Comments on: 2727 Kirby: Refunds Are on Their Way http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/ Houston, Texas real estate development, home buying, landscape, and design Sat, 20 Mar 2010 20:21:55 +0000 http://wordpress.org/?v=2.6.3 By: TheNiche http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-51688 TheNiche Sat, 21 Nov 2009 22:05:12 +0000 http://swamplot.com/?p=12943#comment-51688 I'm unfamiliar with the legal situation as it presently stands, but if there is a bankruptcy or mass foreclosure then the unsold units are taken by the trustee or the bank (respectively) and are marketed for sale as a deeply discounted package to an investor that is willing to take the time and effort to resale them to consumers. If the HOA hasn't kicked in yet because not enough units have sold, then there is a possibility that services will be cut back, but that's nothing that an active HOA couldn't restore at a later date. . Someone trying to purchase a unit might have their purchase delayed slightly while this stuff gets worked out. But when the units come back to the market, it is entirely possible that they'll be at a lower price point because the seller's basis will be so much lower than the developer's had been. This circumstance could hurt individual owners trying to resell their unit over the next several years. . Another thing that could hurt owners is if there aren't restrictions on an owner renting units in bulk. A large rental population would not be desirable, but that may be the path taken by an investor. I’m unfamiliar with the legal situation as it presently stands, but if there is a bankruptcy or mass foreclosure then the unsold units are taken by the trustee or the bank (respectively) and are marketed for sale as a deeply discounted package to an investor that is willing to take the time and effort to resale them to consumers. If the HOA hasn’t kicked in yet because not enough units have sold, then there is a possibility that services will be cut back, but that’s nothing that an active HOA couldn’t restore at a later date.
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Someone trying to purchase a unit might have their purchase delayed slightly while this stuff gets worked out. But when the units come back to the market, it is entirely possible that they’ll be at a lower price point because the seller’s basis will be so much lower than the developer’s had been. This circumstance could hurt individual owners trying to resell their unit over the next several years.
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Another thing that could hurt owners is if there aren’t restrictions on an owner renting units in bulk. A large rental population would not be desirable, but that may be the path taken by an investor.

]]> By: Babs http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-51680 Babs Sat, 21 Nov 2009 21:44:03 +0000 http://swamplot.com/?p=12943#comment-51680 Is there any more news on the law suits pending against 2727 Kirby? The building still seems quite empty and with law suits pending the future of this building seems to be slightly rocky. If the building goes under what happens to the people to have already purchased condos and to those who have contracts but haven't closed on their condos? Is there any more news on the law suits pending against 2727 Kirby? The building still seems quite empty and with law suits pending the future of this building seems to be slightly rocky. If the building goes under what happens to the people to have already purchased condos and to those who have contracts but haven’t closed on their condos?

]]> By: Babs http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-51678 Babs Sat, 21 Nov 2009 21:38:40 +0000 http://swamplot.com/?p=12943#comment-51678 Has there been any newer investigations of 2727 Kirby? Has there been any newer investigations of 2727 Kirby?

]]> By: Ed http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-48201 Ed Wed, 28 Oct 2009 00:03:18 +0000 http://swamplot.com/?p=12943#comment-48201 Uh oh. The down market cat is out of the bag. Its a beautiful,but virtually empty building. It'll take years to sell out. Uh oh. The down market cat is out of the bag. Its a beautiful,but virtually empty building. It’ll take years to sell out.

]]> By: Mies http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47374 Mies Wed, 21 Oct 2009 18:10:17 +0000 http://swamplot.com/?p=12943#comment-47374 This may well be history repeating itself... . The Huntingdon was built at the top of the market in the early/mid eighties, went bust, was taken over by the RTC, eventually purchased out of the RTC scrap bin in the mid 90's, and the units were eventually all sold by 1999 or so. . The top of Houston's 1980's housing bubble was characterized by a rash of high-rise condo construction, just like today. The developers (and investors) of those projects suffered due to their unlucky timing, as appears to be happening with the current crop of high rise condos today. It is a sad situation. This may well be history repeating itself…
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The Huntingdon was built at the top of the market in the early/mid eighties, went bust, was taken over by the RTC, eventually purchased out of the RTC scrap bin in the mid 90’s, and the units were eventually all sold by 1999 or so.
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The top of Houston’s 1980’s housing bubble was characterized by a rash of high-rise condo construction, just like today. The developers (and investors) of those projects suffered due to their unlucky timing, as appears to be happening with the current crop of high rise condos today. It is a sad situation.

