VOL. 124 | NO. 228 | Thursday, November 19, 2009
Goodwyn Condos Shoved Back Into Marketplace
By Eric Smith
FROM THE ASHES: After a shaky period of foreclosure and unit auctions, the Goodwyn Condominiums are poised to rise again. -- PHOTO BY ERIC SMITH
It didn’t take long for the Goodwyn Condominiums at 127 Madison Ave. to get back on track. Just two months after foreclosing on more than 80 percent of the historic building, First Tennessee Bank NA has taken steps to finish 21 unsold units and put them on the market.
The city-county Office of Construction Code Enforcement last week issued the bank a $500,000 permit application to finish 12 of the Goodwyn’s condo units, all of which are on the bottom six floors of the 18-story building.
Two Memphis-based companies are working with First Tennessee to revive the Goodwyn. Metro Construction LLC has been hired as general contractor and Hobson Co. Realtors has been hired as sales and marketing lead for the project.
First Tennessee executive Dave Dawson, who can see the Goodwyn from his office window, said Metro and Hobson were the perfect fit for turning around a building that struggled when residential and commercial real estate crashed.
“Our goal is to sell it through Hobson and hopefully get the majority of our money back that way,” Dawson said. “We’ve got a good team working on it for us. I can’t control what the marketplace will do, but we plan on it being successful.”
Nothing less will do
Success seemed like a sure bet for the Goodwyn when its developers – entities called 119 Madison Properties Tennessee LLC and Goodwyn Institute Properties LLC – began converting it to condos in 2006. But after a host of construction delays and other financial troubles, most notably an inability to move units amid a soft market, they defaulted on their loan.
First Tennessee reclaimed the building’s unsold units and a small neighboring commercial space for $4.5 million during an Oct. 21 substitute trustee’s sale on the steps of the Shelby County Courthouse.
The interiors of the units were unfinished because the original development plan called for letting buyers choose the final flooring, countertops, cabinets and paint for the units they bought. That approach proved to be risky, and qualified buyers didn’t emerge.
Matt Savage, director of sales and estimating for Metro, said the company will finish the condos, something he sees as a necessity in most real estate deals. As an example, he cited a project the company finished last year – the Park Terrace condos on Poplar Avenue across from Overton Park – when the economy “fell out.”
“We found something important – it had to be done,” Savage said. “People weren’t going to buy a condo for X number of dollars just to move in and say, ‘OK, now I’ve got to hire a contractor and interior designer, pick out finishes, get appliances picked out and now I’m ready to occupy.’ People like it simple, done, all in the little box and finished.”
That means having everything installed from the flooring to the paint to countertops, something Metro has begun. Once the company is through with the project, the units will be move-in ready.
“Our experience is that paradigm works better in this economy and in this market as well,” Savage said.
At least one unit won’t see any work, however. Dawson said the penthouse suite will remain a blank palette for the buyer to add his or her finishing touches.
“Anybody who would buy that unit has probably got a pretty good idea of what they would like that to look like,” said Dawson, who wasn’t certain if other units would be finished.
Already, though, seven units were listed on Hobson’s Web site at press time, with prices ranging from $175,000 to $495,000.
While the Goodwyn is by no means the biggest real estate bust in Memphis – not even in the Downtown market, where The Horizon sits unfinished and vacant – its status as a historic property has garnered more attention than normal.
Tony Bologna, principal of Bologna Consultants LLC, a real estate consulting firm, said projects like the Goodwyn are literally and figuratively more high-profile than others.
“An eight-unit building in Midtown or East Memphis is not going to get the kind of press that the Goodwyn Institute is going to have,” Bologna said.
Now the team working on the Goodwyn is hoping for some good news. Savage said he believes the Goodwyn’s potential turnaround is analogous to what’s happening with the rest of the housing market.
“It’s almost a perfect picture of what our economy has gone through in the last couple of years. It had all this promise and glory,” Savage said. “Then it sort of fell on hard times and now maybe it’s showing some resilience and it’s back. It’s a good metaphor for what’s going on.”
For more about the Goodwyn and other Downtown condo stories, see the Nov. 21-22 issue of The Memphis News, sister publication of The Daily News.