I love September in Reno. It begins with the influx then outflux of the Burners, the Best in the West Rib Cook-off, the balloon races that are going on this weekend, next week’s National Air Races which is simply a must see, and even the PBR event (Professional Bull Riding). If we could only get my favorite MMA star (Mixed Martial Arts) to schedule a bout here, I could die a happy man. I dwell so often on the negative aspects of the region that it takes September to remind me what why I relocated here in the first place.
I saw some interesting positive developments downtown today. La Familiglia restaurant is relocating to the new building at State and Court Streets. Great food, and if they leave the attitude on Center Street, this will be great for downtown. ecoReno has relocated from their out of the way location to a storefront at SVA and Vassar. And out of the blue, I ran into Raymond’s Sourdough Bakery on NVA between 2nd and 3rd. Has anyone checked them out yet? Fresh sourdough every hour is the claim, and that sure works for me.
The Beast of Caughlin Ranch FINALLY got their NOS this week. Currently listed at $3.5M and I think down from $4.5M at one time in it’s multi year listing history. I would feel better if it had a roof and hadn’t gone through a couple winters exposed to the elements. The recorded loan amounts aren’t nearly the asking price, so I think a lot of personal money has been invested in this one. Architecture or eyesore? This may have been the only property owner who was hopeful during the Hawkin Fire. So what do you think, will someone buy this or is it a future knock-down?
Trying to stay positive, Corus Bank finally failed this evening. The Montage goes into official limbo until the asset auction is complete, though the sales office was still open at 4:15 this afternoon. Finally, action and resolution may be on the horizon for the original contract holders, or maybe just one more level of Hell. Lost in all the Montage talk is that the Resort at Tanamara is also a Corus loan showing as non-performing..
Wake up early and be in awe of the balloons as they rise over the horizon. In the end, it’s pretty cool to live in the Truckee Meadows.
Noze4thenwz
downtown makeover dude is also reporting that idlewild went back to the bank as well.
bondstevenbond
You can click through Mike’s link above to the FDIC’s press release. In the press release the FDIC mentioned that assets which are non-cash and non-marketable securities will be sold via a private placement within the next 30 days. Presumably this means that Corus and the Resort at Tanamara have already been sold to private equity investor(s)? Does anyone know the % occupancy of the Resort at Tanamara and do you think the potential change in ownership will affect occupancy rates or prices at Tanamara or in the South Meadows area. Personally, I think that the core downtown condo market is absolutely uninvestable until the Montage is well on its way to being either occupied, converted, or mothballed. In the case of Tanamara, I am thinking the situation is not nearly as dire because that property appears mostly occupied. Appreciate any insights.
SkrapGuy
Yet again, another prediction from the RRB comes to fruition. When the Village at Idlewild went to 50% rentals, there was robust discussion on this blog. Most of the consensus was that this would inevitably be the kiss of death for the project. The deed in leiu back to the lender completes yet another saga of the bubble frenzy. So at auction, what do these Village at Idlewild places go for? $75 a sq. ft.?
Carole
The Montage, the Village at Idlewild, Tanamara, 1000 NODs a month, 70% of all sales are distressed, falling median. For some of us, all of this is quite welcome. For some of us, this all is quite positive. For some of us, this destruction of the bubble, piece by piece, bit by bit, marks a return to financial sanity.
For some of us, falling prices are not the problem. They are the solution.
Casa de Dolor
Carole, I wish I had written that…spot on.
Sully
Yeah Carole, now if only Bernanke, Obama, Reid and Pelosi can get that message …..
bob c
Sully, if you were in charge what would you do?
In my opinion they had to ‘bailout’ the system
in October 2009 with the unlimited backing of
the the U.S, treasury or we would have had a total collapse.
From here, the path is not clear. My theory is
to inflate their way out (even though in a real
sense everyone loses a few % a year) by holding
rates artifically low for as long as possible. But, we could be repeating a japanese style deflation. I knew we were in trouble
(thats why i went all brokered CD’s in 2000), but
I don’t have the solution. Market forces left
on their own could have wiped us all out and benefited only the mega rich.
What is the long term sustainable solution?
The rebound in the stock market is a relief (even
though I own none) and the moderation in the
housing numbers and other economic idicators
is welcomed.
