Sacramento: 301 Capitol Mall: A New Plan for The Towers Site - Page 43

TowerDistrict · #**841** Posted **Sep 21, 2006, 5:51 PM**

a perfect example of this negative train of thought:

Quote:

D.R. Horton's "decision makes sense," said Greg Paquin, analyst for The Gregory Group, a Folsom company that studies the new-home market. "I think what we're finding today is that not a lot of developers can make high-rises work based on cost." Material costs have risen, while new-home sales have declined, making projects less feasible, he explained. He estimated high-rise projects won't make economic sense for two or three years

Nassi and Saca didn't miss the boat - they're three years ahead of it.

Quote:

Homebuilders have been backing out of deals to buy land because new-home sales have declined 42 percent in the six-county Sacramento region this year. Industry insiders wonder if D.R. Horton might only be the first to walk away from downtown development in the next few years.

That has nothing to do with downtown or even urban development. DR Horton is a huge national builder that answers to shareholders and doesn't know a damn thing about downtown. Now it's time for Kolokotronis, Domich, or even Saca to pick up their dropped ball. If anything, I'm just pissed that DR Horton wasted all this time that someone else (someone local) could have been using.

Also remember that DR Horton didn't even try to sell either of those projects. They just killed it.

urban_encounter · #**842** Posted **Sep 21, 2006, 5:54 PM**

Quote:

Originally Posted by TowerDistrict

high-rise, luxury-living won't be the beginning or the end of downtown sacramento. there is much more to this city than that. you live up hgih for the view. you come down to the street for the life.

Very well said...........

Quote:

Originally Posted by TowerDistrict

there's just too much idle speculation going around right now.

True and I guess i'm guilty in that respect. Though i have always believed we would see both the Towers and Aura get built, I have been puzzled by the very lengthy delays with Aura. I've also always believed that the real untapped market for highrise condos (would be) priced in the mid range. Condos that offer less amenities than either Aura or the Towers and would of course cost less. Now however with rising construction costs I wonder if building mid priced condos (such as the Metropolitan or the Cathedral Lofts) might not prove cost prohibitve (in Sacramento)???

But your points are well taken TowerDistrict and I'll endeavor not to speculate in regards to Aura (since) we really don't know what the hold up is. I'm hoping that their new sign (that innov8 captured a photo of) is a sign of life for that project. Meaning it's highly unlikely they would go through the trouble were the tower now in doubt.

urban_encounter · #**843** Posted **Sep 21, 2006, 5:57 PM**

Quote:

Originally Posted by TowerDistrict

I'm just pissed that DR Horton wasted all this time that someone else (someone local) could have been using.

Exactly what i was thinking...

Now the process to find developers for those parcels starts all over again...

sugit · #**844** Posted **Sep 21, 2006, 6:19 PM**

The way I look at The Tower is Saca was going to look to get 400 - 500 per sf to pencil out, now he is getting over 500 and into the 600's. He should be fine, he won't make as much money as before, esp with CalPERS I'm sure commanding a nice return on their 100M, but he will still make some.

Quote:

high-rise, luxury-living won't be the beginning or the end of downtown sacramento. there is much more to this city than that. you live up hgih for the view. you come down to the street for the life

Amen

mechanico · #**845** Posted **Sep 21, 2006, 6:24 PM**

"

Quote:

Material costs have risen, while new-home sales have declined, making projects less feasible, he explained. He estimated high-rise projects won't make economic sense for two or three years"

I expect the cost of material to drop with the decreased demand and decreasing energy cost. Though steel is being sucked up, like crazy, by China it's price should drop as coal and oil prices drop. Concrete prices should fall off significantly, as the bulk of it's cost is in the energy it takes to produce it.
While alot of these projects don't pencil out now, they may by next summer.

I don't think material cost was the reason DR Horton killed there project though. DR Horton is too large of a company, they have to have hedges against rising material cost. DR Horton is simply overexposed to the real estate slowdown with new home developements sitting empty. The company failed, not the project!

TowerDistrict · #**846** Posted **Sep 21, 2006, 6:38 PM**

Quote:

Originally Posted by mechanico

I don't think material cost was the reason DR Horton killed there project though. DR Horton is too large of a company, they have to have hedges against rising material cost. DR Horton is simply overexposed to the real estate slowdown with new home developements sitting empty. The company failed, not the project!

that was said perfectly. or atleast to what i agree with. now let's see what a more focused developer can do.

Quote:

Originally Posted by urban_encounter

I guess i'm guilty in that respect. Though i have always believed we would see both the Towers and Aura get built, I have been puzzled by the very lengthy delays with Aura

you don't have to explain yourself to me, urban. i know first hand what a proponent you are for downtown development. the only thing you're guilty of is wanting sacramento to build them faster and better.

mechanico · #**847** Posted **Sep 21, 2006, 7:29 PM**

From April

http://dwb.sacbee.com/content/business/story/14239034p-15059260c.html

Quote:

Both projects still lack some important elements, including financing. Nassi says he's close to a deal with a Chicago bank and says he's negotiating with a contractor.

