The Heights Information & Developments

[J008]

Being right down the street from the proposed site, it's pretty obvious to me that the hole is Walmart related.

If it were the city would have thrown $6 Million dollars into it while waving a middle finger at the effete that is the Heights, then there would be several sympathizers saying how this hole is the only thing that keeps us free.

[Tiko]

Thanks to the changes in the historic ordinance, the hole is contributing and permanent. Any construction on the block must now include a huge hole.

[s3mh]

Thanks to the changes in the historic ordinance, the hole is contributing and permanent. Any construction on the block must now include a huge hole.

The pro-preservation comeback line is just too easy and too rude. You all are a smart bunch. You can figure it out for yourselves.

I guess the way this thread has gone says something about the collective knowledge of all things real estate on this board. Thus, it is not a coincidence that so many are pro-walmart/anti-preservation.

[chester77008]

I looked at this property a few years back and there is a large drainage easement running through the lot. There is a massive storm drain running under the lot that starts further north at that old power station and heads south to the bayou. The lot directly to the north has a large gully that is part of this old drainage issue, it looks like an old creek, and its pretty deep, maybe 12 feet deep and 20 feet wide. My guess is the old warehouse was built over this gully, thus the hole.

At any rate the easement will make the property a tough sell, it eats up quite a bit of the square footage.

[s3mh]

I looked at this property a few years back and there is a large drainage easement running through the lot. There is a massive storm drain running under the lot that starts further north at that old power station and heads south to the bayou. The lot directly to the north has a large gully that is part of this old drainage issue, it looks like an old creek, and its pretty deep, maybe 12 feet deep and 20 feet wide. My guess is the old warehouse was built over this gully, thus the hole.

At any rate the easement will make the property a tough sell, it eats up quite a bit of the square footage.

Interesting. I took a closer look, and there was definitly some sort of basement. There is a staircase on the north end of the property.

Could this property be part of the detention ponds that are needed for the new I-10 frontage? Seems too small to me. But, I cannot imagine building anything on the lot with the drainage easement.

[J008]

Anyone know what the plan is for that big lot on Studewood between 12th 1/2 and 13th that used to be an Immanuel Lutheran Campus?

I noticed there is a variance request sign up with the name Owens Management System LLC on it.

[SilverJK]

Those 4 lots on Pecore haven't paid their taxes yet... I wonder if anything will be happening their in the near future. The police have been putting a "this is your speed" display thing their lately. I wonder if they would sell them seperately?

[tanith27]

White Oak is definitely changing quickly. New restaurants and pub destinations are moving in quick. D'Amicos Italian, Tacos a go go, Christians Tailgate and now BB's Cajun are soon to open.

I have also heard that 6th St Bar and Grill will soon become the latest addition to the Little Woodrows clan.

"Is White Oak Drive becoming a cozier, more walkable version of nearby Washington Avenue as a restaurant-entertainment hub? One local real estate agent thinks so.

White Oak is more concentrated with restaurants and bars in a much smaller area, said Jeff Trevino, a local commercial real estate agent who has done work on both streets.

Washington is three miles long and the restaurants and bars are spread out, he said. By comparison, White Oak is about a mile long, and many of the restaurants are popping up along a quarter-mile stretch between Studemont and Oxford."

http://blogs.chron.c.../entertainment/

[mcook2002]

I think its great news. That will be a great section of places to enjoy.

[LTAWACS]

The agent doesnt know what he's talking about.

[RedScare]

The agent doesnt know what he's talking about.

I was thinking the same thing about you.

[crunchtastic]

any progress on the the Roeder's Pub that is supposedly going in at the old Reddi Room location?

[tanith27]

@crunch: I was wondering the same thing

[mcook2002]

inferred from the article - BB's took over the location Roeder's Pub was going to move into.

[livincinco]

The agent doesnt know what he's talking about.

I'll bite. Please explain why this is incorrect. Some specifics would be nice.

[mcook2002]

6th st has something along the lines of "bbs cafe coming soon" on their billboard as of last night.....so i might have inferred incorrectly!

Edited March 4, 2011 by mcook2002

[sonic0boom]

6th st has something along the lines of "bbs cafe coming soon" on their billboard as of last night.....so i might have inferred incorrectly!

I can confirm this, too. I tried to take a picture last night, but the camera phone isn't quite up to balancing night time with bright lights...

Also in other news, I noticed some activity last night at Little Fats, the dessert place near the bead shop on White Oak. The place looked all ready to go about a year ago and then .... nothing. Driving by, i noticed some people inside and there were chairs stacked up on tables. So, it looks like they may actually be opening at long last.

