May 24, 2010: UIYB: The Natick Collection

>> Rooney: IN 2005, GENERAL
GROWTH PROPERTIES BELIEVED IT
HAD A BRILLIANT AND PROFITABLE
IDEA.
BUILD A HIGH-END CONDO
DEVELOPMENT AND ATTACH IT TO A
HIGH-END SHOPPING MALL.
BUT WHEN IT HIT THE MARKET IN
2007, ONLY A HANDFUL OF CONDOS
SOLD.
RAISING QUESTIONS OVER WHETHER
THE ECONOMY OR THE LOCATION IS
TO BLAME.
FROM THE OUTSIDE IT LOOKS LIKE
ANOTHER PART OF THE NATICK
COLLECTION BUT FROM THE INSIDE
IT'S A LUXURY JUNKY'S DREAM
COME TRUE.

>> TWO PUTTING GREENS OUT
THERE.
ALL OF THE FURNITURE THAT SITS
ON THE PARK WAS IMPORTED FROM
GERMANY.
ALL THE UMBRELLAS WERE
IMPORTED FROM ITALY.

>> Reporter: JANICE IS THE
LISTING AGENT.
A 215-UNIT LUXURY CONDO
DEVELOPMENT THAT MADE A SPLASH
WHEN IT HIT THE MARKET IN 2007
WITH PRICES RANGING FROM
$500,000 FOR A ONE BEDROOM TO
$1.6 MILLION FOR A PENT HOUSE.
BUT AFTER TWO YEARS ONLY 37
UNITS HAD SOLD.

>> THE BUILDING WAS COMMITTED
TO IN ONE OF THE STRONGEST
REAL ESTATE MARKETS EVER.
AT THE TIME THAT THE BUILDING
WAS COMPLETE, THE REAL ESTATE
MARKET OBVIOUSLY WAS
TREMENDOUSLY IMPACTED BY
ECONOMIC CONDITIONS.

>> Rooney: IT BOASTS 24-HOUR
SERVICE, A 1.5-ACRE ROOF TOP
GARDEN AND PRIVATE ACCESS TO
THE NATICK COLLECTION.
AN ATTRACTION THAT IS ALSO A
PROBLEM.
SALES HAVE BEEN HAMPERED BY
THE PERCEPTION OF A HIGH-END
HOUSING COMPLEX BEING ATTACHED
TO A MALL.

>> I THINK A LOT OF PEOPLE
REALLY BELIEVE THESE
CONDOMINIUMS WERE BUILT ON TOP
OF THE MALL.
WE HEARD MANY CONVERSATIONS
LIKE THAT AND ACTUALLY STILL
TO THIS DAY ARE HEARING THOSE.
WE'RE REALLY AJISENT TO THE
MALL.

>> Reporter: DEVELOPER GENERAL
GROWTH PROPERTIES HELD AN
AUCTION LAST OCTOBER.
55 UNITS SOLD AT PRICES 35 TO
65% BELOW THE ORIGINAL ASKING
PRICE.
SHE SAYS BUSINESS HAS BEEN
STEADY SINCE.

>> WE HAVE PULLED OUT OF ALL
OF OUR PENT HOUSES.
THEY HAVE LESS THAN A HANDFUL
OF THREE-BEDROOM HOMES NOW
LEFT AND PROBABLY ABOUT THE
SAME OF THE ONE-BEDROOM HOMES
LEFT.

>> Rooney: WITH 70% OF THE
BUILDING NOW SOLD, SHE IS
HOPING BY 2011 THERE WILL BE
NOTHING LEFT BY HOMEOWNERS.
JOINING ME NOW IS BUSINESS
CONTRIBUTOR KRIS FRIESWICK.
WELL, COUNT ME AMONG THE
PEOPLE WHO THOUGHT THE CONDOS
WERE ON TOP OF THE MALL.

>> UNLESS YOU'VE ACTUALLY BEEN
OUT THERE AND SEEN IT, IT'S
HARD TO VISUALIZE HOW THEY
WOULDN'T BE ON TOP OF THE
MALL.
THEY'RE SORT OF ATTACHED TO
THE MALL.
THE RESIDENTS HAVE THEIR OWN
PRIVATE ENTRANCE INTO THE
MALL.
I GUESS THAT IS A BIG PERK.

>> Rooney: WHAT DID GO WRONG
HERE?
WAS IT IS THE LOCATION?
NATICK.
THE IDEA OF HIGH-END CONDOS IN
NATICK OR THE IDEA OF A HIGH-END
CONDO BEING RIGHT NEXT TO A
HUGE SHOPPING AREA?
NOT JUST THE MALL BUT ROUTE 9
AND MASS PIKE.
I MEAN THEY ALL CONVERGE RIGHT
THERE.

