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 so glad I found this blog. I thought I am the only one who is thinking of backing out from my condo at Olive 8. I also purchased a unit on the 29th floor and I leaning towards walking away for many reasons. Lending market is tough especially if you are doing a jumbo loan. The uncertaintly of the economy is making me nervous. I am afraid the value of these units will drop and I can not afford to lose equity few months after I move-in. If you observe the floor plans on their website, 18th floor was shaded gray meaning all units were sold out, well I noticed today 18th floor is again shaded yellow and one unit is not back available on the market. It will be interesting to see how many people are going to close.
That’s interesting, does seem like a few more units become available. Esp the open one bedroom on 18 or 19.
I wonder why. It doesn’t make any sense for someone to back out now. Why not try and dump the unit, or wait right up until closing before backing out? Why not wait the few months until closing and back out then?
Something fishy is going on. Either: they got a lawyer and the lawyer was somehow able to get their earnest month back OR O8 gave them some sort of concessions in allowing them to back out of their units. In no way would someone back out and give up their earnest money this far in advance of closing. It just doesn’t make any sense.
Any of you guys out there? We’d love to hear from ya!
I’d be curious if anyone has gotten a lawyer yet, or the real reason these units are back on the market.
to interestings comment above, I know it seems like they should wait till the last minute, but sometimes its pointless. there are many reasons somone would back out now, not the least of which is they have lost their job, credit score, or dont have 10% to put down. THEY CANT CLOSE. and I should point out that in any high-rise presale situation, it is normal for 10% to 20% of buyers to walk away from their deposits before closing, it is perfectly normal, as alot can happen in 3 years.
the contracts are pretty much air tight, I had a lawyer look at it BEFORE I signed it, and she said, if I sign it i will essentially NEVER get My money back. Again I am closing, here are my reasons, The building, materials, interiors, everything, is very high quality and a great deal compared to escala, 1521, 4 seasons, etc.( no I am not an agent ) It is probably one of the best locations in downtown seattle, literally right across the street from the street car, transit station and light rail, and new developments are going up all around it. the olivian apartments across the street are going to be renting for roughly 3 dollars a sqft. I am not thinking what it will be worth next year, I am thinking what it will be worth in 10 years.
Condoboy,
We have represented a lot of condo buyers who want out of their purchase and sale agreements and have helped them obtain some or all of their earnest money. Judging by the comments on this blog I think many of the above posters would be surprised at the number of ways an “air tight” contract can be cracked. I’m more than happy to discuss options with anyone who would like to contact me.
Marc, how do I get hold of you I am very interested in talking to you.
To contact Marc click on his name. It links to his website where you can contact him directly..
Thanks Ben! I look forward to speaking with you Ampy.
has anyone spoken to this man? any luck with getting the earnest money back?
Hi Mark,
I am just waiting for some documents. I will be in touch with your soon.
Hello, has anyone have any success working with Marc getting your earnest money back? please let me know. I am anxious to find out. Thanks a bunch!
I cant see how he could get one person their money back and then not another ( as everyone signed the same psa ), so If he could show that he was able to get even just one person their money back, he could get a lot of clients Im sure. Or is he just fishing for fees? so lets hear about it Marc, any luck @ olive8. I know some very “well lawyered” folks at the 1521 project who were unable to get their deposit back. I am not saying anything bad about marc as I dont know him, but I would approach with skepticism and lots of questions.
Condoboy,
That’s a fair question and I certainly understand why you ask it. However, I would not answer it whether the answer was yes or no. To do so would risk prejudicing the developer of Olive 8 (or any other builder who might be reading this post) against any current or future clients I might have. For the same reason I will neither admit nor deny that I currently have any clients dealing with Olive 8. You never know who might be monitoring boards like this. Not to mention that attorney-client confidentiality precludes me from discussing specific results
It certainly stands to reason that obtaining one refund increases the likelihood of obtaining others. However, every buyer’s and every builder’s situation is unique even where the documents that were signed are substantially similar, if not identical, between all the other buyers. Accordingly, it would be imprudent to make broad generalizations .
That said, my firm has successfully negotiated refunds for clients dealing with numerous in and around Seattle. We are also currently litigating against a major builder who refused to refund my client’s funds and we expect to be litigating against another one soon. However, there is never a guarantee of success in a contract dispute and I make certain my clients understand this before the representation begins.
