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2hearts

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About 2hearts

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  1. 2hearts

    The Vue

    Assuming there was some kind of default in the loan agreement the bank probably had an opportunity to improve the terms of their deal with the developer. This could have included stronger guaranties, additional collateral, and an interest rate floor (the construction loan was probably libor plus a spread now paying the bank only 2-3%) of 5-6%. They may have also agreed to include closing benchmarks to assure the bank that they would be more agressive with pricing. All of this will probably serve to create much more urgency on the part of the developer to get units closed. If the developer is w
  2. Has anyone been able to deterimine whether or not you can get a conforming loan for a purchase ? Here is an article from yesterday that speaks to the new changes related to presale requirements. It went from 50% to 70% as of March 1. http://online.wsj.com/article/SB123733304341863319.html
  3. ^ I'll be interested to hear what you find out. There seems to be a lot of confusion about this issue even though I think it will have a very big impact on the future values of these condos. Here is some additional relevant info: http://cincinnati.bizjournals.com/atlanta/...16/story10.html I'm not sure how/whether this change in FNMA underwriting will impact projects in NC but, again, it seems like a big issue.
  4. I assumed they'd go that route but I still question whether or not that will enable the building to get FNMA approved. I understand that there are unsold projects everywhere that can't offer conforming loans. If it were as simple as legally carving up the building I would think that every one would do this to qualify, regardless of how serious they were about renting. For example, a 460 unit project needing to show 50% presales (and related rental restrictions) could legally split the building in two (rental and for sale) and immediately lower their 50% presale hurdle by half. Or why not make
  5. Interesting. Given the material change in plans I assume that everyone with an existing contract will be permitted to walk if they're not comfortable buying in to a building that is 50% rental rather than 20 or 25% as the Novare projects usually are. Maybe Novare is planning to offer sizable discounts to counter this. For a buyer that chooses to move forward, how will they possibly get a conforming mortgage with less than half the building presold and 50% or more of the units not being owner occupied ? I realize Novare and the lender might offer something competitive through an affili
  6. My guess would be that every deal is generally different in terms of structure, mezz lenders, and even equity partners. A successful negotiation on one deal wouldn't necessarily equate to success on another. Here's an article I ran across that addresses the issue of "going rental": http://www.bizjournals.com/atlanta/stories.../18/story6.html There is some good discussion and quotes in this one about the challenges of switching to rental, including some quotes by Jim Borders, the Novare chief. And here is another more recent article about some of the bulk selling going on down in Mi
  7. ^It's my understanding that there is a mezzanine lender between Novare and Wachovia still owed $20-$30 million so I doubt much consideration is being given to Novare's rep at the moment. My guess is that the mezz lender is trying to assess the benefit of throwing more capital at the deal to maintain a position going forward. Whatever the outcome, I suspect they will probably team up with a multifamily rental specialist before they launch the rental program.
  8. You are spot on. When the smoke finally clears on the condo craze I think the buildings lacking any reasonable limitation on rentals will represent the worst of all worlds. Painful as it is for Novare and its lenders they are doing the right thing by avoiding the mess of a fractured condo association and 50% plus of rentals in the building. Having hundeds of amatuer landlords scrambling to try and stay current on their overleveraged mortgages is just not a good situation, particularly when these tenants are co-habitating with owner/residents that paid top dollar for what I'm sure they expec
  9. The senior debt on Catalyst is about $73 million, which I think works out to a little under $200 per foot. I agree that Wachovia would be likely to do a permanent on the deal as a rental but at 90 plus percent loan to value, absent a big pay down, they'd really be keeping Novare in the deal for nothing. Given that Novare isnt an apartment specialist I'm not sure why they'd do this. Also, bear in mind that the apartment values you and I seem to agree on are for a stabilized property. Someone will have to carry this monster for a couple years, service the debt, pay the taxes and hoa fees, etc. u
  10. I am reliably informed that Novare is in an organizational tailspin right now coping with an enormous pile of high interest debt on both unsold projects and vast amounts of land purchased at the crest of the market. In order to stay afloat they have eliminated most of their staff and are scrambling to negotiate extensions on debt where they are unlikely to retire the loans as provided in their original agreements. In some cases, as with Catalyst and Element (a Tampa twin of Element) they realize they're unlikely to close more than 20-30% of the building so they are instead opting to convert
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