By John Schaffner
Owners of units in Buckhead condominiums developed by the Novare Group and some Buckhead business leaders are asking questions about the impact on the company’s Buckhead holdings after a recent article in the Atlanta Business Chronicle said Novare Group Holdings LLC is working with its lenders to restructure at least $100 million in loans for projects across the Southeast.
Novare founder Jim Borders told the Buckhead Reporter, “We do not believe that the corporate issues outlined in the (Business Chronicle) article will have an impact on our condominium communities, including those in Buckhead.”
The only Buckhead condominium project in development by Novare, in a venture with John Williams Properties, is the Ritz-Carlton Residences at 3630 Peachtree Road. The company also has projects under construction in Midtown, downtown and Atlantic Station. The total under construction in Atlanta is 500 units, out of 1,387 high-rise condo units across the Southeast.
In responding to the Reporter’s request for information about the Buckhead properties, Borders said Eclipse, on Pharr Road near Peachtree Road, and Realm, at 3324 Peachtree Road, “sold out long ago and are now simply part of the successful fabric of Buckhead.”
He said Gallery, at 2795 Peachtree Road, “is over 50 percent closed (104 of 203 homes), is the most successful to date of all of the new middle-market condominiums in Atlanta, and has a close-knit and active homeowner base. It is separately capitalized, has low leverage and well-capitalized partners, and we are continuing to see a steady pace of sales.”
Novare and Buckhead-based Coro Realty Advisors have a joint venture, Peachtree Rumson Holdings, that developed Gallery and is separate from Novare, legally and financially. More than 80 percent of the debt on the Gallery building has been paid down, according to a representative for the partnership.
“We expect Ritz-Carlton Residences, once we initiate a full-scale marketing campaign this fall, to be similarly successful (to Gallery), as its moderate pricing relative to its luxury namesake will, we believe, attract homeowners in a buyers’ market,” Borders said.
Novare also has land holdings in the Buckhead Village area. Borders said they are “challenging in those instances where tenancy was vacated in anticipation of near-term development, and we will continue to work through any issues there as they arise.”
The Business Chronicle said Novare lost $47 million in the first quarter of this year and $61 million in 2008. Novare’s auditors questioned the company’s “ability to continue as a going concern.” Novare faces $280 million in loan maturities in 2009 and $320 million in 2010.