]]> By: John http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47372 John Wed, 21 Oct 2009 17:33:28 +0000 http://swamplot.com/?p=12943#comment-47372 This topic has become stale. No one knows anything, and all the guesses and opinions have become repetitive and boring. I simply wish the developers who built such a great project well, and those who are buying in it the best. This topic has become stale. No one knows anything, and all the guesses and opinions have become repetitive and boring. I simply wish the developers who built such a great project well, and those who are buying in it the best.

]]> By: Eric http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47351 Eric Wed, 21 Oct 2009 13:46:48 +0000 http://swamplot.com/?p=12943#comment-47351 Does anyone actually know whether 2727 Kirby's developer is having any sort of financial difficulty? I, for one, wish the folks who built this building nothing but the best. Does anyone actually know whether 2727 Kirby’s developer is having any sort of financial difficulty?

I, for one, wish the folks who built this building nothing but the best.

]]> By: jgriff http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47344 jgriff Wed, 21 Oct 2009 12:13:08 +0000 http://swamplot.com/?p=12943#comment-47344 <i>The nastiness of the people defending this project kind of makes me want to see it fail.</i> And what are they defending it from? No one is attacking this project. They are just stating the facts about it. TheNiche said that he believes the project is <i> a well-conceived, competently-handled, top-tier project which should have been a huge financial success</i>. It is not the fault of the developers or the designers of this project that it is having problems. It is the timing. If your trying to defend this project then you must be defending it against the laws of economics because no one else is attacking it. The nastiness of the people defending this project kind of makes me want to see it fail.

And what are they defending it from?

No one is attacking this project. They are just stating the facts about it. TheNiche said that he believes the project is a well-conceived, competently-handled, top-tier project which should have been a huge financial success. It is not the fault of the developers or the designers of this project that it is having problems. It is the timing. If your trying to defend this project then you must be defending it against the laws of economics because no one else is attacking it.

]]> By: Miguel http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47325 Miguel Wed, 21 Oct 2009 06:32:50 +0000 http://swamplot.com/?p=12943#comment-47325 The nastiness of the people defending this project kind of makes me want to see it fail. The nastiness of the people defending this project kind of makes me want to see it fail.

]]> By: TheNiche http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47322 TheNiche Wed, 21 Oct 2009 05:45:22 +0000 http://swamplot.com/?p=12943#comment-47322 My perspective is that of someone who has actually worked in the headquarters offices of a multifamily developer that builds and manages both apartments and condos. We hired people like you. . There is very clearly a need for bare-minimum recordkeeping and security procedures, but the only thing that concerns the developer is that the **process** is adequate to mitigate certain potential legal and casualty liabilities. It's just a risk management tool to him. Subordinate personnel are tasked with the mundane details, but unless those particulars become materially relevant to the bottom line (for instance as a consequence of a fire, as you suggested)...the owner cannot be bothered with them. . Move-ins will never--NEVER!--get reported in a staff meeting. Sales and sales prospects are reported on because that's the organization's bread and butter. It is what pays the mortgage. My perspective is that of someone who has actually worked in the headquarters offices of a multifamily developer that builds and manages both apartments and condos. We hired people like you.
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There is very clearly a need for bare-minimum recordkeeping and security procedures, but the only thing that concerns the developer is that the **process** is adequate to mitigate certain potential legal and casualty liabilities. It’s just a risk management tool to him. Subordinate personnel are tasked with the mundane details, but unless those particulars become materially relevant to the bottom line (for instance as a consequence of a fire, as you suggested)…the owner cannot be bothered with them.
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Move-ins will never–NEVER!–get reported in a staff meeting. Sales and sales prospects are reported on because that’s the organization’s bread and butter. It is what pays the mortgage.

]]> By: John http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47268 John Tue, 20 Oct 2009 20:37:15 +0000 http://swamplot.com/?p=12943#comment-47268 TheNiche, I will only reply to one part of your last comments because we are so far apart on our understanding of these issues that this could go on for days. You wrote, "Is it your belief that the developer has nothing better to do with his time than track such a mundane and innocuous activity as tenant move-ins? If you’re right, then I may have to take back my comments about the project being competently-handled; it just isn’t a metric that is pertinent to his bottom line." - It's not my belief; it's my knowledge and experience. I've been involved in design/construction/development for 20 yrs. In any multi-family development, especially in highrises, the developer also manages the building and common areas, at least until it is 51% sold and an HOA made up of homeowners can take over that management. - Some developers hold on to control until the property is 75% or even 100% sold. Many developers operate management companies as a side business to continue to operate the properties for the HOAs after the homeowners take over official control - for considerable fees. Knowing who is occupying units is part of the responsibility of whomever is managing the building. - If for nothing more than safety considerations, the manager of the building MUST know which units are occupied. If there is a fire in the building, especially in a highrise, one of the first things the Fire Department will need to know is which units are occupied and which ones are not. Lives could be at stake. I'm not sure why you find this relatively simple and common, and required element of building management to be "a mundane and innocuous activity". Or who, if not the developer of a new property do you think is managing the building? - Any owner of a luxury highrise building will tell you that they expect top-notch security and yes, they expect that security to be fully aware of who is coming into and going from the building. This is not atypical. I'm guessing you've never lived in a full-service high rise? TheNiche,

