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

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[quote author="freedomCM" date=1232595000]do you know how the townhouses at the NE corner of macarthur and main are doing? every once in a while, i see adds on CL for a rental or on the mls for a sale.



they seem nice, and went for $500k plus back in the day. but i wonder how far/fast they will fall.</blockquote>


I'm currently living at Bre Properties Pinnacle at MacArthur Place (renewed lease till 11/09). We share the amenities with the townhouse folk (Vantage), but we don't pay the $297/month HOA. While this is the closest I've ever lived to a freeway, I'm finding it more convenient than anything (I grew up in Huntington Harbor and had to drive past 13 traffic signals to hit the 405). My wife and I have been watching the Vantage homes drop from the low 400s to low-mid 300s. A friend of ours in 2004 considered buying one when the asking price was in the high 400s, we're both glad they bought elsewhere. I'm not sure where we're going to buy, but fiscally I'm hoping to purchase before 2010. I have yet to take a tour of the properties, but here's my pro and con list:



Pro:

Quick access to fwy and carpool access

Low price for first home



Con:

Freeway and air traffic pollution

Market price will likely drop another 25%

$300 HOA is a bit high

3-levels means quite a lot of stairs
 
[quote author="freedomCM" date=1232595000]do you know how the townhouses at the NE corner of macarthur and main are doing? every once in a while, i see adds on CL for a rental or on the mls for a sale.



they seem nice, and went for $500k plus back in the day. but i wonder how far/fast they will fall.</blockquote>




I work in that area. Seems to me that most are rentals now and slum rentals at that. Even 8 years ago when I was in transition from one house to another and looking to rent, several of these were available. I drove in the complex and drove right out, didn't even stop to cancel the appointment, I knew it was a waste of time. I see signs in the front, something about rent to own (blah, blah, blah) when I'm on my way to Trader Joe's after work.
 
I also work in the area. There were originally supposed to be 3, 25-story towers. The third was supposed to be across the street (Hutton Centre) from the food court. Also another developer was supposed to build an 18-story high rise and an 8 story town home complex across MacArthur next ot that huge parking lot.
 
[quote author="tmare" date=1232630990][quote author="freedomCM" date=1232595000]do you know how the townhouses at the NE corner of macarthur and main are doing? every once in a while, i see adds on CL for a rental or on the mls for a sale.



they seem nice, and went for $500k plus back in the day. but i wonder how far/fast they will fall.</blockquote>




I work in that area. Seems to me that most are rentals now and slum rentals at that. Even 8 years ago when I was in transition from one house to another and looking to rent, several of these were available. I drove in the complex and drove right out, didn't even stop to cancel the appointment, I knew it was a waste of time. I see signs in the front, something about rent to own (blah, blah, blah) when I'm on my way to Trader Joe's after work.</blockquote>


You know what, I'm sorry, I was thinking of a different location. Aren't the ones you are talking about all rentals, I'm very confused about what this is you are talking about.
 
[quote author="bkshopr" date=1225241284][quote author="Joe33" date=1225238516]Another project with no good way out. They can't sell them. If they rent them, they will still be way underwater on their debt service. If they sell the project in bulk, all of the equity will be gone and the lender would probably have to take $.70 on the dollar.



Similar to Astoria in Irvine, they probably have some term left on their construction loan and they are just going to wait until that term finishes and hope for a miracle in the interim.</blockquote>


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.



<img src="http://cache.boston.com/bonzai-fba/Third_Party_Photo/2007/03/17/1174154804_8951.jpg" alt="" />

Yamasaki's AIA award winning project



<img src="http://www.eichlernetwork.com/images/Story/down_b.jpg" alt="" />

Eichler's leap of faith on high density residential that ended his empire.</blockquote>


Actually, the Eichler and Yamasaki projects cited where both designed as low income, federally subsidized, public housing projects. The were in no way designed or intended "for the rich."



http://www.eichlernetwork.com/ENStry17.html

http://en.wikipedia.org/wiki/Pruitt-Igoe



Both projects quickly became epic failures. Large, projects that both architects did design for the rich have done very well.
 
