Hanover Hermann Park: Multifamily At 5927 Almeda Rd.

[Guest danax]

Bottom line, these guys have had a lot of sheer luck. It wasn't enough to know what they were doing. They were just in the right place at the right time and had the right connections.

It looks simply like they and the lenders decided to take an "unconventional" risk, and now it's looking like they'll be rewarded for that risk. Conventional wisdom doesn't become conventional until the unconventional people break new ground, which allow the copycats to flood in, and that's the part that I'm looking forward too.

[TheNiche]

It looks simply like they and the lenders decided to take an "unconventional" risk, and now it's looking like they'll be rewarded for that risk. Conventional wisdom doesn't become conventional until the unconventional people break new ground, which allow the copycats to flood in, and that's the part that I'm looking forward too.

That's not exactly the logic that they're following.

[houston-development]

It looks simply like they and the lenders decided to take an "unconventional" risk, and now it's looking like they'll be rewarded for that risk. Conventional wisdom doesn't become conventional until the unconventional people break new ground, which allow the copycats to flood in, and that's the part that I'm looking forward too.

thats not the case at all. im too lazy to search but i said this was the route they were most likely to take. build as apartments and then sell as condos. you dont need the presales, earnest money, deposits, etc; only market data supporting the project as a rental.

i still dont understand why they built the first phase closer to downtown. phase 2 is going to be tougher sell without the view.

do it in reverse and you can somewhat ethically sell the view twice.

[Guest danax]

thats not the case at all. im too lazy to search but i said this was the route they were most likely to take. build as apartments and then sell as condos. you dont need the presales, earnest money, deposits, etc; only market data supporting the project as a rental.

i still dont understand why they built the first phase closer to downtown. phase 2 is going to be tougher sell without the view.

do it in reverse and you can somewhat ethically sell the view twice.

I see. Well, a lot of the best discoveries were accidental. That somewhat seedy seam known as Almeda was destined to get upgraded anyway being the edge of the upscaling islands of Midtown and the Museum District.

[TheNiche]

I see. Well, a lot of the best discoveries were accidental. That somewhat seedy seam known as Almeda was destined to get upgraded anyway being the edge of the upscaling islands of Midtown and the Museum District.

Destiny has little to do with condo sales in the here and now. The Buffalo Bayou corridor from Jensen to about Turkey Bend is destined for greatness too, but I wouldn't want to be financing any highrise condo development just yet.

[HtownWxBoy]

thats not the case at all. im too lazy to search but i said this was the route they were most likely to take. build as apartments and then sell as condos. you dont need the presales, earnest money, deposits, etc; only market data supporting the project as a rental.

i still dont understand why they built the first phase closer to downtown. phase 2 is going to be tougher sell without the view.

do it in reverse and you can somewhat ethically sell the view twice.

Anyone buying into this is going to know there are going to be two towers... so I don't think people would buy into the southern tower "for the view" knowing it would one day soon be blocked. Build the first tower to the north and sell the view that will still be the view even when the second tower is built... and then build the second tower to people who want to buy for everything but the view of Downtown since they know ahead of time the view won't be there. This way, nobody is tricked or disappointed.

[Guest danax]

Destiny has little to do with condo sales in the here and now.

The fact that Mosaic is selling them tells me that the first inkling of destiny has arrived.

[BuilderGeek]

Well 218 units in one tower sold is a good number, but I don't know if that would have prompted me to build another unless it was closer to 250-280 units sold.

They've been selling for a year now and have only sold 200? IF they sell at the same rate they would sell out in 2010? And this after they cut the prices so much. I believe they started in the 190s originally and then were cut to $154k for the starting price? I wonder if the developers are making any money on this at all. Seems if it was such a success Wood Partners would have been in on the second tower as well but it looks like they bailed. I still have questions about this one, built or not.

And this info coming to light after they made the statement in April that they had "nearly sold all first tower units." Even now, 218 is not "nearly all" of 394.

Edited August 22, 2007 by BuilderGeek

[musicman]

They've been selling for a year now and have only sold 200? IF they sell at the same rate they would sell out in 2010? And this after they cut the prices so much. I believe they started in the 190s originally and then were cut to $154k for the starting price? I wonder if the developers are making any money on this at all. Seems if it was such a success Wood Partners would have been in on the second tower as well but it looks like they bailed. I still have questions about this one, built or not.

spoken like a builder. it's all about money.

[TheNiche]

The fact that Mosaic is selling them tells me that the first inkling of destiny has arrived.

