Entries from December 2006 ↓

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The New York Times Charles V. Bagli has an outstanding article on the genesis of the largest residential real estate deal of our time, the sale of Peter Cooper Village and Stuyvesant Town by MetLife to Tishman Speyer Properties. The deal was contested for by over 100 bidders and sold for 5.4 billion dollars. When the deposit is 400 million, you know you are talking some serious coin.

On the phone was Darcy A. Stacom, the broker handling the multibillion-dollar sale of two huge, adjacent Manhattan tracts — Stuyvesant Town and Peter Cooper Village — for the properties’ owner, Metropolitan Life Insurance. Ms. Stacom asked Mr. Speyer to hustle eight blocks south from his Fifth Avenue conference room to a skyscraper on 45th Street, telling him to bring along representatives of his partner, BlackRock Inc., and his bankers and lawyers. She also cautioned him that they should arrive in groups of two, not en masse, to avoid any unwanted attention — there were eight other potential buyers waiting for the same phone call that Mr. Speyer had just received.

Mr. Speyer’s team and MetLife then wrestled through the night over the terms of a possible sale, with an occasional round of five-card stud during the lulls. A bleary-eyed Mr. Speyer finally signed the documents at about 9:30 the next morning, plunking down a $400 million deposit on what would be the biggest real estate deal of all time: the $5.4 billion purchase of 80 acres of prime Manhattan land that included 110 buildings and 11,232 apartments. NYT

In India. Sorry, but I saw the headline and could not resist.

The booming real estate market will gain momentum and is likely to attract foreign investment worth Rs 8,000 crore in 2007, an Assocham study has said.

“The real estate boom of 2006 is set to multiply itself in 2007 to get India a foreign capital of over Rs 8,000 crore with leading international investors establishing their presence in the rewarding real estate development,” the industry body said in a statement.  via The Economic Times.

Ah, the greed of a developer and the threat of new laws aimed at stopping them. The St. Louis Redevelopment Agency in its eagerness to avoid following the legistlatures decision, rushed an eminent domain takeover lawsuit to remove property from a Wheel Chair Bound senior citizen who has a long term lease on a property the city wants to turn into an entertainment district.

The legislature passed a new more restrictive eminent domain law to stop such aggressive and enriching taking by development agencies, but the law does not go into effect until December 31st, 2006. So instead of following typical proceedure, some greedy and unethical bureaucrat decides to file the lawsuit to start the process before the law takes effect.

So instead the city is going to have a big black eye as it tries to take the property from an elderly woman, who leases it from a church. Does the city of St. Louis have no shame? All to avoid a more restictive law passed by the legislature they will aggresively sue an old lady.

The suit, filed in St. Louis Circuit Court, says the city’s Land Clearance for Redevelopment Authority has been unable to agree on a price for 1119-1127 South Broadway, owned by the Convent of the Sacred Heart.

The land and buildings have been leased for no rent to Salvatore and Mabel Inserra for a 999-year term, according to an appraisal supplied by the Inserras’ lawyer, Francis X. Duda.

The Inserras have leased the 13,660-square-foot property since at least the early 1980s. Salvatore Inserra, a longtime Soulard Market produce seller, died at work in 1985 at age 60.

The suit also names property owners from centuries ago and their heirs, including John Mullanphy, said to be St. Louis’ first millionaire, a nun and “Philipini Duchesne.” The suit appears to be referring to St. Rose Phillipine Duchesne, who founded a school for the Society of the Sacred Heart of Jesus in a cabin in St. Charles in 1818, according to the Vatican. She died in 1852 and was canonized in 1988.

While one may disagree that the ranch house is one of the great architectural achievements of the 20th century in America, I do, an interesting article in the Washington Post talks about the influence of future building styles that was created by the ranch house.

The ranch house is ubiquitous in surburban America. It does come in many styles and flavors, but the homes never have done much for me. I have been fortunate to have gone upstairs for bed my whole life excluding the apartment years. However, it is a predominant style of architecture in the country, and this is an interesting read on the genesis of the ranch home in America.

