We recently posted about Marc Realty Capital wanting to deconvert River City condos to rental. It garnered a lot of discussion in our comment section. The one below was very interesting, so we wanted to post about it. A cautionary tale:
I feel sorry for all the people who live in this building and what they are about to go through.
I live a few blocks away and just went through this with Marc reality. Unfortunately the whole process is a con. We were also offered 225 a sq ft from an initial letter of intent to buy. The first vote was approved, then they started doing their research and all the sudden the price per sq ft. turned into a bulk offer that was wayyyyyyy less, and of course it was "best and final", yeah right you will hear that a few times!!
That vote got declined without contest. A few days after the NO vote, there was a new higher offer, which again required a vote. This one passed with significant margin. From that point on, we were told this was a done deal on the base offer. Then we moved on to the point of letting them walk through all the units to decide on upgrade credits, up to 20k. Kind of a joke, without outline as to how that would be decided and what the qualifying values were.
To complicate matters, they brought on board another partner company which was now running the deal. They also offered a discounted rent back formula so people could rent back their homes if so desired. It was a fixed formula based upon purchase price.
Well that was B.S. too. After walking through the units, that rent back formula disappeared and now a random list of rent back prices came out. No one could figure out a new the formula since the values were all over the board. If you had an upgraded unit, you were screwed since they wanted going rate for the neighborhood.
Anyway, the process struggled its way forward and more than 75% were on board with the new values, upgrade credits, and rent back prices. All that was left was a final vote to ratify the deal and it would have been done. Well that's when everything fell apart. Just before the day of the vote, a new offer was submitted that was drastically lower than what was proposed the second time around.
By this point, months had passed and people were making plans to move out and buy / rent new homes. I even heard that some people bought and signed leases. Basically, they waited until people were near or past the point of no return without options and gave everyone the shaft. They also tried to say that at least 50% of people were required to rent back from them at their non discounted going rate prices.
Needless to say, The new vote did not pass and the whole thing went down the drain.
Lesson learned; This process takes months, and during that time no one can sell units, start new leases, or basically do anything. If you are a land lord in river city this is your worst nightmare. Who wants to rent in a building that's for sale. While the deal sounds great, don't be fooled the end value will not be 225 a sq ft. or even close.
Long Time S. Loop Resident