Eleven Eleven East Pike is ready to sell and they're not gonna take it anymore. In a new press release, the folks at Eleven Eleven were none too pleased about the downward pricing pressure of recent auctions, citing Brix's reduction of prices by 30% and frustrations that bank appraisers will use previous comp auction sales to value Eleven Eleven.
In response, the developer will be offering "bulk pricing" where the pricing will vary depending on how many people participate. If you're the only one, you pay the high end of the bulk band. If 8 other people buy before November 30 (there are only 9 of the 27 units that have been put on the market so far), you'd get it at the low end of the band.
Personally, I'm not sure the bulk marketing tactic is worth the complexity. In my opinion, they should just price it well to begin with or sell them all in an auction — especially since the auction prices have been creeping up. They're not gonna make oodles of profit but even recent auctions have been pushing up price per square foot as more people realize the economic recovery is underway and the rambling talk of another Great Depression is now limited to militias and other other fringe groups.
Also, the bulk pricing seems to steal the show from more tangible Eleven Eleven selling points like the pretty good location, great architecture, and nice pricing. Cool design elements include movable puzzle walls and multi-purpose storage units.
Maybe it's just me but I think the whole bulk pricing bands concept is more trouble than it's worth and might even cause some buyers to focus on other places which keep it simple. What do you think?
I agree that this pricing strategy won’t work. This building has been on sale for six months already, and has not closed any sales, so they fired the sales agents and are trying this?
They should just reduce prices 30% and be done with it. The price per square foot at 1111 is simply too expensive for a wood and MDF building, regardless of the architect.
When did the Justen company take over 1111? I swear there was a different developer involved last year?
The marketing and sales effort was largely tabled until the building could be seen and appreciated for the finished product. The Justen Company has been involved since the beginning of the project as a development consultant.
Thanks for the discussion, Wendy.
What I find interesting is both an auction and a bulk sale require market participation – so they both have some level of nuance (it’s not that complex, really). However, I think a bulk sale is far less onerous than an auction. For one, the price range is clear with a bulk price because at an auction you never know what the price will be until the day of the auction. Also, there’s no guarantee that you’ll be successful with a purchase at an auction but with a bulk sale you have a reservation that provides a first right of opportunity for the home once the price is set.
All that said, we also accept offers and we publish a “buy it now” price. Several buyers have taken advantage of this to buy and close on their own schedule. In any event, the participating projects are offering base savings of 15%-25% percent off original list prices so they represent significant value even before further discounts.
I guess I must have imagined the three 1111 sales events I attended, the earliest being over a year ago at the Kundig offices, plus the myriad of emails. I think the reverse is true – potential buyers excitement went down when they saw the completed building. I know mine certainly did. Add a dash of economic chaos, and here we are.
Bulk condo sales is yet another gimmick to try to get buyers in the door without the developers/marketers having to take as big of a hit to find the true bottom of the market. It is wishful thinking on their part to try to offload a mass of inventory while still trying to hold their cards close (ie. uncertainty in price if you decide to buy in, but still have no idea whether or not others will participate). Essentially, the buyer does not know or understand what he/she is getting in way of price until last minute. Banks aren’t going to provide lending beyond what a property’s value is appraised, and in many cases today, they won’t even provide that much financing. A property is worth what it is worth. Here’s a novel concept – price the condos what the market will bare and buyers will buy the units, and inventory will reduce more rapidly allowing a “recovery” to ensue more quickly. WOW! Simple economics. This stand off is only hurting the developers and marketers in this game both short-term and long-term. Buyers have nothing but time on their hands, and they can wait much longer than developers with overhead costs to pour out each month.
I disagree with your characterization that talk of another great depression is limited to the fringe – ask any one of the 10% that are unemployed and have NO chance of getting their previous earnings back even if they manage to get hired in the same field. The 90% that are employed (or should I say the ~80% if you use the real U6 measure like the great depression) may think we stabilized temporarily but that can change quite rapidly unless real economic improvement (read HIRING) occurs. Having the government provide more bailouts is not economic growth…unless you are a precious metals dealer.
Eleven eleven’s bulk sales plan is lame lame.
from the mind of Dean Jones, creator of Urbancondominiums.com (dead website)comes another way to whip up the market & take reservations a la Escala (277 condos, 60 sold, 30 in a lawsuit & supposedly closing next month). Seriously marketing people. We’re only going to buy homes when we need one, want one & like one. You’re not going to change our minds. Why do you think disguising the old way that didn’t work is going to work this time? I cry foul.
Yeah, sounds about right. Just be fair in your pricing & offer a decent product instead of hiding a bad offering in an elaborate scheme.