Downtown San Diego's massive 769-unit Vantage Pointe condo complex has been sold to Chicago-based Equity Residential for $200 million, keeping the failed condo development as a rental building. The San Diego Union-Tribune reports
that the sale lets Canadian developer Pointe of View exit the troubled development which failed to find enough buyers to stay afloat. In March, Pointe of View defaulted on its original $210 million construction loan
. Although at one point there had been as many as 100 buyers for units in the 40-story tower, 60 buyers had canceled over the last few months and the remaining buyers will have their deposits returned. The project appears to have been the victim of bad timing, hitting the market in the middle of a condo glut.
To generate income for the project, Pointe of View began renting units and buy the time it was sold Vantage Pointe, a little more than 20 percent of the building had been rented out. Rents for one- and two-bedroom apartments range from $1,600 to $3,400.
The transition of stalled condo projects back into rental units is one that seems to be happening across the country. It's the reverse of the condo craze that happened when real estate
was reaching stratospheric heights and apartment buildings were going condo.