AUSTIN | Projects & Construction II

[arbeiter]

What is eco-luxury? Toilet paper that's brown and from recycled motor oil bottles?

[The ATX]

Originally Posted by arbeiter

What is eco-luxury? Toilet paper that's brown and from recycled motor oil bottles?

..and overpriced

[MichaelB]

Originally Posted by arbeiter

What is eco-luxury? Toilet paper that's brown and from recycled motor oil bottles?

Wha- whaaaaaaaaaaaa

[migol24]

Originally Posted by nixcity

^Wow nice view, is that taken from Spring?
Too bad about the Foundran I thought it was a perfect fit for that area of town. Hopefully someday someone will be able to finish it.

what is the Foundran I?

[WAustinResident]

Originally Posted by Mopacs

Austin Business Journal has an update on the half-finished Fondren condo tower on Lavaca. The development group has filed for bankruptcy.

http://austin.bizjournals.com/austin/stories/2010/07/19/story1.html?b=1279512000^3649661

I wonder if these can be converted to much more affordable condos once the projects clears bankruptcy.

I would think if they could get all the condos built out and on the market for 150-250 psf price they could sell out pretty quick.

[MichaelB]

Originally Posted by WAustinResident

I wonder if these can be converted to much more affordable condos once the projects clears bankruptcy.

I would think if they could get all the condos built out and on the market for 150-250 psf price they could sell out pretty quick.

I just hope desperately it does not become student housing. ( I live in Cambridge) We know that the folks that own Dobie looked at it.... but all the law suits around it scared them away. Thank God. Just want something decent to happen soon. They are marketing the property to Hotel interests as well. Still would prefer private residences... but a Hotel would be OK. "Intel II", as we call it IS my view right now!

[hookem]

Originally Posted by WAustinResident

I wonder if these can be converted to much more affordable condos once the projects clears bankruptcy.

I would think if they could get all the condos built out and on the market for 150-250 psf price they could sell out pretty quick.

Or a hotel. Wonder if it could be converted to a hotel? Austin still needs hotel rooms, and around campus is one of those areas where it is still hard to find a room. Would certainly sell out during game/graduation weekends.

But yeah, mid-priced condos would probably do well, too. Not sure you could payoff the loans at $150sq ft right now, but maybe after the lenders foreclose.

[WAustinResident]

I can completely understand why you wouldn't want student housing. I was basically thinking that it could serve some housing for the people working in downtown either in the capital complex or people who work in downtown. Something highly affordable.

I don't know how feasible it would be since so much has been built for its original purpose, such as the high ceilings, 13 feet on some floors.


Frankly the more I'm looking at it and doing napkin math its looking like this will remain a shell for a long time. It looks from the website that you could get around 45 condos in the building if you max out an average of 1,000 sq ft per unit. If you sold them for 300 a sq ft. which would be pretty high. You would net 13.5 million. I think the building will cost more than that to buy and finish out. I would think the building and the finish-out combined would be around 15-20 million.

If somehow you were able to get it done and at least break even, the units should have an interesting appreciation since they will have some unique features like 13 foot ceilings.

Frankly I wouldn't pay more than 5 million for the building myself, anything over that and you are forced to go the luxury route.

[crewer]

I seem to recall there were a lot of people dumbfounded (me included) that the Intel shell had to be imploded since no developer wanted to (or could) retrofit the shell into something useful. What are the odds that this may have to be imploded as well?

[WAustinResident]

Originally Posted by crewer

I seem to recall there were a lot of people dumbfounded (me included) that the Intel shell had to be imploded since no developer wanted to (or could) retrofit the shell into something useful. What are the odds that this may have to be imploded as well?

I would think not good in the short term. Someone will try and retrofit this building. But if you look at how its designed, many of the office spaces are interior blocks of space with no windows, not exactly useful for a condo type building.

I doubt it can survive as it is currently marketed and offered, it would probably have to be converted into less expensive condos, and that will be difficult with how much of the layout has been created already. You would have to change so much of the scope of the project, yet many units would have to be large to try and eat up the internal space.

If someone can get the shell cheap enough, like 3-6 million, then there is chance for a retrojob.

[P3FE]

Hey Austin, just for perspective sake, the Federal Courthouse will be a mere foot shorter than the Whole Foods Headquarters.

[ahealy]

thanks!

[nixcity]

Does anyone think any of these pent up projects will break ground before the year ends? The first hotel to get going will make a killing and it seems like Starwood is in the best spot to get moving. What about Andaz, Seaholm, Marriot, etc...

[StoOgE]

Doubt anything happens this year. Maybe one of the smaller hotels could get up and going, but I would be surprised to see any really major project before 2012-2013 given the economy especially in commercial real estate.

[WAustinResident]

Originally Posted by nixcity

Does anyone think any of these pent up projects will break ground before the year ends? The first hotel to get going will make a killing and it seems like Starwood is in the best spot to get moving. What about Andaz, Seaholm, Marriot, etc...

nearly zero percent chance. Hotel financing is just as difficult as condo financing. I was just talking to a friend who does mezzanine debt for new construction buildings primarily in the NY metro area. They aren't giving loans to people who have 60% equity in their projects. They are looking at a minimum of 75% equity and a strong strong project before giving out financing, and this is for projects that are usually already underway. New financing is even tougher.

For an example the W hotel cost 300 million. The original plan had 66% debt and 33% equity, after the financing fell through this changed to around 50/50 (its not exact but close enough for our approximations) This was for a project that is high profile and halfway sold out. Under todays financing rules the developer would need around 225 million of their own money to get this project built.

The W Hotel is coming online with 250 rooms at the end of the year. Vacancy rates in downtown aren't extremely high, so the abortion of this project should be relatively slow. There isn't a high demand for hotels expect for a large convention center hotel. That project probably won't break ground until around 2012 or so. Very few developers self finance and even less on large projects for obvious reasons.

I would expect plenty of ancillary activity though. There are probably a limited number of dollars that will come back into downtown for development when it does begin again. Its not going to be a full on building spree at the beginning. Financiers will have their pick of the best projects left on the table. In that vein expect lots of projects to get announced, retooled, etc. Whatever a developer can do to make his or her project more attractive before financing and to clear hurdles to construction, expect that to be done now. I think we saw the owners of the Marriott lot were able to roll the alley way into their property and are applying for height variances. All this is to attract the finance dollars once they come back. So at least it won't be totally quiet.

[nixcity]

Thanks for the perspective. I think that it probably will take until 2012-2013 to see any form of a boom again but do hope that over the next year and a half one or two of these hotels will get going and maybe one more residential project.

[arbeiter]

I just found the name for my band (if I decided to start one) - Mezzanine Debt.

[mars-man]

Originally Posted by arbeiter

I just found the name for my band (if I decided to start one) - Mezzanine Debt.

And mine: Slow Abortion.

[jeremyz]

I posted some pictures that I have taken over the construction period of the W at http://waustin.com. The pictures are roughly at a monthly interval. I messed up the ordering on some of them. The pictures basically go from it being a hole to what it is today.

[migol24]

Originally Posted by jeremyz

I posted some pictures that I have taken over the construction period of the W at http://waustin.com. The pictures are roughly at a monthly interval. I messed up the ordering on some of them. The pictures basically go from it being a hole to what it is today.

the link doesn't work. wish it did though!