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Prices lower, Ritz units are selling

Ownership of the $220 million Ritz-Carlton Residences is back in the hands of its Long Island-based developers nearly two years after the luxury development underwent a massive refinancing amid problems stemming from construction lawsuits and the recession.

Joseph Graziose

The stately luxury development, perched at the water’s edge on Key Highway, remains one of the city’s most luxurious addresses — and units are beginning to sell faster thanks to new lower pricing, RXR Realty Senior Vice President Joseph Graziose said.

“We have 190 units, and we have closed on 62,” an optimistic Graziose said last week. “And we have another 20 under contract with scheduled closings through the end of December.”

RXR Realty recently bought back a $176 million private refinancing loan made in 2010 to help restructure the development’s construction debt load. That has relieved some business-related pressure at the site, said Graziose, also general manager of the project.

During this time of tight lending in the housing market, it has allowed the developer leeway to close deals in creative ways that include making small to mid-size loans to buyers of the project’s one-, two- and three-bedroom units that sell for $499,000 to $4 million.

Graziose said the RXR ownership also allows them to “move pricing around the building” to suit interested buyers, some young professionals with limited budgets.

“When we [at RXR] were talking about it, we talked about the need for flexibility and flexible pricing,” he said. “The best thing we can do with this property is to take the banks out so we’re not under pressure.

“It’s extremely exciting news.”

The Ritz-Carlton Residences opened in 2007 — shortly before the recession hit and all but shut down luxury condominium sales along Baltimore’s glittering waterfront.

Other developments such as Silo Point, the Vue and Harborview Pier Homes were also affected. The Pier Homes held an auction of 18 units in June 2010 to jump-start sales at the waterfront property, located next door to the Ritz-Carlton Residences.

Graziose reported last week that sales at the Ritz are starting to pick up. His confidence is supported by figures that show a total of 75 units are expected to be sold by Dec. 31.

“I’ve had offers in 2011 that I did not accept,” he said. “I’m anxious, but not in a rush. In two or three years, by early 2014, I’m quite confident we’ll be set and done,” selling all units.

“I have a lot of cash buyers here.”

That is a phenomenon also seen by local Realtor Theo Harris, of Keller Williams Realty Baltimore. Harris said high-priced luxury projects like the Ritz are attractive to cash buyers on the hunt for great real estate deals.

“I have sold two properties — one downtown for over $1 million and I’m marketing another one — recently,” Harris said. “I think we are seeing incredible deals, and I’m seeing people writing checks for them. People who have the money are making aggressive deals.”

Of the Ritz-Carlton Residences, Harris said: “I think the Ritz is a great project. I believe the competition now is the Four Seasons Hotel” — the $200 million luxury development that opened Nov. 14 in Harbor East with plans to build residences in yet-to-be-finished floors above the hotel.

Sales figures have been mixed in the luxury condo market.

In August 2010, only 23 of the 190 units at the Ritz-Carlton Residences had sold. In response, Graziose embarked on a mission to drop the prices of several units throughout the tastefully landscaped five-star project.

Each unit has an elevator and custom crown molding, marble floors, gourmet kitchens and luxury bathrooms. The project has a spa, an indoor pool, concierge service and vistas of the city skyline, Federal Hill and harbor.

The most expensive unit remaining to be sold is a $4 million penthouse with 5,675 square feet, he said.

Multiple units have been combined by buyers to make up larger condos, including the units purchased by bestselling author Tom Clancy who bought an entire penthouse floor.

Clancy originally paid $12.6 million for three Ritz units at the penthouse level in November 2009, the most expensive residential real estate transaction of that year.  In 2010, Clancy purchased three more units — at discounted prices — to form an entire floor of living space.

“We are really becoming quite a community here – our residents continue to be our biggest cheerleaders,” Graziose said.