 2 BA with all the amenities you could ask for. This floor is just above the building with the red roof to the north, so you can see all of the lake. The price in 06 was much better than the price now. We are not looking to make anything on the unit, just to get our deposit and cost of our upgrades back. At this point, we wont be able to close, so if you or anyone you know of are interested, let me know.
I am sorry to hear you won’t be able to close on your unit. My husband and I are worried we won’t be able to close on ours in another building also. What steps have you taken to try to get your EM and upgrade money back? Have you hired an RE attorney to look over your POS? We are curious as we are in the same boat. Best of luck to you.
what was your total deposit and upgrade?
What is the price of condo?
For more information on the unit, please email me at olive8owner@gmail.com. Thanks for your interest.
Last spring we put a 5% deposit on a nearby condo under construction. The unit is on the 8th floor. My wife was visiting the sales ctr & asked how much the same plan one flr up was. Not remembering her they said the same unit on the 13th floor was avail for $50k less than what we paid on the 8th floor. Now what? She just walked out stunned.
I question how they expect our unit to appraise for more than the one 5 floors up?
With this economy, I’m afraid I won’t be able to close on my investment at Olive8. I’m looking for someone to take over the contract so I can get my earnest money back. I reserved the sky collection 03 plan. It’s a hot selling plan, almost all 03 plans are sold out. It is a great investment if you got the money to buy it. If you’re interested, please email me at olive8condo@yahoo.com for more information.
Great info. Nice to know I’m not alone. 1 bed room 28th floor, bought on spec . My guess is there is a much higher percentage of spec buyers than admitted to in purchase doc’s. How about a no fee (craigs list) condo clearing house web site.
If there are any other olive8buyers out there ,I would be curious to know if you are wanting to close, or wanting to back out. I just noticed that there are units for lease on the seattle mls, which makes me nervous. If they are going to rent out units, that is not good for value. Not to mention, they were offered as condos, not condo/apartments.
I also bought an unit in April 06 and put in some upgrade later on. Reading this blog makes me nervous. What are the likelyhood of negotiating the price? say a 5% down?
There is almost no way they would allow negotiation. Are you planning on living there for a while, or were you planning to sell it? I am also curious what you are nervous about specifically… Paying too much?
we buyers at olive8 took a gamble years ago. with a presale only 2 things can happen, it is worth more when you move in, or it is worth less when you move in. If it was worth more, would you let the developer renogotiate to charge you more money?
That all being said, anythings possible in this market.
good luck to you kyyy, who knows, we might end up being neighbors 🙂
I do not have a problem closing it. However, When i bought it, I was hoping to find a job and get back to Seattle (I am currently in the East coast). With this kind of job market, I am not sure when I can get back to Seattle and do not know what to do with the unit.