While “sustainability” is a word that if often flung around in today’s society, hearing it in the world of building and development is becoming more common. According to Ian Gillis of Urban Community Partners, LLC, “Everyone has their own definition of sustainability. For me I prefer the word “walkable. We want to create a community where people can walk to work, to the store and out for dinner.” Not only is this idea something that is environmentally friendly, cutting back on use of cars, it is also much healthier for individuals. “Studies have shown,” he continues, “that people who live in mixed-use communities are actually healthier than those who don’t. They are using the two legs God have them, instead of their cars.” Continue reading Walkable Communities Are a Winner for Urban Community Partners
While there is much talk about having reached the economic bottom for the real estate market and that a possible upturn is right around the corner, developers and builders still may have uncertain times ahead. Our latest interview was with Jeff Daley, a 36-year old Assistant Vice President for a regional developer in the southeastern United States. Jeff gave us another look into those surviving the economic downturn. Daley was brought on as an analyst six years ago. Before the real estate crisis, his main responsibilities included sourcing and underwriting land deals along with the associated due diligence. Today his responsibilities have increased in light of the needed layoffs to cut overhead. “Like everyone else, we have had to downsize, and I’ve had to reinvent myself,” explains Daley. “I’m doing everything now from Power Point presentations to Real Estate Tax analysis.
As far as Daley’s project analysis is concerned, he strictly uses Land-PIE and Tract-PIE; “I can’t tell you how pleased I have been with the power and flexible capabilities of both Land-PIE and Tract-PIE. The ‘goal seeking’ element of the programs has been really beneficial. These systems are truly amazing and took my analysis to a whole new level,” praises Daley.
In regards to the economy, “I can’t say when there will be a turnaround. I have a theory that those who make a prediction, would be better served to simply say, ‘I don’t know.’ There’s just too much political risk,” surmises Daley. As far as personal growth is concerned, he has learned to be glad with the job he still has. “My wife and I have learned to cut corners. Well, I have had to. My wife comes from a more frugal-minded culture and I’ve learned a lot from her.” While admitting that this is his first economic “down stroke” experience, it has been more valuable than sitting in school earning his Masters. Apparently the school of hard knocks has another well-educated graduate.
Since beginning our interviews last year, we have come across one amazing story after another. While no one is enjoying, necessarily, the changes in the present real estate market, they are welcoming the creative opportunities rising from the ashes. Our latest interview with Michael Barnes was an exciting glance at new unforeseen opportunities and investments.
Situated in Reno, Nevada, Barnes was co-owner of Copper Canyon Development, a master planning developer from 2000-2005. Unlike many of his real estate contemporaries, Barnes and his company were able to sell at what turned out to be the height of the market and walk away with not only a profit, but an opportunity for a personal year - long sabbatical that led to a renewed enthusiasm for real estate potential.
In our latest interview we touched base with the Western Regional President of Kimball Hill Homes, Tom Jacobs. Jacobs has been with the builder for 18 years and has journeyed with the company on its rise to the national top 20 spot and now on its slow and graceful exit from the building industry.
Last April, Kimball Hill Homes filed chapter 11 intending to eventually make its way through our current economic landslide, but instead due mostly to the changing priorities of their banks, they will instead be closing their doors. “At this point, it’s not a matter of if, but when,” says Jacobs.
To their credit, they are not escaping the industry looking to only benefit themselves, but have sold all their properties, provided severance packages for their associates and have maintained a spotless reputation with their banking partners and others in the industry, “We are looking to leave the industry with as much class as we entered it with,” comments Jacobs.
In our latest interview, we discussed with Daniel Crow of Banner Communities, their innovative and ground-breaking methods for successful building in a struggling economy. Crow has been in development and construction for nearly 40 years spanning all areas of building from luxury housing to commercial development to affordable rental housing. 
For the last two years his company has been building what he calls “Workforce Housing” in west Texas. Unlike any other building developers I have ever run across, their personal involvement with the community does not end with the sale of the home; it is just beginning.
Building single-family starter homes ranging from $150-200K, their goal is not only to build energy-efficient (a point I’ll cover) affordable homes, but to ensure that their homeowners will keep their homes in beautiful condition; preserving the esthetics of the home and aiding to maintain its value. This “Transparent Life Management System” helps to preserve the integrity of the community through HOA’s and by maintaining for the homeowners their front yard and community landscaping. Anthem also keeps as full-time property manager at the community to assist homeowners and not abandon them as some builders do, creating more of an investment in the community and establishing a long-term relationship.
