Sacramento: 301 Capitol Mall: A New Plan for The Towers Site - Page 53

brandon12 · #**1041** Posted **Oct 21, 2006, 3:20 AM**

^possibly. Please confirm that these were HARD deposits, and it will definitely count on the list. Let me know when you can confirm this and I will add it to the list. Good job. There's one (maybe, pending your documented confirmation that these were HARD, NONREFUNDABLE deposits)
Let's continue the list!!!
Actually, I just realized in your post that it only mentions 285 deposits, so that would definitely not be eligible for the list. But keep trying, I'm counting on you to help me with my list!!!

TowerDistrict · #**1042** Posted **Oct 21, 2006, 3:23 AM**

the project was completed. they just sold to nothing but investors who chose not to move in. i'm not seeing a paralell?

TowerDistrict · #**1043** Posted **Oct 21, 2006, 3:35 AM**

it's not that just that prices are going to go up in the Towers project, but the selection will be more limited aswell. i figure this as a place for people to live. i haven't heard one story about a person buying a unit for investment only. not saying there aren't, but people are generally excited about LIVING THERE.

and they should be.

bennywah · #**1044** Posted **Oct 21, 2006, 3:49 AM**

lol, wow!!

so many people in sac bought homes in the 90's when prices were just above 100k that even with a slow down they have a huge, huge amount of equity in their homes. An example my mom bought her house for $155k in 95, with corrected numbers lately its worth $475,000 a $320k increase, even if the market dropped 10%, that would still be about $280k in the pot. theres 2-3 yrs for the towers to be built and completed do you honestly think the market is going to continue slipping that long?

This is a correction in the market and people will be cautious for a bit but in a couple of years the buyers market will start to tip prices back up.

according to research the sacramento valley will see some serious population increases which will shoot up demand for pricing and seeing as sac can't add new freeways to help traffic issues, downtown will add more offices and housing, and some will be highrises to deal with less land, and the suburbs will begin to densify in order to make the area more viable with increasing gas prices and on going traffic issues, things take time to realize but the los angles model for growth is now seen as flawed and cities are looking at controlling sprawl and creating livable communities!!

bennywah · #**1045** Posted **Oct 21, 2006, 3:53 AM**

also, as a former resident of elk grove, the citizens of that city even 4-5 years ago have tried to limit sprawl and random retail projects and have tried to make the point more offices and business and density are needed to make the community viable, the city gov't has somewhat taken that into acct, but in the short term to secure city coffers are going for retail and housing, I belive that some of the outlying cities will see the need to make their cities more than bedroom communities to survive, no city just starts with the perfect urban plan, it comes after failures and successes, anyhoo end rant!!

brandon12 · #**1046** Posted **Oct 21, 2006, 4:04 AM**

my responses in CAPS

Quote:

