COMMENT OF THE DAY: WHAT’S THE THOUGHT PROCESS? “. . . There is one other thing that troubles me that maybe some of the developers on this thread might clear up. How much does humanity and civic duty factor into these decisions? I could quickly assume that the dollar and cent logistics is enough for anything like this to get green-lit, but I would rest a little more easily knowing that someone along the line questioned the implications of suddenly forcing so many people to find new places to live. Especially considering that, for students like me and my room mate, springing this change so close to the beginning of the coming semester only makes finding a new place that much more impossible to find. It might sound petty, but I hope someone somewhere feels at least a little guilty for the amount of hardship that has been dumped onto my lap.” [thisboy, commenting on Report: Castle Court Midrise Planned for Andover Richmond Apartments Site]
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COMMENT OF THE DAY: DIMENSION DOOM 101 “The floorplate is the set of measurements and parameters that you have to design the floor plan within. If its too large or too small, too narrow or too wide, or if the elevators and stairs are awkwardly situated, it will make the floor plan inefficient in terms of squeezing the most net rentable area from the gross floor area. In addition, what often happens is that there are awkward rooms within apartment units that have little functional utility, which then affects the rent per square foot that can be achieved from those units. To compensate, the developer must purchase the property for a lower price than if the building were ideally configured. But if these adjustments to the financial model drive the value of the property below the value of the land (which is determined by the model for new construction) net of the cost of demolition, then the old building is not the highest and best use. It is doomed. Problems such as these are common in situations where a building gets re-purposed for a completely different use.” [TheNiche, commenting on Finger Going After Finger’s Ben Milam Hotel Downtown]
COMMENT OF THE DAY: HOW DOES THE COIN-OP STRATEGY WORK? “Speaking of quarter car washes . . . how much money do those things make? There must be 6 of them on Studemont sitting on some pretty valuable real estate. Do they even make enough money to cover the property taxes?” [Walt, commenting on Meanwhile, at the Corner of 11th and Studewood]
COMMENT OF THE DAY: WE JUST RUN THE NUMBERS “If you dig a bit deeper into the Milhaus proformas, what the developer is REALLY saying is that there won’t be retail because: 1. lenders don’t like it; 2. buyers don’t like it; 3. adding retail reduces my return on cost somewhat; AND 4. mostly because of #1 and #2, it kills my numbers. If you look at the overall return on cost (NOI/cost) you get 7.7% return on cost with retail vs 8.7% return on cost without retail. That’s a substantial difference, but not eye popping. If the Midtown TIRZ really wanted some retail in the deal, they could easily toss Millhaus a bone and bridge this 100 basis point gap with ease. The real problem, at least according to Millhaus (not that I disagree), is that the lenders and buyers treat mixed use differently. In the example comparison, Millhaus assumes the non-retail deal gets a permanent loan underwrittien to 1.25 DSC [debt service coverage] vs 1.30 DSC for the with-retail deal. This means a larger permanent loan upon completion for the no-retail deal (more cash in Millhaus pocket). He’s assuming lenders will get more aggressive on a apartments-only deal. He also thinks his eventual buyer will prefer a non-retail deal. He calculates the as-completed value using a 7.00% cap rate for the non-retail project, but uses a 7.25% cap rate for apartments+retail project. What he’s really saying is, ‘Don’t blame me for not including retail in my development. Blame the lenders and buyers.’†[Bernard, commenting on Nixing Milhaus Retail: Why These New Midtown Apartments Won’t Have Shops on the Ground Floor]
A real-estate firm out of Indianapolis with a keen interest in developing mixed-use projects plans to build a midrise apartment complex on 2 vacant blocks in Midtown, just south of the Pierce Elevated and 4 blocks east of the light rail line running down Main St. Like almost every other recent residential development in the area built before or after the Post Midtown Square about a dozen blocks to the west, though, the Milhaus Midtown won’t include any lease spaces for stores or restaurants. If you’re wondering why not, the company has a detailed explanation ready.
Here’s the feel-good Houston bayou hit of the season: a dreamy, 11-minute-long video talking up a $5.4 billion plan (that’s the proposed budget, anyway) to build a new interconnected system of parks and trails out of “derelict” properties along Houston’s extensive network of bayous. The goals: better air and water quality, reduced flooding, and economic development.
Properties not directly located along bayous would also be included. In all, the plan calls for acquiring 3,800 acres of land and turning 3,200 acres of them into parks and stormwater detention sites. The remainder would be “set aside” for future redevelopment. Continuous greenbelts would be established along 10 major Houston bayous, connecting parks and community gathering places. In all: 300 miles of trails and 1,600 acres of linear greenway space.
But that’s just for Houston.
The decent-apartments-not-too-far-from-Rice gig is up for the red-brick Greenbriar Chateau Apartments just south of Hwy. 59: According to a couple reports, residents of the buildings at 4100 Greenbriar received a letter today from Kaplan Management, notifying them they have until March 8th to leave. The courtyard-style 3-story Mansard-roof buildings, which date from 1969, will then be torn down and replaced with a “‘state of the art’ housing complex.” Renters current on their payments will be offered $250 to help pay for moving expenses, the letter said. An entity connected to InSite Commercial Real Estate bought the 3.63-acre site last August.
