08/22/08 12:37pm

Another report on that Royce Builders sales meeting earlier this week:

I was in attendance at the infamous “Forget the Rumors and sell, sell, sell! [meeting.] We all thought the meeting was called to thank a dedicated and hard working group of sales people. Never once did the Speers humble themselves to utter a thank you for any contributions. We were asked to continue to sell the inventory, but they could not tell us where we would close the home nor how we would get paid. They had Countrywide Sr. Loan Officer Shawna Oakley present because we were told that all the sales on the books at been transferred to her. This did not make a bit of sense because the homes still have liens. We were told the bank was in control out of one side of the mouth and then told that they were trying to find another Title Co. It is no secret that Stewart Title out on Bay Area Blvd. is up to their ears in legals.

We all felt that the Speers should have just told everyone goodbye. The building is basically empty, there are 2 construction workers, 1 accounting person, 1 hr per son and the poor girl answering all the dirty calls and giving callers the runaround. Hats off to Fox’s Mr. Carey for trying . . . to report the truth about Royce Homes.

08/19/08 4:54pm

Royce Builders now has “about 60″ employees — down from 220 earlier this year, reports the Chronicle‘s Nancy Sarnoff, who managed to get company president John Speer on the phone:

Speer said Royce is working with its lenders to complete homes that already have been started. It is also negotiating with vendors who have liens against the company.

Royce has between 60 and 80 homes that are under construction and will be completed, Speer said. Another 70 or 80 that have been contracted but not yet started are unlikely to be built.

Meanwhile, a tipster tells us that Royce

fired ALL of the project managers and construciton managers yesterday. The corporate phones are not being answered. Hammersmith mortgage, their in-house lender, was closed for good yesterday. The Stewart Title office branch in their corporate office was also closed yesterday.

. . . and adds this colorful story:

One of the PM’s (project managers) was holding a meeting yesterday with his staff of sales people and construction. This was in one of the neighborhoods he manages. He was telling the staff NOT to listen to the rumors and keep slling as usual. He got a phone call on his company cell and left the meeting for several minutes. When he returned, he informed the staff he had been fired and they are on their own.

More Royce rubbernecking . . . after the jump!

CONTINUE READING THIS STORY

08/18/08 11:47am

Plaza on Former Bolsover St., Sonoma, Rice Village, Houston

“Sonoma is mystery,” proclaims Randall Davis near the end of an excruciatingly long promotional video posted at the project’s recently updated website. Part of the mystery, of course, has been when — or whether — construction might actually begin on the 7-story condos-shops-and-parking Rice Village layer cake. Since the buildings on the site were demolished and the block of Bolsover between Kelvin and Morningside was fenced in last fall, not much has happened.

Nancy Sarnoff has some details on the delay:

Sonoma, an upscale condo and retail project planned in Rice Village, was supposed to break ground in April.

The land has been cleared to start building, but the developers have a loan commitment for just half of what it will take to build it.

“We’re ready to put a shovel in the ground,” said Julie Tysor, president of Lamesa Corp., owner of the project. “The speed of the changing lending markets wasn’t really anticipated by any of the people involved.”

Rendering of Sonoma: Ziegler Cooper Architects

08/11/08 9:55am

Aerial Photo of Second Mosaic Tower Under Construction, June 20, 2008, Hermann Park, Houston

A reader asks:

Has anyone else heard the rumor that Mosaic Hermann Park’s South Tower (already under construction) is going all rental once complete?

It would be kinda cute if the second condo tower did end up switching to apartments, since the first tower went in the opposite direction:

[Phillips Development managing director Donald] Phillips says the company financed the first Mosaic tower as a rental property because that was the only way to secure funding.

“We did whatever we had to do to get the thing built,” he says.

Photo: Aerial photo of Mosaic from June: Aero Photo

08/01/08 11:28am

UNITED TITLE: OUT OF TEXAS IN A HURRY United Title of Texas, a subsidiary of Mercury Companies, has shut down. “The local offices are in Clear Lake, Pearland, Cinco Ranch, Cypresswood, The Woodlands and on Richmond Avenue. . . . United Title is an independent agency that relied on national title companies to underwrite its policies.” [Houston Chronicle]

06/24/08 5:00pm

Tremont Tower, 3311 Yupon St., Houston

It didn’t garner much local attention, but a certain local condo building — along with a few close friends — made a star appearance in last week’s big mortgage-scam announcement by the FBI. More than 400 people were charged in 144 separate mortgage fraud cases nationwide over the last 3 months as part of the agency’s “Operation Malicious Mortgage.” Six of those arrests were in Houston:

This indictment charges Houston-area residents Frankthea Annette Williams, Ishmael Boyd Laryea, Charles Joseph-DeShawn Wilson, Kristen Anne Way and Robert Wilfred Stanley, and Tasha Rene Bellow, of Burbank, Calif., with engaging in a scheme to defraud by providing false and fraudulent information to residential lenders to induce the lenders to fund the purchase of single family homes and condominium units.

