arch-image

Can't say I am disappointed because that was one ugly building! I do like the designs of the bar in Loopnet. I always liked this little building, I hope it stays a small cool little building but I can see it coming down for something much larger because of its proximity to the Convention Center. 

I have worked for the guys who did the one in Austin, great guys, sadly we didn't get a chance to be involved as the GC they used wound up being a major equity partner in it. It is a beautiful Hotel on the inside. 

That's is some VERY cool stuff Nixtope! 

Currently half the property can go 4 stories and half can go 3. The property is split in the middle as it is multiple lots. As one of the people stated in the meeting, once pulled into the new zoning, it would probably be limited to 2 stories like the buildings across the street. I think however they would be able to go 3 stories but it would be on all of it not just part. So, he would probably lose around 30-35 rooms loosely based on some sketches done. 

As for the brand he started out looking at doing a Holiday Inn Express but upscaling it a bit. Then he was approached by several people wanting to partner and bring $$ to the table to go higher end, probably in the Marriott or Hilton flags. I have always felt something along the line of a Moxy Or Motto would do great there as there is nothing like it in the area that more scales to a younger crowd. It definitely would not be a sleep inn. He mentioned it being a 30-40 mil project, probably on the high side but depends on flag and variances. I think anything will also have a small half floor undergrounds parking which can be built into the hill pretty easily as there is about 10' of slope in the property. 

Dr. Ashai should have given a better answer abut the Church Building when asked if he had made any attempts to repair the building than just "no". He should have explained he purchased the property with the intent of the church building being demolished to make way for his new development. As well, he should not have waffled on his answer on what they were wanting to develop. They are looking to build a hotel with some possible retail on the 1st floor which with all the new development going on there is a big need for more quality rooms in the area without paying the ridiculous prices at places like the drover but that it could change based on how all of the numbers work out but that a hotel is the main goal. 

As well, the city's response to the question on being classed as a contributing structure was just as weak. While she admitted it is not listed as contributory now, there i nothing that says once brought into the district it would not change, I have seen that happen and kill many  deals over the years and many times the structures have no true contribution to the area at all. I am not sure when it was built, Hist Arials shows it there in 52 but that's as far back as it goes. But it was not built I dont think during the stockyards heyday. Same as with Tidwells, bar which was a gas station, it definitely wasn't but I can see both getting hit with people trying to block demo and redevelopment. 

I don't think either is going to be very happy and and neither would I. On Doc's property it very well may kill anything he was going to do. Several people were VERY interested in partnering with him BECAUSE the property was outside the district, not sure they will still be interested. All of this In my opinion only and based on knowledge of what Doc was trying to do. 

 

I happened to find a presentation given by an accounting firm that deals a lot in the construction industry and thought I'd share a few of their insights into why some construction companies fail:

 

Ten Most Common Reasons for Construction Company Failures:

• Growing too fast
• Obtaining work in new geographic region(s)
• Dramatic increase in job size
• Obtaining new types of work
• High employee turnover
• Inadequate capitalization
• Buying dumb stuff (cars, boats, ranches, etc.)
• Poor estimating and job costing
• Poor cash flow
• Poor accounting system

 

That is a very good and true list! It has most of all my favorites. I used to do consulting on helping smallish companies looking to take that next step from small company to midsize. The #1 thing I always stressed, Hypergrowth will kill a company faster than anything. Growth has to stay limited to what staffing, cash flow and focus allows. The second biggest cause of failure is having an owner who has been doing it all and refuses to let go. You can't double or triple the size of your company and still totally micromanage everything like you have been. Figure out what you like the lease and hire the best person you can find to take that one and let them do it. 

I edited your comment down a bit to get to what I think is the bottom line question w2hich is why you cannot JUST look at how a project may perform in the future. 

On using their own money. Every developer puts up hard money into a project up front. Currently most lenders require a MINIMUM of 20% Had cash into project, Sometimes, lenders wont even count the land value even if you own it clear, they want to see hard cash in the bank dedicated to the project. Your actually usually better off financing the land so you can have the cash into the project. I have a couple of clients never finance more than 60% because at that rate their planned occupancy can drop to 50% of what is hoped for and still be able to make all the payments. 