[quote author="tmare" date=1232664026][quote author="tmare" date=1232630990][quote author="freedomCM" date=1232595000]do you know how the townhouses at the NE corner of macarthur and main are doing? every once in a while, i see adds on CL for a rental or on the mls for a sale.



they seem nice, and went for $500k plus back in the day. but i wonder how far/fast they will fall.</blockquote>




I work in that area. Seems to me that most are rentals now and slum rentals at that. Even 8 years ago when I was in transition from one house to another and looking to rent, several of these were available. I drove in the complex and drove right out, didn't even stop to cancel the appointment, I knew it was a waste of time. I see signs in the front, something about rent to own (blah, blah, blah) when I'm on my way to Trader Joe's after work.</blockquote>


You know what, I'm sorry, I was thinking of a different location. Aren't the ones you are talking about all rentals, I'm very confused about what this is you are talking about.</blockquote>


these nice new ones (i'm guessing you are talking about the crappy old ones across the street?)

http://www.zillow.com/homedetails/3405-S-Main-St-UNIT-G-Santa-Ana-CA-92707/2140149367_zpid/
 
[quote author="freedomCM" date=1233384631][quote author="tmare" date=1232664026][quote author="tmare" date=1232630990][quote author="freedomCM" date=1232595000]



these nice new ones (i'm guessing you are talking about the crappy old ones across the street?)

http://www.zillow.com/homedetails/3405-S-Main-St-UNIT-G-Santa-Ana-CA-92707/2140149367_zpid/</blockquote>


Yeah, I guess that's what I was thinking. I had a friend who rented in the building you are talking about. They are pretty nice but have a tiny balcony. The shops nearby and at the bottom of the complex seem to be dropping like flies....not a good sign. Plus the disaster that is Skyline will probably have a serious effect on the neighborhood should it become abandoned and blighted or turned into rentals.
 
I think that eventually investors will buy them as rentals, you are right. but they are very, very nice rentals. 1800sf, etc they would be nice in irvine.



see here: http://www.redfin.com/CA/Santa-Ana/3405-S-Main-St-92707/unit-G/home/5949717



but the banks have been taking a lot of them back in the past year. In the spring, they took back 4 at around $450k. This fall, they have been taking them back (6) at $300-$350k, and still not had bidders at the auctions. That is 1/10th of the 100 units in the complex. I wonder how many will fall in the next 12 months? 1/3rd?



I wonder when investors will step in. It seems to me you could rent these for $2000 now no problem (not more due to local). $300 HOA means $1700, so investors should start stepping in around $225k or so. Of course, they sold for $600 at peak, so that's almost 2/3 off!



This is a much nicer community than the cityplace up on the 5, it seems to me.
 
You are right, they are nice rentals, my friend would only rent them if they were, she's very picky. She rented a 2 bdr. there in 2003 for $1600, I can't imagine they rent for much more now. City Place just feels like a place you work and shop, not live. I'm not sure what can be done about that, I just could never imagine living there, I walk there from my house and it feels like a ghost town, all the merchants I've seen have turned the living space into a 3 level store, there's no common area for residents and no pool. The places you are talking about feel like a high end apartment complex or a resort, I can imagine that some people would like to live there, just not me.
 
<a href="http://www.ocbj.com/industry_article_pay.asp?aID=01627028.9344801.1748890.1212844.241963.274&aID2=134521">Current OC Business Journal story on Skyline</a>





Posted date: 2/23/2009



Decision on Santa Ana Condos Unlikely Before Midyear



KBS Fund Sees Charges on Drop in Investment Values; Lower Pay for Grubb Exec, Director

By Mark Mueller



Orange County Business Journal Staff





RESIDENTIAL

Don?t expect to see anyone moving in, conversion to apartments or ownership changes at Santa Ana?s Skyline MacArthur Place condominium towers until midyear at the earliest.



The twin 25-story towers?Orange County?s tallest condo buildings?are likely to remain empty and off the market for the next three to six months, according to real estate sources.



That much time is needed to give the project?s main financier, New York-based iStar Financial Inc., a better sense of where the local market stands, sources familiar with the situation said earlier this month.



Prospective buyers have been asking about acquiring the condos from iStar, which contrary to speculation hasn?t officially taken the property back from developer Nexus Cos. of Santa Ana, according to sources.



Right now, a distressed sale of the buildings along the Costa Mesa (55) Freeway in Hutton Centre seems unlikely. IStar appears to think any sale now would be at too steep of a discount, sources were told this month by the finance company.



Resuming sales of the condos hasn?t happened either, because of the tough market for home sales. The sales office for the project has been closed since last fall.





Skyline condos during earlier construction phase: now nearly done



Meanwhile, iStar isn?t convinced that converting some or all of the 349 condos to apartments is the best decision either, in part because the units are too large.