>> FIRST OF ALL NATICK IS
ABSOLUTELY LOVELY WHEN YOU GET
AWAY FROM THE MAIN DRAG.
THAT'S BEEN A MALL AREA FOR
ABOUT 45 YEARS.
THE NATICK MALL WHICH IS WHAT
THE NATICK COLLECTION IS BUILD
ON WAS ACTUALLY BUILT IN 1966.
SO AS LONG AS THERE HAVE BEEN
ROADS THERE PRETTY MUCH
THERE'S BEEN A MALL THERE.
TO ANSWER THE QUESTION OF WHAT
HAPPENED, IT WAS THE PERFECT
STORM.
THE LOCATION IS NOT THE BEST
IF YOU WANT....

>> Rooney: TERRIBLE.
I'LL SAY IT.

>> THE ECONOMY PUT A DAMPER ON
ALL REAL ESTATE DEALS.
QUITE FRANKLY THE DEVELOPER
WAS VERY DELUSIONAL IF HE
THOUGHT THAT THEY WERE GOING
TO GET $1.6 MILLION FOR PENT
HOUSES IN A CONDO IN NATICK
NEXT TO A MALL.
I THINK THE REASON THAT THEY
SOLD SO POORLY DURING THE
ONSET AND THE TROUGH OF THE
RECESSION WAS THAT THE
DEVELOPER NEVER CAME TO THEIR
SENSES AND SAID LET'S CUT OUR
LOSSES AND LOWER THE PRICE
POINT.

>> Rooney: DID THEY DO IT ALL
HIGH END?

>> EVERYTHING IS ABSOLUTELY
HIGH END WHICH I THINK
PROBABLY WAS ONE OF THE
REASONS THE DEVELOPERS WERE
RETICENT TO DROP THEIR ASKING
PRICE BECAUSE WHEN YOU'RE
TALKING ABOUT, YOU KNOW, HIGH
END MARBLE FINISHES AND CUSTOM
THIS AND DESIGNER THAT...
COOK'S KITCHENS, JUST
EVERYTHING DONE PERFECTLY AND
THEY HAD COMMITTED TO ALL OF
OF THIS WAY BACK BEFORE THE
RECESSION WAS EVEN SOMETHING
THAT PEOPLE WERE WORRIED
ABOUT.
THEY HAD STOPPED BIDS, SOLD
UNITS AS EARLY AS 2007 AND THE
BUILDING OPENED FOR OCCUPANCY
IN 2008.
THEY LITERALLY COULD NOT HAVE
PICKED A WORSE TIME.
WHEN YOU'RE PLANNING SOMETHING
THIS HUGE AND THIS EXTENSIVE,
ONCE THAT BALL IS ROLLING YOU
CAN'T JUST STOP IT.
SO THEY GET STUCK HIGH AND
DRY.

>> Rooney: I WONDER IF THEY
HAVE MADE ANY MONEY.
THEY WENT INTO BANKRUPTCY IN
'09.
WHAT DOES THAT MEAN FOR ALL OF
THIS?

>> THAT MEANS THAT GENERAL
GROWTH PROPERTIES IS THE
SECOND LARGEST MALL OPERATOR
AND OWNER IN THE UNITED
STATES.
WHEN THEY FILED FOR BANKRUPTCY
BACK IN APRIL OF 2009 IT WAS
SORT OF THE SHOT HEARD ROUND
THE WORLD.
ANOTHER ONE OF THE HARBINGERS
OF DOOM THAT THE ECONOMISTS
POINT TO, POINTED TO DURING
THE RECESSION.
BASICALLY FOR THE PURPOSES OF
PEOPLE THAT LIVE THERE, IT
DIDN'T MEAN ALL THAT MUCH.

>> Rooney: THE NAME IS
HORRIBLE.
SO PRETENTIOUS.
WHAT WERE THEY THINKING.

>> THE BRANDING PEOPLE SORT OF
WENT THROUGH AND BRANDED
THIS....

>> Rooney: THAT'S THE NEW
PRONUNCIATION FOR NATICK.

>> OR PERHAPS IT SHOULD BE
PRONOUNCED NAY-TEEK.
BE THAT AS IT MAY.
YOU KNOW, THE PROPERTIES ARE
COMPLETELY PROTECTED BECAUSE
GENERAL GROWTH PROPERTIES IS
IN BANKRUPTCY.
THEY HAVE HAD LIENS PUT
AGAINST THEM FOR WORK THAT HAD
BEEN DONE ON THE CONDO AND THE
NATICK COLLECTION BY THE
DEVELOPERS THAT DID THOSE
PROJECTS WHO WENT UNPAID
BECAUSE OF THE OF MASSIVE
AMOUNT OF MONEY THAT THE
DEVELOPER WAS HEMORRHAGING AS
A RESULT OF THE FACT THAT
NOBODY HAD BOUGHT THESE
CONDOS.
HOWEVER, PEOPLE THAT OWN THOSE
PROPERTIES THAT ARE PAYING
CONDO FEES, THEY'RE ONLY
PAYING THEIR OWN CONDO FEES.
THEY'RE NOT EXPECTED TO SORT
OF MAKE UP THE CONDO FEES THAT
AREN'T GETTING PAID BY THE
EMPTY UNITS BECAUSE THE
DEVELOPER IS IN FACT PAYING
THE CONDO FEES, FUNDING THE
CONDO FEES FOR THE UNITS THAT
THEY STILL OWN WHICH AS OF
LAST COUNT 174 OUT OF THE 215
UNITS HAVE BEEN SOLD.

