The New Condo Tower on Broadway (Dallas, San Antonio: townhome, neighborhood, buyer)

[wCat]

Originally Posted by dvlpr

wCat -

The building already has a sub-grade parking garage. But there are other "issues" that would greatly complicate the building's conversion into an office use.

Keep in mind the "McCombs" part of Koontz-McCombs.....he's a billionaire, and while he's absolutely not immune from economic problems, the total amount of $$$ to finish the building is a relatively small number given his overall net worth.

With regards to the Broadway Lofts project (started by George Geiss), the project was stopped because Geiss and the original contractor had "issues" (because the project's construction plans were incomplete when they were approved by CoSA, but that's a different issue altogether). It didn't have anything to do with the economy, or demand, or rents, etc. Lake-Flato's design looks good.....and when capital markets return to normal, it should be a great project.

Thanks for the added info. And thank you for clarifying my point about the Geiss project....where I was meaning to say that the economy did not have anything to do with it tanking. I thought I said that...but it did sound confusing. You just did a better job of wording that.

[ryneone]

So does anyone have any HARD facts about the project except for speculation?

It is funny people on this board take word of mouth as gospel.

[hello13685]

"But if the project isn't a economic success, I would guess it has more to do with the project being overpriced than some price-to-income ratio problem (that you're convinced exists)."

Yes, and it's mine and others' view that overpricing is due to a price-to-income problem--perhaps not for targeted Alamo Heights retirees per se, but for others. That begs the question: if they were not overpriced, then what happened?

[CronieRed]

Go ahead... buy and move to The Broadway and contribute to the [mod]one word, substitute "exploitation"[/mod] of our neighborhood. It is the ugliest building ever not to mention so tall that it shames many of the historic homes and cottages around it. The entire neighborhood opposed this project but wealthy cronie Red McCombs got away with it. I live more than 10 blocks away and I can see this monster, I feel sorry for those home owners who live right by it, not to mention how many will have to move as property values go sky high if we ever get out of this recession. As far as Red and his cronies they are all [mod]one word, substitute "evil people"[/mod], in my book, who "greased" the wheels of local officials and the University of Incarnate Word (whose president took $$ McCombs donations to look the other way when they should have been the first ones to oppose to this atrocity) and so together "brick by brick" continue to [mod]one word, substitute "exploit"[/mod] our historic neighborhood.

[hello13685]

Good post CronieRed. A high tower is indeed bad feng shui for surrounding homes. Do the people one block from the tower have historic designation?

[wCat]

Originally Posted by CronieRed

Go ahead... buy and move to The Broadway and contribute to the Moderator cut: one word, substitute "exploitation" of our neighborhood. It is the ugliest building ever not to mention so tall that it shames many of the historic homes and cottages around it. The entire neighborhood opposed this project but wealthy cronie Red McCombs got away with it. I live more than 10 blocks away and I can see this monster, I feel sorry for those home owners who live right by it, not to mention how many will have to move as property values go sky high if we ever get out of this recession. As far as Red and his cronies they are all Moderator cut: one word, substitute "evil people", in my book, who "greased" the wheels of local officials and the University of Incarnate Word (whose president took $$ McCombs donations to look the other way when they should have been the first ones to oppose to this atrocity) and so together "brick by brick" continue to Moderator cut: one word, substitute "exploit" our historic neighborhood.

There's a mixed message here. Residents don't want their property values to increase while they're living there because of the annual taxation. But when it's time to sell, they pat themselves on the back for making a great investment.

Moderator cut: two sentences orphaned - the updated quote addresses those concerns

[dvlpr]

Originally Posted by leslie b

Dvlpr - If I understand your post correctly, you are saying that the condos are overpriced. I'm curious as to why you believe they are overpriced. Is the project, to your knowledge, poorly built? Too much other high end inventory to compete with? (And those other high end properties are being snapped up rather than this project?) Or are there other reasons? It sounds as if you have a bit of insider information which would be interesting to share.

leslie b -

First, I don't have any "inside info" about the project, but am somewhat familiar with similar projects (which is to say, residential towers).

Simply put, the pricing at the Broadway ($500+/sf) is what condo towers cost to construct (and provide a market profit to the development group).

Towers are a very expensive building type - structural building (instead of wood frame), with a podium garage (instead of an attached garage), with a relatively low-density (given the size of the site, 80+/- units really isn't very dense). These buildings are very complex and, as a result, expensive to build (probably somewhere in the $300/sf range). KM also started construction at a time when hard costs were much higher than "normal". Said differently, if they started the project today, costs would likely be 15%-20% lower. Of course, we all know about hindsight, and there's really nothing they could've done about that.

My opinion is that the "value" just isn't there right now - in SA, you can buy anything you want for $500+/sf. And I don't think there's enough local retail/restaurant options, or a scarcity of land at this point to justify that sort of cost.

I do think that, ultimately, as more high-density projects are built in the area (mostly in the form of rental units), there will be increased demand for condos at high price points (Uptown Dallas is instructive on how urban infill progresses). But hopefully, this will take the form of mid-rise buildings instead of towers.

[dvlpr]

Originally Posted by hello13685

"But if the project isn't a economic success, I would guess it has more to do with the project being overpriced than some price-to-income ratio problem (that you're convinced exists)."

Yes, and it's mine and others' view that overpricing is due to a price-to-income problem--perhaps not for targeted Alamo Heights retirees per se, but for others. That begs the question: if they were not overpriced, then what happened?

First, I'll agree that a relaxation of lending standards (based on banks being more "aggressive" on evaluating incomes with respect to loans) caused prices to increase. 10%-20% year-over-year increases are not normative (or sustainable).

But I'm not sure that the current residential prices in SA (and Texas on the whole) are unsustainable. People can still afford high-end housing - a family making $250k/year can easily qualify for a $1mm house (assuming 20% equity and using a 30% gross income qualifier). Hence my reference to very few foreclosures in the "better" neighborhoods in SA (where you typically see the highest residential price-points).

I don't think the issue (in these neighborhoods) has anything to do with price-to-income. I think the issue is that the units are just too expensive (which is mostly a function of the type of construction for residential towers) for the market.

You might ultimately be right about housing prices - but the sky hasn't (and isn't) falling in SA (or Texas) for residential real estate. That said, I will reiterate a point I've made before - housing (in Texas) is a mediocre investment. Your home isn't a stock, or a bond, or a CD. It's where you'll spend lots of time, where you'll entertain friends, or raise a family. It should be something you enjoy, especially since you have to pay for shelter anyway.

People who view their home strictly from an investment standpoint (aside from being, uh, wrong) are really missing out on the joy that can come from living in a house (and neighborhood) that you can love and afford.

[Eleanor Rigby]

That said, I will reiterate a point I've made before - housing (in Texas) is a mediocre investment. Your home isn't a stock, or a bond, or a CD. It's where you'll spend lots of time, where you'll entertain friends, or raise a family. It should be something you enjoy, especially since you have to pay for shelter anyway.

If I could rep you a thousand times for this, I would. I think the biggest point of lunacy over the past decade has been this idea pushed by all sorts of industries that your HOME, your PRIMARY RESIDENCE, is a vehicle for investment and wealth acquisition, as opposed to the roof over your head, the place your children grow up, the locus of your life.

[pr57001]

Back to the topic, a new sign on the fence says occupancy in Spring 2010. Let the speculation continue.