I will only reply to one part of your last comments because we are so far apart on our understanding of these issues that this could go on for days.

You wrote, “Is it your belief that the developer has nothing better to do with his time than track such a mundane and innocuous activity as tenant move-ins? If you’re right, then I may have to take back my comments about the project being competently-handled; it just isn’t a metric that is pertinent to his bottom line.”
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It’s not my belief; it’s my knowledge and experience. I’ve been involved in design/construction/development for 20 yrs. In any multi-family development, especially in highrises, the developer also manages the building and common areas, at least until it is 51% sold and an HOA made up of homeowners can take over that management.
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Some developers hold on to control until the property is 75% or even 100% sold. Many developers operate management companies as a side business to continue to operate the properties for the HOAs after the homeowners take over official control - for considerable fees. Knowing who is occupying units is part of the responsibility of whomever is managing the building.
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If for nothing more than safety considerations, the manager of the building MUST know which units are occupied. If there is a fire in the building, especially in a highrise, one of the first things the Fire Department will need to know is which units are occupied and which ones are not. Lives could be at stake. I’m not sure why you find this relatively simple and common, and required element of building management to be “a mundane and innocuous activity”. Or who, if not the developer of a new property do you think is managing the building?
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Any owner of a luxury highrise building will tell you that they expect top-notch security and yes, they expect that security to be fully aware of who is coming into and going from the building. This is not atypical. I’m guessing you’ve never lived in a full-service high rise?

]]> By: TheNiche http://swamplot.com/2727-kirby-refunds-are-on-their-way/2009-10-19/#comment-47266 TheNiche Tue, 20 Oct 2009 20:12:27 +0000 http://swamplot.com/?p=12943#comment-47266 John, Is it your belief that the developer has nothing better to do with his time than track such a mundane and innocuous activity as tenant move-ins? If you're right, then I may have to take back my comments about the project being competently-handled; it just isn't a metric that is pertinent to his bottom line. . And you're right that second home buyers and international buyers are important components of the market share for highrise condos, btw, but unless you believe that the management company is tracking such owners' day-to-day comings and goings and passing along a report back to the developer, that has absolutely no bearing on the matter that we're discussing. . As part of your response to me, you made the comment, "This project is not unique in its difficulties with the market. That's precisely how I know that there is a lit fuse. Look at what has happened to other condo towers that have hit the market recently. Then consider that mortgage markets for condos and jumbo loans are still poor, that interest rates are rising, that the value of residential housing at comparable price points is declining, and that prospective buyers' capability to fund their purchases is severely diminished at present. This project is firmly lodged within The Suck. . However...since apparently you do not consider financial ramifications relevant to your definition of what constitutes a project's "success" or "failure", just what metric are you using? John,
Is it your belief that the developer has nothing better to do with his time than track such a mundane and innocuous activity as tenant move-ins? If you’re right, then I may have to take back my comments about the project being competently-handled; it just isn’t a metric that is pertinent to his bottom line.
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And you’re right that second home buyers and international buyers are important components of the market share for highrise condos, btw, but unless you believe that the management company is tracking such owners’ day-to-day comings and goings and passing along a report back to the developer, that has absolutely no bearing on the matter that we’re discussing.
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As part of your response to me, you made the comment, “This project is not unique in its difficulties with the market. That’s precisely how I know that there is a lit fuse. Look at what has happened to other condo towers that have hit the market recently. Then consider that mortgage markets for condos and jumbo loans are still poor, that interest rates are rising, that the value of residential housing at comparable price points is declining, and that prospective buyers’ capability to fund their purchases is severely diminished at present. This project is firmly lodged within The Suck.
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However…since apparently you do not consider financial ramifications relevant to your definition of what constitutes a project’s “success” or “failure”, just what metric are you using?

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