Are there any other O8 buyers that are interested in getting together to discuss our options? From reading other blogs, it seems like Rollin Street and Veer buyers are all joining together to discuss their options.
I wouldnt be opposed to getting together to discuss options.
I did hear a rumor that Rollin Street is having extreme difficulty getting buyers to close and are potentially looking at renting their units as apartments until the market clears up. In this case, buyers would get earnest money back and it makes sense for Vulcan to bring in some cash flow instead of having vacant units sit for months on end. Does anyone know if this is a possibility with Olive8? That would be great!
O8 Owner – just to comment on Rollin. I did hear that scenario/rumor floating around, but at this point, it’s just speculation. Vulcan, however, did notify Rollin Street buyers that (1) they are postponing closings and (2) due to new Fannie Mae guidelines, they may not be able to close on loans. New Fannie Mae guidelines may require condo developments to be 70% pre-sold and Rollin is nowhere close to 70%. Vulcan is likely keep all options open. Other projects will be affected by this new guideline as well. (revised)
Ben’s correct about Rollin Street. I’ve seen an email from the developer’s representative to a buyer that follows Ben’s description of the situation.
Rollin’s postponed closing to April 2009. They are getting a ton of bad press from the guy who bought at Veer who was in the PI last week.
I noticed that units at 1521 are already on the MLS, plus there is a lawsuit from eight owners, probably because they are also unable to close financing.
And to add insult to injury:
Effective March 1, 2009, Fannie Mae is implementing condo guideline changes “in light of the current condo market and the need to mitigate risk on condo loans”. Some of these changes may affect a buyer’s ability to obtain conventional condo loans for new and established condos.
I would like to talk to other olive8 buyers?
I dont know if enough of them post or read here to make it worth while?
Attention all Olive8 Buyers,
If you are interested in getting together to discuss the current status of condo lending and to discuss if you plan on going through with your purchase or not, please email me and I will facilitate a meeting place in downtown Seattle (Belltown or South Lake Union). Please pass this email on to any other O8 buyers that would potentially be interested in discussing our options. I am a buyer at O8 and do not work for the developer or Leslie Williams. I am not an attorney and have no interest other than learning what my fellow buyers plans are. I know of three other buyers and they will attend. Please email me if you’re interested. You do not need to disclose your unit number, just let me know if you’re interested.
O8 Buyer
olive8buyer@gmail.com
I’ve spoken to several lenders, and they’ve ALL said that hotel/condo financing is near to impossible to attain right now with the new FM regulations.
My guess is that O8 sticks it to everyone who has reserved, takes the earnest money and ends up converting to apartments.
Lincoln Square financing is about impossible as well as 2200, both condotels.
o8buyer2 – thanks for the comment and visiting the blog. I spoke with a rep at Olive8 who stated the project has approval through its preferred lender Countrywide, but only Countrywide. As you found out, other lenders are unlikely to lend for Olive 8, so re-sale buyers will need to work with Countrywide as well.
Just a point of clarification – Olive8, 2200, Lincoln Square – are not “condotels”. They are hotel and condo entities within the same property. Condotels are condos that can be rented as part of the hotel room inventory (e.g. 1 Hotel).
That said, the recent Fannie Mae changes will necessitate homeowner associations at 2200, Madison Tower, Millennium Tower, Lincoln Square and possibly the Four Seasons to obtain waivers on the 20% non-residential rule, otherwise, re-sales may be adversely impacted.
Spoke to a rep at Countrywide – here’s the deal in a nutshell
-You’ll need a minimum of 10% down, no less
-Rental income is not recognized if there’s less than 30% equity in the unit you’re going to rent out
-You’ll be paying the additional (.75) point fee since it’s a condo
Like Ben said, you’re pretty much forced to go with Countrywide.
Forced to go with Countrywide….thats messed up.
Email me if you’re interested in getting together.
It breaks my heart to walk past this building now it is nearly complete and realize that most of us who bought into the Olive 8 dream are never going to live here. Rationally, I know the condo’s are >30% overpriced for 2009 but it’s still hard to come to terms with that and walk away from earnest money.
My brother in law has done Seattle downtown real estate for nearly 20 years and we had a ‘told you so’ moment last weeked. He pointed out recent sales to me in comparable new condo’s where the per square foot is heading under $500, so it would be insane to close on Olive 8 even if financing was no problem. He is confident Olive 8 will be high end apartments by fall because the developers financing will not hold out when so many buyer closings fall through. The only developer likely to weather the storm is Vulcan because they have deep pockets (and they are still overpriced, plus I dislike the SLU location).