If that’s not enough, the homes come complete with all appliances, community pools and meeting places; designed to create an orderly and comfortable lifestyle, “Our intention is to provide something that is not dramatically different, but distinctively different from our competitors,” Crow says. And they are doing just that; setting them apart at their price point. Continue reading Workforce Housing In West Texas
 
In my latest interview with Mountain Capital Group (MCG) partner, Ellen Bellandi Alexander, I was really impressed not only with her understanding of her area of influence, but also with her ability to see the larger picture and incorporate others into it.
MCG is a private boutique equity lender providing Capital and Mezzanine Loans to real estate developers utilizing private equity sources. MCG provided about $200 million in private equity and Mezzanine debt for the development of real estate projects in California, Nevada and Colorado; funding the development of more than 6,800 housing units.
Since Mountain Capital’s inception in 1996, Alexander’s responsibilities have been mostly in the area of project due diligence and lending/underwriting and funding with her partner focusing on raising capital for developers who were building almost exclusively residential tracts, although MCG funded some value added apartments.
After the market turned south in 2007, Alexander had to devote her attention from funding new projects to exclusively spending one hundred percent of her time attempting to restructure debt and equity not only their developers and their attorneys but with the senior construction lenders while attempting to quell investor’s apprehension concerning the declining value of their equity. Continue reading Challenges for Mountain Capital Group
As the goal of this blog is to keep you, the reader, informed about the pain being caused by this housing crisis and what others are doing to weather the storm, I wanted to share with you the letter that I’ve just received from the NAHB. Many of their suggestions for solving this crisis quickly have been voiced already by those we’ve interviewed which means that someone is listening to someone!
The letter provides a CALL to Action and material to be downloaded and used as “talking points” when communicating with Congress. Let’s get involved and let Congress know what we want!
The letter follows:
December 10, 2008
From: Mark Pursell
Senior Staff Vice-President
Subject: Tell Congress to Fix Housing First
We need your help! The National Association of Home Builders (NAHB) is taking decisive actions to push President-elect Barack Obama and the 111th Congress to revive the American economy by addressing the core problem to the current economic crisis falling home values.
Continue reading Letter from NAHB - Tell Congress to Fix Housing First
Marty Mitchell is the Vice CEO and Vice President of Land and Business Development for Mitchell and Best Homebuilders, focusing on single family home development in Washington D.C. and outlying areas.
Having survived the slump of the early 1990’s, they were very aware of the market cycle. But no one could have predicted their present circumstances. Since 1997, the number of employees they have averaged was around 80; however, since the economic crisis, they have about 20 on staff, including 5 family members. While in a typical year, they would build between 80-90 units priced between 800K and 1 million per sale, they experienced a drop off in 2006 and presently have about 25-30 homes in inventory. They are struggling at this point to rid themselves of these "spec" units and in the process attain a breakeven point.A few years ago they experienced some delays with banks funding loans. These delays caused problems in other areas and eventually left them with a housing inventory of unsold homes that they are forced to get rid of after the housing prices had fallen 20-30%. If not for the delays, they would have been able to sell the remaining properties while their values were still high.
Mitchell remains optimistic, although admitting that this crisis is quite possibly the "Great Depression 2". "While we all expect financial dips from time to time in the industry, no one would remain in it if they knew something like this would happen."
Continue reading Housing Crisis in the DC Area
- One Architecture
 Shelby Navarro is the founder and owner of ONE Architecture in Tulsa, OK. Navarro has had his own firm for six years and unlike other companies in his industry, Navarro has been very successful in branching out into other areas to compensate for the lack of building in the present economic crisis.
While focusing mainly on architectural design for residential and commercial buildings, he has set his company apart with his work in "sustainable" or environmentally sensitive design. While there are existing incentives for builders and owners of green homes, Navarro hopes that there will soon be more that actually benefit the developer as well. He confesses that interest in high energy conservative approaches has waned a bit since their price of fuel has decreased, but there still are many potential homeowners interested in decreasing their energy use and incorporating healthy and environmentally friendly techniques.
Continue reading Green Projects in Tulsa, OK
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