Nexus last year filed an amendment to its development agreement with the Santa Ana Planning Commission that would allow leasing of some or all of the two towers. It withdrew that request shortly after.



Right now, the only company making some money off the project is Nexus, sources said. Nexus still is wrapping up some construction at the mostly completed buildings and likely is getting paid management fees for its efforts.
 
Thanks for the update NoWowWay.



These towers are such a prominent reminder of the Bubble and the Crash, standing there dark and silent when I drive on the 55 Freeway in the evening. It's eery.



I wonder what is up with the Astoria twin towers down at Central Park West? I haven't been down there in awhile. I imagine they are just as dark and eery looking now that they are completed. But I haven't heard that Lennar and that Dubai firm that was involved with them has formally thrown in the towel on Astoria. Yet.



Lots of dark, empty condo towers in Mid OC. Creepy.
 
I visited the Central Park West Astoria towers. To drive through that neighborhood is like driving through an abandoned hollywood movie set.



The only sign of life is the security guard at the gate, and the sales lady browsing the internet in her quiet sales office. From what I was told, dates and prices have not been planned as Lennar is holding back until the market turns.



From the looks of it, that lady better start looking for a new job soon.
 
[quote author="Shooby" date=1235392422]I visited the Central Park West Astoria towers. To drive through that neighborhood is like driving through an abandoned hollywood movie set.



The only sign of life is the security guard at the gate, and the sales lady browsing the internet in her quiet sales office. From what I was told, dates and prices have not been planned as Lennar is holding back until the market turns.



From the looks of it, that lady better start looking for a new job soon.</blockquote>
They are waiting for the market to turn? I'd bet that they go BK waiting for the market to turn.
 
Anyone have any updates on what they plan on doing with these developments?



Everytime I drive by and see what a colossal waste of money that project was, I shake my head and am glad I wasn't a part of the Nexus company.
 
[quote author="Shooby" date=1242196271]Anyone have any updates on what they plan on doing with these developments?



Everytime I drive by and see what a colossal waste of money that project was, I shake my head and am glad I wasn't a part of the Nexus company.</blockquote>


Spoke to someone familiar with the project a short while ago. They have no idea.
 
[quote author="tkaratz" date=1242206201][quote author="Shooby" date=1242196271]Anyone have any updates on what they plan on doing with these developments?



Everytime I drive by and see what a colossal waste of money that project was, I shake my head and am glad I wasn't a part of the Nexus company.</blockquote>


Spoke to someone familiar with the project a short while ago. They have no idea.</blockquote>


How many of these huge completed but empty projects are there in Orange County?
 
Today's front page <a href="http://www.irvinehousingblog.com/blog/comments/penthouse-plunge-michelson-towers-irvine/">North Korea Tower blogpost</a> post and a quick trip close to Mexico (I mean to Costa Mesa) yesterday reminded me about my personal fav. high rise development, Santa Ana?s Skyline Towers! And I mean reminded as in ?I was reminded of my last prostrate exam.?



I found this gem:



<blockquote>The project - estimated to cost about $350 million- has a total of 349 units.</blockquote>


On average, their into these about a million dollars a piece.



I have no idea what market rates are for this sort of property, but my thumbnail guess puts it slightly below IAC rental territory. Coupled with what must be oppressive HOA's, the market clearing prices on these pieces likely is in high 100's and low 200's. I haven't precisely calculated it (I will if somebody wants me to) but this is a textbook example on why high rise residential FAILS in So Cal. The investors will be lucky to recover 25cents on the dollar (minus opportunity costs) for choosing poorly. A sophomore finance student at a bottom of the barrel CSU recognizes this doesn't pencil, and that's unfortunate because I think both buildings are really lovely. I even kid of dig the location.



Anyway, I am waiting for the broom of bankruptcy to sweep this project clean. My own private train wreck, if you will.
 
They could at least turn these things into affordable housing rental units instead of just having them sit there empty collecting dust. I mean, are they even trying to sell these units today?
 
Because of the location, these towers, like the Jamboree towers, have a somewhat limited audience of buyers and renters, in addition to the limitations of being towers in suburbia.



I doubt that they could rent them for IAC level rents. Even then, they will be competing with the two new apartment developments around south coast.





I think the only successful exit strategy is to convert them into offices. And by successful, I mean recovering 15c/dollar rather than 8c/dollar for residential.
 
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