On The whole aspect of value in future to a very large degree, while it may seem counterintuitive, does not matter a whole lot. It makes no difference if a job looks like it will do great 5 years down the road if for the first 5 years you cannot make your loan commitments. As an example, in a Hotel, you normally will have 12-18 months maximum to get the project stabilized and up to expected occupancy and room rates and some money is usually built in to the proforma to accommodate this early period but after that the project has to be able to stand on its own. 

And your welcome, i am a numbers nerd so never mind trying to explain the basics of how and what it takes to make a deal work. 

Thanks arch-image -- I really appreciate you taking the time with that reply.

 

 

Are you basically saying that even though these are assets with decades of useful and productive lives, the cost of initially borrowing the money exceeds the future revenue generating ability?  Are there businesses that are in the business of building and owning buildings that could use their own money and formulas to decide what a reasonable upfront investment could be for something that will be around for decades so their borrowing thinking is not mixed into the same thinking as a business that needs to borrow some money now to buy parts to make a product they will sell in a few weeks or months?

 

 

“She’s saying, if you go through the repairs piecemeal, the substantive repairs start taking away from the integrity of the historical methods,” O’Hara told the commissioners. “To do it twice, you’re probably less likely to get the desired result.”

It has been a while since I read the report but as I remember the bulk of it is making structural repairs to the floor slabs and columns where the concrete has delaminated and allowed the reinforcing to begin rusting. So this is a ridiculous statement IMHO. This work has to be done FIRST no matter what direction you go with the rehabilitation. 

As part of the commission’s vote, the owner, Ola Assem, will be required to prepare a comprehensive action plan that addresses, within the next three years, all of the issues identified in the structural assessment. The proposed solutions should be permanent and consistent with standards set by the U.S. government for historic properties.

I know I am not always the brightest bulb in the box but this is ambiguous to me. This seems to say they get three years to come up with a plan before even beginning any work. I Know we all WANT it to be saying they have three years to MAKE the repairs but is that really what it is saying? Perhaps John can clarify? 

I can try to answer some of this. Lest get a few things out of the way first. Yes, you can refi later but that has NO bearing if you can't make the numbers work to begin with.

"5 floors sitting empty" ... depending on what percentage of space that 5 floors is, yes it can make a huge difference. Most buildings generally are say, ten to fifteen floors, so that's 1/3 to 1/2 the space. SO let say your building a 15 story hotel, typically 30 rooms a floor, that's 450 rooms, so cut 135 rooms off right off the bat, 5 floors, then count on occupancy being 75% of the remaining and your down to 220 rooms paying your bills, it wont cash flow. 

On the issue of Materials and labor have value, sure they do. But lets look at costs right now, using pre-covid prices I could buy concrete around $100 a yard, right now its running 155 at best assuming you can get it due to the cement shortage. Lumber, steel, copper, anything oil related, conduit, roofing etc..., it is all up 25-40%. So yes it has value but with the cost now, its value will be LESS in a few years as costs come down. Don't get me started on labor, people are already starting to see that no, you aren't worth 75 an hour to drive a dump truck but I'm paying it right now because there is no choice. As construction starts are crashing labor rates are already coming down and will accelerate soon so I hope you have been putting some of that money into savings! 

Now for the big question, are the the short term increase in costs "counterintuitive" , no, not at all because at the end of the day on most projects you have 18-24 months to get a project stabilized and cash flowing. Rental rates, room rates etc... are not much different now then 4 years ago but costs are 30-40% higher and interest rates are almost triple. The project's numbers still have to work for todays market at the elevated costs and on MANY projects that's just not possible. You can try and scale down but then do the numbers work because the land cost has gone up thru the roof. In some cases it actually works to go go bigger as you have more SF or rooms, to spread a lot of the more or less "fixed costs" over. I have a project I am involved in that the only way to make it work was to INCREASE the room count from 130 to 180 it is a huge balancing act that right now is a big moving target. All that to say at the end of the day the numbers have to make sense that the project will cash flow at market rates today, 5 years down the road doesn't matter. 

Not sure if that answers the questions but thought I would give it a shot! 

 It is very counterintuitive to me that short-term fluctuations in material and labor costs, demand, and interest rates seem to have a outsized impact on an asset that is expected to be performing for 30 or 40 years.  Not just performing, but taking up land opportunity (not that we don't have too much of that).

 

Is it impossible to refinance x years down the road if interest rates get better?  

 

Is it really all that terrible if 5 floors just sit empty for a few years until demand builds up?  