The "first inkling" shouldn't be 792 units. Anybody that does this is insane. And although I do think that BuilderGeek has a point, I suspect that as long as economic conditions don't deteriorate, it'll be easier to sell units in the second tower when customers can be shown finished units in the first one. Models and sales centers only go so far.

Still, his point is well-taken. The pace isn't exactly the type needed to set of a condo tower boom on Almeda.

[lockmat]

thats not the case at all. im too lazy to search but i said this was the route they were most likely to take. build as apartments and then sell as condos. you dont need the presales, earnest money, deposits, etc; only market data supporting the project as a rental.

i still dont understand why they built the first phase closer to downtown. phase 2 is going to be tougher sell without the view.

do it in reverse and you can somewhat ethically sell the view twice.

Do these condos have the same qualifications that in fact make them condos since they were made as apartments? Or did they still build them to condo standards?

Aren't condos built with better sound proof walls, etc?

[TheNiche]

Do these condos have the same qualifications that in fact make them condos since they were made as apartments? Or did they still build them to condo standards?

Aren't condos built with better sound proof walls, etc?

High-profile apartment complexes--even when the intent is to actually lease them as apartments--tend to be built to condo standards or very near them so that if a condo converter comes along, they don't have to do so much to turn them back on the market for sale.

[KinkaidAlum]

218 actual SALES (not reservations/deposits) is an incredibly high number for the Houston market, especially for an unfinished product. We are not a mature high-rise condo market but selling 218 units months before the building opens in an area that many who don't know it still think of as "iffy" is quite remarkable.

The developers took a chance on LOCATION and they didn't go super high end with mega 8,000 plus square feet units. They built units and sized them so that they might be attractive to TMC workers, med school students, Rice/UH/TSU/UST/ students, and middle income downtown workers.

All along, I thought that was a BRILLIANT strategy. It follows what this out of state group (Atlanta/Raleigh) have done in other cities that don't have nearly the same positive market factors as Houston.

I always thought this project would make it. The one I have my doubts about is Turnberry. A huge condo tower with the lowest prices units coming in around a million bucks on the "wrong" side of the Galleria is very risky IMO. Especially when there is a ultra high end already rising at 2727 Kirby (better location to draw from River Oaks/Tanglewood empty nesters) and more projects coming that will tie in to 5 star hotels (River Oaks District and BLVD Place).

[BuilderGeek]

It was my understanding that the plans from the beginning were to sell all the units and never have it actually begin renting, so they are probably already built to condo standards. If it gets to the point where they have a completed building and don't have it sold I would imagine that they would have to begin renting to satisfy lender requirements. Of course I am talking out of experience and don't know what their deal is, so I may be (probably?) off.

This whole thing has me thinking about the Royalton and what a mess it has been to get sold as well as the all-but-abandonded (at least it seems to me) Tremont Tower on Westheimer. What is the issue with that building anyway?

With that said, I SO HOPE that this goes off well and the whole area gets a great benefit from it. I'd love to have some sushi with a Hermann Park view.

[TheNiche]

218 actual SALES (not reservations/deposits) is an incredibly high number for the Houston market, especially for an unfinished product. We are not a mature high-rise condo market but selling 218 units months before the building opens in an area that many who don't know it still think of as "iffy" is quite remarkable.

The developers took a chance on LOCATION and they didn't go super high end with mega 8,000 plus square feet units. They built units and sized them so that they might be attractive to TMC workers, med school students, Rice/UH/TSU/UST/ students, and middle income downtown workers.

All along, I thought that was a BRILLIANT strategy. It follows what this out of state group (Atlanta/Raleigh) have done in other cities that don't have nearly the same positive market factors as Houston.

I always thought this project would make it. The one I have my doubts about is Turnberry. A huge condo tower with the lowest prices units coming in around a million bucks on the "wrong" side of the Galleria is very risky IMO. Especially when there is a ultra high end already rising at 2727 Kirby (better location to draw from River Oaks/Tanglewood empty nesters) and more projects coming that will tie in to 5 star hotels (River Oaks District and BLVD Place).

I'm not clear that we are actually talking about sales and not reservations. Reporters get that confused frequently.

In any case, that number of condo sales at that price point is actually fairly believable. Lower the price point and you get more sales, but you have to sell more of them to be able to capture the really high-dollar view premiums that make a highrise a highrise. And that's the financial challenge.

[MyHomeHouston]

I should be able to provide some interior pictures very soon; a client should be closing on their unit late October. They do hard hat tours every Saturday at 10:00AM in case anyone is interested. I also have the current pricing posted over at my blog. Upon request I'll post a link.

Did you guys catch this press release? PDR Finances It's Largest Project To Date

Edited August 23, 2007 by MyHomeHouston

[ricco67]

Welcome to the forum, and thanks!