Saca has a contractor, Turner Construction, which recently joined the project after switching over from Nassi's Aura.

Did Nassi ever lock in a contractor?

sugit · #**848** Posted **Sep 21, 2006, 8:07 PM**

I thougt I heard they got Tishman

POGO · #**849** Posted **Sep 21, 2006, 9:20 PM**

Quote:

Originally Posted by TowerDistrict

Nassi and Saca didn't miss the boat - they're three years ahead of it.

That has nothing to do with downtown or even urban development. DR Horton is a huge national builder that answers to shareholders and doesn't know a damn thing about downtown. Now it's time for Kolokotronis, Domich, or even Saca to pick up their dropped ball. If anything, I'm just pissed that DR Horton wasted all this time that someone else (someone local) could have been using.

Also remember that DR Horton didn't even try to sell either of those projects. They just killed it.

It appears that they might have missed the boat. Go back two years and construction costs were a lot less (20-40%?). I dunno how much less, but my point is their cost of building would have been some number of millions of dollars less. Two years ago, money was flowing freely to borrowers as well at lower interest rates, so buyers could have afforded bigger purchase prices for the same monthly payment (or the same purchase price for a lower payment). So financially, it seems their timing was a couple of years late. Now, the big question, was Sacramento more receptive to these projects at the time they went forward that if their timetables were two years earlier? I dunno. I recognize the City Government has made great strides in streamlining their approval process in this time, but I am really asking about the readiness of buyers to spring for the purchase of these units.

TowerDistrict · #**850** Posted **Sep 21, 2006, 10:27 PM**

two years ago, there was no boat. the towers were recently proposed, and aura was just a rumor. in three years time, these three towers will be built and we'll all be speculating that they should have built epic, the metro, cathedral square, cap grand, library lofts, and jibboom three years ago when the world was a better place.

dcox20 · #**851** Posted **Sep 21, 2006, 10:57 PM**

Quote:

Originally Posted by TowerDistrict

two years ago, there was no boat. the towers were recently proposed, and aura was just a rumor. in three years time, these three towers will be built and we'll all be speculating that they should have built epic, the metro, cathedral square, cap grand, library lofts, and jibboom three years ago when the world was a better place.

Touche

...and I own page 35 - if these pages were like floors in the sactowers I'd be going for about $750k + right now.

TowerDistrict · #**852** Posted **Sep 21, 2006, 11:02 PM**

right on! congratulations!! what floor? what tower?

mechanico · #**853** Posted **Sep 21, 2006, 11:07 PM**

Quote:

Originally Posted by dcox20

...and I own page 35 - if these pages were like floors in the sactowers I'd be going for about $750k + right now.

Quote:

TowerDistrict

right on! congratulations!! what floor? what tower?

What?

Schmoe · #**854** Posted **Sep 21, 2006, 11:17 PM**

I got it. TD, dcox20 meant the page 35 of this thread.

TowerDistrict · #**855** Posted **Sep 21, 2006, 11:18 PM**

oh.... hahaha!

dcox20 · #**856** Posted **Sep 22, 2006, 2:57 AM**

sorry - my dry humor leaves folks parched at times... ahh "the office" premiers tonight. such a happy little man i am.

BTW folks - it pays to refer friends to buy in the towers. ask me or Los Lobos about that... lol

urban_encounter · #**857** Posted **Sep 22, 2006, 3:06 AM**

Quote:

Originally Posted by sugit

I thougt I heard they got Tishman

Correct Tishman is his contractor and the lender is supposed to be Chicago based Corus Bank...

Corus has financed some of BCN's other projects in Denver, Houston and Reno. I can't imagine that if he (Nassi) truthfully sold 80% of the units in Aura (collecting 15% of the total cost) that he wouldn't get a bank to finance this thing.

Which again leads me to ask what the hold up is with Aura???

The clock is ticking and Autumn has arrived (well at least here in Chicago).. Sacramento should have dry weather for another month and a half..

Phillip · #**858** Posted **Sep 22, 2006, 4:44 AM**

Quote:

Originally Posted by TowerDistrict

in three years time, these three towers will be built and we'll all be speculating that they should have built epic, the metro, cathedral square, cap grand, library lofts, and jibboom three years ago when the world was a better place.

They better get one of these towers up soon so Sacramentans will have something tall enough to jump from.

SoCal · #**859** Posted **Sep 22, 2006, 4:48 AM**

dont ask why im saying this but i was downtown over at 800 j st and those lofts looked pretty nice, the area seems to be a bit more busy than usual or has it changed since ive been there i dont know, but something is buzzing downtown

-sorry this has nothing to do with capitol towers

foxmtbr · #**860** Posted **Sep 22, 2006, 4:56 AM**

Quote:

Originally Posted by Phillip

They better get one of these towers up soon so Sacramentans will have something tall enough to jump from.