Owners of the high-class Ritz-Carlton Residences at the Inner Harbor have significantly dropped the asking price of 30 luxury units in an attempt to jump-start the dull sales that have consistently plagued the project.
"The [discounted] units are located throughout the building -- some on the ground floor, some on the waterfront, some with downtown views," Harris said. "It is a mix."Sales at the Ritz have been in the spotlight since the June 28 auction of 18 units at the development's next-door neighbor, Harborview Pier Homes, where sales had been equally stagnant, local real estate sources say. The auction served to reset values in the luxury condominium market on Baltimore's waterfront, and units listed at or above $1 million sold under the gavel for between $545,000 and $750,000.Graziose said RXR Realty, which purchased the Ritz-Carlton Residences property in December 2007, was not seeking to sell it. The sales office offers detailed brochures, maps and books detailing the property and its gilded lifestyle. RXR Realty, Graziose said, has "the necessary coffers and we're stable and solid. There will be no bulk sale, no fire sale."Only 23 of the development's 190 units have sold since the $220 million project opened in 2007. Three of those units were bought by bestselling author and video game entrepreneur Tom Clancy, who shelled out $12.6 million last year and merged them into a mega- penthouse where he now lives."The condo market in Baltimore has a lot of obstacles to overcome," Herber said, listing the stagnant market, high city taxes and condo fees as negatives. "I also think that one of the top issues is that it's very difficult to get financing for condos. It's not impossible, it's tough and you need to shop around.""It attracts a very small wedge of the market that are capable and comfortable getting into a property with that sort of arrangement," Herber said, of the luxury condo market in Baltimore. "I don't know what the fix is."In the past, Graziose admitted, the Ritz development had a standoffish atmosphere along Baltimore's waterfront, where working class people once carried lunch buckets to labor at loading and unloading ships on city piers.The Ritz condos, located at 801 Key Highway, feature a "five- star" lifestyle with elevators to each unit, elegant crown molding, marble floors, a spa, indoor pool, concierge service and panoramic views of the city skyline."I think the Ritz is a beautiful and unique property, and it's special in a number of ways, but in this particular market, the rubber has to hit the road and people are much less inclined to splurge as they are now looking for solid investments," Lynott said. "I think a price reduction at the Ritz to get people in the property is a good idea."Carl Herber, vice president of the Inner Harbor branch of Coldwell Banker Residential Brokers, said the decision to drastically lower prices at the Ritz was a good move.Condo fees, which Graziose said cost about $900 per month at the Ritz, add to the bottom line and, combined with high city taxes, often amount to "a second mortgage payment."Ritz officials declined to release a complete list of the new prices, but revealed a select few. One unit, a 1,675-square-foot, two-bedroom condo that originally listed for $1.2 million, is now $700,000. Another unit, a 3,799-square-foot, three-bedroom penthouse, is listed at $2.1 million, down from its original asking price of $2.7 million.Betty Lynott, a Realtor with Long & Foster based in Fells Point who specializes in condo sales on Baltimore's waterfront, said all of the luxury condo units in the city, many built during 2004-2006 when the housing boom was in full swing, are selling for less "across the board."Data reflects the downturn. The marketing group Delta Associates reported last month that new condo prices in the Baltimore metropolitan area were down 3.6 percent over last year and that there are 1,752 unsold units.Lynott said she had recently rented out a unit at the Ritz- Carlton Residences and that the development also has a rent-to-own sales plan.In February, RXR Realtors, the Long Island-based owner of the project, refinanced $176 million in construction debt for the Baltimore Ritz to a consortium of 14 lenders from around the world.Joe Graziose, senior vice president and project executive for RXR Realtors, said he crafted the new "tier-release" marketing plan that includes lowering prices of 30 units with a goal of selling them by early 2011. Another group of 30 units would then be targeted and discounted, he said.When sales continued to remain stagnant, RXR went into negotiations with its lenders last month to drop the prices further, Harris said."It's really apples and oranges," Graziose said, of the two luxury developments that are side-by-side and abut the waterfront across from Inner Harbor East. "It's a different project at the end of the day. The "A" word is a dirty word -- it means something is wrong. But we don't feel anything is wrong."The restructured loan has a three-year term and a pledge from RXR Realty to sell out the development within that time period. Prices on Ritz condos were dropped 10 percent in February as incentive."The refinancing took the pressure off," Graziose said on Monday. "But the clock is ticking and I'm definitely feeling it."But the development has remained mostly vacant. Units were originally listed between $800,000 and $5 million, but this week the prices were cut to between $499,000 and $2.1 million, said Greg Harris, marketing consultant for the project."There was too much velvet rope nonsense," he said, in a thick Brooklyn accent of his hometown. "The lesson here is to be transparent and to communicate the honest, open issues. We want people to come down and see what is a day in the life like here. There is no place in this market that compares to living here."
"There was too much velvet rope nonsense," he said, in a thick Brooklyn accent of his hometown. "The lesson here is to be transparent and to communicate the honest, open issues. We want people to come down and see what is a day in the life like here. There is no place in this market that compares to living here."
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