11 News reporter Allison Triarsi describes how the scams worked:

The suspects would find a home for sale, let’s say $200,000.

They would then get a phony appraisal that would almost double the home’s actual value. In that case, $400,000.

The culprits would then look for an investor. That’s someone to actually put the house in their name using their good credit for the closing and title.

A bank would then loan the money for the house, which has the phony appraisal value. The crooks would then pay the seller the $200,000 asking price and pocket the other $200,000.

Here’s a question. If you were trying to run this scam, where would you find properties you could get appraised for as much as twice their actual value? Sure, Houston had some price runups . . . and yes, appraisals can be played. But why fake something you don’t have to?

CONTINUE READING THIS STORY

05/30/08 12:35pm

Map of Houston Subprime Loans in 2006 from PolicyMap.com

Here’s a tool likely to be useful to armchair developers interested in the lay of the land. PolicyMap is a new GIS website that allows you to view a range of local market and demographic data for Houston or any area of the country. You can see how local crime statistics, an interesting array of mortgage categories (such as the percentage of piggyback, subprime, and refi loans), income distributions, and even donations to presidential candidates look on a map. (Big surprise: Pearland and the Energy Corridor really like John McCain!)

PolicyMap is a project of The Reinvestment Fund, a non-profit community-development financial institution from Philadelphia. Some of the advanced features require a subscription, but there’s plenty to play around with for free.

The quick map above shows what Houston areas took out the most subprime loans in 2006. (The darkest purple means more than 50% of all mortgages funded that year.) If you discover more interesting neighborhood stories demonstrated nicely in PolicyMap maps, share your finds in the comments.

04/17/08 10:08pm

An update on the 1031-exchange debacle surrounding the West Oaks Mall: In March, the mysterious Edward Okun — the mall’s owner — was indicted by a Virginia grand jury on charges of mail fraud, for misappropriating $132 million invested in his 1031 exchange company, 1031 Tax Group — along with bulk cash smuggling and related charges. Days later, Okun was arrested in his home on Hibiscus Island in Miami Beach.

To the 340 investors who had trusted $150 million of their 1031-exchange funds to supposedly-qualified intermediaries controlled by Okun, this was good news. But it doesn’t necessarily mean they’ll get their money back — or find a way around the huge tax liability now associated with their failed exchanges.

The 1031-exchange investors in Okun’s 1031 Tax Group had hoped to recoup some of their missing funds by raiding Okun’s other assets — including the West Oaks Mall. But the Okun-controlled companies that owned the mall declared Chapter 11 bankruptcy in October.

Today, the Costar Group reports that the freestanding building formerly known as JCPenney at the West Oaks Mall has been put up for sale, along with a mall in Salina, Kansas. The trustee in the bankruptcy case has hired Keen Realty, the new real estate division of KPMG Corporate Finance, to market both properties.

04/09/08 11:22am

Performance at Discovery Green, Downtown Houston

Lou Minatti asks the $54 million question:

Why is Discovery Green a sea of brands? Waste Management, Inc. Gardens? OK, I understand the revenue issue. Are these naming rights perpetual?

Dunno about the perpetual part, but the list of brand and donor names on the new 12-acre Downtown park’s many features does go on and on! A few of our favorites: The Kinder Large Dog Run, the Martin Family Scent Garden, and the Marathon Oil Bike Racks.

Fortunately, Houstonian Kim Borja didn’t have to pay anything to choose the park’s name — he won the naming contest:

The response was overwhelming: more than 6,200 entries were submitted, and a theme soon emerged. Houstonians wanted a name that was distinctive and unusual, including elements that mirrored Houston itself. Words such as “surprising,” “unexpected” and “vital” were reoccurring.

If this place had ended up with a name like “Unexpected Gardens,” we’d all probably want there to be a serious donation behind it.

After the jump: that long list of Discovery Green’s branded park parts — plus: a few yet-unbranded park features may still be available!

CONTINUE READING THIS STORY

03/11/08 11:21am

Rendering of Building in Trademark Properties’ Proposed High Street Development

The square footages appear to have adjusted a bit since our last report, but Trademark Properties says it has its financing, and that High Street is a go. From a report in Globe St.:

The Fort Worth-based Trademark Property Co. and Coventry [Real Estate Advisors Ltd. of New York City] are redeveloping a seven-acre site of the former Central Ford dealership at 4410 Westheimer Rd. In turn, the JV signed a partnership pact with Indianapolis-based Kosene & Kosene Development Co. for the residential component of High Street. The redevelopment will have 233 apartments atop 100,000 sf of retail and 80,000 sf of office in a separate structure. The foundation’s been poured for the office building, with residential and retail to go vertical in 60 to 90 days.