 

(it is not like you {normally} can build more all-new floors later when demand picks up -- you have committed the smaller project to not be able to meet the needs of 5 years from now)

 

The money is in a steel and concrete and glass asset that has a value.  Sure, it is not super-liquid, but it is a pile of money in a different form.

 

And these things do eventually have some kind of residual value when it it time to change hands way down the road.  Is it seems like that number will be better out there in the future if it is not value-engineered so much today.

 

 

It is located at 3801 Arundel Ave in the Westcliff neighborhood. Mike Nichols of Hometown our favorite Historian had an article about it ..... hometownbyhandlebar.com/?p=8167 

I tend to agree with what several others have said, I feel like they will spin out the lower performing stores and locations that are in areas they don't care about, otherwise known as lower income areas. IF that is what happens it goes against everything the divestiture is supposed to accomplish. What they should be having to split off is locations that do well and are in direct competition with each other, such as the Mansfield location someone mentioned. That is the whole point of it, keep the competition going. I fully expect our location in Meadowbrook to be on the closure list as comparatively to Kroger it would be seen as a very low margin location. It will be interesting to see how it plays out, follow the purpose of the law or just close stores for the press releases basically and close all the underperforming locations. Maybe I am just getting very jaded in my old age! 

The lighting really highlights the uneven concrete panels on the blank wall.  I'm wondering if the lighting designers might re-think their decision at some point in the future.  As for the color temperature of the lighting, I do think that it is less than 4,000 Kelvin.  I'm hoping that my cell phone didn't alter the colors too much. 

I really like the way it Highlights the unevenness of the panels. It at least give it some type of "look" other than just a flat face of concrete.  

"One of the most visited" but behind Parks at Arlingtion, NE Mall, Montgomery Plaza, Hulen Mall, and about the same as Overton Park Plaza.  Is it more visited than *any* other enclosed mall (besides the corpse of Ridgmar)?

Actually for the latest numbers it is equal to Hulen at 4.9 Mil, and where Montgomery is concerned, I have to ask, how many of those "visitors" are going simply because they live there or right adjacent to i, to me it isn't a good comparison as it is really your basic neighborhood type shopping center and gets a large percentage of traffic due to bars and restaurants. 15 of the "Stores", that's 30%, just not the same. Take them out and Lan Gran is tied for 3rd place. I think what the owners have is quite impressive and has been a good deal for the CIty. 

Seeking tax breaks: https://fortworthrep...ex-on-hemphill/

Saw an article this morning https://www.star-tel...e278381109.html , where they want to take the option of paying the $200 fee per unit per year instead of doing any low income units. IT equals $357,000 per year for 5 years. Unless my math is wrong that's about 1.785 Mil for a return of 2.5 mil in tax abatements. So basically they are making $715,000 from the $357k per year, I wish I could get that kind of returns! Never been a fan of all these abatements to get people to do developments or move here as they seldom have any milestone markers. Each year they don't it their goals and then at the end just say oh well, we tried and nothing is ever done about it. I would never support this, there many developers would be more than happy I am sure to build there with zero abatements AND offer low income units. 

 

It's not only how much it would take but how long it would take.  Seizing the building would do little if anything to speed up redevelopment.

I wonder if there are any development/redevelopment companies standing in line for the opportunity to have a go at this. Surely the city has some idea of what reputable and qualified companies might be interested, and at what cost...

 

Yes, yes there are. Some I think the city knows about but there are several that I doubt they know anything about. It will be interesting to see if Cleopatra's attitude changes since now they know the city IS considering making a move to take the building if they can't show some way to go forward. This is also possibly going to cause some developers to move to the sidelines and wait for the city to move on it as they would rather work with the city than Cleopatra. Of course there is always the issues of costs being out of frigging control and Interest rates so high that it will sideline many people. This is the reason Construction starts are down 23% in 1st quarter in DFW. people cant make the numbers work or they just aren't willing to make commitments with the rates so high. All that to say I feel like Cleo has lost a ton of leverage, the question is do they realize that. 

 

I posted about this in another group that this seemed like EXACTLY the same thing these guys did here. I tried to look and figure out of it was some of the same people but didn't find it on my original look and never got back to it. If I was forced to put money on it I would go with never gonna happen! Seems to me people have just figured out a way to get money out of people then move on to the next set of chumps willing to give their money away. 

... vague memories of Meredith Willson's "The Music Man"...

 

Lol ..... Wc Fields ... The old fashion Way .... this could be fun ! hahaha