What do you guys think of Skyline at Macarthur Place?

NEW -> Contingent Buyer Assistance Program
[quote author="No_Such_Reality" date=1215991119]I suspect the future is vulture funds. I see them buying a couple units for pennies on the dollar, getting themselves on the HOA board, excersizing the HOA's foreclosure option on excessive past due HOAs and then taking the condo complex private and turning it into an apartment.



Unfortunate owners will have the choice of jingle mail, selling at a major discount to the vulture fund, or simply getting driven into the ground in their private apartment building and the majority voting block on the HOA board nickle, diming and special assessing them to death.</blockquote>


You are retarded. This is the most implausible scenario ever due to the existence of the California DRE and that your mind is stuck in the bubble mentality (no one purchasing here is not going to be able to afford due to stringent loan requirements). Furthremore, you sound like your business education consisted of watching the movie Wall Street on TBS.



The likely scenario is the bank (Lehman?) will foreclose on the property. Lehman will go bankrupt. Their holdings will be auctioned off, likely to a soverign fund who will develop and hold the property.
 
JC--I would agree with you except your towers are competing with our

towers (tho 3,000 miles distant), and I would guess that we have more

towers more insolvent than your towers.



A competition I would sincerely desire to lose.



But the way last week on tv there was this thing about Thai towers, which

were abandoned, unfinished. After a certain number of years unfinished

and unmaintained, they hopelessly rot.



What is this fixation on the upper upper and upper middle class?



Housing for the merely mid middle class is not worth thinking about, not

sexy enough? Everywhere, it seems.
 
[quote author="Shooby" date=1215953812]Just got a price estimate for a 1,265 sq ft 2bed/2bath on the 3rd floor. Pricing is about $420,000, with HOA's around $500 for 5 years.



Price is still steep at $330/sq ft but it does look very nice inside with upgrades on virtually everything including wood floors, viking appliances, washer/dryer, porcelain tile and upgraded countertops/cabinets. It's still Santa Ana though, and its still a bit much for a condo...tempting though b/c it looks pretty darn nice inside, that is..if you're into the urban style of living..</blockquote>
Wow, that's gonna have an adverse effect for all those folks trying to sell their condo units for $400-$500/sf+ over at the Marquee towers.
 
[quote author="jcaraway" date=1216005471][quote author="No_Such_Reality" date=1215991119]I suspect the future is vulture funds. I see them buying a couple units for pennies on the dollar, getting themselves on the HOA board, excersizing the HOA's foreclosure option on excessive past due HOAs and then taking the condo complex private and turning it into an apartment.



Unfortunate owners will have the choice of jingle mail, selling at a major discount to the vulture fund, or simply getting driven into the ground in their private apartment building and the majority voting block on the HOA board nickle, diming and special assessing them to death.</blockquote>


You are retarded. This is the most implausible scenario ever due to the existence of the California DRE and that your mind is stuck in the bubble mentality (no one purchasing here is not going to be able to afford due to stringent loan requirements). Furthremore, you sound like your business education consisted of watching the movie Wall Street on TBS.



The likely scenario is the bank (Lehman?) will foreclose on the property. Lehman will go bankrupt. Their holdings will be auctioned off, likely to a soverign fund who will develop and hold the property.</blockquote>
I thought Wachovia had the construction loan.
 
[quote author="usctrojanman29" date=1216010939][quote author="jcaraway" date=1216005471][quote author="No_Such_Reality" date=1215991119]I suspect the future is vulture funds. I see them buying a couple units for pennies on the dollar, getting themselves on the HOA board, excersizing the HOA's foreclosure option on excessive past due HOAs and then taking the condo complex private and turning it into an apartment.



Unfortunate owners will have the choice of jingle mail, selling at a major discount to the vulture fund, or simply getting driven into the ground in their private apartment building and the majority voting block on the HOA board nickle, diming and special assessing them to death.</blockquote>


You are retarded. This is the most implausible scenario ever due to the existence of the California DRE and that your mind is stuck in the bubble mentality (no one purchasing here is not going to be able to afford due to stringent loan requirements). Furthremore, you sound like your business education consisted of watching the movie Wall Street on TBS.



