Regatta Galveston

[WesternGulf]

Not too much information but found this project on HAR. Located on West Beach.

[J.A.S.O.N.]

*Eagerly awaits The New Junipers response*

oh yeah, thanks for the post WG

[houstonsemipro]

All of these projects Galveston has on the books I just hope these come to reality. But, next time I see a new project on Galveston thread I'm just going to say Damn, cause Galveston is really booming.

But, I will say this...

IT'S ABOUT DAMN TIME GALVESTON!!!

[The New Juniper]

*Eagerly awaits The New Junipers response*

oh yeah, thanks for the post WG

OK. And i know it seems like i poo poo projects all the time. But, i heard a local broker is hawking these "proposed" units at $240 per square foot.

For fear of sounding patronizing, a brief education on cost:

Cost to build a wood framed apartment complex (i.e. Club of the Isle) - $130 psf

Cost to build mid rise concrete post tension building under the high rise code - $155 psf

cost to build high rise with punched openings in major metropolitan area - $180 psf

cost to build high rise with curtain wall system in major metropolitan area - $190 psf

cost to build high rise in coastal community with high impact glass, hurricane code and curtain wall system - more than $200 psf.

The buildings rendered (and i know it's only $3,000 worth of someone's time to come up with those pics) show buildings that will cost more than $200 psf to build. There is a tremendous amount of site work required over there to level the land, say $5 psf. If the land cost $10 psf of net sellable square footage, which i suppose is feasible, we are now at $215 psf. If we had only $25 psf left for soft costs, which has to contain EVERYTHING else including marketing, INTEREST on the construction loan, architects, engineers, developer fee, etc. we would be at $240 psf.

So, if the above were true on the cost side, they would be selling a building at COST and NO PROFIT. When typically, developers look to make at LEAST $75 psf for the risk involved.

All I'm saying is that it doesn't do anyone any good to come to market with a picture and say "We're selling this for $240 psf. IT CAN'T BE DONE. Either they are building something other than what they are showing, or they building what they are showing and selling for more. It is that simple.

It upsets the buyers expectations and is a disservice for all those who work hard to actually bring reputable product to the market.

Off the soap box and back to work.

TNJ

[J.A.S.O.N.]

Very informative TNJ, thanks for the breakdown of costs. You learn something everyday

[The New Juniper]

no problem. Sorry to sound frustrated, but i believe in the Galveston market and i hate to see projects announced that i know have no chance of making it at the announced price.

[The New Juniper]

no problem. Sorry to sound frustrated, but i believe in the Galveston market and i hate to see projects announced that i know have no chance of making it at the announced price.

The developer of this building is out hawking this product. The newest version looks fairly nice. However, and reference my earlier epistle, it is going to be expensive. Hope it gets built...

[Trophy Property]

All I'm saying is that it doesn't do anyone any good to come to market with a picture and say "We're selling this for $240 psf. IT CAN'T BE DONE. Either they are building something other than what they are showing, or they building what they are showing and selling for more. It is that simple.

TNJ

So if a developer is looking to make a $75 profit and there is no way to build these condos for less than $240 then they would have to sell in the neighborhood of $315 - $330 PSF. Is there a market and a demand for $330 PSF condos. Paying $330,000 per 1,000 SF seems a little out of reach for most Galveston buyers. I know this is changing, but 5 buildings. I am with you. This will not get done.

[The New Juniper]

So if a developer is looking to make a $75 profit and there is no way to build these condos for less than $240 then they would have to sell in the neighborhood of $315 - $330 PSF. Is there a market and a demand for $330 PSF condos. Paying $330,000 per 1,000 SF seems a little out of reach for most Galveston buyers. I know this is changing, but 5 buildings. I am with you. This will not get done.

i agree with you on price. however, i believe that people will stretch to that high price tag so long as you give them huge amenities. Face it, Galveston will never be known for its miles of pristine white beaches or crystal clear water. People want to be near the water, but need to be entertained. You cannot sell just the fact that you can cross the seawall to get to a rocky, unsafe area where the waves crash against the seawall. You need to able to market an entire experience that happens to have the background of the Gulf of Mexico, along with the serenity that (allegedy) comes with waking up to the salt breeze......