Life sucks. 🙁
Ex-Future Olive 8 resident
A point to consider if you think you should still close on an overpriced condo in the current market. Look at what is happening in Miami with condo’s that are 50% unsold or massively foreclosed. The few buyers left standing become responsible for ALL of the HOA fees and assessments.
from http://www.nytimes.com/2008/05/15/business/15condo.html
“The pain in the condo market, mostly in urban areas, may not only be deeper than in the rest of the housing market during this downturn but more prolonged. Bargain hunters say they are reluctant to buy into a building even when the upfront cost seems low because they might have to pay unexpected fees as distressed neighbors default on their mortgages or just stop paying the association fees that cover everything from taxes to pool maintenance to air-conditioning repair.
Rosa Rodriguez, a resident and property manager at Parkview Point Condos in Miami Beach, says her former neighbors have left her with so many problems that she would never buy a condo again. The 38 foreclosures in her 244-unit building and the unpaid dues nearly cost the residents running water because the building could not pay its bills. The building abruptly stopped repairing its ceiling lobby and left its wiring and ducts exposed when the board ran out of money. She avoids answering questions from visitors about ceiling repairs.
“We’re not going to tell them we don’t have any money,” she said. “That’s embarrassing.”
OliveMartini – just curous, what condos do you think are comparable to Olive 8 and have under $500/sqft prices? Just curious how you are determining that Olive 8 is 30% over-priced…
Also – for anyone – what happens to buyers that do close if the developer later tries to switch to apartments? Is that even possible to have a mixed condo/apartment building? Do the closed parties get their money back, and a chance to rent, or?
On brighter note, I had a chance to walk around the lobby and amenity areas, and there is no doubt this building is top, top notch!
Sorry for breaking the thread, but I’m a buyer at Bellevue Towers and it appears that Olive8 and Bellevue Towers buyers are living in parallel universes, i.e., building is behind in “sold” units, some buyers unqualified (see article in Wed. Feb 18, 09 edition Seattle Times), some walking away from EM, developer refusing to adjust prices. Can’t find much discussion re BT. Anyone aware of a blog for propective BT buyers? Thanks.
NoTraction – there is a Yahoo group for Bellevue Towers, but it doesn’t look very active http://groups.yahoo.com/group/BTowers/
Check the MLS and King Country sales records. 1521 is averaging $670 sf on closed sales (non-penthouse). 5th and Madison has had resales under $500 sf. Both are comparable to Olive 8 if you strip away the marketing hype. Olive 8 is asking $800 to over $1000 sf for non-penthouse condo’s with no view. That’s easily 30% overpriced – I’d say closer to 50%.
The other factor that I think may be hurting Olive 8 is the massive 27 story Olivian apartments going up across the road (http://theolivian.com/). With the Qwest building on one side and the Olivian on the other, it’s starting to look crowded on that block. Buyers below the 27th floor may have not taken the construction of such a large tower fully into consideration.
I think the Olivian is a nice looking building does not look like the typical apartment building.
Reader – good points on the price/sq ft. That said, the 1521 units closing are on the lowest floors, whereas the Olive 8 units still for sale on MLS are on the highest (generally). We will have to see what the 1521 sales look like on the higher floors, but generally speaking 1521 was quite a bit higher in price per sq ft compared to Olive 8 (asking prices). 5th and Madison is a nice building, but is not really comparable to the quality or amenities that Olive 8 will have.
And pretty sure that most buyers were aware of the Olivian apartments since they began construction around the same time. This is not nearly the same as the situation at Cosmo where only the most diligent that were checking city building permits would have known about the big office building going up next door.
Has anyone spoken to an attorney to see if there is anyway to get our deposit back on Olive 8? It seems completely unfair that we have one lending option.
Jeff,
I have received over 10 emails from O8 buyers that would like to get together to discuss our options. Marc, a real estate attorney who has posted on this forum, also contacted me and would be interested in attending our meeting. I told him I would check with the O8 buyers first to see if they wanted him to be there or not. His email indicates that he has O8 buyers as clients at this time.
Anyone else interested? There is an O8 event this Thursday and if we all speak with the other buyers, maybe we can see what everyone else is planning. I’d like to get a date and location chosen prior to this Thursday’s event so that we can spread the word. It would be nice to have a gathering of 20-30 O8 buyers, without anyone from Williams marketing or the developer’s office listening in.
