Terrazzo buyers get deal at auction

Prices could set tone for market
By Naomi Snyder • THE TENNESSEAN • November 22, 2009


Buyers at an auction for the $68 million luxury Nashville condo building Terrazzo walked away with 27 units Saturday at prices about one-third lower than previous buyers in the development have paid.

The sale had been much anticipated as a way to reset prices in the future for the nearly stalled condo market downtown.

The 117-unit, glass-walled Terrazzo building in the Gulch had sold just 15 units since sales started in March.

"I thought the auction was good because of the economy. We got good prices,'' said Nanda Kemkar, who is married to a Cookeville doctor and bought a one-bedroom condo for $243,000 on Saturday.

The sale had been much anticipated as a way to reset prices in the future for the nearly stalled condo market downtown.

The 117-unit, glass-walled Terrazzo building in the Gulch had sold just 15 units since sales started in March.

"I thought the auction was good because of the economy. We got good prices,'' said Nanda Kemkar, who is married to a Cookeville doctor and bought a one-bedroom condo for $243,000 on Saturday.

She said they intend to rent out the condo until they retire in a few years, at which point the couple plans to move into the Terrazzo. "When we retire, we need a nice city,'' she explained.

The developers plied the crowd at the Renaissance Nashville Hotel with Jack Daniel's glazed ham and jumbo shrimp in a room decorated with a glass sculpture of the Terrazzo.

Six sales negotiated

The room erupted in applause after the first winning bid. But after a few more sales, the prices began to fall and auctioneers halted the bidding after the 21st sale, a one-bedroom that went for $190,000, almost half off its asking price.

Then, auctioneers negotiated another six sales on the auction floor with individual buyers. The developers had put 35 condos up for sale. The average sale price Saturday was $233 per square foot.

"I think we had a great turnout,'' said Bill Barkley, president of Crosland's Tennessee division, which is Terrazzo's developer. "It's a real indication that the momentum is back in the market. That's what we wanted to see.

"This market is not overbuilt. We are in a rebuilding climate with our economy, and it's only going to get better."

Crosland had hired auctioneers Accelerated Marketing Partners, a firm with offices in Boston and San Francisco, which has conducted similar sales across the country to jump-start stalled condo purchases


"The bidders got a good price, '' said Jon Gollinger, the chief executive officer of Accelerated Marketing Partners. "But we can live with it."

Betsy McIness, who bought a one-bedroom condo in the Terrazzo in April with her daughter for roughly $373,000, said she was initially fearful of what the auction would do to the value of her condo.

But she said Saturday she was happy that more people will be moving into the building, and she thinks condo values eventually will go back up.

"It's a shame we had to do it like that,'' she said. "I'm happy they didn't go for half off. I'm thinking my daughter is going to be able to hold onto it for a few more years."

Several people said they showed up at the auction just to see how it went. Even former Sen. Bill Frist of Nashville showed up for the auction, although he said he was just curious and didn't bid.

Auction has impact

Appraiser Richard Exton said the auction probably will affect prices for condos going forward.

"Obviously, the market is showing some declines, and this is probably further evidence," he said.

The West End Luxury Condominiums, another condo project where sales have been coming in at a trickle, is due for its own auction of up to 45 units in two weeks, on Dec. 5.
The Terrazzo has an outdoor pool, a 24-hour concierge and has environmentally friendly LEED-Silver certification from the U.S. Green Building Council.

Developers had lined up financing for the auction with SunTrust Mortgage, MetLife Home Loans, CityLife Lending Group and Bank of America. The lenders were offering loans for as little as 3 percent down for owner-occupied units.