Knew i should have been a real estate agent......

[RedScare]

So if a developer is looking to make a $75 profit and there is no way to build these condos for less than $240 then they would have to sell in the neighborhood of $315 - $330 PSF. Is there a market and a demand for $330 PSF condos. Paying $330,000 per 1,000 SF seems a little out of reach for most Galveston buyers. I know this is changing, but 5 buildings. I am with you. This will not get done.

They are not selling to Galveston buyers. They are selling to Houstonians, Dallasites and other nearby wealthy types, looking for second homes, as well as investors who are tired of paying triple that price in Florida. Believe it or not, Galveston has a lot to offer, compared to some beach resorts in other areas. Sure, the sand isn't as white as the stuff they imported into Destin, but you can't find anything remotely resembling The Strand within miles of Destin, not to mention all of Houston's amenities just 50 miles away.

EDIT: Didn't know that TNJ was typing the EXACT same thing!

[Trophy Property]

I can understand paying that for a condo that is on the water and you can actually walk out the door and be at the beach. So many of these condo complexes seem to be built along the seawall where you have to cross a highway to get to the beach. You better lop of $50 psf + if I am going to be interested in anything like that.

[J.A.S.O.N.]

I can understand paying that for a condo that is on the water and you can actually walk out the door and be at the beach. So many of these condo complexes seem to be built along the seawall where you have to cross a highway to get to the beach. You better lop of $50 psf + if I am going to be interested in anything like that.

The view from behind the Seawall is pretty nice.

Also, maybe some of those potential buyers are thinking "the beach is just across the street", as opposed to "Damn, I have to cross the highway".

[Trophy Property]

I guess I am a glass is half empty kind of guy.

My wike's familly has a condo down there and we never cross the highway. Of course there are certain places where it is easier than others. Don't aske me where it is, but it is one of those 20 story dealios that looke pretty scummy on the outside. I have been a few times. The balcony is fun for drinking and smoking. That is about all.

[VicMan]

Hey, isn't this at 9902 Seawall Boulevard? (The HAR renderings for 9902 Seawall are the images shown in this thread)

The people creating this complex need better renderings...

As for schools (Galveston ISD):

* Oppe Elementary School - http://www.gisd.org/oppe

* Weis Middle School - http://www.edline.net/pages/Weis_MS (older website is http://www.galveston-schools.org/weis/)

* Ball High School - http://www.ballhigh.org/

Schools aren't much of an issue for most condo buyers, though - The condos jack up property values and send middle class people packing to Texas City and other areas, reducing the sizes of local GISD schools..

[Boris]

Here's a story in the Houston Bus. Journal on this development:

_________________________________________________

Galveston luxury condos will take in Gulf view

Houston Business Journal - October 27, 2006

Galveston is getting another luxury condominium development. Construction is set tro begin in January 2007 on Regatta, a complex with four towers, 11 stories each being built by Global Royal Investments Ltd.

The development will consist of 247 condominium suites overlooking the Gulf of Mexico. Positioned behind the seawall, it will be built 5 feet above sea level for maximum storm protection and constructed to withstand 155 mph winds.

Regatta will have four condominiums per floor ranging from 1,595 to 2,087 square feet and two penthouses on the 11th floor of each tower that will be 3,578 to 3,746 square feet. Reservations for Tower III are available at pre-construction prices. The units average $289 per square foot. More than 67 percent of Tower III and 25 percent of Tower I at the Regatta is reserved, according to Global Royal Investments Ltd. principals Dr. Surendra Mahato and Ratan K. Jha.

Mahato, based in Minsk, Belarus, is a medical doctor who oversees numerous international family businesses. Jha is a registered professional engineer, based in Houston.