Originally Posted by Phillip

Folks, it's over. My condolences to the many good people involved with selling, designing, and building this project. But it's done.
THANK YOU FOR YOUR SYMPATHY. WITHOUT IT, I DON'T KNOW HOW I COULD GO FORWARD.
So what if an additional 36 units sell by December 31? There are still 400 empties after that. Everyone who wants to buy into this project has bought. There aren't dozens of new millionaires moving to Sacramento every month.
EVERYONE WHO WANTS TO BUY INTO THIS PROJECT HAS BOUGHT? REALLY? YOU MUST HAVE INFORMATION THAT I DON'T. WHERE DID YOU GET THIS INFORMATION FROM? IS THERE A SURVEY OR STUDY YOU BASED THIS ON?
I can't believe dcox20 is the only buyer out of 364 who's backed out since the real estate market started tanking. There are an unknown number of buyers who want out but haven't said so because they'll only get their deposit back if Saca cancels, not the buyer.
YOU'RE RIGHT, THERE IS AN UNKNOWN NUMBER OF PEOPLE. IT COULD BE ANYWHERE FROM ZERO TO 362.
This project was ego driven, not market driven. Someone wanted to build the tallest condo on the West Coast and name it after himself. Nobody stopped to consider whether there were 800 people in Sacramento willing and able to live in a place like this. It turns out the market for downtown highrise in Sac is more like 300-450 now, including Aura.
NAME IT AFTER HIMSELF? IS IT CALLED THE JOHN SACA TOWERS OR THE TOWERS ON CAPITOL MALL? MAYBE HE CHANGED THE NAME OF THE PROJECT AND I JUST HAVEN'T HEARD THE NEWS YET. I'LL DO A GOOGLE SEARCH TO SEE IF I CAN FIND ANYTHING. AS FAR AS THE MARKET SIZE, UNFORTUNATELY YOU'RE CONFUSING TWO THINGS: 400 0R SO PEOPLE HAVE PUT NONREFUNDABLE DEPOSITS SO FAR, THAT'S ENTIRELY DIFFERENT AS TO WHAT THE MARKET CAPACITY IS.
No doubt the sudden real estate downturn hurt SacaTower (and many other projects, including some I liked and will be sorry not to see happen). But I don't think SacaTower would ever have sold out even if the market had held firm. WOULD NEVER HAVE SOLD OUT? REALLY? I CAN'T IMAGINE YOU REALLY MEAN THAT. DO YOU REALLY MEAN THAT THEY WOULDN'T SELL OUT BEFORE CONSTRUCTION WAS COMPLETE? THOSE ARE TWO DIFFERENT THINGS. SacaTower was just preposterously, ridiculously WAY TOO BIG for Sacramento. DEUCTCHE BANK AND CALPERS, ALONG WITH SACA AND MANY OTHERS TEND TO DISAGREE WITH YOU. And I still maintain that Capitol Mall isn't a great location for a highrise, even one properly sized. THAT'S GREAT. THANKS FOR YOUR OPINION. I WOULD SUGGEST YOU NEVER BUY A RESIDENCE ON CAPITOL MALL THEN. THEN EVERYBODY'S HAPPY. Any of these projects would do better east of the Capitol, where the liveability factor is much higher.

I see some silver linings to this development though:

1) Construction will probably stop before the skeleton goes up. The hole in the ground with pilings sticking out is ugly, but think what a 20, 30, or 40 story abandoned skeleton would have looked like! Maybe we can salvage a Saca Plaza from this? WOULD YOU LIKE TO BET? I HAVE $1 TO $10,000 (DEPENDING ON YOUR BUDGET AND CONFIDENCE LEVEL) THAT SAYS THE SKELETON WILL GET ABOVE GROUND. IF YOU'RE INTETERESTED, LET ME KNOW WHERE/WHEN YOU WANT TO CREATE AN ESCROW ACCOUNT.

2) It's now more likely that a condo tower properly sized for the Sacramento market will be built Downtown, whether it's the Aura or something else. We now know there are 300-500 qualified buyers looking for a highrise home Downtown and they've got no place to go.

3) Hopefully this will knock out the unneeded Intercontinental Hotel, which was doomed to fail, even with an $11 million subsidy. Downtown hotel occupancy only runs about 75% now and Residence Inn and Joie de Vivre will be adding over 400 more rooms within the year.
BASED ON YOUR COMMENT, YOU HAVE MORE AND BETTER KNOWLEDGE OF THE WORLD'S HOTEL MARK THAN INTERCONTINENTAL, THE WORLD'S LARGEST HOTEL OPERATOR. ARE YOU WORKING IN HOTEL STRATEGIC DEVELOPMENT? I HOPE SO, BECAUSE WITH INSIGHT LIKE THAT, YOU COULD BE MAKING MILLIONS PER YEAR!

With the Hyatt, Sheraton, and Embassy Suites those will be more highend rooms than Downtown needs for the foreseeable future, and especially since the Kings are leaving town. The room tax revenues generated by a new Intercontinental would NOT have been additional money for the city; they would just offset declining room tax revenues from other Downtown hotels losing business to the Intercontinental.
REALLY? PLEASE FORWARD THE ECONOMIC IMPACT STUDY THAT SUPPORTS THIS STATEMENT. I THINK YOU'RE WRONG, BUT WILL BE WAITING FOR YOUR EVIDENCE.
===========

Is it possible that Saca could go forward with a single 30 or 40 story tower and no hotel? Or is it two 53-story towers plus hotel or nothing?

kenratboy · #**1047** Posted **Oct 21, 2006, 4:06 AM**

You are right about housing prices.

