A May16 Business article incorrectly said that Washington Communities of Vienna bought the Ridgeleigh at Van Dorn Metro apartments in Fairfax County. Washington Communities is the management company. The apartments were purchased by Washington Communities V LLC, a separate corporation.
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The Bad News On Condos
The plan was simple: Convert 15, four-story apartment buildings to condominiums, and do it in two phases. At the time of the purchase, the market seemed ripe: Buyers had been lining up outside new projects, eager to buy before prices escalated even more.
In 2006, the first phase of the condos went up for sale. Units ranged from 589 square feet to 1,081 square feet and were priced from $274,990 to $444,990, according to a news article posted on the complex's Web site.
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Eventually, about 45 condos were sold. But that wasn't enough. The first phase remains a mix of rentals and condos; what would have been the second phase is still rentals.
According to someone familiar with the project, the company was not "able to sell units, pay down debts and were not able to sell units fast enough." The source spoke on condition of anonymity because of the sensitive nature of the transaction.
Lawyer James C. Brennan, listed as the registered agent for Washington Communities, did not return a number of phone calls over several days. Attempts to reach company officers by phone were unsuccessful.
Yesterday, at 1 p.m., the foreclosure was announced, and lawyer Jeremy Root, one of two substitute trustees, read a dry description of the property in front of the steps of the Fairfax County Judicial Center. The area was fenced off from the noisy construction that at times drowned out the reading.
Then lawyer William H. Casterline Jr., the second substitute trustee, began the auction. The first bid, $50 million, came from Eron Sodie, the lending bank's vice president and regional manager in Bethesda.
Several feet away stood portfolio manager Chris Beaulieu of Ritchie Capital, of Lisle, Ill. He bid $51 million. The bank went to $55 million.
"Do I have $56 million?" Casterline asked. The Illinois man bid $55.5 million. The bank came back with $60 million. The Illinois man backed off. The bidding ended.
Afterward, Beaulieu was asked whether his firm would have stuck with the condo plan.
Citing the uncertain market, he said: "We were going to take a fresh look. We were looking at different options given the deteriorating market."
Staff researchers Alice Crites and Karl Evanzz contributed to this report.
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