Posted Nov 12, 2007, 8:18 PM
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Join Date: May 2006
Location: Far Sub-Urban San Antonio
Posts: 443
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Monarch Update
After two months of sales, Monarch tower to become apartments again
Austin Business Journal - by A.J. Mistretta
Buyers of units in The Monarch residential tower downtown are being notified today that the project's developer is changing the apartment-turned-condo high-rise back into apartments.
ZOM Inc. has decided not to proceed with selling the 305 units in its 29-story tower. The company had originally planned the project as apartments, but decided to take it to the sales market earlier this summer in the heat of downtown condo demand. About 20 percent of the units were sold in the last 60 days, according to Kevin Burns with Urbanspace Realtors LLP, which was tapped to market the condos. Units were marketed at $229,000 to $1.75 million. The Monarch, located at 801 West Fifth Street is slated for completion by the second quarter of 2008.
"The decision to convert The Monarch back to apartments was based on timing rather than demand," says Steve Buck, chief operating officer of ZOM Companies. "The buyers are there; just not at the pace we needed by early 2008."
Burns says the decision to switch strategy wasn't at all a reflection of lack of demand for condo units downtown. "For us to have sold as many units as we did in the slowest selling season, I think says a lot," Burns says. "We simply didn't have the luxury of time on sales."
The Monarch's units will range in size from 681 square feet to 3,530 square feet with lease rates starting at $1,650. The development will also feature more than 9,500 square feet of ground-floor retail space.
Burns says taking Monarch out of the sales picture will likely make the downtown condo market rather tight in the near term. Developments that are near completion like The Shore and 360 are virtually sold out. And while a slew of new projects have been announced, and a few have broken ground, it will be late 2009 before the first of those comes to market.
Developer Larry Warshaw, a partner in Barton Place, The Spring and other projects, says while demand among those who actually plan to live in the unit they're buying remains strong, he's seen a decline in investor interest in condos in recent months concurrent with the tightening credit markets.
"Owner occupants and those who are looking at this as a long term investment, those groups appear to be fairly immune to anything," Warshaw says.
Warshaw says The Monarch may have had a tough time overcoming its original image as an apartment project.
"The market is still strong but less forgiving than it was a year ago," says Warshaw. "It won't carry a marginal location or a product that doesn't hit the sweet spot--and there are various things that will affect whether or not it hits the sweet spot."
Still, Warshaw says, ZOM may be looking at the extremely strong downtown apartment market. The opening in coming weeks of the new AMLI downtown property at Third and San Antonio streets will help alleviate some of the rental demand, but no other apartment properties downtown are close to completion.
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Quick question regarding these shots, on the 360 tower are we approaching the top out point, or will the cranes be bumped up one last time? It seems we have a little ways to go, and the crane as it stands will need to 
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