The Vue’s new owner has started foreclosure proceedings on the luxury residential high-rise in uptown, according to court documents filed Tuesday.
New York-based Northwood Investors paid about $100 million to take control of the complex in early April, according to Real Estate Alert, a trade publication.
The project’s developer, MCL Cos. of Chicago, defaulted on a $195 million construction loan in February 2011, Real Estate Alert has reported. Insurers Mitsui Sumitomo of Japan and Munich RE of Germany sold the junior portion of the loan, with a balance of $130 million, to Northwood for about $42 million. Northwood agreed to pay the $58 million balance on the senior loan, held by Goldman Sachs, according to Real Estate Alert’s April 18 issue.
The 409-unit condominium tower at Fifth and Pine streets was announced during the real estate boom and was one of the few uptown high-rise projects to be finished despite the recession. Yet, the Vue’s developer struggled to sell units and close sales on contracts signed in better economic times.
Real Estate Alert has speculated that the tower, which offers an Olympic-size swimming pool and tennis courts, is ripe to be turned into apartments. Investors have eagerly snapped up multifamily complexes and announced new apartment projects in the Charlotte area. Rents are forecast to rise as more people turn to renting.
The Vue has said it had about half the units under contract but it has closed sales on less than two dozen condos. Some buyers have sued to get out of their contracts. Others say they have had trouble getting financing because appraisals for the condos are coming in below contracted sales prices.
Also this week, a couple sued the Vue asking for their $90,987 deposit back. Stephanie Rizzo and David Rizzo of Wake County said in court filings they agreed to pay $699,900 for a two-bedroom, two-bathroom condo but that the developer changed the floor plan, eliminating one bedroom, and downgraded the quality of promised appliances.
The couple says they informed the developer within the allowed two-year timeframe that they wanted out of the deal, according to documents filed in federal court.
Anne Miller, director of sales and marketing for the Vue, said in an email that “the developer” had no comment about the lawsuit.
In November, a federal judge decided in a separate but similar case that a couple should get their $145,485 deposit back. The judge ruled in that case that a proper description of the property had not been provided with the sales contract as required by the Interstate Land Sales Full Disclosure Act. This ruling has the potential to affect future condo development because it could shorten the time developers would want to take to complete projects, some attorneys say.