Sales of new condominium high-rise apartments in Northern Virginia have rebounded from a desultory real estate glut only five years ago to become one of the most vibrant aspects of the current, strong market.
The appeal of high-rise ownership in the late 1970s might best be illustrated with the selling records at three large, amenity-packed developments: the Rotonda at Tysons Corner, the Skyline at Baileys Crossroads and the Watergate at Landmark. Total sales at the Big Three have edged over 3,600 units. Individual sales now average nearly $80,000. Most of those sales have been made in the past four years.
In 1977, 1978 and 1979, the area's total real estate market - ranging from new and resale conventional single houses to cluster apartments, town houses and rental apartments converted to condo ownership - has been exceptionally active.
Yet the rapidly maturing new kid on the housing block has to be the high-rise apartment packaged in an envelope of recreation facilities and personal security. And most of the market is in Northern Virginia, where most single houses now are priced over $100,000.
In listing the individual selling records, the Rotonda shows 964 sales through the end of April. That's more than one a day since the opening of the five-building ownership complex in October 1976. Paul Clohan, sales director, said that 65 deposits were taken in three days at the end of April for building No. 5 (the last) that will be started this month for occupancy next summer. Building No. 4, to be completed for January occupancy, is 90 percent sold.
At Skyline, where north and south condo 26-story buildings totalling 940 dwellings were sold and occupied earlier, sales manager Gene Charles reported that 205 of the 279 units in 17-story Skyline House West (now under construction for occupancy beginning in October) were sold in the first 4 1/2 months of this year. A fourth building has been started but a selling program will not begin until late June. The average price of a condo apartment at Skyline now is $73,000.
Since a sales campaign began five years ago, Watergate at Landmark has had 1,446 sales in four buildings. "We've got only 10 left in the fourth and final building," said senior marketing vice president Lee Elsen, who added that owners do not move into No. 4 until August. A man never at loss for an adjective, Elsen said the Watergate-Landmark sales success has been "amazingly good." And he quickly added that resales have been "phenomenal," with a three-bedroom sold early and priced just below $70,000 having been turned over to a new owner recently for nearly $120,000.
If Charles, Clohan and Elsen got together, they would agree that the buyer appetite for high-rise ownership living in Northern Virginia has been documented by the selling records at Skyline, Rotonda and Watergate-Landmark. They might also recognize that they have been in competition. Most buyers in one complex have undoubtedly looked at the other two - and probably some others - before deciding to become owners.
The big Three are all located within the Beltway and near major centers of employment and shopping. Professional give all three high marks for convenience of location. In fact, they might even be strategic locations now that gasoline shortages have surfaced again. But earlier decisions had to be made mostly on the basis of convenience and availability of public transportation.
Watergate-Landmark came on strong in early days when that area of Alexandria became known as "condominium canyon" with a glut of unsold dwellings in 1975-76.The markt had cooled after a mortgage money crunch.
Skyline survived the negativism of a building-under-construction that collapsed, keeping 50 percent of the prepurchasers, according to Charles.
Rotonda opened on the crest of a hot market and used a strong, consistent marketing program, as did the other two.
All three have offered relatively low prices per square foot of living area, mostly under $60 a foot until recently. All have kept their price increases below the recent averages for new single-family houses. All showed attractively furnished models that whetted buyer interest.
Each of the Big Three emphasized facilities for swimming, tennis and such - plus other amenities (party and exercise rooms). All have appealed to a wide range in the adult market, although Elsen said Watergate-Landmark has a fair share of children among its 3,500 residents.
Joe Robert Jr., a multifamily-housing specialist who has been identified with sales at other condominium buildings, commented that the sales success of the Big Three is unchallengeable. He attributed it to "selling high-rise homes with things to do on the sites in good locations." He added that the same offerings might not have done nearly so well in Manassas, for instance.
Robert also said that his own study of Northern Virginia demographics indicated a larger-than-expected concentration of well-to-do "young singles and empty-nesters who are more interested in life-style than price."
Another view came from advertising executive Marvin Gerstin, whose firm's contribution was in marketing the Big Three projects. Gerstin cited the good reputations of the builder-developers, the amenity programs and the size of the projects. "They are big enough to give some extras and the public had confidence that the developers would not go broke in so doing. They simply gave a lot for the dollar and did good jobs of merchandising what they were selling."
In regard to bigness, each of the Big Three has more than 1,000 units. Some prospective buyers might tend to be turned off by a big community of like units. But another view is that largeness begets a "sense of community" that Elsen insists is important to today's buyers, who want more than just a place to live.
Clohan agreed with Elsen and Charles that earlier buyers influenced some of decisions of recent purchasers. "People living in the Rotonda are spreading the word to friends and acquaintances," added Clohan. Incidentally, early sales at Rotonda showed empty nesters buying three bedroom apartments. So the mix in subsequent buildings was changed to provide more larger apartments, including a four-bedroom unit with 2,535 square feet of space.
However, the Rotonda policy has also been to keep price increases modest. For instance, the least expensive one-bedroom apartment in the first building sold for $40,300. The same-size unit in Building 4 is $45,500. That's about 13 percent more over a three-year period.
Richard Grizzard, project manager at the Rotonda for International Developers Inc., said that long-term contracts with suppliers and volume purchases have permitted building costs to be held to a minimum. He also cited standardization of kitchens and baths and using only three different types of windows throughout the 1,165-unit complex.
"Nothing drives up costs more than delays in construction resulting in rescheduling," added Grizzard, who said all of the buildings have been finished on schedule. Majestic Building Corp. provides construction management for the Rotonda.
Despite the selling successes scored by the Big Three, it may be unlikely that other developments of that size will soon be started. West Alexandria Properties Inc., which is doing town houses in Alexandria, is a subsidiary of Watergate Development Corp. which has plans for a high-rise in Georgetwon, but not of the scope of an original Watergate or a Watergate at Landmark.
Giuseppe Cecchi, president of IDI and credited as the mastermind in planning Watergate-Landmark (wehn he was with Watergate Development Inc.), has a downtown site for an office building and apartments on Homas Circle. IDI also has been the redeveloper at Parkfairfax, a large rental conversion in close-in Virginia. But Cecchi said a few months ago that inflation must end sometime. So he's taking a cautious position on the future of the market.
A subsidiary of the Charles E. Smith Companies has been the developer at Skyline, which also includes two fully leased high-rise rental apartments and tall office buildings. Skyline House East is barely under way, and it will have 273 units to be sold beginning in July. Already a major developer in the Crystal City area, the Smith group now has ongoing projects for 1980 and 1981.
Whether another major high-rise condominium apartment development will be started from scratch in this metropolitan area in the next few years seems questionable today. It is becoming increasingly difficult and expensive to obtain large, well-located sites for new projects and get local permission to build them. New construction financing costs are now nearly 14 percent, two percentage points above prime. That's expensive and inhibiting.
No area home builder has ever undertaken a single-family community of the scope of Levitt's Belair at Bowie. That was started in 1960. So it may be some years before any developer has the financial ability or the visceral fortitude to start another Watergate-Landmark, Skyline or Rotonda for condominium high-rise buyers. CAPTION: Picture, Pool tables in the community center at The Rotonda high-rise condominiums.