A small number of architects working in California and the Southwest during the 1920s and ’30s designed the first suburban ranch-style houses. These were based on the simple, one-story houses built by ranchers who lived in the harsh climate of the plains and mountains of the West. For young architects seeking forms that were defined by their function and not layers of Victorian bric-a-brac or the Colonial-style treatments popular in the East, the ranchers’ houses had particular appeal.
The architects also admired the way the casual lifestyle of ranch families was reflected in their houses. All the rooms opened onto a shaded veranda, which functioned as a hallway and as an important living area for much of the year.
On their drawing boards, the young architects re-created the solitude of the vast prairies by arraying the living and dining areas around a private back yard from which no neighbors could be seen. Even more startling to the homeowners of the time was the way some of these designers merged indoor and outdoor spaces. Drawing on the work of Frank Lloyd Wright, they used multiple windows and French doors on the walls that faced the landscaped back yard, an innovation that made the outdoor area appear to be part of the indoor living space.
Another Wrightism was using the same space for multiple functions, as in a living-dining room or an eat-in kitchen. Placing the bedrooms in the front of the house was also unusual.

Read the rest at the washingtonpost.com.

Not completely, but Boston’s famous Hancock Tower was sold to a New York company, Broadway Real Estate Partners, as part of a 1.3 billion dollar deal. If I was a Boston native, and a Red Sox fan, I would be less than thrilled to have New Yorkers owning their landmark building.

Beacon Capital Partners selling to Broadway Real Estate Partners. What next, Stienbrenner buying the Red Sox? The Horror, The Horror…

Broadway Real Estate Partners has purchased the John Hancock Tower from Beacon Capital Partners.
The 790-foot-tall, 60-story glass tower in the Back Bay was designed by architect I.M. Pei and completed in 1976.
The reported one-point-three (b) billion dollar deal also included two smaller properties: The old Hancock tower at 200 Berkeley Street and a building a 197 Clarendon Street. Broadway Partners then re-sold those properties to Manulife Financial — the parent company of John Hancock Financial Services — for 454 (m) million dollars. via Eyewitness News

An interesting article in the AP discusses the difficulties in selling churches after the congregation declines or the demographics of an area change. The balance of getting the right price and having the buyer use the building for purposes that the church deems acceptable are a tough balance. In a younger day I went to the Limelight in Manhattan, a night club that was housed in an old church. Even in those days it was not the most comforting place to have a cocktail.

Now churches are fighting the battle of how to sell and who to sell to.

Population shifts, declining Mass attendance and a shortage of priests in many areas have forced Roman Catholic leaders to consolidate parishes and sell off churches.
But selling a house of worship is no easy task. Pastors must placate parishioners upset by the sale and find a buyer who will respect the building’s history.
On the market
Parishioners in Pittsburgh were riled in 1996 when the former St. John the Baptist Church became The Church Brew Works, a restaurant that brews beer near where an altar once stood.
“The issue wasn’t the beer,” said Ronald P. Lengwin, spokesman for the Catholic Diocese of Pittsburgh. “The issue was that we were told by the parish all sacred items had been removed before the sale. We found out later they had not been removed.”
Two of 216 Catholic churches in the Diocese of Milwaukee are on the market. Eight have been sold since 2000. Three of 134 Catholic churches in the Diocese of Madison are for sale after parishes merged, according to Brent King, spokesman for the Madison diocese.
Churches nationwide are undergoing similar changes. The Catholic Archdiocese of Boston put 60 churches up for sale in 2004, many of which were converted into condominiums. The North Indiana Conference of the United Methodist Church in Marion, Ind., has sold 30 churches in the past 14 years.
Most churches are sold to other denominations with growing membership. But in some cases, religious leaders have been forced to seek buyers in the commercial market. St. Stephen Catholic Church in Milwaukee, built in 1847, sits about a mile from the Milwaukee airport and faces an adult lounge and a parking lot.  via the Herald News

If you are a real estate agent, one of the growing demographics is the Hispanic housing market. Recent reports from DataQuick have show the growth in housing purchases by those with Hispanic surnames has grown dramatically in the past few years. While I am not saying enroll in a Spanish language course tomorrow, recent signs on immigration policy point to a large group of previously illegal aliens being granted legal status. Once that occurs, the next step for many of them will be the entry into the housing market as buyers.

