The Chimney Condominium site is a 41,667 sf townhome development site with 30′ zoning on a full city block at 115 110th Ave NE in Bellevue, WA which is across the street from the Bellevue Park. The client was 21 separate Condominium owners who lost their building in a late-night fire. Kidder Mathews commercial real estate broker, Ross Klinger represented the seller in the transaction.
Washington State Law and the Title Companies do not favor an easy disposition of a Condominium property for a fee simple sale, even if the building is in complete disrepair.
This property faced several challenges including:
- The 1st Washington Condominium Act applied to this property based on the year it was built. Its declaration required the owners to decide in 60 days whether to rebuild the property or sell the property on land value. With building permits taking +/- 2 years, Condo owners would still owe their mortgage payment during this time period while spending additional monies on architectural soft costs. They ultimately chose to sell the land and collect insurance money for the lost building value.
- 2 weeks before closing Chicago Title went back on their word to ensure the sale of the property because they were worried about a single holdout owner who didn’t want to sell. There was a super majority vote to sell between the owners and Chicago Title still would not ensure the sale.
- The Development community knows the challenges of Selling a Condominium building as a fee simple sale and they have hesitation to spend their time and money underwriting the opportunity.
Kidder Mathews worked with Consultants and Attorneys (Condo HOA counsel reference available upon request), who as a team were able to settle pending litigation prior to closing, work with the Courts to fend off the holdout, and work with the Board of Directors to market the property through a call for offers date.
When Chicago Title made the decision to not ensure the sale, Kidder Mathews sent all documentation to the 4 most creative Title Companies in the market asking if they would ensure the sale. A week later Old Republic Title stepped up and agreed that the holdout appeal was frivolous, and they would ensure the property. We signed an addendum to transfer title and closed a week later.
We received 21 offers on the bid date and chose the non-contingent offer (no Feasibility Period) which was subject to clean title with a close in 60 days. We were also successful in adding a voting mechanism in the PSA that allowed an out in the event the final homeowner vote was unsuccessful after under contract. The property closed at its contracted price of $11,310,000 which equates to a record breaking price of $538,571 per potential Townhome lot in the raw.