Nexus Cos. Skyline at Macarthur Place website disappears but towers remain

[quote author="no_vaseline" date=1225245275][quote author="Joe33" date=1225238516]Another project with no good way out.</blockquote>


Yes there is. Bankrupcy court. Done.</blockquote>


The only problem with that is that by all accounts Nexus is (or was) very successful in the commercial arena. I suspect that they wouldn't want the whole company dragged down by their first residential project.
 
[quote author="bkshopr" date=1225241284]During the 50's and 60's many well known architects designed beautiful highrise residential buildings. Yamasaki the architect of the Twin World Trade Towers designed multistories in St. Louis and Eichler built the twin towers in South SF were initially targeted the rich but recession changed the destiny of the "projects". The luxury towers became a real project instead after renters moved in and trashed the place. After some 28 years both places were plagued with so much crime the government condemned the structures and had them torn down.</blockquote>


We went and toured the model awhile back. I think the way they were trying to avoid becoming "a Santa Ana project" was to "luxurize" the crap out of the units with high end tile, faucets, cabinets, etc. My guess is that their theory was if they make it high end enough, it will attract high end people. I would be curious to know what their market studies revealed.
 
[quote author="usctrojanman29" date=1225280337][quote author="Shooby" date=1225242040]One person with inside information told my friend that these properties are now bank owned, and it is still being determined what will be done with them since selling them seems to be out of the question.</blockquote>
Bank owned? I'd be curious who has the keys since the lender is out of business as is the equity/mezz partner. haha The reality is that they had to complete the construction of the towers because that would result in the highest possible value for the owner.</blockquote>


Didn't they have to complete the towers (external) to comply with safety codes and regs? I mean you can't leave a structure half built for safety reasons, in addition to the fact it will make the city look like crap even more.
 
They seemed like very nice looking buildings. They're just 100% overpriced is all. If Nexus is healthy enough to unload it at a big loss now, it seems like that would make more sense than trying to wait it out and making things worse. It just doesn't work for you to be able to buy a newer low-rise unit (I'm thinking Vantage across the street here) for far less. What is the value proposition here, really?
 
[quote author="JLegend" date=1225287810][quote author="usctrojanman29" date=1225280337][quote author="Shooby" date=1225242040]One person with inside information told my friend that these properties are now bank owned, and it is still being determined what will be done with them since selling them seems to be out of the question.</blockquote>
Bank owned? I'd be curious who has the keys since the lender is out of business as is the equity/mezz partner. haha The reality is that they had to complete the construction of the towers because that would result in the highest possible value for the owner.</blockquote>


Didn't they have to complete the towers (external) to comply with safety codes and regs? I mean you can't leave a structure half built for safety reasons, in addition to the fact it will make the city look like crap even more.</blockquote>
Another reason why they completed it was because there was only a completion guarantee and no repayment guarantee, so for Nexus to wiggle off the hook they need to complete the construction (ahh, the benefits of a non-recourse loan...that's the kind of garbage Fremont did in the good old days). I'm sure that the city would fine the crap out of whoever owned the property if it wasn't completed.
 
[quote author="bkshopr" date=1225264275]Learn from the expert. There is no residential highrise on the Irvine Ranch. This building type does not make sense for the financial model in OC. If it made sense then wouldn't you think TIC would be all over it ? All builders follow the wave of TIC and the ripple effect influence neighboring states like Nevada, Arizona and Colorado. The risk takers strayed from the formula are getting themselves into big trouble.



Every 2 months Kevin Pheiffer who conducts model home tours takes homebuilders from across the country to tour Irvine Ranch model homes. Architects and builders from the western states maintain a satellite firm in OC just to keep up with latest trade secrets and prototypes. This is the reason why homes in the neighboring states look like a real bad knock off of OC homes.



<strong>Tuscan and Santa Barbara architecture is now in Utah, Idaho, Colorado, Montana, Arizona, Las Vegas and the Tuscan plague is spreading in Dubai, Beijing, Shanghai, Indonesia, Seria, India and Algeria. Oversea commissions are keeping the OC architectural firms alive and OC architects are spreading their favorite Tuscan disease. Eamar who bought John Laing Homes is promoting OC style in the middle east.</strong></blockquote>


This is a scourge that needs to end. I was hoping that homebuyers in different locales had better taste than the vapid populace of Orange County.
 
[quote author="OC Zed" date=1225337384][quote author="bkshopr" date=1225264275]Learn from the expert. There is no residential highrise on the Irvine Ranch. This building type does not make sense for the financial model in OC. If it made sense then wouldn't you think TIC would be all over it ? All builders follow the wave of TIC and the ripple effect influence neighboring states like Nevada, Arizona and Colorado. The risk takers strayed from the formula are getting themselves into big trouble.



Every 2 months Kevin Pheiffer who conducts model home tours takes homebuilders from across the country to tour Irvine Ranch model homes. Architects and builders from the western states maintain a satellite firm in OC just to keep up with latest trade secrets and prototypes. This is the reason why homes in the neighboring states look like a real bad knock off of OC homes.