The market has 'softened' - it has not crashed and burned. In a few years, things will start to go back up. How do I know this? Look at California home prices since WWII. In general, it is going UP.

California may have as many as TEN MILLION more people in the next 15-20 years - they will need to live somewhere.

Also, cheap, plentiful land is disappearing and everything is getting more expensive for new construction - so existing buildings have a few benefits. One - they are already there, ready to live in. Also, the locations are usually better.

Jay916 · #**1048** Posted **Oct 21, 2006, 4:59 AM**

Quote:

Originally Posted by Phillip

Folks, it's over. My condolences to the many good people involved with selling, designing, and building this project. But it's done.

So what if an additional 36 units sell by December 31? There are still 400 empties after that. Everyone who wants to buy into this project has bought. There aren't dozens of new millionaires moving to Sacramento every month.

I can't believe dcox20 is the only buyer out of 364 who's backed out since the real estate market started tanking. There are an unknown number of buyers who want out but haven't said so because they'll only get their deposit back if Saca cancels, not the buyer.

This project was ego driven, not market driven. Someone wanted to build the tallest condo on the West Coast and name it after himself. Nobody stopped to consider whether there were 800 people in Sacramento willing and able to live in a place like this. It turns out the market for downtown highrise in Sac is more like 300-450 now, including Aura.

No doubt the sudden real estate downturn hurt SacaTower (and many other projects, including some I liked and will be sorry not to see happen). But I don't think SacaTower would ever have sold out even if the market had held firm. SacaTower was just preposterously, ridiculously WAY TOO BIG for Sacramento. And I still maintain that Capitol Mall isn't a great location for a highrise, even one properly sized. Any of these projects would do better east of the Capitol, where the liveability factor is much higher.

I see some silver linings to this development though:

1) Construction will probably stop before the skeleton goes up. The hole in the ground with pilings sticking out is ugly, but think what a 20, 30, or 40 story abandoned skeleton would have looked like! Maybe we can salvage a Saca Plaza from this?

2) It's now more likely that a condo tower properly sized for the Sacramento market will be built Downtown, whether it's the Aura or something else. We now know there are 300-500 qualified buyers looking for a highrise home Downtown and they've got no place to go.

3) Hopefully this will knock out the unneeded Intercontinental Hotel, which was doomed to fail, even with an $11 million subsidy. Downtown hotel occupancy only runs about 75% now and Residence Inn and Joie de Vivre will be adding over 400 more rooms within the year.

With the Hyatt, Sheraton, and Embassy Suites those will be more highend rooms than Downtown needs for the foreseeable future, and especially since the Kings are leaving town. The room tax revenues generated by a new Intercontinental would NOT have been additional money for the city; they would just offset declining room tax revenues from other Downtown hotels losing business to the Intercontinental.

===========

Is it possible that Saca could go forward with a single 30 or 40 story tower and no hotel? Or is it two 53-story towers plus hotel or nothing?

every village has its idiot....apparently so does this forum.

kenratboy · #**1049** Posted **Oct 21, 2006, 5:02 AM**

Woohoo! Do I get a hat or something?

tuy · #**1050** Posted **Oct 21, 2006, 5:23 AM**

Phillip · #**1051** Posted **Oct 21, 2006, 5:31 AM**

Brandon,

I don't know how many there are, if it's a dozen or a hundred, but cancelled highrise luxury condos aren't so unusual now, unfortunately, and they're not just in Sacramento.

Declining buyer pool, shrinking home equity available for down payment, tightening credit standards, difficulty selling primary home, rising constuction costs---those are problems in multiple markets now.

The Icon was cancelled in Vegas, returning deposits to 350 buyers, including Reggie Jackson.