You do the math.

The number of Hispanics buying houses across the country is growing rapidly. DataQuick, a San Diego real estate information company, scoured public records from 2005 in 37 states and found 14.6 percent of all homebuyers had Hispanic surnames, compared with 10.3 percent five years earlier. “The one group of people that are continually buying homes is the Latino community,” said Migdalia Norat, a spokeswoman for the National Association of Hispanic Real Estate Professionals. “One out of every four homebuyers in the U.S. is Latino.”

At a time when the overall real estate market has grown sluggish, many in the real estate world are looking at the Hispanic home-buying market as a future source of growth. Nationally, the Hispanic home ownership rate has risen 21 percent in the past decade but still has room to grow, Norat said. Experts estimate that Hispanic homebuyers will represent 40 percent of first-time homebuyers by 2012.

Currently, 49 percent of Hispanics are homeowners — well below the national average of 72 percent, according to figures provided by the Institute for Latino Studies at the University of Notre Dame.  via THE NEWARK STAR-LEDGER

The greed of local governments as the tax money was rolling in knew no bounds. While professing to keep taxes down, the rising property values filled the coffers of local governments and their spending increased proportionally. Now as property values are not increasing and sales slow further reducing the transfer tax revenue, these same city governments warn of cutting “essential services”.

Of course these government officials will not cut back on the pork ridden programs they have created. Instead they will raise taxes putting a further burden on the homeowners who face a market that has very little upward pressure.

”Are we worried about whether we’re going to have to raise taxes?” Pembroke Pines Commissioner Angelo Castillo said. “You betcha.”

The amounts of new construction and commercial development are the biggest predictors of future city budgets, experts say, along with leaders’ decisions during the boom years.

A rising real estate market basically allows officials to take in tons of money without having to increase the tax rate. ”That’s the cheapest way to grow a government,” said Robert Lang, director of the Metropolitan Institute at Virginia Tech in Alexandria, Va., which studies metropolitan growth and development. “It’s like found money.”

The trouble is, some cities made financial commitments during boom times that they may be hard-pressed to keep when times get tough.

PLANNING FOR FUTURE

In South Florida, many cities have decided to spend their surplus on, among other things, more generous pension programs for employees, especially the police and firefighters whose influential unions help keep city commissioners in office.

In Pembroke Pines, for instance, the city borrowed a total of more than $90 million in 2003 and 2004 to pay for improved pensions, which will allow uniformed employees to retire after 20 years on 80 percent of their working salaries.

By 2007, the annual debt payments for the loans were expected to reach $6.7 million, according to the city finance department. Pensions also were a major issue in Hollywood’s budget talks this year, with the city expecting to spend about $17 million in interest on its unfunded liability for pensions in 2007. via the Miami Herald

Merry Christmas!

While the world tends to only report that bad, I found this wonderful story about a town rallying around a family who lost their house in a fire three weeks ago. Now they have new home and a new life.

Angels descended on Ken and Jodi Gardner’s piece of paradise last weekend, clad in Carhartt coveralls and tool belts.

They came to build not just a house but a home, to replace what the Gardner family lost three weeks ago in a fire.

The old-fashioned house-raising began at 7:30 a.m. last Friday. By noon, around 50 people were cutting lumber, setting beams and standing interior walls.

Amid the humming generators, buzzing saws and the THWACK! of nail guns, the volunteer construction crews scurried about like a fast-forward version of the popular television show “Extreme Makeover: Home Edition.”

By noon Monday, after about 40 hours of work, the walls were painted, the interior doors were hung and the floors were being swept in anticipation of the arrival of the first load of furniture.

“We have beds with drawers underneath them for the kids, and a crib that somebody got for their little girl and she never even slept in it,” Jodi Gardner said with a shy smile, an air of disbelief still hanging around her. “I had four couches to choose from — people donated 11, and not one was orange flowered. Somebody donated an oak table that seats six, and someone else donated six oak chairs.”  via the Helena Independent Record.