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Originally published Tuesday, July 14, 2009 at 12:00 AM

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Bellevue Towers, other new condo projects cutting prices

Bellevue Towers, the region's tallest luxury condo project, is cutting prices 20 percent to kick-start anemic sales. Other projects coming online are cutting prices, too.

Seattle Times business reporter

By the numbers

Bellevue Towers: 184 of 539 units presold, but only 43 have closed.

Enso: 136 units; no closings.

Escala: Nearing completion; approximately 270 units.

Fifteen Twenty-One Second Avenue: 82 of 143 units closed.

Four Seasons Private Residences: 22 of 36 units closed, none since February.

Olive 8: 28 of 229 units closed.

Washington Square: 171 of 379 units closed.

Sources: King County; Seattle Times staff

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The developer of the region's tallest luxury condo towers says it's cutting prices an average of 20 percent in hopes of kick-starting sales.

Only 43 of the 539 units at Bellevue Towers in downtown Bellevue have sold since closings began in January, according to county records. "We're trying to respond to the marketplace and to what our buyers have been telling us for the last four to six months," Mark Edlen, a principal with developer Gerding Edlen, said Monday.

Bellevue Towers is one of more than a half-dozen high-rise, high-end condo projects in downtown Bellevue and downtown Seattle that have recently been finished or are nearing completion.

Sales or presales at all have been anemic. Gerding Edlen's announcement is perhaps the most dramatic response so far to the realities of the new, chillier marketplace.

In Seattle, a spokesman for Vulcan Real Estate said prices of all 136 units at its almost-finished Enso condominium in South Lake Union also are being reduced, but would not say by how much.

Most other developers have been reluctant to cut prices across the board. But some have been quietly settling for far less than list price on a negotiated, case-by-case basis, said James Stroupe, a Windermere Real Estate agent who specializes in condo sales.

He said across-the-board cuts could attract some prospective buyers who have been waiting for developers to make such a move.

"People scared"

"People are scared to close," Stroupe said. "They're afraid they'll be upside down (owe more than the home is worth) right away."

The two Bellevue Towers, 43 and 42 stories, are the city's tallest buildings. When the project held its grand opening in February, Edlen said sales were going well and predicted 100 percent occupancy within two years.

But "the market has adjusted downward," said Patrick Clark, of RealtyTrust, the firm marketing the project, "and we have to respond to that ...

"We've hit the reset button."

With the price cuts, he said, the least expensive condo in the towers is listed at $349,000, down from $399,000. The most expensive unit has dropped from $4.4 million to $3.35 million.

One-third presold

The average price is $927,000, he said, down from $1.18 million.

Bellevue Towers had presold 184 units, about one-third of the project, almost all before March 2008. Clark said 34 of those buyers backed out, usually because they couldn't sell their existing homes, or couldn't find financing, or feared their units no longer were worth the price they had committed to.

Reduced prices also are being offered to 113 presale buyers who haven't closed or canceled, Clark said.

Like Gerding Edlen, Vulcan, too, has offered price cuts to Enso's presale buyers, who have put deposits down on about 60 percent of that project's units. Closings have not begun at the 19-story building.

Edlen said he didn't know whether Bellevue Towers' price cuts would prompt similar moves by other developers of downtown high-rises. "Everybody's got their own strategy," he said.

Some observers have maintained that sales will pick up soon because savvy buyers will recognize supply is limited.

After the current crop, few, if any, additional new condo projects in downtown Seattle or downtown Bellevue are scheduled for completion before 2012.

But Clark said the inventory of unsold units in new or nearly finished buildings in the two downtowns tops 1,800, and price cuts will help unclog the pipeline.

At Olive 8 in downtown Seattle, county records indicate only 28 of 229 units have closed. But David Thyer, president of developer R.C. Hedreen, said his firm has no plans to cut prices.

"We're not inclined to discount the product to generate sales," he said. "We're long-term players. We have the support of the hotel [a new Hyatt occupies Olive 8's bottom 17 floors]. We're going to wait this out."

Hedreen has extended the contracts of some of the 180 presale buyers, Thyer said, and is acting as a lender, offering second mortgages to others to help close sales.

"We're doing lots of creative things to get through this," he said.

At Escala, another luxury downtown Seattle condo tower near completion, Eric Midby, of Lexas Companies, said the developer has no intention of reducing prices.

In downtown Bellevue, county records indicate 171 of 379 units have closed at Washington Square, finished early last year. The developer initiated a lease-to-own program earlier this year.

Two other luxury condo towers in Seattle were completed late last year.

At Fifteen Twenty-one Second Avenue, 82 of 143 units have closed, according to county records. Twenty-two of 36 units have closed at the ultraluxury Four Seasons Private Residences — none since February.

Eric Pryne: 206-464-2231 or epryne@seattletimes.com

Copyright © 2009 The Seattle Times Company

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