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Regent Square: Mixed-Use On Allen Parkway At Dunlavy St.


Travel_n_Transport

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I always wonder, in cases like this and the River Oaks Shopping Center, why they tear down the old structures early instead of waiting until as soon as possible before construction begins. You would have thought the ongoing income from Allen House would have come in handy.

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The only thing I can think of is that with the variety of leases available to tenants, they didn't want to risk being held up because some leases would end up running a couple of months past the desired start date. Other than that, I tend to agree with you. Seems as if they could've gotten another 9 months or so out of the last tenants.

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Standard Operating Procedure is to keep the tenants as long as you can by converting leases to month-to-month as they roll. When you're ready build, you give them 30-days notice to vacate and the bulldozers come in a week later.

The Regent Square developers told the tenants to get out because they thought they were ready to build. They weren't. They had to go back to the drawing board because their previous plan didn't work. They left a lot of money on the table with their hasty demolition.

I'm curious to see how their scaled down project works out.

Only time will tell.

bpe3

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Standard Operating Procedure is to keep the tenants as long as you can by converting leases to month-to-month as they roll. When you're ready build, you give them 30-days notice to vacate and the bulldozers come in a week later.

The Regent Square developers told the tenants to get out because they thought they were ready to build. They weren't. They had to go back to the drawing board because their previous plan didn't work. They left a lot of money on the table with their hasty demolition.

I'm curious to see how their scaled down project works out.

Only time will tell.

bpe3

You're correct. As demoltion day comes nearer, if you're an apartment owner and you have to concess the living hell out of rents to keep the place occupied, that is still preferable to the alternative. Vacant units just don't generate income.

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Aren't property taxes way less with no structures on them also?

Realistically, if the underlying value of the land is in excess of the present value of the stream of income from the existing structures, then value is actually added to the land by demolishing the structures and thereby making it less costly for the next developer to build. But the way the property tax system actually works, yes, you're probably right.

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Realistically, if the underlying value of the land is in excess of the present value of the stream of income from the existing structures, then value is actually added to the land by demolishing the structures and thereby making it less costly for the next developer to build. But the way the property tax system actually works, yes, you're probably right.

I think they obviously are off of their timetable a little bit, but they might not be getting hammered sitting on vacant land. I recall an early article about this development stating that the compnay has owned this place a long, long, time. If they own this land outright and aren't paying a note on it somewhere, they might not be losing money. They also have all the units that are stll east of Dunlavy and South of Dallas. So while they aren't generating as much money as they were, I doubt they are sitting there hemmorhaging money while waiting to get started. Just a thought.

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I think they obviously are off of their timetable a little bit, but they might not be getting hammered sitting on vacant land. I recall an early article about this development stating that the compnay has owned this place a long, long, time. If they own this land outright and aren't paying a note on it somewhere, they might not be losing money. They also have all the units that are stll east of Dunlavy and South of Dallas. So while they aren't generating as much money as they were, I doubt they are sitting there hemmorhaging money while waiting to get started. Just a thought.

Opportunity cost. One way or another, they're getting hammered.

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Here's some quick math: 900 units @ $90,000/unit = $81,000,000 value X 5.5% cap rate = $4,455,000 NOI/year = $371,250/month. Assuming they tore down 2/3rds of the units, the early demolition is costing them $245,045/month in foregone cash flow. It's not the kind of money that will make or break this project. At the same time, it's enough to get someone's attention. No smart delevoper would just leave this much sitting on the table. Clearly they thought they'd be going vertical by now.

bpe3

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It seems pretty clear that they reached an unexpected snag in the timetable. What the implications are for the project overall will obviously remain to be seen. I would certainly like to see or hear of revisions to whichever aspects of the project that are deemed prudent by the development group.

Edited by The Great Hizzy!
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Here's some quick math: 900 units @ $90,000/unit = $81,000,000 value X 5.5% cap rate = $4,455,000 NOI/year = $371,250/month. Assuming they tore down 2/3rds of the units, the early demolition is costing them $245,045/month in foregone cash flow. It's not the kind of money that will make or break this project. At the same time, it's enough to get someone's attention. No smart delevoper would just leave this much sitting on the table. Clearly they thought they'd be going vertical by now.

bpe3

what?!?!

seriously, stop.

if you don't understand underwriting, please, don't act like you do.

and let's not go back into the debate of economics because i already wasted enough time trying to explain things to you. had you been a tad more receptive back then, probably would be happy to elaborate.

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if you don't understand underwriting, please, don't act like you do.

