Ashley Terrace

A tower completed into the downturn

A residential high-rise finished in the late 2000s was completed into the sharpest housing downturn in living memory, and in a condominium project that leaves particular traces worth looking for.

The developer control period is the first. Under Michigan condominium practice a developer controls the association until enough units are sold, and a project completing into a downturn takes longer to sell out — which extends that control. Developer-controlled boards commonly hold assessments low to keep units saleable, which is exactly the period when reserves should be building. Ask when owner control transferred and what the reserve balance was at that point.

Unsold inventory is the second. Where units did not sell, they may have been leased by the developer, sold in blocks to an investor, or taken by a lender.

The sales record is the third. Prices achieved in 2008 to 2011 came out of a market that no longer exists and anchor nothing today.

The good news is that fifteen or so years on, all three of those are answerable from the association's own records, and a project that came through it and is now well run will say so plainly. A board that has rebuilt its reserve after a difficult start is in a materially better position than the history alone suggests.

The building itself is modern-code construction with modern systems, insulation and glazing, which is a genuine advantage over older towers and removes most of the era agenda older towers raise.

Secure parking in a downtown building is a real asset

Parking is the single most valuable ancillary thing a downtown residence can have, and a building with structured secure parking is offering something the surrounding streets cannot.

The questions are specific. Is a space deeded to the unit, assigned to it as a limited common element, or merely available to rent? A deeded space is property that transfers and can sometimes be sold or leased separately; an assigned space transfers with the unit but is governed by the bylaws; a rented space is a monthly cost that may or may not continue.

How many spaces come with a unit matters as much, because a two-bedroom home with one space is a constraint for a two-car household and there is rarely a simple downtown solution.

The parking structure itself is a substantial capital item the association owns. Concrete decks in a Michigan climate take salt, water and freeze-thaw cycling, and structured parking has a well-recognized repair cycle — deck coatings, joint sealants, and eventually concrete repair. It belongs in the reserve study as its own named line, and in a building whose parking is structured rather than surface, it is one of the larger items there.

So the test is whether the reserve study names the parking structure separately with a date and a figure. Where it does not, that is a significant omission rather than a technicality.

For a seller, deeded parking is worth stating explicitly and separately, because buyers who understand downtown will price it, and buyers who do not will need to be told.

One-bedrooms to corner plans is more than one market

A building running from efficient one-bedrooms to corner plans with skyline views holds several products, and the corner units are worth separating first.

A corner unit has windows on two elevations, which changes light, cross-ventilation and outlook fundamentally. In a tower there are only four per floor, which makes them structurally scarce within the building — and scarcity inside a building is the most reliable kind, because the supply cannot increase.

That means corner units should be priced against other corner units rather than against interior plans of similar area, and it means their comparable set within the building is small and worth tracking across several years rather than one.

Floor is the other variable and is priceable in its own right. Light, view, street noise and the practical experience of the elevators all differ between a low floor and a high one, and none of it appears in square footage.

The efficient one-bedrooms serve a different and durable pool: buyers wanting a downtown base at manageable cost, including those who intend to lease. That makes the building's leasing rules a value question for those units specifically — how many units may be leased at once, whether there is a waiting list, and whether the rules have changed recently. In a university city those rules do change, and they change what a unit can be used for.

So match on plan type, then position, then floor. Area is the last thing to match on rather than the first.

Living in downtown Ann Arbor, in practical terms

Downtown is the reason to be here, and the everyday realities are worth setting out plainly rather than discovering.

Parking is the first and largest. What comes with a unit — a deeded space, an assigned space, a right to rent one, or nothing — is a genuine component of value downtown, and the difference between a unit with deeded parking and one without is substantial and permanent. Establish whether a space is deeded, assigned or merely available, whether it can be sold or leased separately, and what the monthly cost is if it is not included. Where there is no space, find out what the alternatives actually cost and whether they are secured or waiting-list.