The likely scenario is the bank (Lehman?) will foreclose on the property. Lehman will go bankrupt. Their holdings will be auctioned off, likely to a soverign fund who will develop and hold the property.</blockquote>
I thought Wachovia had the construction loan.</blockquote>


Maybe, I'm pretty sure that Calpers is in on this deal. Maybe Lehman is the equity? I still predict the venture goes upside down because lehman or whomever the equity is goes upside down because their capital is cutoff by both the bank and the partners.
 
[quote author="lawyerliz" date=1216009258]JC--I would agree with you except your towers are competing with our

towers (tho 3,000 miles distant), and I would guess that we have more

towers more insolvent than your towers.



A competition I would sincerely desire to lose.



But the way last week on tv there was this thing about Thai towers, which

were abandoned, unfinished. After a certain number of years unfinished

and unmaintained, they hopelessly rot.



What is this fixation on the upper upper and upper middle class?



Housing for the merely mid middle class is not worth thinking about, not

sexy enough? Everywhere, it seems.</blockquote>


Well, at least in your neck of the woods, tower living and the density made some sense. I don't understand how anyone justified luxury condo towers in Santa Ana in the middle of an off shoot business park.



Hmmm, well, I think we all wanted to feel special and call ourselves the upper middle class, not just middle class, and, on paper, many could justifiably do so. And it's sad, because every corporation, every retail outlet easily capitalized on this mentality because of the high returns. Seems like all you had to do was manufacture a product call it luxury and mark it up by 100% for it to be the next big thing. I think it easily explains the negative savings rate. A whole generation is going to need a government bail out.
 
[quote author="jcaraway" date=1216011670][quote author="usctrojanman29" date=1216010939][quote author="jcaraway" date=1216005471][quote author="No_Such_Reality" date=1215991119]I suspect the future is vulture funds. I see them buying a couple units for pennies on the dollar, getting themselves on the HOA board, excersizing the HOA's foreclosure option on excessive past due HOAs and then taking the condo complex private and turning it into an apartment.



Unfortunate owners will have the choice of jingle mail, selling at a major discount to the vulture fund, or simply getting driven into the ground in their private apartment building and the majority voting block on the HOA board nickle, diming and special assessing them to death.</blockquote>


You are retarded. This is the most implausible scenario ever due to the existence of the California DRE and that your mind is stuck in the bubble mentality (no one purchasing here is not going to be able to afford due to stringent loan requirements). Furthremore, you sound like your business education consisted of watching the movie Wall Street on TBS.



The likely scenario is the bank (Lehman?) will foreclose on the property. Lehman will go bankrupt. Their holdings will be auctioned off, likely to a soverign fund who will develop and hold the property.</blockquote>
I thought Wachovia had the construction loan.</blockquote>


Maybe, I'm pretty sure that Calpers is in on this deal. Maybe Lehman is the equity? I still predict the venture goes upside down because lehman or whomever the equity is goes upside down because their capital is cutoff by both the bank and the partners.</blockquote>
If Calpers is one of the equity providers, they will keep funding equity to re-size the loan (it'd be too much bad press for them default on their equity requirements).
 
[quote author="jcaraway" date=1216005471][quote author="No_Such_Reality" date=1215991119]I suspect the future is vulture funds. I see them buying a couple units for pennies on the dollar, getting themselves on the HOA board, excersizing the HOA's foreclosure option on excessive past due HOAs and then taking the condo complex private and turning it into an apartment.



Unfortunate owners will have the choice of jingle mail, selling at a major discount to the vulture fund, or simply getting driven into the ground in their private apartment building and the majority voting block on the HOA board nickle, diming and special assessing them to death.</blockquote>


You are retarded. This is the most implausible scenario ever due to the existence of the California DRE and that your mind is stuck in the bubble mentality (no one purchasing here is not going to be able to afford due to stringent loan requirements). Furthremore, you sound like your business education consisted of watching the movie Wall Street on TBS.



The likely scenario is the bank (Lehman?) will foreclose on the property. Lehman will go bankrupt. Their holdings will be auctioned off, likely to a soverign fund who will develop and hold the property.</blockquote>


You need to stop thinking of skyline and start thinking of the completed Park Towers, San Diego towers and other towers all built and sold out in the bubble. For the uncompleted towers like Skyline, I think Liz's Thai story is more likely. For the places in San Diego and the North Korea towers, I foresee the HOA going the same way and the HOA's in Miami. The HOA in order to keep the lights on literally ends up driving regular homeowners out with special assessment due to the number of units not paying.