[tanith27]

http://www.chron.com/disp/story.mpl/business/7458000.html

[sonic0boom]

Also in other news, I noticed some activity last night at Little Fats, the dessert place near the bead shop on White Oak. The place looked all ready to go about a year ago and then .... nothing. Driving by, i noticed some people inside and there were chairs stacked up on tables. So, it looks like they may actually be opening at long last.

Correction, it is called Happy Fatz .... I did a search and see that they had a pre-opening inspection in January, but that's about all i can find. I guess we will find out soon enough.

[SilverJK]

So I walk by these all the time and I've been baffled that nobody has bought them up and tore them down. I know they were back on their taxes earlier this year, and it looks like the taxes were recently paid off as well as a change in ownership. I've been hopeful that something would come of this, and I see this on HAR today.

http://search.har.co...HAR88184581.htm

renovating just seems like a waste of money, I don't see how they can make this place worthwhile. HCAD has the value of the "improvements" less than $200k. I wonder if they just mean repaint and replace all the broken duct taped windows when they say renovations?

Anyone know anything about this?

Edited May 23, 2011 by SilverJK

[Tricky Matt]

Someone was mugged by a guy with a gun at Pecore and Bauchamp last year, right across from those apartments.

[SilverJK]

Yeah i think it was in that vacant lot there across the street from the apartments, and there have been a string a garage breakins on Pecore lately. One got caught last night by the police. A lot of people think that some of the apartment residents are the root to a good bit of the crime in the area. I can't verify that, but I can verify I saw a lady from those apartments holding a butcher knife yelling and screaming at a guy holding a baby telling him to "come back with my ****** ****** baby". Not exactly what you expect to see around noon on a saturday. Those apartments are one of the few structures in the heights I'd rejoice to see torn down.

[Simbha]

I don't know anything about these apartments, but...

I've always been curious as to how difficult is it to buy an apartment complex and tear it down when there are people who reside there. I imagine at least some of these people have contracts, and I would suppose one would have to wait until all the contracts are expired to kick people out. Might that mean that one would have to budget for up to a year-long waiting period before tearing the whole complex down, or can the new owner simply nullify the contracts somehow? And, can it be done in stages as long as some buildings become completely unoccupied sooner than others, or does that present a hazard to the other tenants?

[SilverJK]

I don't think it would take much of a stretch for someone to rule this place as unsafe.

There never had a for sale sign on this property, but it seems to have changed hands several times in the past year.

26,162 sq. ft. Lot per HCAD. I'd love to see 5 street facing (pecore side) homes with back facing garages with access from Rural. I'm sure that is too much to ask, and 6-10 would be much more likely to happen, but for now it looks like we are stuck with the apartment complex.

[jamesw]

Think these are the guys?

http://www.khou.com/news/local/1-in-custody-5-on-the-loose-after-police-chase-crash-in-The-Heights-122501769.html

Cheers

James

[innerlooper]

Its all about MONEY and CASH FLOW. There is no way these units will be torn down. The limited parking is grandfathered. Assuming there are only 16 occupied units (I can't tell how many there are actually) at $750 a month, that is $144K a year. That is 7 years to pay off full price, according to HCAD. That is printing money my friend. Try doing that with fully assessed single family/ duplexes/ fourplexes in the 'hood.

HCAD subsidizes "marginal" commercial properties by mostly taxing the land, no matter how phenomenal the business cash flow. While you, gentle homeowner/ sucker, pay the big bucks on your improvements, and your land.

Do you think you could buy a place like that for only a million?

Texas does not have mandatory disclosure of sale price of property. So lots of apt complexes sell privately with no hint of price to HCAD. They throw up their hands and say well we'll just go by land value.

Its the golden rule. Those with the gold make the rules.

[RedScare]

Its all about MONEY and CASH FLOW. There is no way these units will be torn down. The limited parking is grandfathered. Assuming there are only 16 occupied units (I can't tell how many there are actually) at $750 a month, that is $144K a year. That is 7 years to pay off full price, according to HCAD. That is printing money my friend. Try doing that with fully assessed single family/ duplexes/ fourplexes in the 'hood.

HCAD subsidizes "marginal" commercial properties by mostly taxing the land, no matter how phenomenal the business cash flow. While you, gentle homeowner/ sucker, pay the big bucks on your improvements, and your land.

Do you think you could buy a place like that for only a million?

Texas does not have mandatory disclosure of sale price of property. So lots of apt complexes sell privately with no hint of price to HCAD. They throw up their hands and say well we'll just go by land value.

Its the golden rule. Those with the gold make the rules.

Well, according to the HCAD page you referenced, there are 30 units.

