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  • 1 month later...
I would prefer that they renovate the low-rise modernist building that already occupies this tract and raze the old hard rock for amenities.

That said, it is certainly one of the nicer designs of the current high-rise building boom. Still begs the question: Who the heck is buying all of these $$$ condos?

agreed. i am really irritated that this building is going to be demolished. i've always liked it.

was going to start a new topic but alas, it's mentioned here back in may, so i'll save the rant.

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  • 1 month later...

I know Atlas' proposed project has been discussed in previous threads, but attending the grand opening party for 2727 Kirby mandates that I bring it up again.

First, Kudos to his team. They have assembled a first class sales center. Top shelf on everything.

Here's where the air goes out of the balloon: They are expecting, yet needing, to get $400-$500 per square foot to turn a profit.

Do I hear the ghosts of Orion or Redstone rolling over in their collective graves???

Edited by The New Juniper
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Did they tell you that? Are you basing that on their list prices?

What are their prices? I can't find any on their website.

While there certainly have been condos sold in that price range (400-500 per square foot) and above, I would think it would be quite a challenge to sell out an entire building averaging in that price range.

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Of course, the $8,025,000 unit is a TEN THOUSAND SEVEN HUNDRED square foot penthouse! That is actually cheaper than the comparable units in the Huntingdon, Bayou Bend, Montebello, and Villa d Este. The price for the penthouse on the Redstone was around $10 million.

There's also a 2400 unit for around $1.1 and a 1400 square foot unit for $500,000 and change.

The developers are going all out on textures, fabrics, stone, and technology. Savy buyers wont balk at these prices, especially considering the location. They also aren't making the mistake of the Orion by dumping 400 units on the market. This will be a slender project with far fewer units.

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I know Atlas' proposed project has been discussed in previous threads, but attending the grand opening party for 2727 Kirby mandates that I bring it up again.

First, Kudos to his team. They have assembled a first class sales center. Top shelf on everything.

Here's where the air goes out of the balloon: They are expecting, yet needing, to get $400-$500 per square foot to turn a profit.

Do I hear the ghosts of Orion or Redstone rolling over in their collective graves???

Orion is still getting built. They are redoing the layout though. And I heard they have made the towers a little bit taller.

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The developers are going all out on textures, fabrics, stone, and technology. Savy buyers wont balk at these prices, especially considering the location. They also aren't making the mistake of the Orion by dumping 400 units on the market. This will be a slender project with far fewer units.

Unfortunately, it has less to do with buyers being savvy, as it does buyers having $1,000,000 to spend on 2,000 sq ft. Buyers do not rush to pay $500 per foot.

And no, the Orion is not going to be built.

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Unfortunately, it has less to do with buyers being savvy, as it does buyers having $1,000,000 to spend on 2,000 sq ft. Buyers do not rush to pay $500 per foot.

And no, the Orion is not going to be built.

Again I ask... Did the 2727 Kirby people tell you they had to have 400-500 per square foot to break even? If not, on what information are you basing that statement?

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I spoke to a representative with the developer; he said they were SELLING 450/sf and raising the price to 500/550 in Dec05/Jan06. Not beak even. He also said they were justifying these prices by not offering any upgrades to increase the price... everything is already completely finished out top of the line.

He further explained that they did not expect many buyers of the individual smaller units. They think that most people will buy two units and combine them into one.

Edited by danes75
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I spoke to a representative with the developer; he said they were SELLING 450/sf and raising the price to 500/550 in Dec05/Jan06. Not beak even. He also said they were justifying these prices by not offering any upgrades to increase the price... everything is already completely finished out top of the line.

He further explained that they did not expect many buyers of the individual smaller units. They think that most people will buy two units and combine them into one.

I hate to seem argumentative, but this type of statement made by a developer's representative should be a red flag for everyone involved. If someone tells you that they are selling at X and will increase to X+$100 in the future, it is nothing more than an attempt to create urgency among the buying public. Further, if all it took was putting expensive finishes to get $500 psf in Houston, don't you think it would have been done?

I really do want to see it succeed, but they have lost touch with reality. The mindset of "I will just build a nicer, higher end product than anyone else" doesn't work. There is a reason current high rise developers build what they build. Do you not think that a developer would spend an extra $1,000 per unit if he could charge $2,000 for it?

It just doesn't work that way. You have to build to the market and the super high end market, today in Houston, does not exist.

By the end of the development, these types will have spent so much on marketing and allowed costs to get away from them so much that they will have to get huge prices just to make the numbers work. Again, this is EXACTLY what happened at Orion. News of a partner fight, hurricane problems, measels, bird flu, whatever is a smoke screen for a failed approach. The units they did "sell" were sold at a cost that came in at less than the cost to build. The remaining units, thereby, had to be increased so high to make up the loss, that they couldn't be sold.

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FROM SOURCES I DEEM RELIABLE - SO TAKE IT FWIW

per my sources (yes, there is more than one), atlas is looking for someone to buy him out at $160 psf. with 3333 ap going into the crapper and about to be relisted as rental, its become difficult for a first-timer to build vertical projects.

im not attempting to piss on anyone's parade, just passing along what i heard yesterday.