The banks need to foreclose first and the banks are notoriously bad about paying their HOA fees. Finally, California has a strong history of HOA shenanigans. It's one the primary reasons we now have the HOA foreclosure rule that states the home owners needs to be more than 12 months past due and more than $1800. Which for many towers is a mere two months of dues.
 
[quote author="usctrojanman29" date=1216012494][quote author="jcaraway" date=1216011670][quote author="usctrojanman29" date=1216010939][quote author="jcaraway" date=1216005471][quote author="No_Such_Reality" date=1215991119]I suspect the future is vulture funds. I see them buying a couple units for pennies on the dollar, getting themselves on the HOA board, excersizing the HOA's foreclosure option on excessive past due HOAs and then taking the condo complex private and turning it into an apartment.



Unfortunate owners will have the choice of jingle mail, selling at a major discount to the vulture fund, or simply getting driven into the ground in their private apartment building and the majority voting block on the HOA board nickle, diming and special assessing them to death.</blockquote>


You are retarded. This is the most implausible scenario ever due to the existence of the California DRE and that your mind is stuck in the bubble mentality (no one purchasing here is not going to be able to afford due to stringent loan requirements). Furthremore, you sound like your business education consisted of watching the movie Wall Street on TBS.



The likely scenario is the bank (Lehman?) will foreclose on the property. Lehman will go bankrupt. Their holdings will be auctioned off, likely to a soverign fund who will develop and hold the property.</blockquote>
I thought Wachovia had the construction loan.</blockquote>


Maybe, I'm pretty sure that Calpers is in on this deal. Maybe Lehman is the equity? I still predict the venture goes upside down because lehman or whomever the equity is goes upside down because their capital is cutoff by both the bank and the partners.</blockquote>
If Calpers is one of the equity providers, they will keep funding equity to re-size the loan (it'd be too much bad press for them default on their equity requirements).</blockquote>


One word "MacFarlane Partners", okay maybe two words. Calpers won't default, they site mismanagement.
 
Nice, using North Korean real estate development as a parrallel case study might fly at USC, but not in real life, brah. Second, you missed the entire point about HOA foreclosure, that it would be used as a tool buy a vulture fund to create an apartment building.



The fact that California has had so many shenanigans with HOA's in the past has empowered them so that they are so far over reaching that developers can't come in a remove them. Hence, the 12 month waiting period, no investor is going to try to gain control of the board (an overt and obviously unpopular move with the existing owners, who would elect them?). Than, if they do get control, they have to wait 12 months for every single tenants! That's at least a five year process with a mess of litigation, arbitration and sabatoge. Plus, no court is going to take a persons home for $1,800.
 
They would here in Florida.



In the late 80s there were these people who paid cash for a condo.



Maybe 80 grand then.



They thought they didn't have to pay fees. WRONG!!



The property was sold to a vulture-type person. Then the firgured

out that they had lost their unit!! The vulture was very kind to sell

it back to them for 15 grand which was maybe 10 times his costs.
 
Fine, the vulture funds won't take over, they'll just buy the properties for 10 cents on the dollar from the bank for cash flowing rentals. Property after property in the place will be complete scum bucket rentals until it's DOA whether vulture fund or private.



Still, like hedge funds, the vultures are going to want a sure deal and dicking with the time waste of HOAs and property owners isn't it.



In the end, I still see the HOA sh*t returning to biblical proportions in Cali as incumbent boards see profit potential.



BTW, no court needs to take the property, it's still non-judicial foreclosure.
 
[quote author="No_Such_Reality" date=1216014636]Fine, the vulture funds won't take over, they'll just buy the properties for 10 cents on the dollar from the bank for cash flowing rentals. Property after property in the place will be complete scum bucket rentals until it's DOA whether vulture fund or private.



Still, like hedge funds, the vultures are going to want a sure deal and dicking with the time waste of HOAs and property owners isn't it.



In the end, I still see the HOA sh*t returning to biblical proportions in Cali as incumbent boards see profit potential.



BTW, no court needs to take the property, it's still non-judicial foreclosure.</blockquote>


What profit potential are you talking about? How are hoa board members going to have a financial advantage over anyone else when it comes to foreclosing on a property deliquent with HOA fees? Reform may come as a form of recourse against the builder, but not because the board members are somehow profiting.



