AUSTIN | Projects & Construction II

[KevinFromTexas]

Nice view.

[crewer]

Originally Posted by ivanwolf

BTW went to the Monarch Launch party, and that place was packed at least 300 people, I got there like 45 min after it started and all the food was gone, and most of the brochures too. I did not see any floor plans laying around or any price lists. Did any one else go and get price lists?

Wow! Déja vu! I can't begin to tell you how many times that scenario was repeated here in DC. I remember when a buddy of mine went to an open house 1.5 years ago and found the lines of prospective buyers out the door, waving down-payment checks and ready to buy buy buy.

The building is completed now...and it's gone rental.

By the way, just saw this in Craigslist:

http://austin.craigslist.org/rfs/442557440.html

Am I wrong in assuming that condos in downtown Austin are suppose to appreciate in value? If this place appraised at $345,000 last year, wouldn't it be reasonable to assume at least a 5% appreciation from that amount, particularly with housing in downtown being so hot right now?

[StoOgE]

for a guy who seems to know so much about real estate it seems odd you arent familiar with the tactic of claiming something is below market when its not.

Who appraised it at that much a year ago? Because when I bought my place I had 3 appraisals... one I paid for, one the bank paid for and the counties.. and I can tell you, there was a 45K dollar difference between them.

[Kevinb]

There are several references on this forum re: the initial sales prices of the Milago @ $250-300/sqft. 10th floor is near the top, so let's go with $300 x 852 sqft = $255,600 (+/-).

Seems to be decent appreciation even selling it "below market"

[jgouger]

Well there seems to be a good number of condos from the Milargo available on the resell market. I'm not really sure why either, the building is in a great location, albeit a little farther from the action that some people may like. They have good views, floor plans, etc. Even at $325k that person is likely making a 50k or higher profit, especially if they bought at pre-construction prices.

Generally the Travis County tax estimate is the least accurate of anything. The records are frequently out of date, and they'll usually just slap a 6-10% increase on the valuation each year regardless of whether the market will support it or not. If there is one lesson I've learned from Realtors over the years is that the TCAD appraised price has ZERO to do with selling price.

[M1EK]

Disagreed - the Milago is in an awful location for most purposes. Too far to walk to a lot of the good stuff downtown (except the H&B trail itself) - so you'll be driving everywhere.

[DTAustin]

Originally Posted by actham

I noticed that the 360 crane is now anchored to the building in 3 places. Does anybody know what if any damage occurs to the condos that have the anchors in them? Do the anchors leave marks in the ceilings? I would hope that the construction process would not leave 6 damaged condos.

Another note about the 360 crane (and presumably other cranes)... I was standing near the base of the crane the other day, and noticed that it appeared to tilt to the side with the counterweights. I thought this had to be an optical illusion until the wind turned the crane around 180 degrees, and it was now tilting the other direction. The crane was vertical up to the point where it was attached to the building. The deflection occurred starting at that point.

I was very surprised that the crane would deflect or tilt so much without a load. It must be a lot of fun to be a crane operator on a windy day.

[DTAustin]

Originally Posted by crewer

I was at a conference last week and was speaking with a colleague from LA who told me that her son was a real estate investor out there. I mentioned Austin, and she told me he had been buying up property there, specifically multiple units in the 360. That made me wonder how many other units at the 360 were sold to speculators. I hope not many.

By the way, I thought I would soon be moving back to Austin, but my job will be taking me to Asheville, NC next for a couple of years. I should be down there in a few months. Though I've never been there, I've heard great things about it. Anyone been there before?

I know of a number of Realtors who purchased condos at 360 with the intent of flipping, but also know more people who purchased with the intent of living there.

360 told buyers that they would only sell 25% of the condos to investors, and also require a 10% down payment versus 5% for residents. I believe this was stated in the purchase contract, which would make it a binding agreement with all buyers. Thus, if they sold more than 25% to investors they could have a contractual issue.

The 360 HOA docs also limit normal rentals to 25% of the condos. To rent out a condo, the owner must apply for a rental permit from the HOA board. There are rules around the permits which state they expire if the condo is vacant for a certain amount of time.

[KevinFromTexas]

Originally Posted by DTAustin

Another note about the 360 crane (and presumably other cranes)... I was standing near the base of the crane the other day, and noticed that it appeared to tilt to the side with the counterweights. I thought this had to be an optical illusion until the wind turned the crane around 180 degrees, and it was now tilting the other direction. The crane was vertical up to the point where it was attached to the building. The deflection occurred starting at that point.

I was very surprised that the crane would deflect or tilt so much without a load. It must be a lot of fun to be a crane operator on a windy day.

Not sure what 360's crane was doing. But check out this crane in New York. It's caught up in a vortex created by skyscrapers which is causing it to spin. This is not normal apparently, but tower cranes do do what is called weather vaning, where the wind pushes and pulls on the top of the crane and makes it sway back and forth like a weathervane.
• Video Link

[jgouger]

Originally Posted by M1EK

Disagreed - the Milago is in an awful location for most purposes. Too far to walk to a lot of the good stuff downtown (except the H&B trail itself) - so you'll be driving everywhere.

