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TheNiche last won the day on November 13 2012

TheNiche had the most liked content!


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  1. Over my head, to be honest. I'm only vaguely aware that Kevin Bacon is a celebrity, and I'm pretty sure that he's an actor, but all I ever can think of when I see his name is bacon. His name is very distracting from anything of relevance that might involve him.
  2. I'm not kidding. That's how it worked out, and none of the three of us are totally irredeemable 'Connection' whores. Small world.
  3. No dude, it's my fault. You and he are both connections of mine, so there are only two degrees of separation.
  4. Having done financial modeling for a living at one point in my life, I'll chime in briefly. A developer's model backs into the highest dollar amount that they're willing to pay for the land. If a developer decides to take a haircut on a development in order to provide a public good, then they won't be able to pay as much for the land. They'd get outbid by a profit-maximizing developer. Also, people that specialize in multifamily typically are hesitant to venture into retail. Its a totally different business model with its own market dynamics and cost structure. If the retail rents that can be achieved are sufficiently high, then the extra effort and uncertainty may be worth it. The problem is that there are only a very few cases in Houston where the risk-adjusted retail rents exceed apartment rents. Which brings me to my next point: It isn't enough to point out that restaurants at the Post development are busy or that Phoenicia is busy. Many other stores are not busy; that consumers return over and over again to busy stores and witness other consumers doing exactly the same thing probably has a lot more to do with those stores' business models and good management than with their physical plant, but that's easy to forget if you don't go to the places that are suffering for business, which you aren't because otherwise they wouldn't be suffering for business...and besides which, don't tend to last very long anyway. So consumers see other people at the places where consumers are at and figure that everywhere should and could be like that. But the fact is that there are only so many retail prospects out there, and so many fewer still that have viable business models or good management. When rents are being negotiated, landlords are price-takers. They can't necessarily tell whether a store will be successful (although a place like Phoenicia is probably an exception, and in cases like that the TENANT typically holds the cards and the rent is much lower), but whether destined for success or not, the prospective tenant can go down the street and find a landlord that will undercut the other one. Its a competitive market. If the rents aren't obviously high enough or the demand isn't obviously there, then nine times out of ten a multifamily operator isn't going to make the effort to take the risk. The multifamily operator has no doubt that there will be demand for their units, with or without a retail component, and they know that even if the market declines prior to delivery, they can give concessions and fill the units quickly to generate cash flow, cover the note, and make the investment marketable to a third-party buyer. If that retail component sits empty for three or four years before finding an awesome tenant, that's a goddamn long time and there's no cash coming in. One last thing. Having retail at the ground floor can be disruptive to parking designs. It depends a lot on the layout of the site and what the architect can do with it, but any option that requires more concrete to yield less net rentable area skews the model against that option. Mixing uses still requires on-site segregation of those uses for resident convenience and security. So yeah, if its a good model then the model won't break. It'll just indicate a lower land price that can be paid as a maximum bid, and the mixed-use guy gets outbid. There are exceptions, but not many in Houston. Niche, out.
  5. No, the entity name is Fenway Development Inc., which is linked to Frank Liu. He's already platted out all that land for townhome development just within the past year. You can look at the HCAD plat maps to see how it's configured. EDIT: Here's a story about the cleanup process: http://stateimpact.npr.org/texas/2012/06/18/urban-renewal-toxic-brownfields-tough-to-redevelop/
  6. Whatever gets built on the KBR site will generate a lot of sales and rental traffic for the Clinton Dr. submarket that would not have existed otherwise. If Liu develops his land concurrent with his competitor, then he can leach off their marketing efforts and take a substantial cut of the market share. It'd be good strategy, that's for sure.
  7. Yeah, it was a Superfund site that Frank Liu bought and cleaned up for residential development, but his timing was right before the real estate bust, and so that never happened. Not sure if he still owns it, but I think so. We probably would've heard about it transacting, otherwise.
  8. Would you rather that townhomes were built at 18 units/ac. around the light rail stations on $30 PSF land, or that dense midrises at 80+ units/ac. and eventually highrises get built around the light rail stations at $80 PSF? Land speculation has a vital role in the long-term future of our city. Just gotta be patient, let market forces to their work.
  9. I've written a number of articles, newsletters, white papers, and data-intensive full-length studies in my day, and ump-teen-thousand posts on HAIF. When I write with the intent of accomplishing something, I write with an audience in mind. In the business realm, they may be executives or analysts. In the political realm, they're typically city councilmembers, a department head, or someone in a similar capacity. If I'm boiling down my points into an executive summary, businesspeople like bullet points with a conclusion that validates their preconceived notions. Politicians like vapid, imprecise, and defensible drivel with a conclusion that validates their preconceived notions. The marketing folks and the media just want sensational bloviation that grabs attention. The Chronicle is in the entertainment business. They want people to read articles, get a rise, comment about them, link to them, and drive traffic to their site. Bill King's op-ed surely was not very informative. I won't dispute that. But then, neither are Crossley's articles when he gets published. Neither of them would be figures in the press if they came off like analytical know-it-all pricks. Having said that, I've met each of them on a variety of occasions. They aren't as oblivious as they come across as in print.
  10. Dude, look in the mirror. Pot meet kettle. Bad and unenlightened articles do not merit similar but opposing responses.
  11. Anticipation of what, now? (Welcome to the wonderful world of business ownership. Since I've made my exit from the East End and the realm of business ownership altogether, I can give in to my cynicism again.)
  12. The "skyrocketing" costs you cite are primarily related to land acquisition, which certainly is important. One of the reasons that Dallas was able to afford so much fixed-guideway transit is that they purchased intact rights of way from railroad companies decades in advance of actually needing to use it. Houston's experience will be more costly because we are trying to develop light rail along the highest-profile and most expensive frontage in the entire city. And yeah, it's going to be expensive, and yeah that would be subject to inflation if they didn't do it now. But they're doing it now, so quit whining. As for materials costs, that's mostly having to do with construction of Asian infrastructure, financed by distorted patterns of international trade and a weak dollar. The most important thing we could do to address light rail and other infrastructure costs (aside from ROW acquisition) would be to get the State Department to hold China's feet to the fire on its WTO agreements, and to kick it out of the WTO if necessary. (Of course...if you think that Obama is totally ineffectual loser and you've got no confidence in his ability to do anything except to further devalue the dollar and cause economic malaise, well then yeah we need to build up our infrastructure as quickly as possible, while there's still some purchasing power left.) Other factors contributing to inflation are more evenly-distributed, meaning that prices increase, but so do sales, sales taxes, and revenue to transit agencies.
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