JWW

So do we feel certain that the demo will not happen before 7am?   Taking a few friends down and guess Prairie and Milam intersection is the best place to go

I still think about the wind turbines not being there but honestly, even at its height, it's a great tower. The lighting effects at night are what make this tower stand out. Right now it glows a large pink hue (for Breast Cancer Awareness Month) that can be seen from many miles away.

Speaking of lighting, can someone explain the flashing lights on some of the upper floors that occurs nightly?   Looks as if a fire alarm is going off...

Regardless of Nate's prognostications and predilections for this tower, it is off the table. Confirmed.

Yep, this 3.7 something acre site has already been under contract for a bit, now. Dean Patrinely - Patrinely Group - has the entire site tied up. For redevelopment. Residential, no surprise. Over 200$/ft.

"To stand at the foot of South Boulevard in Houston is to look down what is perhaps the most magnificent residential street in America. Staged rows of soaring live oaks form the vaulted arches of a great Gothic cathedral over a grassy esplanade, lined with imposing yet graceful mansions from the 1920s by such eminent architects of their day as John F. Staub and Birdsall P. Briscoe."

 

This is what was written in The New York Times in 1987 about the area. Boulevard Oaks is a special place. It's one of the few largely unaltered places remaining that helps make Houston feel unique. I simply do not think this project is worthy of the location. It doesn't fit the area at all and it actually threatens one of the few jewels this city has. 

 

I don't live in Boulevard Oaks, but I've strolled down North and South many times. I've posed for family photos under the oaks. I've entertained out of town visitors with a walk that always amazes. 

 

We're about to lose this, and for what? A generic apartment tower built by people who don't even reside in the City of Houston?

They can build it.   Is there anything else to discuss?

According to the article in the chronicle (consider the source), the developers are asking the city for changes in land-use restrictions. Considering there are generally no land-use restrictions in Houston, I would say this is a highly unusual case.

There are countless land-use restrictions in Houston, and under Bill White and Parker, those restrictions have jumped in number.   This is not unusual, much less "highly unusual", at all.

It would be funny if someone checked the survey and discovered the fence was actually on the developer's property. I'm surprised, though, that the developer isn't more careful given the high level of opposition from the neighbors. It is a sure bet they'll be watching like a hawk for any mistakes.

http://swamplot.com/ashby-highrise-developer-knocked-down-fence-was-on-our-property/2013-06-03/

So, now that this thread has become a travesty of a worthwhile HAIF discussion, let's move on with the posts

1. I never claimed that I know whether height restrictions were imposed or not. What I did say is that it would have been wise for the developer to obtain them. Do you know what was done? If so, could you please share with the group what restrictions were imposed on the McDondald's lot? It took me all of two minutes to find that a 12 page agreement concerning restrictions was imposed pursuant to Harris County Clerk's File No. 20120583367. Since you claim that I don't know what I'm talking about, I presume that you have this document and don't mind posting it so that we can settle this silly argument.

 

2. My original post intended to refer to the adverse effects of height. I apologize if that wasn't clear. Since your reply discussed adverse effects generally, I pointed out that generally, adverse effects are dealt with through restrictions and covenants all the time.

1.  Of course it would be "wise for the developer to obtain them".   It would also be wise for the developer to get first right of refusal on a sale of the remaining McDonalds property.   It would be wise for the developer to obtain any restriction he can on the adjacent property - and as I keep telling you, that was not going to happen - because of McDonalds having the LEVERAGE because the site has the value here.   If you do not believe it, I could not care less.   The only thing silly thing here is that you are talking academically about a deal with details that you do not know about and your generalizing is inaccurate.   "Perfectly reasonable that the seller agree..." - not at all.   McDonalds has too much leverage in the deal.   "Who would probably pay a little more for its lot" - not at all, was not going to happen.

Your academic generalizations do not accurately describe this deal and the leverage in it.   Of course the buyer wants to institute every restriction he can on the McDonalds site.   Of course the buyer wants to put in a height restriction.   And, as I said in my post that you have continued to argue with -  

       "No major oversight - no oversight, at all, actually.   McDonalds has too much leverage in this deal.              

        The site has the value.   Not that it is impossible, but good luck preventing a next-door development  

        from general "adverse effect" of your development....too many things a development can do that  

        can adversely affect your adjacent development."   

You have gone from taking an academic and obvious approach at looking at how to buy a property to extrapolating what is "nonsense" in this deal, "perfectly reasonable" in this deal, that the buyer would "probably pay a little more" in this deal,  and then trying to rebut my comment about "good luck preventing .....general 'adverse effect'..." by stating that some restrictions and covenants are implemented "all the time" - which does not rebut what I said, at ALL - I said good luck preventing GENERAL "adverse effect".   When you use subjective "nonsense", "perfectly reasonable", and "probably pay a little more" claims in a deal that you obviously do not know about, that is when your argument goes awry.   

2.  Your request for a document between the seller and buyer to be posted on HAIF is not going to get any more of a response than this.   Get serious.

This is nonsense.

