Anyone been watching the Towering Inferno at Marquee Place?

NEW -> Contingent Buyer Assistance Program
Many investors bought in the Marquee with flipping in mind, because there was no one year occupancy/holding rule put in place by the builder. Also, buyers had the perception that their unit would increase in value from the time of purchase until the time of close of escrow (often, way more than a year. Reality was that the purchase price was inflated, IMO. I think any visit to the sales office, would have allowed people to predict what happened at the Marquee. I visited a few times out of curiosity, only, and all potential buyers were talking about was buying the units as an investment/flip. At one point, there were over 100 units for sale in there. Leasing a unit would definately create a huge negative cash flow.
 
There are people who have commented on this site that they are renters in that building for around $2200 a month. Do the math, after HOA (1200) Mortgage, taxes , insurance someone is getting hosed
 
so what will happen? I always thought it would be silly for someone to pay a premium for high rise living in a place like orange county.



But if I could pick on up 10 or 15% less then a comparable detached traditional place, i'd think about it since i'm young and single....



Now what I don't understand is, obviously the 'land' is cheaper per unit compared to a traditional condo complex. So why are they hurting so bad? Does high rise construction really cost orders of magnitude more then land+normal construction?
 
Yes, the construction cost is killer compared to an SFR or two level condo. Those big cranes do not come cheap, and the person operating it doesn't either. I haven't seen the actual numbers, but I was told by a very good source, that the company I worked for paid about $150 a sqft. for a home, and their hi-rise project was over $300 a sqft. This was in SD, and they got hosed on it, and yet other builders keep building there. Steel keeps going up in price, just look at the projects in Costa Mesa, and see how much steel is being used. Ouch...





Hi-density = affordable product alternative. Hi-density + premium = money loser.
 
<p><em>In the last real estate cycle there was a luxury tower on Long Beach, on the water on Ocean that was owned by big Japanese outfit. When the market crashed they literally closed the building, refunded deposits and sat on an empty building till around 1997 when the market stabalized a bit. They then opend it for sale and sold out in a year or two.</em></p>

<p>Morekaos, The building is called The Pacific at 850 E. Ocean Blvd in Long Beach. I owned a unit there for a couple of years. You are correct that it sat empty for about 4 years. Places that sold in 1997 for 250K, sold in late 2005/early 2006 for close to a mill. Heck, my little place orginally sold for 80K. I bought for 315K in 2003 and sold for 515K in 2005. So I guess it all worked out...but it's direct oceanfront property. It's a beautiful building....but I'm guessing the units there will drop 50% in price once this whole things shakes out. </p>
 
<p>Thanks Troop,</p>

<p> I was too lazy to look up the address last night. Like I said though, If you have some deep and patient pockets you may survive this to fight another day. Ask the Japanese that pulled that one off. I just don't think most builders in OC have that kind of patience and money in the bank.</p>
 
<p>Kaos, </p>

<p> No, most people in the US don't have that kind of patience. Our whole system is set up to think quarterly.... someone with a little patience might be able to pull it off.</p>

<p>Besides anybody who thinks a real estate investment is short term is taking an awfully big risk. Anyway, good luck</p>

<p>-bix</p>
 
Not only are construction costs over 4 times to build hi-rise psf (80 vs 450), hoa management comes at a premium too due to insurance and specialized building maintenance. To top it off, in Astoria's case which is in a master plan, a Master HOA must be paid in addition to the community HOA.
 
Troop a lot of those units in that building are still askind 8-900K. I saw 4 for sale on zillow listings. That is is bonus building though and pretty high end for the LBC.
 
morekaos, It defines luxury in the LBZ. It's oceanfront. It demands a premium because of these things. However, those WTF priced units have been sitting for some time, and will continue to do so until they drop to around 650K. Then some will sell.....
 
On my daily drive down the 405. Noticed the big banner for "Astoria Sales" is no longer up on the freeway side. Either the wind blew it off or Lennar and the JV are no longer activly attempting sales. So the comments earlier in this thread that they are trying to sell it off as an "Apartment Complex" may have merit. I wonder if they got any bites in the presales period ? Going to guess nada.
 
So do most of you knowledgable RE folk think these buildings will sit empty for years, opposed to selling them to the public for hundreds of square feet less?
 
<p><em>In the last real estate cycle there was a luxury tower on Long Beach, on the water on Ocean that was owned by big Japanese outfit. When the market crashed they literally closed the building, refunded deposits and sat on an empty building till around 1997 when the market stabalized a bit. They then opend it for sale and sold out in a year or two.</em></p>

<p>Was it 850 E. Ocean? This sounds like 525 E. Seaside, Harbor Place Tower. Built by a Japanese company and was held until 1989. I assume you meant 1987 not 1997.</p>
 
If I recall right it was 850 E Ocean. I drove by it for years when it was empty in the 90s. Still there as far as I saw today when I drove by it twice.
 
<p>morekaos, The Pacific 850 E. Ocean is on the corner of Ocean and Alamitos, next to The Villa Riviera. I'm sure we're thinking of the same building...copper awning. Yes, was originally owned by a Japanese developer. </p>

<p>optimus....who knows, 525 E. Seaside might have done the same thing. It doubt it was the same developer though b/c Seaside is a POS in my opinion....but certainly could have been another Japanese outfit.</p>

<p>On a side note, I keep getting emails from the new dual condo towers called "West Ocean" (across from the courthouse). They're hurting for sales...that looks like a nice project.</p>

<p>Aqua is getting creamed with foreclosures ! Great location though. If they drop enough, I might consider one...but would have to rip out all the cabinetry and put in something with a little more quality. I'd take a hard look at their reserves though...I bet they're running short b/c the foreclosees aren't paying their dues....</p>
 
<p>Thanks Troop I knew I wasn't going totally crazy. I agree. I have also watched Irwin Alans projects in the LBC go up in flames and have been waiting to see what would be left. I actually live in LB on Naples Island now. ( Sorry Irvine I still keep an eye on things in my old hood though)</p>
 
Hello to all,



I would like to clarify the reason for the removal of the"for sell" sign. We did not go through the correct channels to get the City of Irvine approval. As some of you "insiders" may know, the penalty and fines are quite steep. We are hoping to get the sign back up once we get the approval from the proper authorities in Irvine.



Also, we ARE selling our homes at Astoria and I can state that as the most accurate "inside" information available here on this blog site. By the way, our sales center hours are 10 to 5, 7 days per week. We are looking forward to meeting all of you.



Cordially,



Mia Will

Sales Manager

Astoria at Central Park West

2500 Michelson Suite 100

Irvine, CA 92612

949-751-0250
 
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