Rolling Wheels

Rolling Wheel MHPRolling Wheels Mobile Home Park on Kietzke just listed for $3,795,000 or $57,500 per each of the 66 spaces.  58 of the units are tenant owned, 4 are park owned and 4 are vacant.  Park rent is about $675 per month.

How do we rid our downtown core of blight like this when the financials are so compelling?  Mobile Home Parks may be even more profitable than weekly hobotels like the Ho Hum (report coming soon).

In case the Loopnet listing gets taken down, here are the attachments:

Rents

Brochure

Pro Forma

How do we irradiate crap like this in our downtown core when the financials are so compelling?  Mobile Home Parks may be even more lucrative than Hobotels like the Ho Hum (report on that coming soon).  In case the Loopnet listing gets taken down, here are the financials:

Rents

Brochure

Pro Forma

4 half cubes and a bungalow for $899,000?

Bubblicious

BubblefrownI track new listings everyday because I am a sad and lonely man.  I track closed sales everyday because I tend to be a bitter voyeur.  I can’t make heads nor tails out of our market right now.  The WTF listing prices are resulting in WTF sale prices.  I know it is all different this time, but are we bubbling?

 

The very best source of real estate data that I know of is Mitch Argon (superhero name!) at CalNeva Realty.  Go to his site to sign up for his quarterly reports, and check out what a really good realtor web site looks like.  His latest report included the following graphic:

Bubble Chart - Reno-Sparks-page-0I tend to use 3% annual (.75% quarterly) appreciation instead of 4% as shown, which would already push us into “overvalued” territory.  I don’t see the upward median trend line stopping – not when Midtown shacks are going over $300K, Highwood condos that were $25K a year ago are at $88K, and Somersett SSBs are selling at mid 2005 prices.

So get ready to ride the roller coast again.

The Breaks

IMG_1767If you’ve been Jonesing for real estate news, here you go.  The photo will explain my absence.

–  Washoe Grille on W 4th Street has changed hands for $1.4M.  The buyers are the Whispering Vine folks, who have also applied for a new liquor license.  Lots of land behind it to develop.

–  The Arterra development site at Sierra and Liberty just sold for $1,081,510 to the neighbor to the West.  I doubt we will see a $500/SF condo tower this time.

–  The Trustee’s Sale for Lakeridge Tennis Club has been postponed until 25 July with over $10M owing.

–  You can buy the Caughlin Club for $4.8M.  The club is private and not a part of the CR amenities.

Donner Guest Trail Ranch straddles the Washoe and Sierra County CA line in Verdi.  You can buy 6.8 Acres on the NV side for $800,000 or 1491 acres on the CA side for $4,000,000.  There are shared service agreements between Sierra and Washoe Counties – Verdi CA residents attend Washoe schools and have Washoe service and Truckee Meadow Fire service.  Major development here could be a disaster.

–  Closings to watch for:  Edge Water at Virginia Lake is the condo and apartment complex going up on the east shore of Virginia Lake.  I have never seen an offering sheet for the condos, but they are scheduled to start closing anytime now.  Watch for SWD NVL LLC deeds on the Recorder’s site.  The sold-out-but-price-increased Cottage Row at Midtown should also start closing soon.  Watch for Cottage Row At Midtown on the Recorder’s site.  This will either be a sham or set the new benchmark for Midtown comps.

DR Horton finally unloaded the shovel ready project outside the gates to Somersett to Jenuine Communities for $2.3M (Villa Toscana?).  Originally designed as triplexes, Horton pulled the plug and redesigned the site for SFRs.  Then pulled the plug again.  The NW need new building stock.  Lennar is the only production builder active in Somersett, and they seem to be taking a hiatus.

–  Where is the building boom?  There haven’t been more that 20 new SFR permits pull puller per week in several months.  Almost all are South Meadows.

There.  Enough to get the discussion going again?

Montreux for $2M

Montreux 2MThere have been resales of 3 housed for over $2,000,000 in Montreux so far this month.  Who buys $2M houses in Reno?  One was a move up buyer from another Montreux home, and two were RCCOTHs (Rich Californians Coming Over The Hill, though one was actually from Seattle).

In a region where the median income does not support the median home price of $285,000, I suspect many if not most new home buyers are coming from out of the region.  Lennar has sold 10 homes at their Plateau subdivision in Somersett.  Pricing ranged from $341-436,000 with the average at about $385,000, or about 135% of the median.  2 homes appear to be investor owned.  2 homes are move-up purchases.  6 were buyers making their first home purchase.  I suspect all 6 were from out of state.

The residential portion of the land purchase around Cabela’s is already on the market (price not disclosed).  At up to 284 lots at 6000 SF, if feels like Lennar bait.  Financing is incredibly tough to get on new construction, so I don’t think the local builders will be in the running.