 

The leverage in a voluntary business transaction is primarily money. Whoever owned the McDonald's land felt like it was wise to redevelop the restaurant and monetize a portion of the lot. In this case, it is perfectly reasonable that the seller agree to a height restriction on its remaining land as part of the benefit of the bargain to purchaser, who would probably pay a little more for its lot because it has the benefit of the height restriction on seller's remaining land.

 

You cannot immunize yourself completely from adverse effects of adjacent development, but restrictions and covenants can mitigate a lot of adverse effects and are imposed all the time. In fact, since most McDonald's locations in the Houston area are located on shopping center pad sites, I presume that most McDonald's locations in the Houston area have height restrictions since shopping center owners typically won't sell a pad site without imposting a 20-30ft height restriction.  

1.  You obviously have no idea what you are talking about.  It was not done, and for the exact reason I stated - the leverage.   

2.  Who claimed restrictions and covenants are not imposed "all the time" ?   You, apparently, did not read or did not follow my statement - so I will repeat one line of it - "good luck preventing a next-door development from general "adverse effect" of your development. "GENERAL 'adverse effect' " - not specific.   There is always a way an adjacent development can adversely affect your property.

There may not be a law against it, but if I were the developer here, I would not have purchased the land from McDonald's unless McDonald's agreed to a height restriction on their remaining land to prevent any development that would adversely affect Astoria. 

 

You would have to check the real property records to be sure, but it would be a major oversight if Randall Davis didn't secure such a restriction. 

No major oversight - no oversight, at all, actually.   McDonalds has too much leverage in this deal.  The site has the value.   Not that it is impossible, but good luck preventing a next-door development from general "adverse effect" of your development....too many things a development can do that can adversely affect your adjacent development.   

It would interesting to know who owns the McDonald's franchise and the land.  If the same entity owns both, I'm sure they/it will make lots of money from operating it over the next few years and then selling the land.

I would presume McDonald's owns the land and the franchisee rents from McDonalds.   Regarding selling the land, remember the hackneyed Ray Kroc quote about McDonalds being in the real estate business.

I don't think that McDonalds will be going anywhere anytime soon. I can think of 4 fairly large properties that have been for sale for quite sometime in that area. Maybe once those properties are finally sold and developed/redeveloped maybe then there will be enough demand in that area for the McDonald's to be sold and redeveloped.

The best thing the new remaining McDonalds site has going for it is that it is not as large as these other sites - aka it is cheaper.   The hard part will be getting something more profitable on that small site that is feasible to build/exist on it.  

I think 11 replies to refute Kinkaid's assertions and predictions are enough....

 

Does anyone see much of a market for mid/high rise condominium living off Post Oak or nearby at a lower density/higher price point than Astoria?  (2727, Monetebello, Huntingdon).   

But they don't start at $1 million. The unit pricing starts in the $590s.

while what you said is likely true i've heard that Astoria may actually be restructuring its loan to lean less heavily on the visa program due to higher than anticipated local demand.

The EB-5 program is not based on getting foreign investors to buy condo units.  It is based on getting foreign investors to invest in the partnership that will build/develop the building.  Minimum investment:  $1 Million. That is probably the source of your confusion about the starting prices of the condo units.

 

Most high-rise condos in Houston do not offer all the amenities you list above.  All have swimming pools.   Few have tennis courts. The Astoria appears to be quite competitve with the other offerings in town (e.g., 2727 Kirby, Cosmpolitan...)

All very well put.

Interestingly enough that crappy two story apartment building is for sale and has been for quite a while.

Someone know the listing price?

Let's cut to the chase; the only reason this tower MIGHT be built is due to foreign buyers "investing" in this property and getting into the USA.

 

No sane resident of the USA is going to move into a Randall Davis building that shares a lot with a drive-thru McDonald's, especially at his prices.

 

I think we're going to see Houston's first "Miami" condo building. 100% sold but 30% occupied.

Kinkaid Alum is not too prescient...and not familiar with this project's market.

I think you're attaching way too much importance to what is next door.  It's not like they will be fighting with McDonald's for parking sports.

 

People are going to buy for the proximity to the Galleria and surrounding area.

 

Any if you think this will be one of the first condos in the area that has a ton of foreign owners, you haven't been paying attention.

Very well put, each of your points.

When was the last time you saw an inspiring residential tower outside of Dubai? Condos & Apartment buildings are fillers, not corner stones.

Isn't that we call a possible potential market?

What is the name of the project?

HouDev,

I have a question about HUD popping a GC for delays... I will post it in the D and R Estate thread if you feel like responding..

Yea I was thinking about where the parking structure would be after looking at the recent pic taken. Does anyone know how much parking hotels require? Like would they need 1 parking space per room or maybe 1 per every 2 rooms? 3 rooms?

Would you mind reposting your question in "Development and real estate" ? That way people not interested in this project can still see and respond to your more general question. I'm interested, too...

Not at all, no.

