This 30 unit condo complex in Eugene never really took off. The Farm on Cal Young, was built in 2008, but no units were sold. The units were originally marketed as high as 420K, or some $300/s.f., which was expensive. Asking prices were lowered, but to no effect–still nothing sold.
The project was most recently up for sale for 4.2 Mm dollars. The debt on the project was said to be at least 6.1 Mm, or 203K per unit; this would have been a short sale, meaning the bank would have receive less than it was owed.
So, what’s the project worth? As condos, it depends on what price and at what rate you think the market will absorb the units; that is, what folks will pay for them, which is bound to be less than they were previously marketed for, and how quickly they’ll sell. Neither is apparent to me.
As apartments, you can make some assumptions, and come up with a price. If you assume an average monthly rent of 1.2K, which may be on the low side, operating expense of 50%, and a cap rate of 7.25 %, that gets you a price of about 3 Mm., or 100K/unit. Will it sell that low? That decision is probably up to the lender and/or its regulators. To justify a price of 4.2 Mm, average monthly rents of 1,700. are probably needed.
I looked at the project when it was just bare-dirt for sale, but never saw how I could make it work. I tend to be conservative, though, and a lot of stuff gets built that surprises me. The project will eventually be successful–it’s just a question of price and time.