When the Pennington mansion sold for $8,000,000 last month, I commented that it was probably a land deal.  7.25 acres in blue has already been put on the market for $2.5M and could take up to 30 houses in a PUD.  That might be attractive to local builders.

Sales and Tales

Chism ParkThe Chism Trailer Park just closed escrow for $4,975,000.  The new owner has commented on expanding the event center facility, but has been silent on plans for the trailer park.  The Chism’s ran a quite, relatively safe refuge for a 100+ low income households, and it is difficult to imagine how those folks will be able to assimilate assuming redevelopment is looming.

The Bourbon Street Casino in Sparks just closed escrow for $3,800,000.  Instead of the “local developer” claimed to be the purchaser, the new owner is LandCap Investment Partners LLC out of San Juan Capistrano CA.  The do, however, count Marina Village and Marina Gateway I and II as part of their portfolio, so I guess that counts as local.

Remember Project 8 at 888 Mount Rose?  It just sold for $1,550,000, only $50,000 below asking to the Bay Area (former?) owner of the Simplified Bee web commerce site.  Renovations are already underway and it appears that the site will stay a water and land pig in the middle of town.

Speaking of water and land pigs, I had the opportunity to take a run at 775 California Street recently.  It sits on 3 riverfront acre zoned SF9 with the 6400 SF main house, a pool to die for, and a 2500 SF caretaker’s house / pool house.  It is currently listed for $1,790,000 down from $2.8M originally.  You could easily subdivide off 3-4 lots on California, renovate the pool house, and maybe nuke the pool itself for an additional lot.  The renovation of the main house was featured on HGTV and I thought it was going to be spectacular.  It wasn’t.  Original single pane windows.  Original asbestos encrusted oil furnace.  No AC.  Modern kitchen totally out of scale (small) for an estate like this.  “Tahoe Room” scabbed on which was actually a pretty cool space, but completely at odds with a unified design concept.  The main house in itself should fetch $1.2M+ in the Newlands market, but it will take $500,000+ to get there.  So this one will sit another 5 years.  At least they are keeping their evil green grass green.  If anyone would be interesting in a scrape and redevelopment project (cultural suicide in Newlands on a non-historic historic house but the right option), give me a shout at macnv@charter.net.

No new Seagull Sweets action lately.  I can’t find any active permits on any of his so called projects.

Dog walk time!  What do you think?

RE Ramblings

ranch-turkey-burger–  Reno Median Sales Prices continue to soar.  We are back at May 2008 levels, or May 2004 levels for the glass half empty crowd.

–  Where is the new product?  There are virtually no new Subdivision Maps being filed, just continued phasing of existing developments.  Being a glass half empty guy on occasion, I believe the major developers are holding back product to increase demand and drive up prices.  Bubble alert.

–  Bubble?  The entry level market is already decimated by low inventory, tight credit, and “predatory investors” .  Prices at Smithridge, Silver Creek, Highview are already 100-200% above valley levels.  Try to buy a run down shack in Midtown or Wells for under $250K today.  These are the EXACT locations that started the bubble run-up last time.

–  RCCOTH – Rich Californian’s Coming Over The Hill.  The $500-600,000 market seems to be a sweet spot right now.  These sales ARE NOT generally to move up Reno buyers.  The mortgage is far less than a typical SF or Silicon Valley 2 bedroom rental, so what’s not to like?

–  The WTFs – Have you seem all the $2M+ monuments to ego hitting the market lately?  At 2007 peak pricing?

–  Just to crow a little, Downtown Makeover did a write up on some of my MidTown Projects.  I’m also working on 40 units of workforce housing throughout Sparks, and my own infill developments at Mayberry Canyon.  And the biggest project of all, de-oaking and de-brassing my 1987 Ranchburger!  Wish me luck with that one – oak and brass breed when you are not looking.

Pennington, Apple, and Ramblings

457001[1]Yeah, the Pennington mansion at 2490 Manzanita just sold to a TRIC investor.  What the RGJ couldn’t tell is for how much.  $8M, far below the original $18,500,000 asking price.  The house sits on over 20 acres of land. With an additional 15 acres next door potentially available, this is looking like a buy and scrape land deal to me.

Apple just applied for permits for 4 new 20,000 SF modular data center cluster buildings at their cloud farm east of Sparks.  This is there single biggest commitment ever, and should silence the folks that say Apple has given up on Reno.  By the way, the rumors that Apple was driving trucks of servers to a site in Tessera to get their tax breaks without ever unloading the truck or hiring the technical staff/consultants is false.  Apple has not applied for their approved tax breaks.