The dirty little secret of real estate development is that developers of big projects like this one actually only buy into a small percentage of the project and are paid substantial fees (typically 3% of project costs, as they're incurred) for the service they're providing to the other investors by acting as the general partner. And once the fee is paid, it gets paid out as compensation or distributions back to the owners of the development entity, making it unrecoverable if the project goes bust.

As a consequence, the developer's primary incentive is to build something, the bigger the better. That's where the money is. And it's a constant struggle with their investors and lenders to justify the biggest and least risk-averse project that the developer can get away with.

Besides, the fact is that a distressed apartment project isn't likely to go bust in the dramatic way that a condo project can. Apartments can heavily concess their rents in the first year or so just to generate sufficient cash flow to cover the note. As long as the property and the capital markets are both stabilized within a five-year period after completion so that the ultimate sale price reflects a healthy NOI and a reasonable cap rate, that's what is most material to the feasibility of the deal. And in this particular case, I don't actually see too much of a problem.

Niche,

Thanks for that information. Please consider posting this at "Development and Real Estate" thread, as well, so that people who do not read about this project, specifically, can still learn this knowledge, generally, as it pertains to all sorts of projects. Great post.

Seriously?

These "arguments" again?

It does NOT MATTER WHETHER YOU THINK IT IS "SMART" OR NOT.

It does NOT MATTER WHETHER YOU THINK THE BUILDING IS TOO TALL OR NOT. (As the fact that the proposed project being multi-family is irrelevant here with the current structure's being multi-family)

It does NOT MATTER WHETHER THE DEVELOPERS ARE "LUCKY" THAT THEY HAVE BEEN RESTRICTED FROM BUILDING THEIR PROJECT, SO FAR.

It does NOT MATTER WHETHER YOU THINK THE DEVELOPERS SHOULD PICK ANOTHER SITE OR HOPE THAT OTHER PROPERTY OWNERS "WOULD TRADE" FOR THIS SITE.

It does NOT MATTER WHETHER THIS PROJECT IS SUCCESSFUL, FROM AN ARCHITECTURAL, CIVIC, FINANCIAL, OR ANY OTHER RELATIVE VIEWPOINT.

It does NOT MATTER WHETHER YOU LIKE THIS PROJECT.

The developers have unrestricted land. If the appropriate governmental authorities (probably courts, in this case) find a legal reason this project can be limited, they will and the project will not go through as currently desired by Buckhead. If nothing is found, the developers may take their chances.

Please stop rehashing and repeating the same worthless and immaterial commentary.

I feel that Marmer makes a good point. There's a difference between what one "can" do and what one "should" do. And while this development is probably in the financial best interests of the developers, there's nothing wrong with considering what's best for the community and others affected by it. In this case, it's pretty clear that most of the community does not want this development.

Good point? Of course there is a difference between what one is able to do and what you think one should do. IT DOES NOT MATTER WHO ELSE WANTS THIS DEVELOPMENT OR NOT. THEY CAN BUILD IT AS-OF-RIGHT.

How many more pages on this thread do we need with more comments about people commenting on what they think the developer should do or not?

Maryland Manor used to be a dump, but a fairly cheap dump. Yes, lots of Rice students used to live there. It was extensively remodeled in the mid-90s, seems to be pretty nice now. I would not assume for a moment that those people who live there now, probably grad students, med students, and middle-income-ish retail and office workers, will be able to find 67 similar units in the area. I could be wrong, but I bet I'm not. But, hey, go ahead and tear down a perfectly decent, up-to-date, highly occupied apartment complex, and build something that might not get financing, might not find tenants, and almost no one in the area really wants. That's what property rights at all costs, with a side order of urban density, really means!

Thanks for your sarcastic recommendation about risk to the owners who, like many of us, could not care less what you think about this.

from the story 13 had at 6, sounds like we've gone from developer lawsuit threats against the city to resident lawsuit threats against the developer.

Buckhead can build this as-of-right. End of story. Seriously.

ALL RIGHT!!!

Once all permitted work has been completed and inspected, the Certificate of Occupancy can be applied for. Upon receiving it, the developer can begin the process of converting pre-sales agreements to actual sales. Usually there is a deposit on the part of the prospective buyer, and the prospective buyer can opt to move forward with the purchase with the deposit applied to the down payment or can take that opportunity to walk away. Conversion is a difficult and often frustrating process for the developer, and even if a prospective buyer wants to move forward, the buyer must still obtain financing. The conversion process is mostly wrapped up within the first couple of months of having received the Certificate of Occupancy, and that's when we'll start hearing rosy reports about how quickly units are selling. Thereafter, the rate of unit closings tends to flatten out and resemble a long tail with some seasonal bumps.

EDIT: I welcome rumors, whether misleading or not. An active rumor mill often prompts a response; even the lack of a response is a response.

Thanks....Can you post that on the development and real estate thread, as well?

Before we jump to conclusions, it might be better not to fan rumors about sales without someone actually getting verification before commenting.

When does the building close? I am posting this question on Development and Real Estate too - can anyone explain the process of a building closing (including receiving C/O, financial closings of units, etc).... ???

Anyone have info about the opening tonight?