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FROM SOURCES I DEEM RELIABLE - SO TAKE IT FWIW

per my sources (yes, there is more than one), atlas is looking for someone to buy him out at $160 psf. with 3333 ap going into the crapper and about to be relisted as rental, its become difficult for a first-timer to build vertical projects.

im not attempting to piss on anyone's parade, just passing along what i heard yesterday.

I assume you are referring to 3333 Allen Parkway? If so, this shouldn't be very surprising---they were asking outrageous prices for units that have absolutely horrible finishes and build-quality....

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FWIW, there was an article in the Wall Street Journal earlier this week to the effect that lenders are pulling back from lending money on condo projects all over the country, and requiring the developers to have a lot more "skin in the game" .

Depends on the market. Miami is seeing a glut of condos going up. Our firm just closed on a unit that pre sold for $850,00, 15 months later the seller sold for $1,300,000. It is all speculation, just like the tech boom for the 90s, at some point, the bubble will burst in certain markets. I think it is fair to say that the market for condos will rise in Dallas and Houston. You are already seeing it.

The one problem that does arrise is a warrantability issue. Say you have a development that you want to buy in, only one problem, it is 90% investor owned. Good luck trying to get a loan unless you want to pay cash. This is a problem I see daily. I do believe that something must be done about the investor concentrations.

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Depends on the market. Miami is seeing a glut of condos going up. Our firm just closed on a unit that pre sold for $850,00, 15 months later the seller sold for $1,300,000. It is all speculation, just like the tech boom for the 90s, at some point, the bubble will burst in certain markets. I think it is fair to say that the market for condos will rise in Dallas and Houston. You are already seeing it.

The one problem that does arrise is a warrantability issue. Say you have a development that you want to buy in, only one problem, it is 90% investor owned. Good luck trying to get a loan unless you want to pay cash. This is a problem I see daily. I do believe that something must be done about the investor concentrations.

I and the article were referring to the financing of the building of condo developments, not the financing of the purchase of individual condos.

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FROM SOURCES I DEEM RELIABLE - SO TAKE IT FWIW

per my sources (yes, there is more than one), atlas is looking for someone to buy him out at $160 psf. with 3333 ap going into the crapper and about to be relisted as rental, its become difficult for a first-timer to build vertical projects.

im not attempting to piss on anyone's parade, just passing along what i heard yesterday.

Thanks for that info. Does this mean that all of the funding has already been secured and its ready to go and he just wants out? Or that he's having trouble finding financing for the project? Or there are no sales....

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Thanks for that info. Does this mean that all of the funding has already been secured and its ready to go and he just wants out? Or that he's having trouble finding financing for the project? Or there are no sales....

I think Houston Development is right on...even if he specializes in retail.... ;)

When you hear that a developer wants "out" of a project, I can promise you it's not b/c he wants to take less money. He wants out b/c he a) realizes he is in over his head; B) realizes the market won't support the prices he needs; c) can't get it financed; or d) all of the above.

We see this happen all of the time. A project will generate tons of fan fare and then, after some time and delay (which will be spun as extra time taken to make sure the design and finishes are all as nice as possible) we get a call in the office that the entire project is for sale. "You can buy a project that is permited and ready to go. Marketing materials are even prepared. Just buy out the developer and hit the ground running." When you hear this, run, don't walk. Nobody walks from a bona fide development unless they have reason to be worried. Just doesn't happen.

Having said all of that, I am a big fan of Atlas and hope he figures out a way to either make it work, or sell the whole thing to Tracy Suttles at some huge profit.....

TNJ

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I think Houston Development is right on...even if he specializes in retail.... ;)

nope, apartments :P

and i pick option d, all the above.

in regards to 3333 ap, the current owner waaaaaay over paid for the asset, especially considering the deal should have been foreclosed on. allegedly, colliers will take on the listing. ive got two words for them.

good luck.

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I went into the "Royalton" once. On the surface it appeared o.k. but it took just a few minutes to realize it was built on the cheap. I could hear the neighbor's tv next door as well as the people upstairs walking around. That might fly for a rental (which it was built to be) but that wont work with for sale condos for the type of money they want. Whoever bought it to flip it didn't do their homework. They paid way too much and will never get their money out if it through condo sales. Their only luck will be to find some sucker more foolish than they were to buy it from them.

The unit I went into was rented by a friend. They offered current residents the chance to purchase units and very few (you could count them on one hand I was told) took them up on it. Not a good sign.

On the other hand, I am surprised someone hasn't purchased the Museum Tower to turn it into condos. Everyone I know who lives there loves the building AND neighborhood. Many have casually said they wish they could purchase there. It's one of the few new highrises that to me makes sense with regards to location. Close to the museums, light rail, med center, downtown, and Montrose. Take the elevator down and there's a great environment right outside. Probably why there are only 19 units for sale right now in the Warwick Towers, 5000 Montrose, Parklane, Parc IV, Parc V, and 1400 Hermann COMBINED.

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