08/15/12 1:26pm

Back in April, former Bootsie’s Heritage Cafe chef Randy Rucker gave up on plans to open a new restaurant in the holdout parcel (above and at bottom right in the photo at right) behind the Asia Society Texas building. Now that property’s owner, Balcor Commercial, is giving up on it as well. The 3,624-sq.-ft. former doctors’ office on a 11,700-sq.-ft. lot at 5219 Caroline was listed for sale earlier this month for just a tad under $1.5 million. The property traded hands for $907K back in July of 2010, when Japanese architect Yoshio Taniguchi’s steamy building next door was just a muddy construction site. Renovations of the Caroline building for Rucker’s conāt never began. “Unfortunately, converting the Caroline property into a fully functional restaurant while maintaining the integrity and design of the structure turned out to be a challenge,” an owner’s rep tells Swamplot.

08/10/12 2:09pm

KINDER MORGAN WORKOUTS OUT OF DOWNTOWN GARAGE The health club up there on the 8th floor of the Travis Place Parking Garage (see it? you gotta squint) at the corner of Travis and McKinney streets downtown is no longer a dedicated workout space for Kinder Morgan employees. The pipeline and terminal company has sold the 25,000-sq.-ft. facility at 1010 Travis St. to Redstone Companies Hospitality, operators of the Houstonian Club at the Houstonian and a couple of other downtown clubs. It’s now called the Health Club at Travis Place and open to general memberships. A Redstone rep reports the club buildout dates back to the days when the structure belonged to Tenneco. Photo: Redstone Companies Hospitality

08/08/12 2:00pm

COMMENT OF THE DAY: THE SAME BOAT “. . . When talking to people looking for stuff in Montrose, this is what I hear: 1) Nothing available 2) Over priced for what you get 3) By the time you try to take it, someone else already has 4) What you do get will have bad electric, bad roof, bad pipes, sketchy tenants, etc. 5) Was built in the 60′s most likely. Doesn’t have it’s cert of occupancy, no water pressure, low insulation, old windows, etc. Then I like to joke that this is what I hear from people trying to BUY apartments in Montrose. Point being, the challenges you face as a renter are the challenges you face as an investor. And the solutions are often the same: Network with owners, jump on something good if you see it, communicate with the property manager showing if you don’t like the place (this is big), look every day. . . .” [Cody, commenting on Comment of the Day: What’s the Thought Process?]

08/07/12 2:34pm

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]

08/03/12 12:49pm

COMMENT OF THE DAY: WHY THERE’LL BE NO 1301 RICHMOND REDO AT THAT SELLING PRICE “At 2.9 acres of physical land, and a purchase price of X (let’s assume priced to the dirt, likely $50/foot) they are in this deal for $6MM dollars day one. If they wanted to be in the business of renovating (This IS income producing property, not pride of ownership single family housing) and retaining the character of the original complex, look at the math . . . assuming a coverage ratio of 1/1, and average unit @ 1000 square feet, that gives you 120 units and 120,000 to renovate meticulously. Assuming you would have to put $20,000 into each unit to justify buying this deal, you’ve now got $6MM + $2.4MM in renovation dollars, plus the fact you’ve got to kick everybody out of their unit to renovate it, do the work, then relet the unit. So, that puts you at 1 year of ZERO revenue, and whatever associated costs there are there. For the sake of argument, your all-in is $10MM. THEN, after you have painfully restored a garden complex to the delight of yourself (I promise you the neighborhood won’t come out and bring you a check for your efforts to retain transient renters for another 50 years), here is your reality: 1) you would need to jump rents from $800/month to $1200 or greater, lease them all, then sell at a benchmark cap rate exit for such a non-conforming product, and that’s assuming you get your investors interested in the capital and scope in the first place, rather than buiding a 2.5:1 ratio development against $50 dirt 2) you would need to find an exit partner with just as much interest in running this model as you did creating it. institutional buyers that are willing to overlook the latest TCC Alexan product to buy a risky retrofitted low coverage ratio multi family deal in a market that has very little inventory of trailblazing like product. what i’m saying is this won’t exist, so you’re stuck with cash flow now. So . . . you have $10MM in it, and if you are the greatest level of execution here, you are 7 years of revenue before you are whole on your initial investment, and you have a huge chunk of change parked in it, with zero recap abilities. if i run a bank, i’m not cashing you out of that mistake.” [HTX Rez, commenting on Report: Castle Court Midrise Planned for Andover Richmond Apartments Site]

