Still Waiting for that 100%

With the recent news that construction on John Saca's condo towers has been halted "indefinitely," it's time for a check up on that other white elephant of Sacramento's housing bubble: Craig Nassi's Aura condo tower. Here's the most recent pronouncement by Nassi, captured in the December 16, 2006 edition of the Sacramento Bee:

Denver developer Craig Nassi insists he is on track to start construction soon on Aura, a 38-story condominium at Sixth and Capitol..."We have a very loyal group of people who have bought in our building and they're ecstatic to move in," Nassi said of Aura, about 70 percent of whose units have been presold.

Just how loyal? Let's take a time machine back to April 2006, a time of downtown condo euphoria. An April 5, 2006 Sacramento Business Journal article sets the stage:

He's spending $250,000 on a gala sales event this weekend. Guests will sip Dom Perignon, dine on pricey Russian caviar and oysters and listen to a San Francisco Symphony string quartet while touring a furnished model that includes such standard features as floor-to-ceiling windows, Bulthaup cabinets, oak laminate floors, Miele appliances and subzero freezers that, Nassi says, "cost more than most people's cars."

By the end of the weekend, he says he expects to collect nonrefundable deposits - 15 percent of the sales price - for all 265 units in his Aura Condominiums project. Units will range from the mid-$400,000s to more than $1.5 million for penthouse and larger condos.

"It will be like a game of musical chairs," he says. In other words, some folks may be left standing without a condo when the symphony strikes its last chord.

On April 8th, the Bee reported this prediction:

Sure, developer Craig Nassi knows how to party, but the question remains: Can he sell out Aura, the high-end condominium tower he has planned for downtown Sacramento? Nassi's answer during Aura's grand-opening bash on Friday: "We'll be 100 percent sold by 6 p.m. on Sunday."

On April 11th, the Bee reported the results of the extravaganza:

Buyers eager for downtown high-rise living snapped up "over 75 percent" of the units in the yet-to-be built Aura condominium tower, during a three-day sales event that ended Sunday, according to developer Craig Nassi. "Sacramento has spoken loud and clear," Nassi said by cell phone. " 'Build it.' "

His Denver-based company, BCN Development, had not yet made a final tally of signed contracts, but buyers had put down nonrefundable deposits on at least three-quarters of the 265 condos in the 38-story tower planned for Sixth Street and Capitol Mall, Nassi said.
...
Although Nassi has not yet identified who will finance Aura, construction is supposed to start in two months and finish in mid-2008.

The next day, a Bee editorial trumpeted "Downtown passes a housing test."

A noteworthy test happened the other day with an upscale 265-unit downtown condominium project known as Aura...More than three-quarters of the units, Aura's backer told The Bee's Jon Ortiz, got gobbled up...It seems the aura of our sleepy downtown is quickly fading.

But what about those remaining unsold condos? Why didn't 100% sell over the weekend?

"We still have about 20 percent of the units to sell," Nassi said. "We just didn't have enough time to write all the contracts..." He expects buyers to ink contracts for the remaining units at BCN's on-site office this week.

Sound familiar? Perhaps Nassi learned this creative trick from the marketing gurus responsible for Centex's "12-hour" sale:

"Our 12-hour savings event was a huge success," D'Arcangelo said. "Because the response was so great, and we were unable to spend quality time with everyone in the 12-hour period, we are extending the special incentives through Sunday.

The week passes without a media report of a sell out. But on May 24th, the Bee's Bob Shallit had this tidbit:

What's the latest on the Sacramento project? Nassi says he's collected non-refundable deposits on about 80 percent of his 265 units.

However by June, Nassi provided a more ambiguous response in a June 2nd Bee story:

Nassi said Thursday that he has taken non-refundable deposits on "the majority" of Aura's 265 units, selling for between $386,000 to $1.24 million. In April he told The Bee that three-quarters of the units were sold during a three-day grand opening. "We still have units left and we're selling every day," Nassi said. "We're not holding back anything."

Although construction was supposed to begin in June, the month ends with no reports of construction. Then in October, the Journal had this report:

Developer Craig Nassi says construction of his closely watched high-rise condominium project in downtown Sacramento will start by the end of the year, despite a fast-sliding housing market that has caused a national homebuilder to cancel two competing projects...The Denver-based company has collected deposits for 70 percent of the 268 condos.

Wait a minute. Nassi said that he's "selling everyday" and yet deposits have declined from "about 80%" to 70 percent? Even more remarkable is this statement that appeared in the October 19th Bee:

Craig Nassi, the Denver-based developer building competing condominiums nearby, has presold 73 percent of his 268 units. Sherryl Fleeman, the sales representative for Nassi's Aura project at Capitol Mall and Sixth Street, said that "sales have been consistent with no noticeable slowing" since the project's splashy April kickoff...Officials with Nassi's company, BCN Development, would not confirm the monthly sales trend numbers.

Sales have been consistent with no noticeable slowing since April? Isn't 73% less than "over 75%" or "about 80%"? If sales have been consistent, then it appears that cancellations have been even more consistent, with "no noticeable slowing." It seems that some of Nassi's buyers aren't "very loyal" or very "ecstatic to move in."

So what is going on here? Let's do multiple choice:

(a.) Nassi and company are engaging in puffery (to put it politely)

(b.) Sloppy media reporting:

• Inconsistent use of terminology (presold, nonrefundable deposit, etc.)
  
• Newspapers misquoted Nassi and company
• Reporters failed to read their own past articles and challenge inconsistent statements
  

(c.) All of the above

(d.) Other

Whatever the explanation is, we're still waiting for that 100%. Isn't nine months long enough "to write all the contracts?"