That's very helpful. Thank you, atlrvr.
After a quick look at the dec and a handful of the deeds here's what I see: The developer borrowed $195M or about $360/sf. Most of the deeds I saw were at pricing of just below $500/sf. So we can probably assume that the develop expected to make about $50M in profit assuming a sellout averaging $475/sf. They appear to need an average of $375/sf to make no profit, lose all their equity, but get the bank paid off. Fascinating stuff we're observing if you think about it. It's like a game of multimillion $ chicken going on right now between this developer/lender and the Charlotte condo buying public.
In 5 years I suspect the market will have rendered its verdict as to what this project at this location is "worth" to prospective owners. In the short run though, I think a combination of circumstances (bad economy, too many units delievered too soon (probably) and other factors) will probably force this project through a period of significant discounting in order to accellerate the absorbtion of the project to a point where the debt is either paid off or reduced to a level that the lenders deem gets them "out of the woods" so to speak on a risk basis. If the Vue follows the typical pattern of others that have been similarly situated it will close some modest percentage of its presales prior to unveiling a program that gets aggressive about pricing to jumpstart sales again. It's obviously impossible, or at least impractical, to do these things simultaneously. And there is more incentive for MCL to hold off if the contracts allow for the developer to sue for performance even though there may or may not be good ILSA defenses buyers could avail themselves too. Developers are also generally an optimistic bunch and this one may or may not have yet accepted that discounting will be necessary.
All of this is to say that it remains to be seen whether +/-$475/sf will be sustainable for this project. I hope for the sake of those who have elected to close that it does. But as you can see from above, every closing that the developer can generate above that $375/sf mark reduces his debt basis in a way that allows him more breathing room with his lender and increases the likelihood that he can recover some invested equity and perhaps still make some of the original profit that was forecast, even if an auction or heavy discounting are required to get there. As a prospective buyer sitting on the sidelines, unencumbered by being a party to a presale contract, it sure seems to me that the best deals to be had in this project will reveal themselves in another quarter or two.