Doesn't look like the Austin DT condo market is thriving quite yet. Two more major projects face foreclosure. (Vega: real estate, foreclosures)

[inthecut]

But they say the bankers will work with them.....question...how can two projects be "posted for foreclosure" if the lenders are willing to "work" with them? Isn't foreclosure an "either-or" thing?

I thought you couldn't be a "little bit into foreclosure" anymore than you could be a " little bit pregnant", but you learn something new everyday.
Especially in THIS Comm. real estate environment....

article....

2 Austin condo projects face foreclosure

[atxcio]

Regarding those two projects:

1. Star Riverside is nothing more than a hole in the ground at riverside and I-35. There are no condos to sell, and financing obviously hasn't been kind to projects haven't started (which is basically where SR is)

2. The Sabine was a remodel of an existing office building, and has been beset with problems since almost the outset. There were a number of homeowner lawsuits, as I understand it, regarding several issues with the building. I believe that during some of that litigation period, they weren't even allowed to sell the remaining inventory.

Not saying the condo market is in good shape, but there are good reasons those two projects are in trouble.

[twange]

Your post headline was a bit misleading ITC.

The last line of that article was:

(the Sabine and Star Riverside projects) "are more indicative of problems that those individual projects were having as opposed to a wholesale problem in the market."


Another article on the same situation:

Deluxe living in foreclosure: Condo projects fall prey to economy | We Are Austin, CBS KEYE TV News

[+ or -]

I think what's being stated here is that the projects are running low on venture capital and so therefore seeking out new sources of revenue.

I'm just glad it wasn't the more prominent projects such as the W (my future residence shall I decide to stay in Austin) or Austonian.

[austin-steve]

I remember reading the initial press release for Star Riverside a year or two ago, and all I could say was "oh brother". It never had a chance, period.

It was a stupid concept, way over priced, and it truly amazed me that anyone could be so dumb as to think that a super high end, luxury project would make it in that specific location. It's not "downtown". The quotes from the developers in the news article were fantasy, wishful thinking, and very naive. The people are not from around here. They could have asked a few Realtors and been told quickly "ain't gonna fly in that location".

How do people this dumb get access to so much money? And who are the bankers that looked at the initial project and thought "looks good"?

Steve

[centralaustinite]

Yes, Steve! You are exactly right, and those in the surrounding neighborhood knew it too and protested to Planning Commission and Council but it did little good, although they were able to get the City to enforce the height limits.

There is nothing on that site but fencing, a dumpster, and some pallets. And a partially completed underground parking complex! Roll-off dumpster runs $2-3000 a month, and every time I drive by I wonder who is paying the rent on the fencing!

Yet the website is still operational and units will be ready "spring 2010"!

ha!

Steve, I think that the developers and banker were from all out of town! Pure bubble-thinking

[austin-steve]

Steve, I think that the developers and banker were from all out of town! Pure bubble-thinking

Yes, it's very bizarre. I think they might have thought it's "close enough" to downtown, but - HELLO - there is a lake and a major interstate freeway separating it geographically from the elements that create desire and attraction for a downtown dwelling. Not to mention the noise from IH35, which is going to be very noticable at that location, especially with the reverberation coming from under the bridges.

It just defies logic that developers can be so blind so so many obvious reasons why this was never going to be a viable approach for that location, though I do think they will sell at a lower pricepoint, which is what they are going to do now.

Steve

[JayBrown80]

Originally Posted by austin-steve

How do people this dumb get access to so much money? And who are the bankers that looked at the initial project and thought "looks good"?

Steve

Isn't this the major issue that fueled the real estate crash to begin with? People spending stupidly and banks letting them?

[inthecut]

Originally Posted by twange

Your post headline was a bit misleading ITC.

The last line of that article was:

(the Sabine and Star Riverside projects) "are more indicative of problems that those individual projects were having as opposed to a wholesale problem in the market."


Another article on the same situation:

Deluxe living in foreclosure: Condo projects fall prey to economy | We Are Austin, CBS KEYE TV News

It would be misleading if the article was holy writ, but austin-american has been a cheerleader for the Austin business/real estate community for the extent of the boom, and hedges every article about RE slowdowns with the famous last line...."but, on a nationwide basis, Austin is holding its own"...UR increases always get hedged with that famous last line. I was thinking of marketing a T-shirt with the slogan, but I don't think it is as catchy as "Keep Austin Weird", so I didn't bother.

The fact is, the city plan was to have a huge corridor of high-rise condos down both sides of Riverside, down to Zilker and I-35, and another two canyons down S. Congress and Lamar.....that turned out to be an absolute bust, just like Las Vegas' idea of canyoning the "Strip" with 1M condos......and the reason for Austin's high-rise condo bust was as much that this city can't support that amount of luxury high-rises as the fact that lending sources dried up at the till....

So, no, the article itself was misleading, not MY commentary....

[centralaustinite]

Originally Posted by inthecut

The fact is, the city plan was to have a huge corridor of high-rise condos down both sides of Riverside, down to Zilker and I-35, and another two canyons down S. Congress and Lamar.....that turned out to be an absolute bust, just like Las Vegas' idea of canyoning the "Strip" with 1M condos......and the reason for Austin's high-rise condo bust was as much that this city can't support that amount of luxury high-rises as the fact that lending sources dried up at the till....

I don' t think that was the city's stated plan, although it did start to feel that way, there is the waterfront overlay to protect the south shore from towers and the neighbors would (and did) protest loud and long over this very issue. There are many MANY people in 78704 who are thankfully that the Great Recession has slowed or stopped many of these projects.

As Steve notes many like Star Riverside were poorly thought out to begin with much like some the land foreclosures in the far exurbs where out of towners thought that if they built master planned communities of 3000 sq foot luxury homes an hour from town, they would sell! Same bubble thinking.