Derrick Penner
Sun
Vancouver developer Nat Bosa lays claim to bringing the highrise condominium to Orange County Calif., but has no qualms about putting the brakes on construction as the housing market falters there.
Bosa Development Corp.’s 28-storey twin-tower Marquee project in Irvine was the first highrise condo project within the county, Bosa said in an interview.
However, with Orange County being one of many American markets in a sales slump, Bosa added that he will wait to proceed with his next Orange County venture, a four-tower complex on a seven-acre site also in Irvine.
“I was supposed to start last year,” Bosa added, “but I’m probably not going to start them until the middle of next year.”
Bosa said San Diego, where he is also building condominiums, is also at the bottom of the real-estate cycle, and “I’ve seen quite a few of them since the ’70s.”
He is not alone. Other developers, including Canadian firms that went south of the border to jump into hot U.S. markets have also put projects on hold while times are tight.
Orange County‘s condo market exploded after Bosa Development started the Marquee project, the Orange County Register said this week.
However, the Register reported that some 17 of 37 proposed highrise condo projects might be delayed due to slumping markets.
Bosa added that the collapse of the American subprime mortgage sector has compounded some of the market’s difficulties, making it harder for buyers to get financing.
“Getting a mortgage three months ago was like a walk around Stanley Park,” Bosa said. “Getting a mortgage now is more like walking the Grouse Grind. It’s tougher.”
Joe Werner, chief operating officer of Intergulf Development USA Corp., a subsidiary of Vancouver‘s Intergulf Development Group, disagrees. Buyers with good credit can still get financing, he said.
However, Werner added that buyers don’t feel any urgency to jump into the Orange County market, especially pre-sale units, which is the reason Intergulf is holding off on construction of a 216-unit, 25-storey project in Long Beach.
Intergulf will “wait until it hits bottom before we proceed,” Werner said. “This is not the time to build. Things have slowed down quite a bit.”
Werner estimated that sitting on the Long Beach site will cost $600,000 to $700,000 a year in financing costs, but waiting a year or two to start construction on it “it’s not a big deal, in the overall scheme of things.”
So, instead of starting work on the Long Beach building in the summer of 2008, Werner said they will likely wait until the winter or the spring of 2009.
© The Vancouver Sun 2007