HCAD

[TheNiche]

Its all about MONEY and CASH FLOW. There is no way these units will be torn down. The limited parking is grandfathered. Assuming there are only 16 occupied units (I can't tell how many there are actually) at $750 a month, that is $144K a year. That is 7 years to pay off full price, according to HCAD. That is printing money my friend. Try doing that with fully assessed single family/ duplexes/ fourplexes in the 'hood.

HCAD subsidizes "marginal" commercial properties by mostly taxing the land, no matter how phenomenal the business cash flow. While you, gentle homeowner/ sucker, pay the big bucks on your improvements, and your land.

Do you think you could buy a place like that for only a million?

Ummm...HCAD's noticed value is $905,500, but used the cost approach instead of the income approach because the income approach would have resulted in negative improvement value, eating into the value of the land. Their analysis is fraudulent, as per usual.

Considering that this property sold in April of this year for $812,500, I'd say that the marketplace bought it for land value net of demolition cost.

Also, consider that the average rent is about $575 per month, meaning that gross potential rent is $207,000/yr. Physical vacancy at the time of listing was 10%. Let's assume 3% economic vacancy for concessions and uncollectable rent, then an additional 3% of economic vacancy for one employee-occupied unit. So 84% of the gross potential rent is $173,880.

Then there are the expenses. A typical expense ratio on a property like this is pretty high. Everything is fully depreciated and requires constant repair, tenants do nasty things to their units, evictions are common, all of that feeds into a higher risk profile for insurance underwriters, and the small size of the complex demands a higher management fee. About the only place that the landlord can catch a break is on property taxes. An expense ratio of 60% of revenue would not be inappropriate, which comes to $104,328.

Net operating income is then $69,552. This also indicates a cap rate at about 8.6%, which would be a little low except for the land component of the deal.

Of course, HCAD is not looking at mortgage payments or anything like that. The mortgage amount is $650,000, which if it is a 15-year note with 5% interest, comes to a $5,140 payment per month, or $61,680 per year. They're left with $7,872 in their pocket, if they manage not to screw up. And that looks like a typical commercial real estate deal in post-recession capital markets. The lender wants the borrower to have positive cash flow, even on an acquisition at land value.

Texas does not have mandatory disclosure of sale price of property. So lots of apt complexes sell privately with no hint of price to HCAD. They throw up their hands and say well we'll just go by land value.

Its the golden rule. Those with the gold make the rules.

I got the sale price and the entire listing history from my home computer. I even paid all of $0.50 for it. HCAD has that, and many more like it. What they can't purchase, they can often confirm by other means. Their information isn't comprehensive; it doesn't have to be. Having information available to them is not the problem, anyway. They have enough datapoints to make appropriate inferences. HCAD's biggest problem is that their analysts are lazy.

Edited June 4, 2011 by TheNiche

[TheNiche]

I don't know anything about these apartments, but...

I've always been curious as to how difficult is it to buy an apartment complex and tear it down when there are people who reside there. I imagine at least some of these people have contracts, and I would suppose one would have to wait until all the contracts are expired to kick people out. Might that mean that one would have to budget for up to a year-long waiting period before tearing the whole complex down, or can the new owner simply nullify the contracts somehow? And, can it be done in stages as long as some buildings become completely unoccupied sooner than others, or does that present a hazard to the other tenants?

The hard part is getting bank financing, variances, and approved plans for whatever will replace what is there. In some cities, zoning changes are also an issue. Once that's lined up, the property can be dirt in three months.

That's how it works in Houston, and in Dallas a developer might even be able to arrange for an incentive from the city to tear down something with poor people living in it. In San Antonio, you just want to be sure that none of the city councilmembers' kinfolk are being personally inconvenienced. And in Austin, they'll withold zoning changes from you until you come up with some politically saleable idea (like allocating a portion of the development for elderly housing) for which they can give you far more money in incentives than that idea costs to build; Austin is worse than Dallas because they will pay developers ridiculous sums of money to achieve the very same goals under a thinly-veiled facade of social justice...over numerous steak dinners, of course.

[innerlooper]

Thank you Niche for your analysis. You be the man. Though that 60% expense ratio seems a little high, for that place anyway. I guess my big gripe in general is with ad valorem property taxes, and how they skew (screw) the diligent middle class. Why am I penalized for wanting to live in an area where properties are cared for, where the neighbors are educated, and the nearby stores are nice? If my taxes are eight times what they would be in Acres Homes, do I get eight times the education and fire service and water pressure?

A friend tried to use a relatively nice 50 unit complex in Montrose to argue down an old 4 plex he owned nearby (they have him for 375K with almost half on improvements). They told him forget it. This 50 small units is on the rolls for 1.2 million. Mostly dirt value but $70,000 assigned to 20,000 square feet of improvement. Place is almost full most of the time. Even with that 60% expenses I think they are way undervalued. Last changed hands in 1989.