- Inner-Loop residents get the boot; apartments to be demo’d [Prime Property]
- RIP, The Semi-Venerable Greenbriar Chateau Apartments: You Have Five Weeks To Clear Out [Hair Balls]
- Previously on Swamplot: Demolition Watch: Greenbriar Chateau Apartments
Photos: Apartment Guide
Where’s Randall Davis gonna find buyers for the glitzy condos in this new 24-story Uptown highrise he’s planning — you know, the kinds of carefree, fun-loving sophisticates who’d regularly leave all the lights on in their bedrooms at night just to make sure the whole building glows like this? In other countries, probably. But they’ll be moving to Houston soon!
COMMENT OF THE DAY: PLAYING COY “’Yes, I’m calling about the property that’s not for sale. No, I’m not interested in buying it.’†[ricemilitaryboy, commenting on Not Even Trying]
COMMENT OF THE DAY: TRACKING THE RUMORED JACKIE O-EXXONMOBIL CAMPUS CONNECTION “The property and Coventry Development Co. are owned by the Aristotle Onassis Estate. Onassis blew thru Houston in 1960 and bought this tract known as Chrimerene, the Gulf Fwy land developed into Baybrook and a motel which is now vacant land on South Main at Greenbriar.” [charles zeller, commenting on Who’s Behind Springwoods Village, Anyway?]
COMMENT OF THE DAY: THE CASE FOR BUILDING CRAP “i’m no developer, but being that this is off Yale (and not washington) across from a wal-mart it’s safe to assume they’re not going to be pulling in high-margin clients. there’s no point building a nice shopping center catered to the area if you can’t lock-in clients that can afford the rent. rent’s are already going to be well above average for houston. better to have a generic crappy strip center than a bankrupt high-end strip center. they know they’re building in the middle of a double-dipping economy in an area that certainly has high average incomes, but is still in flux none the less. better to build crap and establish a proven income stream with sensible margins before going overboard and losing money. as for the store selection, it’s certainly nothing i’d patronize but it’s an expected utilitarian lineup. we live in the internet age, what do you really expect, an amazon pick-up storefront? it’s easy to criticize, but it ain’t my money so i’m not going to call people out for doing sensible things with theirs. you can’t run a business and support employees livelihoods by taking risks for communities that may never support you in the first place.” [joel, commenting on Piggybacking on the Washington Heights Walmart: Stripalicious Yale St. Retail at Heights Marketplace]
Whatever happened to that Park 8 condo tower, hospital, and strip-mall development planned for Beltway 8 next to Arthur Storey Park, just south of Bellaire Blvd.? The Chronicle‘s Purva Patel surveys the wreckage of the self-styled “Land of Oz”: The highrise project has long been in bankruptcy, the contractor and lender are battling over ownership of the land in court, and 2 different groups of investors and condo buyers are suing developer David Wu for their investment losses (totaling more than $2 million), alleging he has or had no intention or ability to complete the project, and that he misled them about funding and leasing commitments. Neither Wu nor his attorney would respond to the reporter’s questions.
NO MONEY DOWN — YOUR GOOD NAME IS YOUR CREDIT! For 3 years in Houston, Claymon Trammell pitched “an investment where the straw borrowers would not need any money down, would not be responsible for the monthly payments and would get money for the use of their name and credit.” Any takers? Sure: enough to allow Trammell, his wife, and daughter to swing “purchases” of more than 70 Houston-area homes — 17 in the name of a single repeat customer. There were payment defaults on every home, and most of them wound up in foreclosure, according to the feds. On Tuesday, the family of mortgage-loan officers from Manvel and Katy pled guilty together to conspiracy to commit wire fraud. [FBI]
Oily 3-time Survivor loser Russell Hantz (pictured above in the shark-wrestling competition from Survivor: Samoa) tells Entertainment Weekly he’s come to town “to bring Houston’s economy back on its feet.” How’s he gonna get the market back from its tippy-toes? By flipping houses — then bragging about it on-camera. Apparently, a gig like that pays pretty well.
Hantz’s reputation as a tell-’em-straight kinda guy was sealed in January when the Daily Beast revealed him as the mysterious source of persistent leaks about the reality show’s top-secret storylines. In his contracts, Hantz had agreed to pay “liquidated damages” of $5 million if he revealed which contestants had been eliminated before episode air dates. CBS responded to the breach by suing the message-board commenter who posted the tips — and featuring Hantz in Survivor: Redemption Island, which began airing in February. (The suit against Survivor Sucks website poster Jim Early was dismissed.)
Last Friday, a former St. Anne’s Catholic School P.E. teacher named Jonathan Barnes pled guilty to 4 counts of federal charges in connection with a multimillion-dollar oil-trading kickback scheme. What does the Bellaire resident have to do with the 360 Sports Lounge on Washington Ave? The plea agreement he signed last week spells it out: His investment in the bar was a kickback itself, one of many gifts given to him by his 2 alleged co-conspirators, to thank him for overcharging his employer, Houston Refining (now a part of LyondellBasell) by as much as $82 million for shipping contracts he arranged with their companies.
Why might Barnes have figured that a new Washington Ave sports bar would be a good investment? Well, his stint at Enron in the early 1990s had given him a solid business background.