M1EK, yes the Milago is far from a lot of the action, hence why there are so many re-sales. But a lot of people seem to have faith in that neighborhood transforming in a few years or there would not be the level of demand there is. The Shore is located a block north of Milago on Rainy Street, and the building sold out (or at least had enough people putting deposits down for reservations) faster than 360. The Legacy on Town Lake will likely enjoy a similarly brisk rental pace. And in a few years when the Waller Creek Project is completed, I'd be willing to bet that the appreciation of those and any future units will be astronomical.

[Strayone]

Quote from Kevin - "Not sure what 360's crane was doing. But check out this crane in New York. It's caught up in a vortex created by skyscrapers which is causing it to spin. This is not normal apparently, but tower cranes do do what is called weather vaning, where the wind pushes and pulls on the top of the crane and makes it sway back and forth like a weathervane".

Egad is the crane not supposed to be locked or tethered in some way? That can't be what typically happens with cranes while they are not in use. Great find by the way.

[DTAustin]

Originally Posted by Strayone

Quote from Kevin - "Not sure what 360's crane was doing. But check out this crane in New York. It's caught up in a vortex created by skyscrapers which is causing it to spin. This is not normal apparently, but tower cranes do do what is called weather vaning, where the wind pushes and pulls on the top of the crane and makes it sway back and forth like a weathervane".

Egad is the crane not supposed to be locked or tethered in some way? That can't be what typically happens with cranes while they are not in use. Great find by the way.

The 360 crane certainly did not look like that! It was slowly moving back and forth in the wind. I believe the cranes are not locked, and allowed to move with the wind, so they do not present a large surface upon which the wind could exert a large force.

In the case of the 360 crane, I was very surprised by the amount of vertical deflection caused by the counterweight. I thought for sure the cranes were more rigid than they are.

[AustinGuy]

Originally Posted by M1EK

Disagreed - the Milago is in an awful location for most purposes. Too far to walk to a lot of the good stuff downtown (except the H&B trail itself) - so you'll be driving everywhere.

I gotta agree with this. The locations of most of the announced downtown projects are much better than the Milago. This means the Milago sellers will probably have to significantly underprice all of the new projects downtowns until they are sold out & constructed if they want their units to sell.

In the longer term, Milago should be a good location and once we absorb most of these new projects, Milago should start to appreciate again. Maybe picking up a cheap unit at Milago from someone who really needs to sell sometime in the next few years could be a good investment strategy?

[crewer]

Originally Posted by AustinGuy

I gotta agree with this. The locations of most of the announced downtown projects are much better than the Milago. This means the Milago sellers will probably have to significantly underprice all of the new projects downtowns until they are sold out & constructed if they want their units to sell.

Milago should be a good location and once we absorb most of these new projects, Milago should start to appreciate again. Maybe picking up a cheap unit at Milago from someone who really needs to sell sometime in the next few years could be a good investment strategy?

With the volume of new developments on the horizon, all trying to outdo each other, the current mortgage crisis, and the slowing housing market in Austin (Statesman, Oct. 7), I wouldn't be surprised if you find the "better location" investors in the same boat as those in the Milago.

Since we haven't seen a history of resale in the other developments, I don't think we can assume they will do better than the Milago over time. After all, units were flying off the shelf when the Milago sales office first opened, as I recall.

The other developments may have location in their favor, but if, over time, they develop reputations for being in noisy areas, poorly constructed, known for rowdy residents, etc., investors could experience problems selling them.

Housing desires are personal. One person's perception of a location can run in opposition to another's. For those who want to be near Town Lake, a walkable distance to downtown (as a city dweller who has to walk a lot, trust me, Milago is not that far from downtown), and in a quieter area, the Milago is in an ideal location that should improve over time.

[M1EK]

Originally Posted by crewer

For those who want to be near Town Lake, a walkable distance to downtown (as a city dweller who has to walk a lot, trust me, Milago is not that far from downtown), and in a quieter area, the Milago is in an ideal location that should improve over time.

It's all relative - many of the other buildings are as close to the lake, and are much closer to everything ELSE.

[Kevinb]

Last Friday's Ausin Business Journal confirmed that Google is looking for 30,000 sqft of space in downtown Austin.

http://austin.bizjournals.com/austin/stories/2007/10/08/story1.html

[G Lee]

They put the tree on top of the Monarch this morning.

[priller]

Originally Posted by G Lee

They put the tree on top of the Monarch this morning.

I remember you guys noting the same about the Shore. What does that signify?

[swollpatrol]

Originally Posted by crewer

With the volume of new developments on the horizon, all trying to outdo each other, the current mortgage crisis, and the slowing housing market in Austin (Statesman, Oct. 7), I wouldn't be surprised if you find the "better location" investors in the same boat as those in the Milago.

Even if I end up in the same boat, I'd rather be riding in first class than in steerage. It seems the investors at Milago are trying to resell at about the same price point as 360 and personally I don't see any reason to choose Milago over 360 except that you get to move in right away.

The flippers are kidding themselves if they expect 20% return in one year's time especially given the quantity of other current developments.

[KevinFromTexas]

Originally Posted by priller

I remember you guys noting the same about the Shore. What does that signify?

http://en.wikipedia.org/wiki/Topping_out


That link talks about the ceremonial activities. When the Frost Bank Tower was topped out, the newspaper did a story on it that all 600 workers had a huge feast in the building's lobby. They also did similar things to some of the last beams. One was to place little tin crosses in one of the columns. They also of course topped it off with a tree.