Developers of ultra-high-end Manning condos ‘confident’
Nashville Business Journal-Linda Bryant
The downswing in housing sales has slowed construction of The Manning at Belle Meade, an ultra-expensive condominium development with units priced from $950,000 to $5.5 million.
The developers of the 34-condo, $60 million project at 120 Woodmont Blvd.—Richard and LaRawn Scaife Rhea—say the ambitious development is secure and moving forward with 50 percent of the units sold so far.
LaRawn Scaife Rhea says the contracts are firm commitments that don’t allow dropouts as long as construction begins by Sept. 30. She says the goal is to start construction some time in September.
A finished project would represent the priciest per-unit condominium development in Nashville to date. The Adelicia near Music Row came in at $66 million but has more than 180 units.
“We are confident,” Rhea says.
“We are within striking distance.”
To deal with the realities of the stagnant market coupled with stricter sales requirements from banks, the Rheas have extended The Manning’s sales period and don’t plan on completing the project until 2010.
By that time the economy likely will have adjusted, Rhea says.
Construction on The Manning was slated to begin in January this year, with completion originally anticipated in 2009.
“The bar is higher than it was even six months ago,” Rhea says. “Banks have changed their (lending) standards.”
When the housing market was boiling over, banks generally required a condo project to hit a 50 percent sales mark before funding was freed up. Now most banks are requiring 60 to 75 percent.
Banks also aren’t willing to finance as much of a development project as they used to, says Ernie Felts, executive vice president of real estate lending for Regions bank.
When the market was hot, the bank would finance about 70 percent of a development. Now that figure is more like 50 percent, says Felts, adding, “It means money is coming out of the developers’ pockets.”
The Rheas have invested $300,000 in a sales and design gallery on Woodmont Boulevard near the intersection of Harding Pike, on the two acres where the 10-floor development will be built.
Felts, who’s not involved with The Manning, says the project should be more attractive to lenders than a large one with many units.
“Thirty-four (units) is a lot different than 400,” Felts says. “They have a specific niche market, so it’s probably a lot more doable.”
Whether or not a not a bank decides to lend also “depends on the financial strength of the borrower,” Felts adds.
The Rheas are no strangers to Rolls Royce-style developments. The Nashville residents have developed other mega-high-end projects in the United States and the Caribbean.
They compare The Manning to another one of their projects, The Retreat at Mountain Village, considered one of the most luxurious condo projects in the United States.
Some of the luxury elements of The Manning include a formal grand salon, private wine storage, event planning services, on-call personal trainers, a concierge service and full-time staff, personal shopping, pet care, extensive estate gardens and walking areas.
Rhea says she’s ordered working drawings from the architect, an expensive step usually taken near the end of a development’s pre-sales period.
“You don’t invest in working drawings unless you’re confident you’re going forward,” she says.