Trump Tower Tampa. 52 stories, soon to be the tallest condo on Florida's West Coast, 80% presold with prices from $700,000, and construction came to a half a few weeks ago.

Site clearing and prep were done, paid for by the developer while he tried to line up permanent financing, which never materialized. (Donald Trump licensed his name to Trump Tampa but wasn't the developer.)

More on Icon:

http://www.realestatejournal.com/pro...tml?refresh=on

More on Trump Tower Tampa:

http://www.bizjournals.com/tampabay/...9/daily48.html

Quote:

Originally Posted by brandon12

just wondering if anyone can help me put together a list of high-rise luxury condo towers in the US that have sold more than 375 units (with hard deposits, not soft) before pile driving is finished? I would love to see that list. If there are too many to list, it may be nessary to use multiple posts. So on the count of three, start listing them. By the tone of some of the posts above, there must be THOUSANDS of condo towers in the US that have faired better with HARD DEPOSIT preconstruction sales. Okay, everyone: one, two three! start adding to the list!!!

Phillip · #**1052** Posted **Oct 21, 2006, 5:37 AM**

Quote:

Originally Posted by urban_encounter

One more reason the towers will continue construction?? Cal Pers isn't about to let their $100 million investment sink...

Can CalPers compel Deutsche Bank to issue the additional $375 million needed?

Alternately can something viable and good be built on this site for $100 million?

Phillip · #**1053** Posted **Oct 21, 2006, 7:01 AM**

Quote:

Originally Posted by Sacdelicious

For the record, Phillip, Sacramento's hotel occupancy is WAY above the national average of 66.5%. In fact, we are on par with occupancy of Hawaii at our 'only' 75%, and we have consistently been above SF in rates. Most cities would do anything to have our near consistent rate of 75%. It is rather our room rates that are lagging behind Hawaii and SF. Expect that to change when the IC hotel is built.

Next time, please do some research. It just gets annoying after a while.

I agree with you, Sacdelicious, 75% is a stong hotel occupancy rate. I also agree that Sacramento enjoys one of the highest hotel occupancy rates among major markets in California.

It's possible for a hotel to run profitably with occupancy less than 50%, especially budget or midrange hotels with low fixed costs. When business is slow you just send the maids home early. Luxury hotels need higher occupancy to make money as they have to maintain concierge, 24 hour bellboys, valet parkers, and room service waiters, even if there's just one guest in the hotel.

I don't object to the Intercontinental because it's part of SacaTowers. I don't even object to it because it's getting a subsidy. So far the other subsidized hotels have worked out well for Downtown and probably their subsidies were a wise investment of city funds.

I'm balking over the Intercontinental because there are already 400 new rooms set to open Downtown next year. That's more than a 25% increase in rooms, based on the Sac Convention and Visitor's Bureau estimate of 1,500 hotel rooms Downtown.

And all 400 new rooms will be $175 and up, while the average room rate in Sacramento is only around $95. The Intercontinental will be $200+. That's too much of the same thing in a short time.

Sacramento's downtown hotel market isn't growing 25% per year. Short to medium run the Hyatt and Sheraton are going to take occupancy hits when Res Inn and Joie de Vivre open and it will probably be several years before overall downtown occupancy returns to 75% again.

If Downtown suddenly booms and the two new hotels suceed beyond all expectations then yes, Sacramento might need a third new expensive hotel too. It's too early to know if we need more. Build too many luxury hotels at once and they all end up on Priceline for $65.

What Downtown Sacramento really needs, hotelwise, is a new MIDRANGE hotel near the Convention Center. Something in the $90-$125 range, like a Fairfield Inn, Springhill Suites, Hampton Inn. The low end has Motel 6, the Vagabond Inns, Travleodge and Econolodge. The high end is also well served.

But midrange Downtown is weakest. Out of town convention goers who can't afford a Hyatt or Sheraton are more and more staying at practically new hotels in Elk Grove, Folsom, Natomas (Holiday Inn Express, Springhill Suites, etc) with free breakfast and indoor pools, driving back and forth to the suburbs, rather than spend the same money for a faded Clarion or 50 year old Best Western downtown.

