Jeeper12

Except you can't really get a 2000 sf unit at the Encore. Like Viridian, Icon and Rhythm, almost all the Encore units are much smaller given Novare's typical approach of focusing on young first time buyers. The other thing you have to remember is many of those projects offer a different level of interior and exterior finish and, of course, all of them offer very different locations in buildings offering very different views. Eventually the market itself will reprice all units within these projects (the ones that get built anyway) during the resale process. As the Viridian has shown us the early buying patterns don't necessarily hold up to the scrutiny of a more patient buying public. Edit: You have to be careful with the 5,000 sf on an acre comparisons too. Where is the acre and how well constructed is the house ? The neighborhoods that I think urban dwellers consider relevant (but not directly comparable) to their condo decisions are urban like Belmont, Hillsboro Village, West End, Richland, Cherokee Park, Sylvan Park, East Nashville and even Green Hills and Belle Meade for projects at the high end of the range.

^All good points. It would probably shock many to know that downtown Nashville has only recorded residential sales over $1 million twice ever, both in the Viridian at $1,018k and $1,050k. And of the initial 305 Viridian sales, only 1 unit sold for over $500k, at $506k; most were under $250k. Also, Tony has yet to sell his lone Cumberland Penthouse that's been priced at $1,250k for almost a year and a half now. I've contended for some time that Midtown and the Gulch will ultimately draw a far greater share of high end units than downtown for some of the reasons you noted; there's already a healthy mix of local driven retail, restaurant and other services that downtown lacks. And with many more luxury units in this area scheduled for completion in the next year or so, these midtown, gulch and West End retail options can be expected to get even better. This is not unlike how Buckhead and Midtown have completely overshadowed the residential growth in downtown Atlanta. Based upon the history (recent and not so recent) of purchase patterns in downtown Nashville I think it would be quite ambitious to try and sell just 50 units at $550/sf let alone 450 in one building. Doubtless, there are 5 or 6 eccentric fellows waiting in the margins to step up for the top floors of any "tallest building in the wherever"; that would probably be true anywhere. But unfortunately, the building won't fly on their backs alone. Tony will have to sell floors 10-65 as well, magically creating a market in an area where previously there was literally none. And using Viridian and Encore to argue for ST is like pointing to two charming queen ann victorians in East Nashville to justify the construction of a new Belle Meade mansion between them. Yet the resales in the Viridian still offer useful lessons I think. 4 or 5 people poor souls there paid over $400/sf late last year but this soon tapered off and now the average resale price is less than $350/sf and trending down briskly. What does this tell us about the first few buyers of anything ? They certainly don't guaranty or even offer strong evidence that hundreds of others will follow suit. To your last question, I think there is much confusion about what constitutes luxury in Nashville. Based upon known project pricing, here is what I know about the pricing of existing projects that are proposed or under construction. WES $750/sf ST $550/sf Terrazzo $380/sf The West End $376/sf Rhythm $375/sf Adelicia $350/sf Viridian $348/sf (average resale closings to date) Encore $325/sf

Careful G-towner, you better tread lightly....Seriously though, you couldn't be more dead-on about the whole "tallest building in the whatever" angle. It's a weak basis upon which to pursue a a condo tower IMO. I mean, is it really likely that it never occurred to a developer in NYC or Atlanta or Chicago or any other market with 4 million or more people to try that one ? I'm sure there are good reasons why most residential condos in those large markets top out at about 40-50 stories (safety, convenience, diminishing returns relative to cost of going from 50 to 70, etc.). But if having the tallest this or that was, in and of itself, a magic bullet, developers would be regularly trying to outdo each other for this honor all the time. But the best of the luxury residential developments around the country that I've seen don't focus on their skyscraper status to sell units. Go figure.

Very exciting stuff to look at. It's amazing what you can do with free access to the federal treasury or a few billion barrels of oil reserves. No need to quibble over material costs or pre-sales. But you have to wonder who will show up to live in all the instant waterfront cities being built in Dubai, U.A.E., Quatar, etc. It seems like the most extreme economic example of too much money chasing too few goods. The only thing we can be certain about is that it will not end softly. It never does. I remember hearing stories in the 70's about rich Saudis abandoning Mercedes Benz' on the side of the road when the gas tank was empty. What will they do with their waterfront condo under similar circumstances ? Economists and supply & demand theorists all over the world must be licking their chops to study the tail end of this era. We should probably continue this discussion on a new thread.