But I really do not understand what is transpiring now in a macro sense. (serious
shifts in macro economics will trump any
local real estate trends).
Can anyone enlighten me?
Walter
Amen, Carole, Amen.
Sully
bob, if had all the answers I wouldn’t be here! But, one thing for sure, continued reckless spending programs will prove to be worse than the illness in the long run.
BTW, the mega rich are already benefiting. The gap between haves and have nots is growing larger by the day.
Martin
bob c,
You can go back a few months ago on this blog when that question was discussed, in and out, up and down, inside out and backside in, over and under, ad nauseum ad nauseum ad nauseum. No inflation and hperinflation, interest rates going up, interest rates going down, the market bottom is here, the market bottom is years away, and on and on and on. Fact is nobody knows, everybody has an opinion.
There are a 1000 blogs to talk about the future of world economy. I like this one because we talk about Reno real estate. I’m with Carole too. I celebrate every REO sale that causes another comp to drop. Right here in Reno.
WorriedGuy
Talking about REO sales. What is a reasonable offer below the Bank’s asking price? I read somewhere that they won’t even look at an all cash offer unless it is somewhere near 85% of their asking price? Thoughts? Thank you.
bob c
OK–cool
Are the REO comps dropping or stabilizing?
(in your opinion)
Gary
I still think I prefer the Rib Cookoff, with its enticing aromas of freshly-grilled ribs smothered in exotic and tangy sauces over the much more bitter smells of fear, foreclosure, and financial ruin, but I guess it’s a personal thing.
Whatever you like most, you can find it right here in Reno 😉
DonC
Carole, as I buyer I’m with you and I understand that falling prices may be a solution, even a necessary solution, to an asset bubble. But that doesn’t make it pretty. Lots of folks, many who were responsible, have been negatively affected.
Sully, not sure what “reckless spending program” you’re referring to.
When you look at spending you have to evaluate what has no value beyond the current period and what will return value in out periods. Sending kids to school is not wasteful since you’ll get a return in later periods. Weatherizing offices is not wasteful because it will generate savings in later periods. On the other hand, fighting wars, sans compelling reasons to do so, is a complete waste or resources.
FWIW I think the wealth gap is flattening courtesy of the bubble. The top 1% had the most assets and, since assets all took a very big hit, the top 1% absorbed the lions share of the damage. Basically the top 1% are now a whole lot less wealthy, relative to the rest of the country, than they were a year or so ago.
With respect to Corus, the reports indicated that the FDIC will need to write down the lending portfolio by 1/2 to 2/3. Given the magnitude of the write downs, I wonder if that means big price reductions for the Montage?
WorriedGuy
Bob C:
“Bailout” of a flawed system with the same methods of unsustainable debt excess is the definition of insanity. What is needed is a reconciliation of the moral hazard disease that caused this debt bubble. The masterminds have it all wrong if they think they can put humpty dumpty back together again with layers and layers of new debt. The consumer isn’t creditworthy and is saying no mas to their enslavement. The banks and Gvt. are fighting something much larger than themselves. The will lose this battle. It might not seem that way with the little spurt in commodities and equities, but that is some good paint on the scoreboards. What about on the ground with real estate and job growth? Sorely lacking. Why? No income as a result of years of debt excess. Give us a paydown of debt and rise of savings and production vs. debt ‘asset’ speculation. Therein lies the answer to future growth and prosperity. The people know this…can the Fedheads figure it out? They will have to soon enough.
WorriedGuy
How valid is this statement?
“This home is a Real Estate Owned (REO)/Post Foreclosure. Once a lender has foreclosed on a property it is soon put up for public auction. If bids fall short of the asking price the bank will buy back the home and attempt to sell it on the open market. However, lenders are not real estate agents, meaning that they will often accept offers 30 to 60 percent less than market value!
Provided by the agent.”
How do we determine Fair Market Value for a home to chop off the 30 to 60 percent for an offer? Thanks.
billddrummer
Another Amen to Carole, and thanks.
Some things to ponder over the weekend:
On 9/11 (irony? prophesy? coincidence?) Corus Bank was (finally) closed by the FDIC. Cost to the agency–$1.2 billion, give or take.