That would be awesome, quite a few of us are rather anxious to take a peek. Even a Hardhat tour picture would be great to the engineers of the forum (the REAL geeks that they are. )!

[MyHomeHouston]

Welcome to the forum, and thanks!

That would be awesome, quite a few of us are rather anxious to take a peek. Even a Hardhat tour picture would be great to the engineers of the forum (the REAL geeks that they are. smile.gif )!

Thanks for the welcome! Jimmy, the sales consultant at the Mosaic, updates me about once a month on the pricing (See July 19 Penthouse Pricing for the Mosaic and July 15 Regular Mosaic Pricing) I'll try to make it out this weekend for the hardhat tour, but I believe my fiance and I have a wedding to attend. If it's in the afternoon I'll try to shoot by and snap some photos.

Edited August 23, 2007 by MyHomeHouston

[BuilderGeek]

Thanks for the welcome! Jimmy, the sales consultant at the Mosaic, updates me about once a month on the pricing (See July 19 Penthouse Pricing for the Mosaic and July 15 Regular Mosaic Pricing) I'll try to make it out this weekend for the hardhat tour, but I believe my fiance and I have a wedding to attend. If it's in the afternoon I'll try to shoot by and snap some photos.

Welcome to the board! Perhaps when you talk to Jimmy you can ask him to clarify if they have 218 sales or 218 reservations and if they are "sales" is the 5% refundable that is mentioned on your fact sheets? Also are the buyers investors or actual residents? Thanks!

Don't remember this being posted, but here are some picks on flickr of their topping out party for the tower. It's mostly people shots but you can see the construction and the views in the background.

http://www.flickr.com/photos/37257335@N00/...57600066274655/

Edited August 23, 2007 by BuilderGeek

[MyHomeHouston]

It looks like of the 396 units in the first tower, they have hard contracts (not reservations) on 70% of them which is right about 277 as of today. The 5% is refundable but only 6 days after your contract is executed. Keep in mind though that the purchase agreement is assignable so you can sell it off to another investor (if you buy at pre-construction prices of course) at closing. There's a separate assignment addenda to the contract for that.

This is all in the sales contract as well, so it is in writing.

I also learned that the closing of the first tower units had gotten pushed back to early Nov. as well, so they are rushing to get it done to avoid fines and so forth. The large amount of money they just raised is to begin the construction of the second tower, so it will come to fruition soon.

I like the parties they throw as well; Jimmy and Iris do a great job coordinating them all.

EDIT: Didn't answer that one question: They are estimating about a 30% investor ratio at the moment, but that number really can't get finalized until they start going to closings early November.

Edited August 23, 2007 by MyHomeHouston

[BuilderGeek]

Thanks for the info Steve. So it looks like 271 under contract, 30% investor which makes it approximately 190 non-investor units sold. Sounds like some pretty good traction. Even if the investors bail out due to the credit crunch they will still have a minimum of 190 residents in the first tower (190 sold, most one bedrooms, assuming one person per condo - bad assumption but this is worst case). Mortgage woes have been hitting the sub-$180K borrowers mostly. Let's hope it doesn't have an effect when they go to close and this thing really takes off!

[Jax]

[lwood]

The photo that includes The Parklane is great. I've always liked the looks of the Parklane. The original sales literature described it as "nautical" in design. Thanks for the photo.

[lockmat]

wow. it's there. no more wondering. I like it.

[BuilderGeek]

Great photo! Thanks for posting. Looks a lot like that sunset in that rendering they put out, but this time in real life!

[Jax]

Thanks!

It was actually a sunrise...

[lockmat]

Don't know if anyone has posted this or not. I stumbled across it at youtube

[Pumapayam]

Don't know if anyone has posted this or not. I stumbled across it at youtube

Looks more like a commercial about why you should live in Houston. I dunno, if you have to convince someone to move to Houston, that says a lot.

And again, who is the marketing nut that decided to make the condo only 5% of the video content.

They should work for the Houston Chamber of Commerce instead of the Mosaic.

[lockmat]

You would think I work for Mosaic or something w/ all these videos, but I don't. I wish

But here's the Mosaic guy again talking about what kind of international clients are purchasing their condos. He primarily names Mexico and Venezuela investors as the buyers.

Here's one for the local clients purchasing them.

-----

basically, just video google mosaic houston and tons of them come up.

Edited September 7, 2007 by lockmat

[Pumapayam]

But here's the Mosaic guy again talking about what kind of international clients are purchasing their condos. He primarily names Mexico and Venezuela investors as the buyers.

Must be using drug money!