Ritz-Carlton developer says it's talking about super-sizing more condos

Novelist Clancy's $12.6 million deal may not be last

November 20, 2009|By Jamie Smith Hopkins, Gus G. Sentementes and Andrea K. Walker

The developer of the Ritz-Carlton Residences in Baltimore said it's talking with prospective buyers interested in making super-sized condos by combining adjoining units - echoes of the deal it struck with novelist Tom Clancy.

RXR Realty said one buyer is considering whether to put two penthouse condos together to make a residence "upwards of 9,000 square feet," said Joseph Graziose, the company's senior vice president. He said a family is looking at combining two lower-level units to make 5,500 square feet of living space attached to a 2,000-square-foot terrace, which overlooks the Inner Harbor and outer harbor.

Clancy's unit, purchased Wednesday for a record-setting $12.6 million, is a nearly 12,000-square-foot residence made from three separate penthouses. It's so big, it outstrips his Calvert County mansion on the Chesapeake Bay by 1,600 square feet.

His attorney, Lowell R. Bowen of Miles & Stockbridge, said Clancy - a Maryland native best known for thrillers starring Jack Ryan - will keep that house as his primary residence. It's not his first condo in the city: He bought a 2,400-square-foot unit in Canton Cove in 1993.

Graziose said the Ritz-Carlton hasn't been marketing itself to the well-heeled with a "buy two, turn them into one" strategy. It poses challenges to construction staff, who have to combine separate units in a way that properly accounts for plumbing and electrical work in the walls.

"People have come to us and in the process of looking at our facility, once they sort of fall in love with it, then it's a matter of falling in love with the space," Graziose said of the requests to put units together.

Clancy's condo has four bedrooms, 6 1/2 bathrooms and a total of six balconies with harbor views. Three semi-private elevators serve the space. There's a theater, imported marble and what RXR Realty dubbed "museum-quality lighting."

The local real estate industry is cheering about the sale, an eye-popping deal in a rough housing market.

"It's a tremendous vote of confidence in the Baltimore market, particularly the luxury market downtown, which has really been lagging here of late," said Joseph T. "Jody" Landers III, executive vice president of the Greater Baltimore Board of Realtors.

But economist Anirban Basu warns against taking it as a sign that the hard-hit market for new condos in the city is picking up.

"I think it does tell us something about Mr. Clancy's finances, but it in and of itself does not tell us that the condo market has turned around," said Basu, chief executive of Sage Policy Group, an economic and policy consulting firm in Baltimore. "Indeed, the lack of sales of new condominiums in Baltimore City has been simply astonishing."

About 530 new city condos are ready for occupants, but only 38 sold in the first nine months of the year, said William Rich, vice president at real estate consulting firm Delta Associates. That is at least an improvement over 2008, when so many buyers backed out of contracts that the net sales were in the negative numbers.

"I wouldn't say the market has recovered yet, but it's in the process of starting to recover," Rich said.

One problem, in Basu's opinion, is that many of the city's condos are positioned for the "aspirationally wealthy" - well-off buyers who might have happily made a down payment on a $600,000 or $900,000 pad a few years ago. But they're not so well off since home values and the stock market fell. The truly wealthy, on the other hand, "can weather this storm," Basu said.

"They are better-positioned to translate the economic downturn into new economic opportunities for themselves," he said.

A $12.6 million deal is unusual not only in Baltimore but in many markets. Sales of homes over $1 million - a much larger category - account for just 1.3 percent of the U.S. market, said Walter Molony, a spokesman for the National Association of Realtors.

Units at the Ritz-Carlton range from the mid-$600,000s to $5 million - not counting Clancy's combined mega-penthouse. His purchase is the 23rd sale at the 190-unit complex.

"I can't begin to tell you the buzz around here, from our employees to our residents," Graziose said.

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