On October 4, Silverwing Development (the condo conversion I used to rent from) will be auctioning all the remaining units at an opening bid of $79,000. These units were offered at $293,000 at the peak of the boom.
They will also auction off The Cottages (Pembroke & McCarran) at opening bids of $89,000.
And yesterday I got a phone call from the Alexander Apartments (the ones that burned on So. Virginia). They are offering 2 months free for a one year lease and a $100 move-in deposit.
I didn’t get a chance to go over there to check out the models.
I wonder if they got the smoke smell out?
billddrummer
Balloons were cool today.
billddrummer
To Worried Guy,
It might be valid if you can figure out who at the bank to talk to about the deal. Most of the residential mortgages that I’ve run across have been sliced and diced so many times that no one knows who the lender of record is, and nobody really cares to figure it out.
Martin
billd,
Is that Silverwing project the one by Virginia Lake? Those 1960s era apartments that were “renovated”?
thanks.
billddrummer
To Martin,
You’re absolutely right. And I apologize for an error–Corus was based in Chicago, but incorporated in MN. You’d think that midwestern banks would stay away from condo conversions in Miami, Ft. Lauderdale, Reno, Scottsdale and Las Vegas.
Then again, maybe not.
I believe that Silverwing is associated with the commercial building at the corner of Plumb and S. Virginia that was built on the site of the old Mark Twain motel.
The building, a two story office complex, is 100% vacant, and I think it has been since it was completed in 2007.
Martin
billd,
Is that going to be real auction or one of these phony “reserve price” deals we see all the time now?
$79K may be decent price for one of those places, but I don’t think Silverwing is going to let them go for that price. I think the $79K is just a come on, and if the seller does not get what it wants, it just calls off the whole ‘auction.’
noz4nws
To Bill D.:
The commercial building next to El Pollo Loco on S. Virginia just south of Plumb on the site of the old Mark Twain is SilverSTAR.(Grant’s Pass) ..SilverWING is Laguna Terrace – I believe around Virginia Lake.
Guy Johnson
Here’s a link to the Corus/Montage story that appeared in this morning’s RGJ:
http://www.rgj.com/article/20090913/NEWS/909130337/1321
Guy Johnson
Here’s a link to tomorrow’s REDC foreclosure auction: http://www.auction.com/auction-details.php?auctionID=H-100&chkVenue=731#;
20 Reno,Sparks, et al properties being sold.
From the auction website:
When: Monday Sep. 14, 2009
Where: John Ascuaga’s Nugget: Room- Rose B Ballroom 1100 Nugget Ave, Sparks, NV 89431
Time: Registration Starts Promptly at 5:00 p.m. Auction starts promptly at 6:30 p.m.
OPEN HOUSE DATES: From 11AM to 4PM
What to bring: Last 2 yrs W-2 – $2,500 Cashier’s Check ($5,000 for each subsequent) – Checkbook for balance of 5% Earnest Money Deposit (15% for each subsequent)
DooLinn
Doc. No 3799364. Looks like Diane is trying to get our of her contract at FDIC Towers.
billddrummer
To noz4nws,
Thanks for corrrecting me. Is that building occupied?
Silverstar Communities also developed those townhomes that look like the SF houses at Virginia Lake and along Moana Lane at Lakeside, across from the Sundance West apartments, just south of the assisted living center.
smarten
Thanks for the info on Diane’s Montage rescission DooLine –
Now for you local lawyers out there, what does recordation of a formal purchase contract rescission election accomplish other than placing a non-traditional cloud on title? In other words, couldn’t Diane and Co. have accomplished the same result by mailing a letter to their sellers/successors?
billdddrummer
Update on the Alexander:
Move-in deposit is $300, $100 to reserve a unit.
Rents are still in the $1100-$1300 range, with an additional $100/month if you want a garage.
The units are nice.
Two months free rent for a 12 month lease. Three months free rent if you sign an 18 or 24 month lease.
Property will remain an apartment complex–no plans to convert a la Tanamera.
Clubhouse is being outfitted now, with opening planned for next weekend.
Heavy trucks are hauling away the last of the debris from the fire. There’s no inkling of smoke smell in the completed buildings (guess the wind was blowing east).
My sense is that Spanos will rebuild, but when, and how, is anyone’s guess.