There was a big condo preview event for Paul Allen’s South Lake Union development yesterday. Allen’s crack team of real estate and financial minions over at Vulcan are planning on building 3000 units over the next 10 years in dozens of buildings spread out over the 60 acres they own in the area located between downtown and Lake Union.
The 4 big buildings they’re pushing right now are Rollin Street Flats, Enso, Veer Lofts and The Martin. There are hundreds of units set to hit the market in the next two years, priced from $200K to penthouses over $1 million.
Who did they hire to market the properties? Did they turn to their own in-house staff of real estate professionals to sell the units? Did they choose to use an online auction? Did they pick Redfin, one of the recipients of Vulcan’s venture capital dough?
No. They chose uber-traditional real estate firm, John L. Scott to sell their properties.
Does the left hand not know what the right hand is doing? Is this a case of indifference, ignorance, actions at cross-purposes or just hedging their bets?
I understand that Vulcan Capital and Vulcan Real Estate are two separate departments, but it appears that Lance Conn, the executive who oversees Vulcan Capital and Ada Healy, the woman in charge of Real Estate Development, work in the same office under Paul Allen. It seems odd that just 3 weeks earlier Vulcan gave Redfin $8 million dollars for their real estate start-up, yet, when it comes to selling their own property, bypassed Redfin in order to hire a traditional bricks-and-mortar real estate firm.
This irony was not lost on the real estate agents I spoke to at the event, nor on the Vulcan staff I spoke to on Saturday.
When asked about the motive behind their decision, several agents and Vulcan staff I spoke to said that Vulcan management didn’t want to take a chance when selling their own property and wanted to hire a traditional firm they knew was up to the job, with a good marketing plan and a history of past success. Though they supposedly could have just marketed all of the units online through a link or page on the Redfin site, several agents from several different firms doubted whether enough Buyers would be willing to purchase homes that way.
As it stands, Redfin has had only 25 closed sales in 2006 (despite media reports of 40 sales) and only 4 of its listings have sold and closed in the same period. When Glenn Kelman bought his own home last year he said he enjoyed looking at the Redfin website, but made his own offer through Windermere.
The condos at South Lake Union will be sold through a lottery process where Buyers will be required to respond within 8 hours to decide whether or not they’ll proceed with the sale. You can view the process and timeline here when it becomes available: Discover SLU
More South Lake Union condo info:
More Redfin chatter:
Investing in Redfin by Steve Hall
Redfin is in the house by Peter Cochran