For the record, my primary business is brokering commercial real estate loans. I've closed over $2 billion in CMBS and life company loans in the last 5 years alone. At least 75% of those have been multi-family. Earlier in my career I worked for a Fannie Mae DUS shop doing nothing but underwriting multi-family loans. I think I know a thing or two about underwriting.

I wasn't underwriting the deal. That's why it called it some "quick math". It nothing more than a back of the envelope estimate of what this deal might be throwing off. If anyone really wants to know how a deal like this really underwrites, I'd be happy explain it.

and let's not go back into the debate of economics because i already wasted enough time trying to explain things to you. had you been a tad more receptive back then, probably would be happy to elaborate.

Did I miss something? I don't recall getting an economics lesson from you at all.

bpe3

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I was thinking of a different jackass, but thank you for volunteering us. :D

That was funny.

A question about something completely off topic: why is the"Hotel"member rank use that old Days Inn as the representative icon? That must be a joke. No need for an actual reply, or a scolding for being off topic. I just want to point that out.

Edited by bkjones98
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There are variance request signs for the portion east of Dunlavy that claim a hearing is happening April 24th or 28th (I already forgot). But I have to think that if the developers are thinking this thing is dead, they wouldn't be moving forward for approval to scrape the other 300 units that are generating income.

Once upon a time someone from Regent came on here and said one of the reasons for the delay had to do with the fact they were going to be able to build faster than anticipated and pushed the date back for some reason. Is there any possiblity that they are waiting to clear out the whole property and do it all at once instead of in phases? I'm not a real estate person, just a guy that likes buildings. I'm curious as to your opinions about whether there is any benefit to proceeding this way.

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I think Houston-Development is confusing you with somebody else from a different thread that was genuinely being a jackass.

if that is the case, bpe has my sincere apologies.

it was similar writing style and broad generalizations.

again, if it wasn't him, im sorry for making that assumption.

ps - i, like ricco, am proud of my jackassedness but only to the appropriate parties.

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  • 4 weeks later...
our (mine) favorite project has made some changes...

http://swamplot.com/going-straight-regent-...3/#comment-1099

is it just me or does the scope of the project seem much smaller in this new rendering? the report says it's remaining at 24 acres, but the original siteplan looks to encompass a much larger tract of land.

regardless, this is still a very exciting project... fantastic location.

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is it just me or does the scope of the project seem much smaller in this new rendering? the report says it's remaining at 24 acres, but the original siteplan looks to encompass a much larger tract of land.

regardless, this is still a very exciting project... fantastic location.

This phase 1 appears to encompass the same land as the original phase 1. The original plan also shows phase 2, which still has the apartments on it.

I wouldn't say this looks all that different to me. I know they have a variance scheduled for May 22. I think this is still looking very cool. Hope it works out.

What we need now is a pedestrian bridge over allen parkway at Dunlavy. I know I could walk down to Waugh, but it would be nice to be able to cross without recreating a game of frogger.

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I wouldn't say this looks all that different to me. I know they have a variance scheduled for May 22. I think this is still looking very cool. Hope it works out.

it looks to me like the changes leave out green space previously there :(

But it also looks like the new buildings have more floors.

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Wow. There's a lot less green space. There also appears to be about 5 times as much surface parking. Much of it is "hidden" behind the project but I feel sorry for the folks who live across the street on the "backside" of Regent Square!

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Wow. There's a lot less green space. There also appears to be about 5 times as much surface parking. Much of it is "hidden" behind the project but I feel sorry for the folks who live across the street on the "backside" of Regent Square!

There does not appear to be any surface parking. All four of those "surface lots" appear in the 3-D drawings to be garages. Click on swamplot's link to the drawings posted earlier to see the 3-D versions.

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We live on Tirrell St, on the backside of the development. It is a parking garage across the street (we were told it'll look nice), not a parking lot, but it was there in the original renderings. As for the green space, we're all for it, but it seems that most of it that was lost was in interior courtyards, something we probably couldn't use ourselves.

As for the variances (we get them by mail automatically since we live so close) IIRC, they are for small sight triangles at some of the intersections (something like 12' instead of the usual 15'). I'm all for that...12' is a lot better than the 3' the W Dallas & Tirrell intersection has now with those bushes...I'm halfway into W Dallas before I can see west-bound traffic!

What we are most excited for is our "Road to Kroger" (the diagonal road from W Dallas to W Clay)...we have a bit of a detour now. However, Marvy's Whole Foods just east of here will probably make that less of an issue.

Finally, do we think Regent Sq. will have a hotel? My guess is that is what the cul-de-sac just south of W Dallas is for.

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