Honest question, won't the bank's foreclosure proceeding take precedence over the HOAs?



There's no way a profesional investor can pickup foreclosed property piecemeal and than effectively manage the property. Sure, the property could become a slum, but if the renters are paying, they have recourse in court and a lot of legislation on their side.
 
The profit potential is the foreclosure on the bank by the HOA. The subsequent reselling of the property typically with minimal-legal disclosure bought by a board member or related.



It's what drove the HOA foreclosure rules, boards would quickly foreclose on a property for a couple hundred dollars and a board member would buy it post foreclosure. It was typically done on high-equity or paid off properties. In the case of a bank foreclosure, there's no more loans, the bank owns it. The HOA wipes them out. So you buy it for the back-due fees. Not likely, I suspect the banks will get it paid before it's foreclosed.



The fundamental problem is the HOA fees, frankly as an investment, most of the units in SoCal have a near net zero value after planning for vacancy and expenses on expected rent.



I've talked about the Florida units before, the bottom, IMHO is 80-90% off peak. For places like the downtown towers in San Diego, I wonder how low they will go? The Plaza towers off of Jamboree and Michelson are another case, the HOA is so brutal, what's their inherent cash flow value? $100,000? That's 80% off, they typically carry a $1000/HOA.



You're right, it's highly unlikely a vulture will do the squeeze. The market will do the squeeze and the vultures will just pick up the pieces. They're f'd all by themselves.
 
Lehman is the mezz lender. They'll probably end up taking control of the partnership and will probably end up losing their total investment.



iStar has the 1st TD courtesy of Fremont's (yes, the sub-prime bandits) sale of their CRE assets. Last I heard (OCBJ), Nexus is considering alternative uses (lux apartment rentals, senior care) for one of the towers, but prob. none of which will pencil out enough income unless we time warp ahead two-three decades.



Skyline: Dubai Buyer Wanted
 
If a 2bd/2ba 1360sqft unit in Marquee has gone for $2500 per month (which I have seen), the smaller units in Skyline should go for less. They are a bit smaller than that, and Marquee is in a better area. I was just doing a little math:



A $200k, 6.25% fixed would end up being ~$2,400 per month after that huge HOA. How is this going to work? What is the most likely scenario here?
 
[quote author="Shadax" date=1216158002]If a 2bd/2ba 1360sqft unit in Marquee has gone for $2500 per month (which I have seen), the smaller units in Skyline should go for less. They are a bit smaller than that, and Marquee is in a better area. I was just doing a little math:



A $200k, 6.25% fixed would end up being ~$2,400 per month after that huge HOA. How is this going to work? What is the most likely scenario here?</blockquote>


You are forgetting that people DO pay a premium to own. It may not be logical, but it is happening ALL THE TIME. The only question is if the banks will let them continue to do it.
 
[quote author="25w100k+" date=1216174032]



You are forgetting that people DO pay a premium to own. It may not be logical, but it is happening ALL THE TIME. The only question is if the banks will let them continue to do it.</blockquote>




My impression is that there is a hierarchy about paying the premium, though. People do pay for SFR, and somewhat for a townhouse/condo.



But how much extra are people willing to pay for an apartment?



Especially one where there is a wild-card scenario for the very high HOA fee?





My guess is close to or less than zero premium.
 
[quote author="25w100k+" date=1216174032][quote author="Shadax" date=1216158002]If a 2bd/2ba 1360sqft unit in Marquee has gone for $2500 per month (which I have seen), the smaller units in Skyline should go for less. They are a bit smaller than that, and Marquee is in a better area. I was just doing a little math:



A $200k, 6.25% fixed would end up being ~$2,400 per month after that huge HOA. How is this going to work? What is the most likely scenario here?</blockquote>


You are forgetting that people DO pay a premium to own. It may not be logical, but it is happening ALL THE TIME. The only question is if the banks will let them continue to do it.</blockquote>


Oh I know, I just keep reading that the endgame for the RE market is reaching rental parity or maybe below. And for that to be the case, that unit would have to be $200,000...
 
The twin towers are beautifully elevated above the concourse. I do like the aesthetic of the architecture. they are by far the best looking of the residential highrises in OC. They do not belong here in OC and the fabric of the surrounding communities does not compliments this lifestyle. They need a right home somewhere in Vancouver.
 
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