The development team includes architect Irvine Phillips, Shelmark Engineering, Sterling Engineering & Design Group and MEP-SEi Group, Prudential/Gary Greene Realtors, Douthit Design Group and M.J. Naschke Public Relations.

http://www.bizjournals.com/houston/stories...2184400^1366661

[Montrose1100]

Here's a story in the Houston Bus. Journal on this development:

_________________________________________________

Galveston luxury condos will take in Gulf view

Houston Business Journal - October 27, 2006

Galveston is getting another luxury condominium development. Construction is set tro begin in January 2007 on Regatta, a complex with four towers, 11 stories each being built by Global Royal Investments Ltd.

The development will consist of 247 condominium suites overlooking the Gulf of Mexico. Positioned behind the seawall, it will be built 5 feet above sea level for maximum storm protection and constructed to withstand 155 mph winds.

Regatta will have four condominiums per floor ranging from 1,595 to 2,087 square feet and two penthouses on the 11th floor of each tower that will be 3,578 to 3,746 square feet. Reservations for Tower III are available at pre-construction prices. The units average $289 per square foot. More than 67 percent of Tower III and 25 percent of Tower I at the Regatta is reserved, according to Global Royal Investments Ltd. principals Dr. Surendra Mahato and Ratan K. Jha.

Mahato, based in Minsk, Belarus, is a medical doctor who oversees numerous international family businesses. Jha is a registered professional engineer, based in Houston.

The development team includes architect Irvine Phillips, Shelmark Engineering, Sterling Engineering & Design Group and MEP-SEi Group, Prudential/Gary Greene Realtors, Douthit Design Group and M.J. Naschke Public Relations.

http://www.bizjournals.com/houston/stories...2184400^1366661

Great to have an update, thanks.

[TheNiche]

The units average $289 per square foot. More than 67 percent of Tower III and 25 percent of Tower I at the Regatta is reserved, according to Global Royal Investments Ltd. principals Dr. Surendra Mahato and Ratan K. Jha.

Note the price increase. Sometimes developers will offer different price points prior to financing/construction, then during construction, and then upon completion. There are two reasons for this. First, the developer needs to fill up a certain percentage of units before obtaining financing...some developers are willing to do this at cost, just to get the project off the ground. Second, consumers willing to sign a contract to buy something that may not exist for another couple of years (or at all) need to be compensated for their willingness to wait and share in the risk. After all, they could very easily go and buy a unit in some other tower.

[The New Juniper]

Note the price increase. Sometimes developers will offer different price points prior to financing/construction, then during construction, and then upon completion. There are two reasons for this. First, the developer needs to fill up a certain percentage of units before obtaining financing...some developers are willing to do this at cost, just to get the project off the ground. Second, consumers willing to sign a contract to buy something that may not exist for another couple of years (or at all) need to be compensated for their willingness to wait and share in the risk. After all, they could very easily go and buy a unit in some other tower.

Note the price increase. Sometimes developers will offer different price points prior to financing/construction, then during construction, and then upon completion. There are two reasons for this. First, the developer needs to fill up a certain percentage of units before obtaining financing...some developers are willing to do this at cost, just to get the project off the ground. Second, consumers willing to sign a contract to buy something that may not exist for another couple of years (or at all) need to be compensated for their willingness to wait and share in the risk. After all, they could very easily go and buy a unit in some other tower.

Let's all please keep in mind that "RESERVED" and "SOLD" are entirely different. Especially to a lending institution.

[wheels]

Some developers will buy out the early guys once the project gets near the end and prices have been driven up. I would think they need to get up to around and average of $350/ft to get out with a decent return.

[TheNiche]

Let's all please keep in mind that "RESERVED" and "SOLD" are entirely different. Especially to a lending institution.

Some developers will buy out the early guys once the project gets near the end and prices have been driven up. I would think they need to get up to around and average of $350/ft to get out with a decent return.

True, true. But financing is the big obsticale. For many local developers (not always acting rationally), the mindset is that they'll build anything that they can get money for. To that end, and bearing in mind the limitations in the consumer market for real estate that doesn't exist, they'll do whatever it takes to get construction financing in place.