I could even support the city providing a subsidy for a midrange hotel downtown, as that would attract NEW visitors to downtown, people who presently stay in the suburbs because their favored hotel brands are there.

Phillip · #**1054** Posted **Oct 21, 2006, 7:08 AM**

Quote:

Originally Posted by Sakramento

every village has its idiot....apparently so does this forum.

brandon12 · #**1055** Posted **Oct 21, 2006, 7:47 AM**

I'm sorry Phillip, I'm confused. Nowhere in either of the two articles that you cited did anyone mention anything about any condo project that had sold more than 365 units before pile driving had completed. Perhaps you misunderstood. I'm looking for a list of high rise condo projects that have HARD DEPOSITS on more than 365 units before pile driving has completeted. Surely you can find evidence of many!!! C'mon, let's get this list going!
Also, to cite a project in Las Vegas, with 700,000 existing housing units (a lot less than Sac Metro) but with 50,000 proposed luxury condo units is kind of like comparing apples and oranges. but if you can cite a project in vegas that has more than 365 HARD DEPOSITS before it broke down, I'll be happy to add it to my list.
But for the record, so far we have this many projects on the list: 0

Quote:

Originally Posted by Phillip

Brandon,

I don't know how many there are, if it's a dozen or a hundred, but cancelled highrise luxury condos aren't so unusual now, unfortunately, and they're not just in Sacramento.

Declining buyer pool, shrinking home equity available for down payment, tightening credit standards, difficulty selling primary home, rising constuction costs---those are problems in multiple markets now.

The Icon was cancelled in Vegas, returning deposits to 350 buyers, including Reggie Jackson.

Trump Tower Tampa. 52 stories, soon to be the tallest condo on Florida's West Coast, 80% presold with prices from $700,000, and construction came to a half a few weeks ago.

Site clearing and prep were done, paid for by the developer while he tried to line up permanent financing, which never materialized. (Donald Trump licensed his name to Trump Tampa but wasn't the developer.)

More on Icon:

http://www.realestatejournal.com/pro...tml?refresh=on
More on Trump Tower Tampa:

http://www.bizjournals.com/tampabay/...9/daily48.html

creamcityleo79 · #**1056** Posted **Oct 21, 2006, 7:48 AM**

Quote:

Originally Posted by Phillip

Can CalPers compel Deutsche Bank to issue the additional $375 million needed?

Alternately can something viable and good be built on this site for $100 million?

I'm sorry to say. But, you're really an idiot...the examples that you and mechanico(you must be the evil twin!) give are of housing markets that are WAY oversaturated. Sacramento is NOT an oversaturated market. As a matter of fact, the downtown area is an UNTAPPED market. You really are small-minded and have no place on this forum if you really believe that this project is too "big" for Sacramento. You are the internet embodiment of Dan Visnich! Maybe you'll choke on your bow tie and some punk kids from the suburbs will come and beat you with your cane.

brandon12 · #**1057** Posted **Oct 21, 2006, 7:49 AM**

Quote:

Originally Posted by Phillip

Can CalPers compel Deutsche Bank to issue the additional $375 million needed?

Alternately can something viable and good be built on this site for $100 million?

CALPERS can and will do just about anything it wants to. Do you doubt it?

creamcityleo79 · #**1058** Posted **Oct 21, 2006, 7:51 AM**

Quote:

Originally Posted by brandon12

CALPERS can and will do just about anything it wants to. Do you doubt it?

He doubts too much! Just ignore him and he'll go away! You'll get your highrise condo.

brandon12 · #**1059** Posted **Oct 21, 2006, 7:59 AM**

responses in CAPS

Quote:

Originally Posted by Phillip

I agree with you, Sacdelicious, 75% is a stong hotel occupancy rate. I also agree that Sacramento enjoys one of the highest hotel occupancy rates among major markets in California.