08/01/12 3:11pm

Tenants of the Andover Richmond Apartments at 1301 Richmond Ave. near Graustark got notice today that the complex has been sold to an entity connected to investment company Behringer Harvard. One of them writes in: “I hope the Swamplot team can stay on top of this one since this 2.9 acre plot was earlier rumored to be on Trammell Crow’s Alexan radar. BH is a big REIT player but I can’t find much information about their history regarding redevelopment of acquired properties. I fear same fate will befall us here as those at Chateau on Greenbriar.”

Photo: Swamplot inbox

07/20/12 11:26pm

COMMENT OF THE DAY: THE LOWDOWN ON THE ELEVATION BURGER LEASE “Update on this corner: Elevation Burger is set to open up in the near future. Jonathan Kagan Properties bought the property and did a fairly extensive update to the structure, then turned it over to Elevation Burger for their build out, which is currently well under way. Trust me, Mai Thai’s closing was a good thing. I own the property next door and saw a steady parade of roaches, rats, and various other vermin going in and out of that building over the past few years. Anytime you see a blue tarp on the roof of a building for months and months on end, it’s a pretty sure sign that they are in decline. If you don’t have the funds to fix your leaky roof in Houston, the end can’t be far off.” [Jared M, commenting on Bye Bye, Mai Thai? Feeding Another Kirby High-Rise Rumor]

07/13/12 1:54pm

A bit more detail on those new Downtown apartments developer Marvy Finger wants to build on the site of the Ben Milam Hotel designed in 1929 by architect Joseph Finger, a block beyond the leftfield fence of Minute Maid Park. The long-vacant hotel, which sits past the foul line at the corner of Texas and Crawford, is toast, Finger tells the Chronicle‘s Nancy Sarnoff. But the demo site will make up only a portion of the property.

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07/11/12 12:06pm

HOW HAR AGENTS GET THOSE GLOWING REVIEWS ONLINE HAR’s pioneering ratings program for real-estate agents gets a bit of scrutiny from the Wall Street Journal’s Smart Money magazine. Among the amazing stats: A mere 1.4 percent of all ratings on HAR come in at less than 4 stars; meanwhile, on Angie’s List 5.9 percent of real-estate-agent reviews have equivalent “mediocre to poor” scores, and on Yelp the number is 18.5 percent. Agents participating in the Houston Association of Realtors program earn an average rating of 4.94 out of 5. How do they chalk up such glowing reviews? “In reality, that 4.94 represents the average score of just 12 percent of the association’s agents. Another 7 percent participate in the rating program but don’t make their results public. The rest — some 17,000 real estate pros — don’t get rated at all, either by choice or because they haven’t completed enough transactions. The group surveys only customers who have closed deals, leaving out everyone who, satisfied or not, walked away. Those qualifications help explain why fewer than 0.3 percent of the Houston agents have been awarded a low one-star rating by their clients — a figure that seems to defy reality, given all the things that can go wrong in a home deal. (The association says low-rated agents often opt out of the program.)” Reporter Alyssa Abkowitz quotes Katy agent Patricia Gant about the one black mark that brought her overall rating down to a comparatively low 4.4 out of 5 stars: “I would’ve never sent [a survey] to her,” she says, “if I’d had any idea that she’d give me one star.” [Smart Money]

07/06/12 12:47pm

Residents of the Cambridge Court Apartments at 6500 S. Gessner will get to stay until the end of their leases, but after that they’ll need to find new homes. That’s the word from the complex’s neighbor and new owner, Strake Jesuit. The Catholic boys’ high school is also the property’s old owner; the 7.55 acres the apartments sit on is a portion of the land Strake Jesuit lost as a result of a 1971 bankruptcy. Developer Harold Farb built what was then called the Newport Apartments on the site 6 years later.

