Richmond condo market starts to turn

The Ginter Place condominiums in the former Richmond Memorial Hospital building came on the market in October 2008 just as the housing market tanked.

Sales have been slow in the 69-unit building, with only 15 condos sold and occupied.

But that could change quickly, real estate experts say. The inventory of condos for sale in Richmond's urban core is shrinking and could reach a crucial juncture soon, they say.

Six potential buyers have contracts on condominiums in Ginter Place off Westwood Avenue on Richmond's North Side, listing agent Dee Mason with Long & Foster said Friday.

Condos can be a tough sell, particularly if Federal Housing Administration funding is not available, requiring higher down payments and interest rates than conventional loans. More than half the condos in a building must be sold for conventional lending standards to kick in.

And that has not happened with Ginter Place, because less than a quarter of the condos are sold.

To help with the project, James E. Ukrop, one of the investors in Ginter Place, recently sold 335,649 shares of his Union First Market Bankshares Corp. stock. He will use the money to pay down a construction loan on Ginter Place, according to a filing this week with the Securities and Exchange Commission.

Ukrop, former chairman of Ukrop's Super Markets Inc. and First Market Bank before it was merged in 2010 with Union Bankshares, sold the shares to the bank for $13 per share for a total price of $4.36 million, the filing said.

Still a major shareholder, Ukrop, a director of Union First Market, holds directly or indirectly 874,064 shares, or about 3.4 percent of the company's outstanding stock.

"The project is financially stable," said Ted Ukrop, an investor with his father and four other people on Ginter Place. "There is no danger of it going into foreclosure."

"Ted and I are in the process of obtaining 100 percent control of the project," James Ukrop said.

"It's a wonderful neighborhood with open spaces," he said. "We thought Ginter Place would appeal to people who have lived there for years and years but don't need the big house anymore or the responsibility of the upkeep.

"We thought it made great sense at the time, but you never know when the world would change and it did."

The timing might be right for the project to turn around, real estate experts say.

"We're running out of inventory," Scott Garnett, associate broker with One South Realty Group, said about the condo market. "People are floored to hear that, but no new inventory is coming on the market."

Developers, stung by the real estate crisis and whose unsold projects have been financially draining, are not keen on doing more condos, Garnett said. Nor can many find financing for such projects.

"Nobody is bringing any online that we know about," Garnett said.

He said he has approached developers about the impending need but has been unsuccessful in persuading them to do more projects.

The number of condos for sale in the urban area from the Museum District to Church Hill was 400 in 2009.

The number now is about 58, Garnett said. Once these are sold, people will look beyond the immediate urban area to places like Ginter Place and Rocketts Landing, a multiuse project with condos and retail.

Also a tough sell until recently, Rocketts Landing straddles Richmond on the east side of the city and Henrico County, so people don't normally look there for condos as they do in the city, he said.

Nor do they look in the northern portion of the city, because Ginter Place is one of the few if only condo projects in that section of town.

"It's only a matter of time before people realize Ginter Place is there," Garnett said.

Sales are being driven by Virginia Commonwealth University undergraduate and medical students whose parents are buying the condos for their children while they go to school, Garnett said.

The big push for those sales isn't until spring and early summer, said Garnett, who expects the inventory to be cleaned out by then.

"The urban core is starting to get healthy again," he said. "We're seeing signs the market is coming back, and it's coming back strong."