After the jump, another pretty picture!

CONTINUE READING THIS STORY

12/12/07 2:13pm

[youtube:http://www.youtube.com/watch?v=iLqkHr77N0U 400 330]

So the actors aren’t likely to win any awards, but this new video posted to YouTube by Tremont Tower owner-victim-gadfly Heather Mickelson is notable for it’s uh . . . stirring illustration of the connection between construction-quality complaints and foreclosure train wrecks.

The Tremont is colorfully renamed “LemonTree Tower” in the video reenactment. If you’re new to the story, you’ll find better introductions to the sordid Montrose condo tale elsewhere. But if you’ve ever wondered why foreclosures seem to gather like flies around new developments that feature questionable levels of quality (and, say, water-tightness), this will make pretty good internet theater. No, the mortgage defaults aren’t the work of the millions of mold spores and the grim reaper, who together make cameo appearances in the video; they’re the ultimate result of the surefire sales techniques employed for undesirable properties — made so much easier, of course, by the subprime-mortgage boom.

Here’s the formula: Building with bad enclosure + poor disclosure = lots of foreclosure. Or just watch the video. At just over seven minutes, it’s still a lot shorter than Glengarry Glen Ross.

12/11/07 12:17pm

Washington Mutual may not be closing all of its home-loan centers nationwide, but it sure is getting out of Houston in a hurry. From the Houston Business Journal this morning:

WaMu intends to close five of six home loan centers in the Houston area, affecting 25 employees, a company spokeswoman said Tuesday.

The six centers are:

Which will remain?

WaMu is now out of the subprime loan business entirely.

11/06/07 3:08pm

[youtube:http://www.youtube.com/watch?v=SJ_qK4g6ntM 400 330]

If you can spare nine minutes and want a lucid explanation of what’s been going on in the mortgage markets, British comedians John Bird and John Fortune explain it all in this video.

10/29/07 12:30pm

Greenbriar Chateau Apartments, 4100 Greenbriar St., HoustonFirst, they came for Maryland Manor. And then: the Greenbriar Chateau apartments? Just what is happening to the great Mansard apartments of Houston? And what will be next on the chopping block: that birthing place of Bushitude, Chateau Dijon?

No 23-story tower has been proposed for the Greenbriar Chateau site—yet. But think of the stylistic possibilities: a Tuscan shopping center . . . or taller, vaguely turn-of-the-century New York-ish apartments. Sure, it’s more than three-and-a-half acres at the northern edge of Boulevard Oaks, but really, it’s those mansards that have to go.

A local investment group has obtained a $10-million loan to buy the 145-unit Greenbriar Chateau in the near southwest submarket. Given the location, it could end up as a conversion into a higher-density project.

Bammelbelt LP bought the complex, built nearly 40 years ago at 4100 Greenbriar St., a prime infill location within minutes of Rice University, Hermann Park and the Texas Medical Center. Sources familiar with the area say rising land costs for infill sites could prompt similar deals by investors buying aging properties as land plays.

Swamplot readers: is this your home? When you get that little slip in your mailbox, let us know.

10/23/07 8:07am

While we’re on the topic of low-minimum real-estate investments, here’s a doozy of an idea for the Houston residential market:

[financial] derivatives that would let people continue to live in their houses, and keep legal ownership to them, without being exposed to fluctuations in the home’s value.

Wanna get out of the real-estate market but don’t want to sell your home? An investor will pay you a monthly fee in return for the profit that may result if your home increases in value. Or pay an investor a monthly fee to ensure that you won’t get hurt if your home drops in value. Or find an investor in each category to offset each other. You keep the title to your home, but you don’t have to worry what the market does.

Neat, huh? The concept is called SwapRent, and it’s the brainchild of Ralph Y. Liu, a financial-derivatives expert and entrepreneur who lives in California.

Sorry, you can’t do it yet:

Liu has tirelessly sought support from lawmakers, regulators, and investment bankers for his concept. He says several bankers have told him they’re interested but don’t want to be the first to move. Says Liu: “Nobody wants to stick their necks out.”

Where would all these new investors come from, to buy up the appreciation potential of Houston homeowners who are willing to swap their upside for a monthly income—or to get cash in return for protecting homes from drops in property values?

A lot of them would probably come from somewhere else: New Houston real-estate investors. Playing our market—from a safe distance.