It's possible for a hotel to run profitably with occupancy less than 50%, especially budget or midrange hotels with low fixed costs. When business is slow you just send the maids home early. Luxury hotels need higher occupancy to make money as they have to maintain concierge, 24 hour bellboys, valet parkers, and room service waiters, even if there's just one guest in the hotel.

I don't object to the Intercontinental because it's part of SacaTowers. I don't even object to it because it's getting a subsidy. So far the other subsidized hotels have worked out well for Downtown and probably their subsidies were a wise investment of city funds.

I'm balking over the Intercontinental because there are already 400 new rooms set to open Downtown next year. That's more than a 25% increase in rooms, based on the Sac Convention and Visitor's Bureau estimate of 1,500 hotel rooms Downtown.
THEY'RE DIFFERENT PRODUCTS. FOR THE MOST PART, THE INTERCONTINENTAL WILL NOT COMPETE HEAD TO HEAD WITH THE MARRIOT. DO YOU TRAVEL MUCH?
And all 400 new rooms will be $175 and up, while the average room rate in Sacramento is only around $95. The Intercontinental will be $200+. That's too much of the same thing in a short time. TOO MUCH OF THE SAME THING?! WHAT OTHER HOTEL WILL CHARGE $200 PER NIGHT IN SAC? IF YOU CAN'T CITE ANY OTHER HOTELS, THEN THAT MUST MEAN THAT THE INTERCONTINENTAL WILL BE THE FIRST OF ITS KIND IN SAC AND WILL BE THE EXACT OPPOSITE OF "TOO MUCH OF THE SAME THING"

Sacramento's downtown hotel market isn't growing 25% per year. Short to medium run the Hyatt and Sheraton are going to take occupancy hits when Res Inn and Joie de Vivre open and it will probably be several years before overall downtown occupancy returns to 75% again.

If Downtown suddenly booms and the two new hotels suceed beyond all expectations then yes, Sacramento might need a third new expensive hotel too. It's too early to know if we need more. Build too many luxury hotels at once and they all end up on Priceline for $65. REALLY? YOU THINK THE INTERCONTINENTAL WILL BE SELLING ROOMS FOR $65/NIGHT? LET ME KNOW WHEN, AND I'LL BE SURE TO BOOK A FEW ROOMS FOR MY OUT OF TOWN GUESTS.

What Downtown Sacramento really needs, hotelwise, is a new MIDRANGE hotel near the Convention Center. Something in the $90-$125 range, like a Fairfield Inn, Springhill Suites, Hampton Inn. The low end has Motel 6, the Vagabond Inns, Travleodge and Econolodge. The high end is also well served.
DOWNTOWN SAC ALREADY HAS A HOLIDAY INN AND A MARIOTT NEARING COMPLETION. AREN'T THESE "MIDRANGE"?
But midrange Downtown is weakest. Out of town convention goers who can't afford a Hyatt or Sheraton are more and more staying at practically new hotels in Elk Grove, Folsom, Natomas (Holiday Inn Express, Springhill Suites, etc) with free breakfast and indoor pools, driving back and forth to the suburbs, rather than spend the same money for a faded Clarion or 50 year old Best Western downtown.
THAT'S GREAT NEWS FOR THE HOTELS IN EG, FOLSOM & NATOMAS. BUT IT SPEAKS NOTHING OF THE VIABILITY OF A INTERCONTINENTAL DOWNTOWN.
I could even support the city providing a subsidy for a midrange hotel downtown, as that would attract NEW visitors to downtown, people who presently stay in the suburbs because their favored hotel brands are there. THAT'S GREAT, THE MORE THE MARRIER. YOU SHOULD PROPOSE ONE! I SUPPORT NEW HOTELS OF EVERY VARIETY DOWNTOWN. BUT ONCE AGAIN, IT HAS NOTHING TO DO WITH A HOTEL LIKE THE INTERCONTINENTAL. PLEASE TRY TO STAY ON TOPIC

creamcityleo79 · #**1060** Posted **Oct 21, 2006, 8:06 AM**

Phillip, are you from Milwaukee? Because you really sound like a lot of NIMBY's here!