Cottage Row @ Midtown just raised their asking prices 5% or about $25,000 today.  But wait, they raised the prices on the properties that were already on the MLS as “Active/Pending”.  I have suspected that their pendings were a sham, and this backs that up.  Show me a closing.  show me a comp.

If you want to buy the Ramada Inn, tours start next week.  Does anyone know why this property ever got built in East Jesus?

Pulled up all the Siegel Group properties this week, and there are no pending permits in the system for any of them.

Reno Shake and Bake.  Director of Parks and Recreation “retired”.  Police Chief called it a day after getting publicly Schievie’d for sending officers to the Ukraine.  Director of the whole Community Development Department is leaving with no stated reason, no even to “peruse family matters” or to “peruse private sector opportunities”.  And now Fire Chief Hernandez may be off to Plano, TX where 2 in 2 out plays to a more receptive audience.  Your take on this upheaval?  Is Hillary cleaning house or are key personnel bailing on her?

Great discussion and debate in the last thread on gaming and Reno.  Keep it up!  Circus Circus is destined to close as is Harrah’s.  How do we rethink downtown now?

The New Downtown Plan

PAVICHNorthern Nevada Urban Development aka Tessera South just received a NOD on their 128 E. 6th Street property.  This following almost losing 595 Lake Street at a tax sale last week (it is unclear if the owner or the lender paid off the delinquent taxes) and losing the linchpin corner of 6th and Virginia to foreclosure.  And they are pushing to have their STAR Bound entitlements extended!

The conventional wisdom was that downtown would transform itself from the North Virginia Street corridor outwards.  But you have Italian Capital and NNUD criminally over leveraged on their Tessera properties, Siegel Slums now anchoring the south end, and disinterested casino and Old Money Reno owners in the middle.  So it will literally take a work-around, and that is what is happening.

Yes, the Siena is changing hands and will go upscale (for Reno) and non-gaming with Nando (Montage, CommRow) at the helm.  Well funded Simon Properties owns the big lot at 2nd and Lake, and a prominent local developer just bought the sales office for the Waterfront Tower across the street on the SW corner of 2nd and Lake.  There is Startup Row growing on the West of downtown, and the Pignic distict to the south connecting to Midtown.  Development is progressing AROUND downtown, not in it.  If you have driven NVA lately, you can see that the retail element continues to decline and even the tattoo parlors are failing.

So this is a come to Jesus call for the traditional downtown core ownership.  Upgrade, sell, or die – Reno won’t wait and simply does not need you anymore.

Frankenwarehouse

Verdi Insustrial Elevation-page-0Directly on the heels of the land around Boomtown being sold, the proposed Industrial Building is wending its way towards a 1 June Planning Commission hearing.  The building is 1500 feet long and 40 feet tall (up to 45 feet with the proposed variance).  It is claimed to be 855,000 SF, but is actually 885,000 SF if you backtrack through the parking calculations.  That is 7X the size of Cabela’s.  The exhibit with the Traffic Counts is HERE, and the more graphic site plans and elevations are HERE.

I say bring it on!  If there ever was a stealth location to bury a building this size, the bench north of Cabela’s fits the bill.  The traffic study is a bit goofy and has 90% of the truck traffic arriving from the east and then departing back to the east with 46 peak hour semis.  The traffic study does not take into account the new Boomtown Truck Stop and the 415 semis per day it will generate not the 289 peak hour vehicles it will add to the Garson Intersection.

My only concern about these two mega projects is the Garson overpass.  It is a narrow 2 lanes and currently serves literally hundreds of bicycles on an average day plus the vehicular traffic and the occasional frightened poor soul on foot.  There are no pedestrian accommodations whatsoever.  RTC has a Garson/I-80 intersection rebuild project in their 2018 budget (unfunded), but it is really an NDOT issue.  So this is a plea to the Reno Bike Project, the Procrastinating Peddlers, and all the recreational cyclers out there to put the screws to NDOT to fix this woefully inadequate interchange STAT.  Reno will approve the Frankenwarehouse project, as they should, and the truck stop is already coming.  We don’t need dead people in the name of progress.

Ramada Out

Ramada RenoThe Ramada Inn at 1000 E 6th Street will go to AUCTION on 3 June.  284 keys plus banquet and meeting space, and the opening bid and reserve price are both $500,000.  The Room Pictures and Reviews for Ramada’s own site are pretty revealing.  Outstanding staff and cleanliness (usually), dated rooms, sketchy neighborhood, and pretty consistent references to plumbing issues.  The auction comes free of management and brand affiliation – Ramada is out and you would be on your own.

Diamond’s Casino is next door on a separate parcel, attaches to the Ramada, and provides most of the food services for the guests.

Meatloaf-Dinner

Follow

Get every new post delivered to your Inbox.

Join 233 other followers