RETURN OF THE CONDO

We know sequels get a bum rap, but you'll like this one. Once upon a time, there was a strong condo market, and now some of it is coming back.
Just ask Jonathan Davis, whom we interviewed last week. He's been buying troubled condo projects with capital from a $230M private equity fund he raised in '09. Last Monday, Jon announced that he bought into a 43-unit unfinished condo project at 340 Court St in Brooklyn near Prospect Park. Paired with longtime associate Prudential Real Estate Investors and New York-based Alchemy Properties, construction is slated to start in late July. The 32 flats and 11 townhouses will be geared toward families and have an average unit size of 2,000 SF. The project will also have parking for 67 vehicles, retail, and is in the P.S. 29 elementary school district, all big selling points for families.
Jon tells us that stories of the condo?s demise are greatly exaggerated … in certain markets. New York, he says, has proven to be impressively resilient even with the layoffs in financial services. In the Boston area, The Davis Cos is completing construction on the remaining 44-units it purchased at the 57-unit DNA Lofts in Dorchester. He expects to start marketing this summer at about $300/SF. Two weeks ago, Jon says he acquired the note on the remaining units in Silver Tower a 240-unit condo building in Chicago?s River North neighborhood. He says units are selling ?briskly? at an average of $300/SF. When investing in condo projects, Jon looks for a significantly discounted price, strong demand, affordable selling prices, and buildings occupied mostly by owner occupants.

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