Rancharrah Dirt for $24,000,000

I just don’t get the Rancharrah project.  1/4 acre custom home lots that would even bore D R Horton are selling for half a mil.  Toll Trash homes in Villages 1 and 2 are listed at $1M++.  And now a 12 acre +/- Multifamily development parcel at Village 7 is listed for sale at $24,000,000.  2 friggin’ million dollars per acre for dirt.

The sales brochure claims “almost unlimited density” and MF30 but the PUD says otherwise – 21.2 unit per acre maximum.  That’s $95K per allowable unit for dirt to build a nicey-nicey Pacific West type of garden apartment – the same model being used for the HOME subsidized Vintage at Summit Ridge project.

This is 5X what any sane developer would pay.  Is the Rancharrah brand’s glow really that strong and I’m missing something?

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January Median Preview

I have my own methodology to see how the median is trending during the month.  Based on Assessor’s data, I screen out new homes that were on the MLS, foreclosure sales, and anything but SFRs.  It isn’t perfect, but it tracks the trends and “official” median statistics reported by RRB pulled off the MLS pretty closely.  The Assessor is a lagging reporting indicator since it can take a sale up to 2 weeks to show up after recording, but probably at least 40%+ of what will be January sales have posted.

RRB Medians – November 2018 $377,000, December 2018 $360,000.

Mikey Medians – November 2018 $375,000, December 2018 $355,000, January 2019 to date $337,000.  That will represent another 5% month over month decline in the median if the trend holds.

Guy at RRB says he is tracking a decline in median for January, but not as severe as what I am seeing.  But he also reports that unit sales are tanking and will be near historic lows when the January numbers are finalized.

My prediction of a 10% decline in median for 2019 got picked up by another blog.  Their 20% guesstimate seems more realistic than mine given the trends.  Or maybe Armageddon II.

Sparks Outdoor Events Center

The first Site Permit for the new Nugget outdoor events center at Victorian Square was submitted today, and WOW!  8958 seats, similar to the Laughlin Event Center (pictured).  Brings back great memories of concerts at the old MGM Grand / GSR.

For reference, Greater Nevada Field has about 6500 fixed seats and a 9100 total occupancy maximum. I’m sure if we ask nicely, they will add a fountain or two to their plans!

Does an urban outdoor venue of this magnitude become a dead zone on off nights?  I worry about that a lot based on the Aces failure to make the Freight House District something that works 365.

Kudos to Marnell Gaming and the City of Sparks for actually DOING something. Meanwhile back in Reno, the City Council will be hearing appeals about tree removals and a proposal to allow homeless services deeper into the community this week.

Serious question here.  Can can anyone explain to me why Reno is so constantly off-message and Sparks gets things done?

Baiting the Bantering Bear

Whassup, Bear?  You called the bottom back in 2006 or so on RRB before anyone foresaw how dire things would actually get.  Your only error was not going more negative.

I had a reader today say “the music has stopped, but they don’t know they need to take a chair”.   I believe that.  The True Believers are in for an ass whooping.   Look for Student Housing to lead the downward spiral.

BB. this is your chance to post your Manifesto.  I hope it generates some serious discussion!

Big Yellow Taxi

Jacobs continues to add Open Parking Lots as a primary use in their Fountain District.  Open Parking Lot is an allowable land use in DRRC Keystone, but why add more?  What is this additional parking (200 or so spaces) supporting or serving?

Jacobs Parking #1 is along 4th Street. The PERMIT claimed 37,584 SF and the Assessor says 38,390 SF so that’s pretty close.  Permit value was $140,000 for 104 parking spaces.  That is an absolute bullshit valuation considering the grading, abandonment and reconstruction of curb gutter and sidewalk, lighting and landscape that will be required.  Or if not, let me know your contractor!

Jacobs Parking #2 just got FILED.  They claim 35,000 SF but the parcels total 41,206 SF – not so close this time.  $208,380 permit value for around an additional 100 surface parking spaces.

Open Parking Lots are expensive to build – you don’t build them as a temporary use.  I would suspect that Jacobs does not plan to develop these parcels in a meaningful way for at lease 5 years.  And not a fountain in sight on the permits.

Greyhound Gone

Greyhound buses to Reno are now docking at the Sparks RTC stop (over Sparks’ objections).  I guess kudos are in order for the Reno Council for throwing up so many objections that the logical location at our RTC City Center location became “undesirable” and Sparks got holding the bag.

1st and Bell in Reno.  Riverfront property next to the ex-Grayhound terminal.  The 4 CLC properties that have been scraped are back in for 4 parcel maps and now 2 townhouse permits.  My best guess is that this will end up as 14 (min allowable) to 16 (max allowable by parcel map) SFR townhouses.   A single onsite parking space is planned for each of the units submitted for permit.  The developer might be well served checking on the sales at Tonopah Lofts and 3×3 Martin.