Email me at olive8buyer@gmail.com
The meeting will likely take place next week, possibly on Sunday. I’ll email any interested buyers with the exact date, location, and time. I’ll also take a poll to see if we’d like to have Marc, the attorney, also attend.
Re Jeff “It seems completely unfair that we have one lending option.”
Just a technicality – Countrywide is O8’s designated preferred lender, but it’s unlikely that O8 requires buyers to use them. I’m not an atty, nor have I seen the terms that you and O8 agreed to in your contract, I’m not in real estate, but I doubt that there’s any language in the contract that requires O8 to provide you with a lender or that requires you to use an O8-designated lender, including Countrywide.
You have the option of going to any of a number of other banks. Ben notes that they may not be willing to lend you the money for the sale, but that’s a function of the current economic mess we’re in, not something that O8 is responsible for. Borrowing money from family, friends, 401(k) plans, etc., are other options. Perhaps not viable options for everyone, but again that’s not O8’s fault.
If you think that you might pursue legal action, read you contract and everything else you signed as thoroughly as you can, as that is likely to be near the heart of any case O8 would be part of. Collect any market literature you were given. Save off copies of the O8 website.
Mark W, Are you an O8 buyer? Are you familiar with the situation? Countrywide is the only option. The building is not approved by any other lenders. Wells Fargo was an option but it sounds like that is no longer the case. There are no wholesale options. That is why I say it does not seem fair.
Jeff,
I believe that you can look into credit unions as an option. Because they lend their own money, they do not need to stick by Fannie Mae standards. Look into Boeing Employees Credit Union.
olive8buyer@gmail.com
Not fair and not legal are two different things. Yes it stinks that Countrywide is the only option (as such their fees are higher since they really have no competition) but it’s not like O8 set it up that way.
One of the things that made me feel really comfortable about buying and closing at O8 is that the building was 75% sold (or reserved). However, with the current lending market and the number of people not completing that purchase (widely known that Olive8 had a ton of investors reserve units), I estimate that come August (when the building is finished) only 35% – 40% of the units will actually be “sold” and closed on. The majority of that being on the lower floors. The higher floors will be very tough to move since they’re so pricey.
Combine that with the price guarantee of a year ago (not like they can drop prices to get rid of the unsold inventory) and you’re going to have a half empty building for the next couple of years if nothing is done. Those unsold units will either: A. be taken over by the bank. B. dumped at an auction (thus avoiding the price guarantee) C. converted to apartments. My hunch is that by the end of the year the unsold units will be converted to apartments.
As much as I love the building and would like to close, I just see this entire thing going down in a disaster.
Isnt Wells Fargo another option? I thought I had read that they were lending without Fannie Mae backing.
O8buyer2 – I can’t see what you are proposing happening. I dont think financing will be that hard to come by. Surely there will be some fallout, but I am guessing it is fairly low. 1521 seems to be closing at a good pace for example.
I agree with 08Buyer2. As we get closer and closer to closings, and the developer realizes only 30% of the people who originally purchased can actually close, that we will see Olive8 as High-End Apartments for the next 5 years or until this market can turn around.
Financing right now is next to impossible for the units on the upper floors unless you have 30% down. Not a lot of people have 300k cash sitting around at the moment. Again, I think the building is amazing, top-notch, and would love to have been able to close. But, times now are nowhere near what they were in 2005/2006. It’s too bad the lending companies dont have to re-adjust their loan practices from then to now as well to reflect the current state of the market, i.e., what do you think you will be making in 2009? OK, you are approved!
Does anyone know what happens if the units dont appraise?
Wells Fargo is NOT an option. The usual guy I work with over there said there’s no way he could finance Olive8. He actually told me to run from Olive8. And this was mid last week.
Olive8 and 1521 are different beasts even though I could see how they seem like very similar projects. The average yearly income at 1521 is 750k/yr, most units sold for over a million, and are also many buyers second homes. Completely and totally different demographic than Olive8. The two don’t even compare. The majority of units at Olive8 are one bedrooms, 1521 is all two bedrooms. 1521 also had a lack of investors whereas Olive8 has a great number.
As far as the units appraising or not appraising that doesn’t matter. If you reserved at 500k and the unit appraises at 400k the lender will just require a larger (in this case, well over 100k) down payment to cover that gap. If you can’t provide that increased down payment you’ll be considered unable to secure financing and be forced to give up your earnest money. Olive8 is pretty much in the clear (giving back earnest money) in the case units don’t appraise for their reservation price. It would severely impact their future sales attempts however.