This was a very good question over a year ago. Isn't it kind of crazy that we still don't know the answer ?

I wish you or someone else had a friend or knew an employee with his lender or equity sources.

Of course I could. It's just much more likely that I'm not, at least as to the question of whether Tony is sitting on good news.

I'm trying to follow your logic. So you're suggesting Tony is overcoming all these monster hurdles and keeping quiet about it for what reason ? To continue maintaining flat sales while simultaneously reducing his condo count and making the hotel pitch even more difficult than it already has been ? Ok, too sarcastic but there has been significant skepticism about his conversions posted in great detail on UP and we know that some of Tony's team, probably Tony himself, monitor these discussions. Heck, sometimes the UP sentiments even get published as sources by the Nashville journalists covering real estate. Err, well, ok maybe WW is the only reporter that does that. But anyway do you see my point ? If your supposition were true and reservations had all been converted to contracts and hotel lenders and operators were signed up don't you think Tony would seize the opportunity to make some new headlines and rouse the publics interest again ? It is, of course, not proveable but I think the silence out of the Tony camp is deafening. That said, again, I'd like to understand what rational motivation you think he would have to sit on so much good news. At what point does a theoretical possiblity give way to plausability and logic ?

He may be but that kind of ignores the point that we're still sitting here in June talking about reservations and not contracts. It also ignores the reality that prospective partners and lenders will be just as concerned if he can't demonstrate solid demand at every level of price point not just the larger (eccentric) ones. True, in theory it may help to achieve a % (of loan $'s) sold presale benchmark quicker but, again, if there is a big apparent hole at the low end of his units (those $500k one bedrooms) he will be just as stymied with the money people.

Does anyone see this as a positive or a sign of progress ? I commented a month or so ago that only 20 new reservations (not to be confused with contracts) seemed awful after over 30 days of traffic in the brand new sales center. If the website is still being kept up to date it seems like interest continues to be flat over the last month. And unless my math is off I think that would suggest that after having the sales center open almost 3 months his sales team has generated only 20 new totally refundable reservations. Also, I thought the process of converting to contracts (which I've contended will likely cause 70-80% of the reservations to evaporate) was to begin a month ago. Does anyone have any news about this because (permits or not) I don't see anything other than a ceremonial groundbreaking in 3 weeks unless he can announce good contract progress and the identity of his equity and lending sources.

Because the developer himself has said so.

Or a sign that the developer is starting to recognize that he can't sell as many condos as he thought at those prices. You are correct that for Kimpton more rooms means more guaranteed mgmt fees with no additional risk. I'm still not aware of any equity partner announcements for the hotel or the condos. Seems like there is still an awful lot to do (or announce) in the next few weeks.

If Tony had kept a lid on everything until a week ago and he had 140 reservations overnight, I would agree with you. But since he announced 120 a year ago all but about 15-20 of his reservations appear to be about a year old. It's common for those with "flip" interest to hold a risk free "place in line" by putting down a refundable $5 or 10K just to see how things unfold. The overwhelming majority of this interest usually doesn't step up but I conceed it's theoretically possible that they could. As to your "closed doors" comment, I think I've already previously addressed why it's to a condo developers disadvantage to sit on good news. I do think we're basically in agreement though in terms of the next month or two being make or break for Tony. These condo projects are all about momentum. Terrazzo suffered greatly from a flat opening (which probably says something about the depth of the market for $500k plus price points) even though they only needed to sell about 50. It took them almost a year to do it despite being almost $200/sf cheaper than ST. So how long might it take to sell 260 units (Tony's stated presale req'mt) ? I guess we're all going to find out.

Not sure I understand the question but I'll try and answer anyway. Tony would have less chance of getting a comparable office project off the ground than a condo because office buildings are always tenant driven. And tenants are much more sophisticated than condo buyers when it comes to signing on the dotted line. I think most local office brokers would tell you that Tony lacks the credibility to be seriously considered as an office developer. The fact that he's never developed one and apparently went bankrupt the only time he ever tried probably has something to do with that. ST wouldn't work as a stand-alone hotel for different reasons. Luxury brand hotels rarely underwrite (cost to build relative to ADR) anywhere these days without some uber luxury condo component to help offset the hotel's development cost. Hence, AP needing to get 50 WES buyers to pay $750/sf (a $250-350/sf premium) to be under the same roof as the hotel. Frankly, I think Tony would have had a better shot had he not fallen into the "tallest building in the south" trap and just tried to do a 35-45 story hotel/condo that was 80% hotel and 20% condo. It would have been easier to pioneer his condo prices at 80-100 units rather and almost 400. Not to say that would have been easy either though. I know there are many downtown bulls on this board but I still don't think the super rich or trendy hotel patrons are dying to stay or live on Church Street. One day they may but I don't see it happening anytime soon.