Looking forward to seeing what Tesla Dad plans for the old Greyhound station.

Apartments

Just when I go all negative, a SPR (Site Plan Review) sneaked in for 70 units in Midtown.  The oneR midTown project proposes 70 units  (31 Studios, 33 1-bedroom and 6 2-bedroom) at the mostly vacant land at Tonopah/Arroyo/Pueblo most recently used as the staging area for the Tonopah Lofts.  Planning has given this site SPECIAL TREATMENT, and the proposed plan sorta kinda responds to this – it would be interesting to see Planning’s comments, but they generally aren’t published to the community at large on SPRs.  All in all a very nice project will most of the based covered (except parking, which may ultimately unfortunately affect the density).  1st Floor Plan can be gleaned HERE.  Elevations are HERE.  The proposed Landscape Plan by Artemesia (great to see them moving up to commercial projects like Haskell Row) is HERE.

The 5th Keystone 10+ acre development site has the S3 Development sign up, but requests for information on what is planned have not been answered.  I don’t know if S3 plans to purchase the entire site or just a portion.  One piece of the proposed development appears to be 230 units of 50% AGI senior apartments based on THIS filing with the HOMES Consortium.  Nice.  The 3.3 acre parcel referenced does not currently exist, so I can’t pinpoint the exact parcel location.

Is the market tanking?  See the RRB December Market Update.  Year over year “doit” appreciation in an economic boom, Pendings falling.  January 2018 was the  big “up” month that is currently keeping 2018 from being stagnant or negative appreciation.

2019

Time for some predictions!

  • Casino Core – Don’t expect any meaningful improvements.  The Virginian will not finish their exterior improvements and their retail space will not be leased.  The Row and Harrah’s will do diddly squat to improve the exteriors of their properties or to improve the pedestrian experience along Virginia Street.  Baseball has a huge parcel assembled for development, but I can’t see any NEED for additional development around the Freight House.
  • Fountain District – Expect a few more demos and no meaningful construction.  Jacobs may finally deign to reveal their master plan, but they have overpaid and development just won’t pencil.  If Renovo is an example of there ROI, the project is doomed.
  • Keystone I-80 – S3 Development has signs up, but no transactions have been recorded.  What is this site screaming for?  Absolutely nothing, and that is what will end up here.
  • Midtown Commercial – There will continue to be tenant churn as the escalation clauses in the initial 2 year commercial leases kick in (Morgan’s).  RTC construction will continue to be a mess, with the completed street redesign project pleasing no one and looking just like the underwhelming E 4th Street renovation.  Meh.
  • Midtown/Wells – Haskell Row is under construction with 22 rental unit and Arroyotopia will break ground 1st quarter will 10 1-bedroom apartments.  That’s it – do not expect to see any additional rental units to be built in Midtown or West of Wells.  All new development will be for sale product.
  • Daybreak – It will return and be approved at 3500 units or so (1550 units are already approved as Butler Ranch).  5000+ units was just stupidly dense, and I never believed it was a real proposal (unless Flood Plan Andy managed to get it approved!).
  • Reimagine Reno – The slog to codify all the pretty words from the Master Plan will continue to bog down due to a lack of any real regional vision and special interest groups bitching and moaning loudly about any changes.
  • Somersett Retaining Wall Lawsuit – The best place to research it is at Somersett United.  The gist of the suit is that a couple of 3 tier rockery walls failed, but after the construction defect period had expired.  The suit tries to extend the guarantee period based on when the master developer turned over the project to a homeowner’s board of directors.  The HOA suit is costing homeowners a ton ‘o cash monthly, and has a virtually negative chance of success.  The ENTIRE construction industry will pile on in the developer’s defense – an arbitrary extension of construction liability is untenable and most likely not legal.  It will be an interesting case study if the case proceeds, and even more interesting to see when the Somersett HOA cuts off their legal assault.
  • Median Home Price – Currently $377,250 in Reno, and I see $350,000 in January 2020.  Not a crash, just a dive.  It’s already happening if you dig down.  The developers have the unit mix all wrong as they try to maximize profits.  There are WAY to may $750,000 stucco shit boxes chasing way to few RICCOHs (RIch Californians Coming Over the Hill).

You might get the idea that I’m a little negative on the Reno market right now!

Mini Storage

The Root of All Evil?  Probably, though perhaps only a symptom.  When Toll Brothers and all the other production builders standardize on 20×20′ (or smaller, code minimum is 18×19′) garages without room to hang a rake or locate your 2 Waste Management bins or store your Christmas ornaments, you either hire a dumpster and downsize your crap once and for all or rent a storage unit where your crap can reside for all time raking up monthly fees that exceed the $/SF of most apartments.

Reno/Sparks/Washoe will add something like 3000 new housing units this year including apartments, and over 10,000 mini storage units.  Mini Storage used to be land use that happened in the wastelands on the far outskirts of town.  Now it is viable even at Park Lane.