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Rapidly-Diminishing-Condo-Supply Party Arrives At The Brookwood

Everyone knows what happened with the Great Atlanta Condominium Building Boom of the Mid-Aughts. Lots of projects were built. And if a new condo development was delivered by, say, 2006, it probably did pretty well. By 2008, though, there was a tremendous glut of condominium inventory, much of it 'commodity' product, which didn't help it sell in the depths of the recession. The ambitious Brookwood project, originally developed by a joint venture between Urban Realty Partners and Regent Partners, LLC, was unique, though. It was Atlanta's first LEED-certified high-rise residential building, and the combination of the project's Brookwood Hills location, high-end finishes and amenities set it apart from some of the competition down the road in Midtown- as did its release prices.

Unfortunately, the timing of the building's release coincided with the worst of economic and real estate crash. The project was originally financed by Corus, the bank that failed in spectacular fashion after going all-in on condominium construction financing, and The Brookwood got tied up in the mess surrounding the Corus collapse. The upscale, move-down empty nesters that were part of its target market were unable to sell their homes, keeping them from buying condos. The street-front restaurant space at the bottom of the building remained unoccupied for years. And those people that actually wanted to buy units in the building found it almost impossible to secure financing.

Fast forward. After being acquired by ST Residential as part of the Corus portfolio, prices were adjusted, and though it took a bit longer than some of the projects (to be fair, it should be noted that The Brookwood was among the least-sold of any of the Corus projects ST acquired in Atlanta), the project began to sell. Watershed- the classic Southern restaurant formerly located in Decatur- moved into the ground level restaurant space and has enjoyed a successful opening. And the owners are now reporting that 70% of its units are under contract.

Though we're short the cash to buy the Haddow Report, we're guessing the new condominium supply in Atlanta is approaching shortage status. How long until one of these new apartment projects gets converted?