Several years in the making, a Buckhead high-rise project in the 2600 block of Peachtree Road raised the eyebrows of development wonks recently when its 151 luxury units were revealed to be for-sale condos, priced from about a half-million bucks to beyond $2 million.
Called The Sutton, the 21-story tower was to be Buckhead’s largest condo project since the Great Recession—and ostensibly a more fitting occupant of the Buckhead Village than the gas station and Chinese restaurant bulldozed on the site two years ago.
But those plans have faltered.
Developer Preserve Properties has confirmed to Curbed Atlanta that The Sutton will instead be offered as rentals, joining hundreds of new luxury apartments that have sprouted in Buckhead in recent years.
Observers say the switch calls into the question the viability of truly luxurious condominium projects, even in Atlanta’s most well-heeled submarket. A few blocks down Peachtree Road, 41 condos at JPX Work’s The Emerson tower, priced around $2 million on average, were cancelled earlier this year.
Deposits for The Sutton’s buyers have been returned. According to a letter from the developer obtained by Curbed Atlanta addressed to condo buyers who were under contract, the project failed to meet its goal of selling at least 50 units by September 15, and thus the agreements were terminated and the switch to apartments finalized.
“We anticipated a higher level of sales and hope you understand proceeding under these circumstances would not have been in anyone’s best interest,” states the letter.
“It’s disappointing to see The Sutton project fail,” said Tom Ellicott, associate broker and cofounder of PalmerHouse Properties, who had a client under contract at the building. “Though it wasn’t disclosed, the developer’s lenders presumably only gave them a very short window in which to meet a pre-sale requirement [which is] a customary requirement. But it takes years, not months, to sell out buildings like this.”
As an example, Ellicott pointed to Buckhead’s last large condo project left standing: The Charles, which is coming out of the ground with substantially higher pricing expectations— from $1.3 million to $4 million or more for its 57 homes.
“Just a block north from The Sutton, [The Charles] was announced more than two years ago, and it’s approximately 60 percent sold, though the cost per square foot was 30 percent higher,” Ellicott said. “So that’s a big success. But, these projects take time.”
As apartments, The Sutton is now billing itself as “the premiere luxury rental residences in Buckhead Village,” with its saltwater pool, concierge, and rentals with Italian cabinetry.
Chris Draper, Preserve Properties vice president, said a leasing center will open October 15, and the building should be ready for tenants in May.
Projected rents speak to The Sutton’s luxe ambitions.
Expect one-bedroom units with dens (about 1,100 square feet) to start around $2,400 monthly. On the larger end, three-bedrooms of about 2,000 square feet will begin at $4,500.
Ellicott noted that Atlanta’s luxury condo market is experiencing a glut of inventory, as evidenced by Case-Shiller data that show 27 months of supply for properties priced higher than $2 million and 11 months of supply for those between $1 and $2 million.