>> Rooney: THAT'S PRETTY GOOD.

>> IT IS.
I MEAN THEY'VE BEEN ON THE
MARKET FOR THREE YEARS.
THEY'VE ONLY SOLD 70%.
WE'LL SEE WHAT HAPPENS.
THINGS HAVE PICKED UP.

>> Rooney: WHAT ABOUT THE MALL
ITSELF?
THE COLLECTION IS VERY HIGH
END.
YOU KNOW, IT'S ALL BEAUTIFUL
STORES.
HOW IS IT DOING?

>> WE DON'T KNOW.
IF REASON IS BECAUSE NOT ONLY
DID GENERAL GROWTH PROPERTIES
REFUSE TO TALK TO US ABOUT HOW
THOSE STORES ARE DOING, HOW
REVENUES HAVE BEEN FOR THE
RETAIL STORES THAT ARE IN
THEIR MALL, THEY WOULD NOT
ALLOW US TO FILM INSIDE THE
MALL WHICH I FOUND EXTREMELY
INTERESTING BECAUSE ON
THEIR....

>> Rooney: BECAUSE IT'S EMPTY.

>> WE DON'T KNOW.
ON THEIR WEBSITE THERE'S A
LINK THAT BASICALLY GOES TO A
SEPARATE WEBSITE WHERE THEY
ADVERTISE THEMSELVES AS A
LOCATION FOR FILM AND TV
PRODUCERS TO COME IN AND FILM
IN THE MALL.
WHY CAN'T WE FILM IN THE MALL?
THEY SAID IT'S OUR POLICY TO
NOT ALLOW ANY TAPING IN THE
MALL EXCEPT I GUESS THEY DO.

>> Rooney: FOR A COMMERCIAL
MAYBE THEY ALLOW IT.

>> BE THAT AS IT MAY THEY
WOULDN'T LET US IN AND TELL US
ANYTHING ABOUT THEIR REVENUES
OR ANSWER ANY QUESTIONS ABOUT
HOW MANY STORES HAD CLOSED IN
THE LAST THREE YEARS, HOW MANY
OPENED.
AND THEY WERE COMPLETELY
UNCOOPERATIVE.
AS FAR AS THE MALL GOES.
BUT THEY WERE COOPERATIVE AS
FAR AS THE CONDOS GOES.
THE FACT THAT THEY'RE IN
BANKRUPTCY PROBABLY HAS A LOT
TO DO WITH WHY THEY DON'T WANT
TO TALK ABOUT ANYTHING.
THEY STILL OWE MONEY ON THOSE
LIENS SO THEY CAN'T COME OUT
AND SAY WE'RE DOING GREAT.
EVERYTHING IS FABULOUS.
WE'RE MAKING MONEY HAND OVER
FIST BECAUSE THE CONTRACTORS
WHO WERE OWED MONEY WILL HAVE
A PERFECTLY GOOD REASON TO
SCREAM AND YELL.
THEY CAN'T SAY WE'RE NOT DOING
WELL, WE'RE STILL LOSING
MONEY.
OUR RETAILERS ARE HAVING A
TOUGH TIME.
I'VE CONTACTED STORE OWNERS
WITH UNITS IN THE MALL AND
THEY WOULDN'T TALK ABOUT HA
THEY'RE EXPERIENCING REALLY.
A REMARKABLE....

>> Rooney: THE HOMEOWNERS?

>> THE HOMEOWNERS ALSO DIDN'T
WANT TO TALK.
SO WE HAVE HOMEOWNERS THAT
WON'T TALK.
RETAIL STORE OWNERS THAT WON'T
TALK.
WE HAVE A MALL OPERATOR THAT
WON'T TALK.
IT MAKES YOU WONDER WHAT IS
THE BIG SECRET OVER THERE.

>> Rooney: WE CAN GUESS.

>> WE'VE HEARD THAT THE MALL
IS BUSY.
I DO KNOW THAT THE ANCHOR
STORES, THE BIG ANCHOR STORES
ARE NORDSTROMS AND NEIMAN
MARCUS.
THEY HAVE BOTH SHOWN
REMARKABLE YEAR OVER YEAR
GROWTH.
LAST YEAR WAS A BLOOD BATH.
THEY HAD NOWHERE TO GO BUT UP.

>> Rooney: WE'LL SEE HOW THIS
ONE WINDS UP.
KRIS FRIESWICK, THANKS FOR
COMING.
WHEN WE CONTINUE, THE MASTER
OF GLASS.
ARTIST JOSH SIMPSON.