School officials plan to tear down the complex “at the earliest possible date” and use the land, which sits just north of the school’s Gessner driveway, for parking and athletic fields. The acquisition will also allow planners to “re-examine where it will construct its new Science and Engineering Building on the campus without a net loss of parking or green space,” the school announced.

Photos: Strake Jesuit (aerial), Apartments.com (Cambridge Court Apartments)

07/05/12 10:29pm

COMMENT OF THE DAY RUNNER-UP: COWARDS SHAPE THE CITY “. . . Has it ever occurred to you that developers (whose core competency is development) develop apartment complexes for long-term investors and operators? What you refer to as cutting and running is actually just an element of their business model. It is a hand-off of ownership from one entity preferring stability to another that demands it. Neither entity is assured of stability, however. A developer can’t pretend (with a straight face) to know what is in store for a nation, a metropolitan area, or a submarket over a five-year period of planning, permitting, financing, construction, the first year of lease-up, the second year of burning through concessions, and the third year of stability so that they can generate a reliable set of T-12 profit and loss figures. As it turns out, they have to make an educated guess about the future, close their eyes, hold their nose, and jump in. The business model may be different, however the same lesson is analogous for subdivision developers and home buyers, too. They can only try their best to make the right decision, then hope for the best. But eventually . . . they all sell. Everybody sells. The only consequential purpose in owning real estate is to be able to sell it. If selling something is cutting and running, then our entire society is founded on cowardice.” [TheNiche, commenting on Comment of the Day: The Shelf Life of Apartment Complexes]

07/05/12 1:46pm

For the last 7 or so years, the atomic-ranch-era front of this 1929 bungalow at 1710 Welch St. served as the Scott Childress Studio, a hair salon. If you recognize that name, you likely know at least the outline of the rest of the story that goes with it: Childress was found on the floor of the property one Friday morning this past January, beaten to death with a pipe wrench; his roommate, Reginald Eaglin, was charged with the murder. The home was listed for sale in late February, but there’s a contract pending now. How that ends likely depends on a planning commission hearing scheduled for this afternoon. Up for approval: plans by Carnegie Homes to replace the modern-front house and the 2 apartments behind it — all on 7,500 sq. ft. — with 4 townhome lots along a central drive.

Photo: HAR

07/05/12 11:02am

WHAT TO MAKE OF THE MUSEUM GARDENS SALE Residents of the Museum Gardens Apartments at 1123 Bartlett St. received notices taped to their front doors this week announcing that both the ownership and management of the 28-unit courtyard-style ensemble a couple blocks northwest of the Contemporary Arts Museum has changed. Contact info for the new owner matches that of real estate, construction and development, homebuilding, REIT, and mortgage firm Jetall Companies. A reader wants to know if Jetall might actually manage apartment complexes too — and asks “Is this lovely old complex a goner?” Photo: Midtown Houston Real Estate

06/26/12 1:35pm

Fiesta Mart announced today that it will shut down its store at the corner of Dunlavy and West Alabama — across the street from the newly built modern H-E-B Montrose Market — on July 15th. Developer Marvy Finger plans to build a 6-to-8-story “Mediterranean-style” apartment complex on the 3.68-acre site, which he bought last fall. Fiesta has operated the former Weingarten grocery store on the site since 1994.

Photo: Candace Garcia

06/19/12 2:24pm

The half-empty strip center left over from a series of unfortunate redos of City Hall architect Joseph Finger’s 1937 Tower Community Center (which once served as an art-deco companion piece to the former Tower Theater across the street) is now under contract to a new owner, along with the entire 2.86-acre block at the southwest corner of Westheimer and Montrose. That’s the word from a posting on the property’s listing site noted by Going Up! City, but the listing brokers at HFF aren’t providing any additional information.

Unless someone wants to spill the beans on the purchaser’s identity or any plans for the current home of Half Price Books, Spec’s, Papa John’s, and 3-6-9 China Bistro (along with the standalone Jack-in-the-Box at Montrose and Lovett) before then, you’ll have to wait until the seller issues a press release — which will happen sometime next week, a source tells Swamplot — for additional details. The property went on the market in early March.

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