Skyline Towers Santa Ana

J

joe33

New member
Skyline Towers just sold to Essex - an apartment REIT based in Palo Alto. Price was $128 million ($367,000 per unit). Looks like the price was about 55% of the cost to build it - big loss for the lender and all involved. I think the first lender was iStar.

It will be interesting to see how this leases up and what kind of rents they are going to try to get.

Here is the article on the deal:
http://finance.yahoo.com/news/Essex-Property-Trust-Acquires-iw-3174469140.html?x=0

And here is their website which looks like it will have rental information eventually:
http://www.skylineocapts.com/
 
A tip of the hat to you Joe33. Without digging it up on IHB, but from memory, you called that one nearly spot on. Very nice call.
 
[quote author="test"]What about Lennar's Astoria in Central Park West?[/quote]
They are trying to make it look pretty and somewhat occupied by turning on most all of the lights along the 405 side. That's gotta be an expensive electric bill. <!-- s:eek: -->:eek:<!-- s:eek: -->
 
[quote author="graphrix"]A tip of the hat to you Joe33. Without digging it up on IHB, but from memory, you called that one nearly spot on. Very nice call. [/quote]

Thanks Graphrix. Essex had been circling on this one for quite a while. They did a good job of waiting it out and letting the price drift down some. I still think they paid a lot for it though.
 
[quote author="test"]What about Lennar's Astoria in Central Park West?[/quote]

Skyline is an easy conversion to rental because no units have been sold. Once some units have been sold (as has happened at Astoria), the value of it as an apartment building goes way down. Once condo units have been sold, the apartment buyer can no longer get Fannie Mae or Freddie Mac financing.
 
Email from Essex:



Dear xxxxxx,

Welcome to the greatest addition to the OC skyline, Essex Skyline at Mac Arthur Place. the tallest urban residential towers in Orange County. A residence like no other! How you live your life starts with where you live. We are proud to announce that we will offer our new luxury rental homes this April 2010. Essex Skyline at MacArthur Place is a community that captures the energy and diversity of all that is Orange County with a premier location where world renowned shopping and entertainment are moments from your doorstep.. You will be a part of our first VIP tours in April. From Penthouse floor plans to our panoramic collection of suites; all 349 homes exemplify extraordinary living. Each floor plan balances comfort and luxury with unparalleled appointments that enrich each home with understated elegance to compliment the views. This is a home in which you can live with distinction and live inspired.

To compliment the superb floor plans, Essex Skyline's amenities rival all other communities and luxury hotels. You'll enjoy our expansive sun deck with Junior Olympic size pool and spas, first class fitness club, his and hers luxurious spas and resident recreation center with gourmet demonstration kitchen and wine lounge. Not to mention the adjacent 2.5 acre park with lake that neighbors the community as well as Hutton Centre.

We are proud to offer such a unique community and we look forward to welcoming you home to Essex Skyline at MacArthur Place, where the sky is the limit! In the next few weeks one of our leasing associates will contact you for further details regarding your desires and invite you for your own personal tour.

We sincerely look forward to welcoming you to Essex Skyline and sharing the excitement of such a grand community.

Best Wishes,
xxxxxx
<!-- e --><a href="mailto:skyline@essexpropertytrust.com">skyline@essexpropertytrust.com</a><!-- e -->
Essex Property Trust
 
Not surprised at all that those places are eating it now. C'mon, mid/high-rise in the middle of the epitome of suburban America, aka Orange County? Nice try. No one wants to park in a community garage, and carry groceries up 5 flights of stairs or the elevator, if you're forced to drive to the store anyway. And most of these have high to outrageous HOA fees, anywhere from $500 - $1000+ from what I've read, to add insult to injury.

The only way mid/high-rise living will ever truly work in OC is if the developers go all the way, and add walkable business/entertainment within the immediate (within a radius of 1 mile), walkable distance. Other than that, these towers will just remain dark and a reminder of what not to do during a bubble.
 
Hallo, long time lurker, etc.

