A s the housing slump continues throughout New England, developers in Rhode Island are adapting their projects to reflect the changing times. Some developers have opted to rent out their units as apartments instead of putting more product into an overcrowded market. Royal Mills at Riverpoint, a converted West Warwick mill, will rent out all of its 249 units, scrapping plans to sell 78 of them as condominiums.

And One Ten Luxury Residences on Westminster Street in Providence has sliced the number of condos in the project from 130 to 60. The space earmarked for the axed condos will instead be turned into a hotel.

Many others are lowering their price points, adding amenities, or looking for any other way to differentiate their project from the competition.

Capitol Cove, near the State House in Providence, has adapted a low-rise design and economical price points, contrasting sharply with two nearby upscale high-rise condominiums that jut into the skyline: Waterplace Towers (17 and 19 stories) and The Residences at the Westin (31 stories).

Bringing the gavel down on prices

One upscale waterfront condominium north of Newport has even held an auction to get buyers off the sidelines.

"When the market is very strong, you just put an ad in the paper and people will show up. This market does require you to be more creative," says Robert Cole, president of The Collaborative Companies, which is handling marketing for The Villages at Mount Hope Bay, an over 55 community in Tiverton, Rhode Island. The community—which won the 2005 Platinum Award for Best Active Adult Community in the United States (151-300 homes) by the National Association of Home Builders (NAHB)—is being jointly developed by New England Property Holdings, LLC, and Starwood Capital Group.

For Cole, creative marketing took the unusual form of a public auction, held last winter in a hotel ballroom. The Villages at Mount Hope Bay consists of townhouses and mid-rises, all of which have water views. Auctioned off were a number of two-bedroom mid-rise condominiums, ranging from 1,350 square feet to 1,850 square feet with prices starting in the high 400s and going to the high 500s.

Cole says the auction was not about holding a fire sale but was an innovative way to raise the condo-minium's profile, and thus increase conventional (non-auction) sales.

"It was a dramatic way of focusing the markets' attention on the product for a short period of time. Particularly during the winter months, when most of our traffic is in Florida or someplace else," says Cole.

A month of advertising in local newspapers attracted 725 different groups of people through the condo, and about half the available mid-rise units were sold in auction.

Marketing Plan Gives Buyers a Voice

In addition to raising the profile of the community and selling off inventory in a slow period, the auction also established the market price of the remaining units, says Cole. Noting that the units auctioned for 84 percent of their listed price (in the 400s), Cole says, "we wanted to let the buyer determine what the value of the units was."

This summer, Cole continued creative marketing but focused on a series of lower-key events, all designed to draw attention and foot traffic to the condominium. (Those who toured the condo before the auction but didn't buy were invited to all the events.)

In June, Cole hosted a weekend of designers talking about downsizing. The seminars were held, not surprisingly, in the model units and aimed at potential buyers who would have to downsize to move into the condo.

In August, Cole held a cooking demonstration with area chefs, including one from the condominium's onsite restaurant, The Boathouse. Prior to the event, current homeowners had submitted favorite recipes which were assembled in a cookbook. The cookbook was distributed at the cooking demonstration that was, again, scheduled in the model units. Also offered at the cooking event were free ice cream samples from a local ice cream establishment and wine from a local vineyard.

"You have to do something different to get people off the sidelines because right now the market is slow and people are concerned about coming out, says Cole. "So we give them a reason to come out and see it."

The developers of Allen Street Mills in Woonsocket (The Aspen Group in North Reading, Massachusetts) are getting prospective buyers to their loft condos through extremely competitive prices. Located in Rhode Island, but only a few miles from Massachusetts and Route 495, the condo is attracting many out-of-state buyers who like its and one- and two-bedroom loft style units ranging from $139,000 to $269,000 with square footage from 620 to 1,408 square feet.

Experienced Developers Anticipated Softer Market

"When we started pricing the project about two years ago, I had a conversation with the developer and we anticipated that the market would turn so we actually priced them for a down market. And that's really served us well," says Kate Duggan, principal broker of Essex Properties in Woonsocket, Rhode Island, which is handling the marketing.

"We are attracting a lot of buyers from Massachusetts that are working the 495 belt, or work in Boston and don't mind the commute," says Duggan.

"Nowhere can you find new lofts for $200,000 and under," she says.

At High Rocks Condominium in North Smithfield, Rhode Island, the developer is also counting on extremely competitive prices to move the loft-style units in the former Tupperware factory.

When Blackstone-Smithfield Corporation started getting permits for the factory conversion about three years ago "the market was hot," recalls Herb Ingram, a partner in the enterprise that also includes David "Duddy" Massad, board chairman of Commerce Bank.

While the market has cooled in the interim, High Rocks will still sell, says Ingram, because it features large units at extremely attractive prices—units at the condominium run from 1,200 square feet to 2,500 with prices from $149,000 to $259,000.

Adding value to the lower price is the condominium's commuter-friendly location, 20 minutes from Providence and 30 minutes from Worcester, Massachusetts.

Ingram expects customers will be professionals who work nearby and are attracted to the condo's amenities and its setting along the Blackstone River. Featured in the condominium units—some with open floor plans and others with separate rooms like conventional apartments—are exposed bricks, hardwood floors and large window views of the Blackstone Valley. Just outside the condominium are walking trails leading to the nearby Blackstone River Valley National Heritage Corridor Park, with a spectacular gorge and waterfalls.

Ingram is a veteran developer whose group bought the former Tupperware factory when the food storage container firm relocated decades ago. Since that time, Ingram has witnessed about every real estate market under the sun. "I've seen it go bad. I've seen it go good and I've seen it go bad again. We happen to be in down part of the cycle right now, but I think it's starting to move the other way," says Ingram. "It comes 'round again."