1521 is not that different to Olive 8. If you check the King County property records, 1521 haven’t closed that many condo’s yet. Their PR talks about ‘reserved units’ but the reality on actual closed sales is very different right now given the credit markets and valuation challenges.
A prominent Seattle realtor filed a lawsuit against the 1521 developers last month to try and get his earnest money back on eight speculative condo’s. The same investor also bought heavily at Hotel 1000 and those condo’s haven’t moved in a year, despite price cuts. Olive 8 has a fair share of investors as well.
I agree that Olive 8 going apartments is the most likely route, rather than an auction. They’ll probably need to get going on a conversion before the Olivian across the street opens up later this year. In that case, everyone gets their earnest money back and is happy. There are plenty of other downtown condo’s to buy.
Sorry guys, just dont see these going apartment. How would that even work if even a few units closed?
Going apartment would happen one of two ways:
1. Developer decides to go apartment BEFORE any closings
2. After going though all the reservations, and a few months trying to sell, they get pressure from the banks and begin to rent out the remaining units.
My guess is that it’ll be number two. The developer will get stuck with less inventory and get to pocket all the earnest money from buyers backing out. Those who closed are stuck in a building with half rentals and half condo ownders
O8buyer2,
Wouldn’t there be Home Owners Association issues if they were to rent out vs sell the units? The developer runs and pays for all HO dues until a certain percentage (70%??) of the units have been closed on.
It is difficult to see these condos going apartment. This development will not pencil, from a cash flow/proforma perspective, as apartments unless there is a foreclosure, the Hyatt backs out (which it probably can’t) and some vulture capital group swipes it up from the bank at cents on the dollar. The developer will move from construction financing to permanent financing and will begin to pay down the perm loan with the initial sales even if only 40% sell. They may not make as much money as they thought with slow sales velocities, but it doesn’t mean they are going to convert to apartments or that sales prices are going to be reduced by an outrageous percentage. If you got in early and you got in on a lower floor, chances are, you’ll do well in 3 years. You never know though…that’s why returns are balanced by risk.
Condo failures in Seattle are already happening. Look at the Intracorp projects like Parc, Expo 62 and Domaine. Intracorp is still trying to sell two dozen units at Parc. Expo 62 went apartment last year and all sales were cancelled. Domaine was auctioned off last month by the bank because Intracorp defaulted on their loan.
According to this article in the Seattle Times, it is possible to have a hybrid condo/apartment. If you want to avoid this at Olive 8 it should be written into your purchase agreement with RC Hedreen.
http://blog.seattletimes.nwsource.com/elizabethrhodes/2008/01/q_what_happens_when_youve.html
@Jeff – If the contract does not obligate you to use Countrywide, then you can approach any other source for a loan that you want; i.e. from your contract’s perspective, I doubt your contract limits you to a single financing option.
These other sources may not approve your loan request, which is their option, but that’s not O8’s doing. Your options – as per the contract you signed – have their own options.
What’s fair is subjective – the O8 developers didn’t create the economic mess, either, after all. By this point they’ve put a lot more money into your unit than you have, and presumably they’re still spending their money in preparation to deliver on their contracted obligations to you. The current situation sucks for both sides. It’s certainly not what either side had in mind a couple years ago, but some gambles don’t pay off.
But going back to your note, where you seemed to connect financing options to getting a lawyer involved in getting deposits back, what does the contract say? If they’re not obligated to provide you with any options, then it’s not fair to expect them to provide you with more than one option.
Ultimately it’s the language in the contract you agreed to that matters, not the 2-bit opinions offered up some blog.
What Reader posted is true, but those were very different circumstances. Parc actually sold fairly well for the # of units in the building, and those are closed sales. 2 dozen remaining out of nearly 200 units is a success by almost any measure. As for Expo 62 and Domaine, those were both fairly low end buildings, and both had very little pre-sales activity. Hence their switch to apartments. I belive at least for Domaine, it was always considered a backup to go apartment if the units didnt sell well (which they didnt, likely due to their location).
Olive 8 is at something like 75-80% pre-sales, including most of the lower floors. Last time I was in the sales center it looked like mainly the units still unsold were on the highest few floors (with the highest prices) that were added when they switched from a 36 to a 39 floor building.