I used to work over at Hutton center (the office park that these were built in) and when they first started popping up some people went into the sales office to find out details on em.  When they were first being built (good ole 2007) they were saying the lowest floor units (ie the crappiest ones) were going to be something crazy like 600k (and the penthouse was going to be 2.3m or something) .  And the association fees ran between 700 and 1200 (more for the penthouses obviously).    So if you assume these were REALLY worth that much at some point *eyeroll* then hey, this is a STEAL to live in one of these. I do remember the sales girls telling us that they had interest from out of state buyers - like people in New York where those kinds of prices were the norm.  Then again real estate sales people lie so who knows.    I do remember liking the layout (on paper) of one that I saw.

I actually think this area has improved as a place to live since the project was started.  Just on the other side of the 55 you have Diamond Jamboree and the District and a big new apartment/condo complex (Isn't that the one that was ALSO just bought by essex).    Around the corner TIC built a new 'luxury' apartment complex with 700 sqft places listed at 1800/month.    3400 avenue of the arts (more 'luxury' apartments is across from those and then you hit south coast plaza.

So assuming ANY Of these places rent it it seems like it could turn into an expensiveish apartment area.  The single family homes nearby are fairly expensive (600k range I think).  there are still some crappy apartment complexes nearby but I would guess that overall the area is has gone up in terms of 'class' of people who might live there (Whatever that may mean).    I mean, *I* wouldn't pay a premium to live there when I have a sizeable 2br 2ba across from the grocery store for 1500/month like 5 miles away.    But I bet there are plenty of people who will and the Irvine Company and Essex seem pretty sure that there are enough people too.      I'd rather live in these than in the crappy things TIC built, i watched those go up too and they look VERY thin walled and tightly packed....and of course no parking at all.

Whew. Just had to join so I could talk about them since I have been watching them since someone started digging a hole in the ground there.
 
diulei said:
Not surprised at all that those places are eating it now.  C'mon, mid/high-rise in the middle of the epitome of suburban America, aka Orange County?  Nice try.  No one wants to park in a community garage, and carry groceries up 5 flights of stairs or the elevator, if you're forced to drive to the store anyway.  And most of these have high to outrageous HOA fees, anywhere from $500 - $1000+ from what I've read, to add insult to injury.

The only way mid/high-rise living will ever truly work in OC is if the developers go all the way, and add walkable business/entertainment within the immediate (within a radius of 1 mile), walkable distance.  Other than that, these towers will just remain dark and a reminder of what not to do during a bubble.
Click to expand...

A few years back in the middle of the bubble, several high rise condo towers were proposed for the Costa Mesa area next to the Segerstrom concert hall and a couple of blocks away from South Coast Plaza and the commercial area along Bristol...this proximity to a real urban area would make a lot more sense than the existing high rise condos.  In fact if they had built these Costa Mesa high rises first maybe the values would stay stable unlike what happened with the North Korea towers and high rise living would have been more successful.
 
I walked around the pond today at lunch and we went up the stairs to peer into the pool complex here.    Made me wonder if they'd gfleshed out their rental site at all and they have --

You can now see the floorplans with monthly rent prices.
http://skylineocrentals.com/fp/ 

I doubt I'll ever want to pay that kind of mark up in rent for a 2br apartment, but its actually maybe a decent price for the amentities.  The property is certainly really nice.  and the price seems comparable to Astoria if not slightly lower.
 
26inirvine said:
But Essex officials maintain they've got the marketing data to show that there are more than enough residents willing to pay an average of $3,000 a month to rent one of Skyline's 349 units.
Click to expand...


What do you think?  Would you pay 3,000 to live there?



http://www.ocregister.com/articles/skyline-239937-essex-county.html
Click to expand...
Guess the new owners are drinking their own kool-aid with the comment below:

"They originally estimated this would sell for an average of $900,000 a unit," said Jeff Rowerdink, Essex's Southern California acquisitions vice president. "So (tenants) will get a $1 million home without having to pay $1 million."

How about mentioning of how much they would sell for today???  Maybe about 30-40% of that?
 
I have a hard time judging how much they would sell for because of the insanely high HOAs they were projecting at the time.    I mean, that wasn't just a 900,000 dollar asking price, it was a 900,000 dollar asking price wiht an 800 dollar a month HOA.  How do you price that?  In terms of affordability it makes the price more like, what? a 1 million dollar place?  Could be as much as 50% off peak.   
 
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