<strong>Tuscan and Santa Barbara architecture is now in Utah, Idaho, Colorado, Montana, Arizona, Las Vegas and the Tuscan plague is spreading in Dubai, Beijing, Shanghai, Indonesia, Seria, India and Algeria. Oversea commissions are keeping the OC architectural firms alive and OC architects are spreading their favorite Tuscan disease. Eamar who bought John Laing Homes is promoting OC style in the middle east.</strong></blockquote>


This is a scourge that needs to end. I was hoping that homebuyers in different locales had better taste than the vapid populace of Orange County.</blockquote>


I was hoping the new Dubai owners of John Laing Homes would bring some of their innovative Dubai design to the OC:



<img src="http://hawtaction.com/2008/06/16/DubaiTowers2.jpg" alt="" />
 
That's pretty, but it won't get built. Half the stuff now under construction in Dubai won't get built, and 90% of the stuff proposed for Dubai won't ever get started.



Did anyone else read the Wall Street Journal on the Dubai market earlier this week? (Monday I think?). Basically the Dubai RE market is imploding, and capital has been sucked dry as the desert sand just outside of town due to the global credit freeze. The speculators in Dubai who were buying all the condo units the last five years have been cut off, and everyone is selling in panic mode right now. It appears as though Dubai is currently where OC was about the Summer of '07. The luxury housing planned or built for Dubai is heading off the cliff of course, but now all of the high rise commercial projects are also freezing up and all of the speculative tenants are disappearing. The Middle East banks are also going insolvent, and just last week the Saudis and other Gulf governments have had to step in with tens of Billions and stop a couple of large Gulf banks from collapsing. The crashing price of oil has also added to the panicked mood in Dubai's financial houses and banks.



This has been lost a bit here with our news cycle already maxed out on our own economic issues and the election, but it's happening very suddenly over in the Gulf. And Dubai is the epicenter of it.



As for OC, I wonder how Santa Ana will handle the security of these Skyline towers if they remain vacant and lifeless for much longer. Who is responsible for keeping the vagrants out? The same issue has to arrive eventually down the freeway at the Astoria twin towers and the adjacent Central Park West midrises owned and mothballed by Lennar. <strong>How long do these towers and complexes remain vacant without attracting crime and vagrancy?</strong>
 
[quote author="MightyAlweg" date=1225364231]Did anyone else read the Wall Street Journal on the Dubai market earlier this week? (Monday I think?).</blockquote>


I read this one, <a href="http://online.wsj.com/article/SB122501263428669773.html">Financial Storm Hits Gulf</a>. I also found this one, <a href="http://blogs.wsj.com/economics/2008/10/27/real-estate-agents-dubai-boom-is-ending/">RE agents in Dubai whine and bitch just like all agents during a down turn</a>.
 
I walk by those towers everyday. There are a few contractors left finishing up some landscaping, etc... The area is surrounded by commercial businesses during the day. It is dead at night.
 
[quote author="S_man" date=1225571976]I walk by those towers everyday. There are a few contractors left finishing up some landscaping, etc... The area is surrounded by commercial businesses during the day. It is dead at night.</blockquote>


But there's a FedEx/Kinkos within walking distance that stays open late if you are looking for that hip, urban streetscape OC lifestyle.



I mean really, the location of the Skyline towers has it all. You can dine on your deck 20 stories above the 55 Freeway with a view of a 1980's business park and light industrial zone, then take a stroll after dinner and have some color copies made. If you are in the mood for romance, you could even have them collated and stapled.



And just a block away on MacArthur is an Arco station with a mini-mart, when you are ready for dessert. Hip! Urban! Highrise! OC!
 
[quote author="MightyAlweg" date=1225623139][quote author="S_man" date=1225571976]I walk by those towers everyday. There are a few contractors left finishing up some landscaping, etc... The area is surrounded by commercial businesses during the day. It is dead at night.</blockquote>


But there's a FedEx/Kinkos within walking distance that stays open late if you are looking for that hip, urban streetscape OC lifestyle.



I mean really, the location of the Skyline towers has it all. You can dine on your deck 20 stories above the 55 Freeway with a view of a 1980's business park and light industrial zone, then take a stroll after dinner and have some color copies made. If you are in the mood for romance, you could even have them collated and stapled.



And just a block away on MacArthur is an Arco station with a mini-mart, when you are ready for dessert. Hip! Urban! Highrise! OC!</blockquote>


The only problem with the ARCO on the corner is that it went out of business months ago and has a chain link fence around it. But heck, you could go check out all of the campaign signs plastered on that fence after your urban weekend experience, I'm sure they'll be there for months.
 
For those interested in this project, I heard from 2 sources today that a buyer is in escrow to purchase the note on this property from the lender. The buyer is a large, insitutional apartment investor that intends to convert the property to apartments.



I don't know a price, but the fact that it is a note purchase with a subsequent foreclosure means that any equity is wiped out.
 
