All Condos at Urban Exchange To Be Leased, Not Sold

Call 540-434-5150

May 26, 2009

Construction is moving along steadily at Urban Exchange in downtown Harrisonburg. This exciting new mixed-use community will include 194 condos, two levels of structured parking, and approximately 12,000 square feet of retail space.

Over the past 16 months, we have been excited to see that people crossing nearly every demographic have interest in living at Urban Exchange. Those having committed to living at Urban Exchange span an age range of 20 to 80, and include retirees, young professionals, university faculty and staff, undergraduate and graduate students, families with children, employees of growing local companies such as Rosetta Stone, SRI, SI, RMH, and more.

Urban Exchange is comprised of two wings with approximately 100 condos in each, and when we broke ground in February 2008, we did so with the vision of selling the condos in the West Wing, and leasing them in the East Wing. This past week, however, we made the decision to lease all 194 condos instead of selling half of them --- primarily because of the significant changes in the condominium financing market that have taken place over the past 12 to 18 months.

The West Wing of Urban Exchange is comprised of 98 condos, and Fannie Mae and Freddie Mac guidelines dictate that 51% (soon to be 70%) of such condos must be owner-occupied in order for any purchaser to use a conventional mortgage for purchasing at Urban Exchange. Furthermore, Fannie Mae and Freddie Mac will not allow loans to close on any condos until 51% of the condos are reserved.

Given these guidelines, we knew that it would be difficult to orchestrate the sale of 70 condos nearly simultaneously, but we were determined to attempt to do so. Unfortunately, a few timing and logistical factors conspired against us:

  1. Construction on the East Wing (for lease) was started two months prior to construction on the West Wing (for sale).
  2. Prospective Urban Exchange tenants were willing to sign leases well before their condo was close to being complete. (In fact, I believe the first leases were signed before we even had a single piece of lumber on the work site!) As of last week, 75% of the East Tower was leased, and 25% of the West Tower was leased.
  3. Prospective Urban Exchange buyers were hesitant to sign even a non-binding reservation agreement until their condo and the building as a whole was nearly complete if not entirely complete. As of last week, 15% of the West Tower was reserved for purchase.

Last week, when this decision was made, we were at the crossroad we had anticipated for several months. We were seeing 5 to 6 new leases a week, yet nearly all of the prospective buyers (without reservations) were waiting to commit until construction was nearly complete. We realized that within the next few weeks we would have to start turning prospective tenants away if were to preserve enough owner-occupied units in the West Tower to achieve the occupancy standards from Fannie Mae and Freddie Mac.

Given the vast, early demand from tenants to live in Urban Exchange, and the delayed, hesitant demand from buyers --- last week we decided to move forward with leasing all of the condos at Urban Exchange.

We have discussed this change at length with all of the buyers who had reservations at Urban Exchange, but we know that there were quite a few other prospective buyers who had not yet committed to purchase. If you are one such person, and are still excited about the possibility of buying a condo in downtown Harrisonburg, we'd like to stay in touch with you.

The developers of Urban Exchange own several other properties in downtown Harrisonburg where they will be developing condos after Urban Exchange is complete. The next two projects that they will be developing will be considerably smaller than Urban Exchange (15-25 units) and thus will be much more feasible for condo sales. In approximately six months we will be starting to hold focus groups with any such interested downtown condo buyers, as we begin the design and planning stages of these next projects. If you would like to know when these focus groups begin, please click here.

Thank you for your continued support of and excitement for Urban Exchange --- while the decision to lease all of the condos marks a slight change in direction, it will still be bringing dynamic change to our downtown district. In just over a month, the first residents will be moving into Urban Exchange, and as the next few months unfold, we will be building up to over 300 new residents of downtown Harrisonburg in an exciting and diverse community at Urban Exchange

If you have any questions about this change in direction at Urban Exchange, please contact me (Scott Rogers, 540-578-0102, scott@LiveUE.com), and if you have interest in further details on leasing a condo at Urban Exchange please contact Mary Messerly (877-548-3831, mary@LiveUE.com).

Thank you,

Scott Rogers  /  540.578.0102
Coldwell Banker Funkhouser Realtors

Learn more about leasing a condo at Urban Exchange:


For Apartment Leasing Information Contact: Mary Messerley @ 540-434-5150 ext 203.
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