Noise is the second. A downtown with restaurants, bars, music venues and a university generates evening and weekend activity, and how much reaches a particular unit depends on floor, orientation, glazing and what is below and beside it. This is the single most variable thing between two units in the same building, and the only reliable test is to be there on a Friday evening with the windows shut and then open.

The university is the third, and it works in several directions at once. It underpins the local economy and the demand for downtown housing in a way few employers could. It also produces a large seasonal population, football Saturdays that transform this part of the city seven or eight times a year, and a rental market that shapes what buildings do about leasing.

Then the ordinary conveniences that are the point: everything within walking distance, no car needed for most errands, and a level of activity that some people want and others do not. Neither reaction is wrong, and both are better formed by spending an evening here than by reading about it.

And service and delivery access, refuse arrangements and moving logistics are all different in a downtown building than in a house — worth asking a resident about rather than assuming.

What a high-rise association actually owns, and has to fund

A high-rise is the most capital-intensive form of housing there is, and its association carries components no subdivision and few low-rise condominiums ever face. Understanding the list is most of what a buyer needs.

Elevators first. They are the single largest recurring capital item in most towers: a modernization — controllers, machine, cab, doors — is a very substantial sum per car, and it comes due on a cycle measured in decades rather than centuries. A building with original or long-unmodernized elevators has that expense ahead of it, and it is not optional, because an elevator that cannot be maintained takes the building out of use floor by floor.

The facade second. Whatever the exterior is — concrete, masonry, curtain wall, panel — it needs periodic inspection and repair, and in a tower that means access equipment, which is expensive before any work is done. Balconies are part of this and are frequently the most demanding part, because they are exposed on every side.

Central systems third. Many towers have a central boiler, chiller or both, serving every unit, rather than individual furnaces. That is convenient and it means the association owns and replaces very large plant — and it usually means heating or cooling is included in the assessment rather than metered per unit, so consumption is shared.

Then the roof, the fire protection and alarm systems, the common corridors and lobby, the security and entry systems, any parking structure, and the plumbing and electrical risers that serve every unit.

So the reserve study in a high-rise is not a formality — it is the document that determines whether an owner is buying a home or a series of special assessments. Ask for it, ask when the elevators were last modernized, when the facade was last surveyed and repaired, and what the central plant's age is. A building that has done that work and rebuilt its reserve is in a materially different position from one approaching it.

And ask about the history of special assessments. In a tower they are larger than most buyers expect, and a building's record of them is the most honest indicator of how it has been run.

What the association documents decide

Buying a condominium unit means buying into a corporation as well as a home, and the corporation's condition is not visible at a showing. Four documents settle it: the master deed and its exhibits, the bylaws, the current budget and the reserve study.

The master deed defines what the unit actually is — where the boundary runs between unit and common elements, and what limited common elements are assigned to its sole use. That is the most misunderstood part of condominium ownership, and it decides who pays for a great many things.

The bylaws set the rules that govern daily life: what may be altered, what may be parked, whether units may be leased and how many at once, and how the board is elected.

The budget and the reserve study together answer whether the association is solvent. An association with thin reserves and a large component near the end of its life is not cheaper — it is a deferred bill with an unknown date, and it arrives as a special assessment.

Board minutes are where a coming expense, a dispute or a construction defect claim surfaces first, and they are the most informative document nobody reads. I go through the recent ones as a matter of course.

One Michigan detail worth knowing: condominium documents are amended by recorded instrument, so what is recorded governs regardless of what any summary says.

Schools

Ashley Terrace is served by Ann Arbor Public Schools. District boundaries are redrawn from time to time.

Buying or selling here

The parking arrangement and the association's history through the downturn are the two things to establish.

For a seller, stating explicitly whether parking is deeded or assigned and how many spaces come with the unit is worth doing prominently — it is one of the few downtown features that buyers reliably underprice when it is left vague. A current reserve study naming the parking structure is the second thing.