I live across the street in Bre Properties Pinnacle at MacArthur Place. My wife and I have been waiting for a few years to buy and we're glad we waited. Honestly, there isn't anywhere we felt compelled to buy and it seems that every development has as many cons as pros. We wanted something modern, versatile, and little to no HOA fees. We looked at the following over the years:



Santiago Lofts - Pros: Near train station, low price, good potential with Renaissance Project, not too far from work, live/work

Cons: Risky since project is not promised, build quality, traffic to work is bad.

Depot Walk - Pros: Green homes, solar panels, nice build quality, rooftop patios, affordable, cute neighborhood.

Cons: Nearby industrial buildings are loud, traffic to work is bad, high HOA

SOCO Walk - Pros: Good build quality, affordable

Cons: Too far from work

City Place - Pros: Lots of room, nicely built with acceptable designs, low HOA

Cons: Horrible exterior paint scheme (Parks look like a college dorm), unknown success of development, traffic to work is bad.



So anyways, I was thinking all the live/work/retail needs foot traffic and the South Coast Plaza area would be the perfect place for this. If Skyline changes to a low HOA, practical designed, and bustling community, I'd love it. My wife works off of Main and Jamboree and our current location is perfect. The 405 and 55 has no traffic down this stretch and we can always take Main. Takes 5 minutes on a good day, 15 minutes on a bad, and 10 minutes on average. I hope the current housing market situation will get developers to start thinking what's desirable, marketable, and most of all practical. It's almost like GM and Ford has infected the business model of home developers. If they would stop taking shortcuts, stop making bad designs, and build things that integrate society, they won't have any trouble selling their products.
 
[quote author="Joe33" date=1226658354]For those interested in this project, I heard from 2 sources today that a buyer is in escrow to purchase the note on this property from the lender. The buyer is a large, insitutional apartment investor that intends to convert the property to apartments.



I don't know a price, but the fact that it is a note purchase with a subsequent foreclosure means that any equity is wiped out.</blockquote>


Fascinating. And not surprising. Thanks for the update!



I wonder what this means for Nexus Cos. then? Can they take this big of a hit? I still miss the hilariously funny old Skyline website with Nexus Cos. CEO Curt Olson on video with Mr. Olson in the gauzy white linen shirt shot at trendy camera angles while he talked about how "<em><strong>Skyline epitomizes the luxury OC lifestyle</strong></em>". You just couldn't find better entertainment than some of those highrise condo websites of 2005-08.



So, Skyline becomes overpriced apartments they will struggle to rent for the next three or four years. Now what happens to the Astoria twin towers just up the 405?
 
[quote author="no_vaseline" date=1226670259]Thx Joe.



You hear that Graph? BK was right. I owe both you fools a drink.</blockquote>


Cool! Drinks on no_vas. You can thank Sheila Bair and buy her one, er 12 too. Since IndyMac was the first lender, and Lehman and the PE group were mezzanine lenders, well... she prolly told them to go pound sand and the FDIC is gonna take what we can get for this Kool-Aid induced disaster.
 
[quote author="Joe33" date=1226658354]For those interested in this project, I heard from 2 sources today that a buyer is in escrow to purchase the note on this property from the lender. The buyer is a large, insitutional apartment investor that intends to convert the property to apartments.



I don't know a price, but the fact that it is a note purchase with a subsequent foreclosure means that any equity is wiped out.</blockquote>




If you find out the price, I would love to see how the numbers work as a rental.



High operating costs, not that many units to spread them over, and not the best location. How much can they pay and still break even in the short term?
 
[quote author="freedomCM" date=1226680538][quote author="Joe33" date=1226658354]For those interested in this project, I heard from 2 sources today that a buyer is in escrow to purchase the note on this property from the lender. The buyer is a large, insitutional apartment investor that intends to convert the property to apartments.



I don't know a price, but the fact that it is a note purchase with a subsequent foreclosure means that any equity is wiped out.</blockquote>




If you find out the price, I would love to see how the numbers work as a rental.



High operating costs, not that many units to spread them over, and not the best location. How much can they pay and still break even in the short term?</blockquote>


I don't know, and this is just speculation, but don't be suprised to read something along the lines of:



"Because they bought it for 25 cents on the dollar of the construction costs, and got the lot for free."
 
[quote author="no_vaseline" date=1226670259]Thx Joe.



You hear that Graph? BK was right. I owe both you fools a drink.</blockquote>


I wouldn't go and pay off any bets yet. It is in escrow, the buyer has some due diligence period. With the economic/financial uncertainty, about 60% to 70% of transactions that have gone into escrow in the last 6 months have not ended up closing.



As for price, I have no idea. The lender was insisting that they would only sell the note at par, but who knows what they really did. Right now is just the starting price too. In this market, the starting price and the closing price have been very different.



As for cash flow, the average unit at the property will probably generate at least $30,000 a year in revenue. Expenses will probably be about $10,000 per unit per year. So $20,000 per year in income. They will certainly have negative cash flow for a period of time while they lease up, but this is a deep pocketed buyer that can carry the negative cash flow for a period of time. I am sure they would just capitalize the negative carry and include it as part of their basis.
 
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