I don't believe it has 50/50 prospects unless he can get 50% to 60% of it sold (binding contracts) soon to buyers willing to eventually put up more deposit than the 5% he is currently requiring. As it stands right now, based upon everything I've seen and heard, I don't think he has much more than a 1 in 10 shot of getting it done. Another quiet month and it will be half as likely, IMO. That may strike some of you as too pessimistic but it's important to understand that even with the sales in hand as above there would still remain huge hurdles that include the following: 1) Find an equity partner (for hotel and condo) good for the $80-90 million in cash needed to satsify a lender. 2) Get under contract with the GC (presumably Turner) at an amount that makes the proforma work. 3) Obtain a $200 million plus construction loan with lenders that are satisfied with his presales and contract terms; as I've said before, the large banks capable of funding these kind of loans will not find a 5% deposit acceptable for such unproven price points and price/sf levels, IMO. Those of you eager to see the project get started with or without Tony should take comfort in the fact that if there really is a market for what he's dreamed up it will most likely get built regardless of his net worth or experience level. In such a scenario (units are sold, construction contract is in place) Tony would inevitably find larger players knocking on his door to bring the needed experience and capital to complete the puzzle. If demand appeared strong (after a year and 70 articles) for what he's got drawn up I think we'd probably have already seen an announcement that he was aligning himself with a bigger player. BTW, it's really not the slight many of you think it is to suggest that Girantanna's company is stretching to try and pull this project off. There aren't many development companies in the US that have the wherewithall (experience, capital, lender credibility) to make a 1/3 of a billion dollar project happen in a large market, let alone all in one shot in downtown Nashville. Also know that I recognize that some of the steps noted on my list above could theoretically already be in place but as I have made clear in earlier posts, projects with as many skeptics as this one need to announce every bit of progress they make as soon as they make it in order to keep prospective buyers believing. So, I don't think my inferences or my odds are illogical. Hope this answers your question, smeagolsfree.

For crying out loud ? It was a joke. Did you ever speak with any of the lenders or equity partners who were involved ? I have and things didn't go well. Not even Tony has publicly suggested it was a big success. Unless of course, your only definition of success is that something gets built and the lights get turned on. I would suggest to you that there are many other measures of success most of which Cumberland didn't pass. And rest assured, if it had gone well, more projects would have followed sooner. I don't think anyone has suggested "it won't be real until its already built". But I'd be interested to see the post that you think infers or suggests that. However, there has been a good measure of reasonable debate about whether Tony is over his head on this one, so to speak, relative to his resume. I presume that even you would conceed that previous experience ought to be a factor in considering ANYONE's chances for success. But since I "know so little" and you apparently know so much I wonder if you could answer this question for me: What projects besides the Cumberland has Tony undertaken where he has had full responsiblity for conceptualizing the project, procuring the needed debt and capital from others and then executing the process of managing the design (architect) and the contractor throughout the duration of construction (a.k.a. being a developer) ??

Ouch...Time will be kind to one of us, Heckles.

Permits won't be the next sign of progress IMO. Here is what has to happen. 1) An initial update on how many reservations converted to contracts. If this takes more than 30 days from the commencement of him converting the first unit that will be a likely sign that he fears posting the (small) number will cast more doubt on his chances. 2) Continued updates tracking his contract percentage to his stated goal of 60%. 3) Announcement that hotel partner is identified and on board. 4) Announcment that a specific lender has issued a commitment letter (even one subject to hurdles). I don't see Tony moving any dirt around or even trying to fake a groundbreaking ceremony without the above behind him. As has been discussed on this thread there are many projects backed by bigger players in bigger cities who have done 1-4 and still pulled the plug. Some even pulled preliminary earthwork permits. Frankly, given the millions of somebody's money already buried in this deal I'm surprised they don't already have the sitework permits in hand (similar to AP). The plans certainly seem far enough along to apply and the cost would be peanuts relative to what's already been spent. But again, I think it would be yet another silly sign of desperation (thinking balloons) if he were to try to do much ahead of 1-4.

titanhog, Thanks for the comments. I hope you understand that I in no way want to stifle discussion on this board, only raise awareness. To that end, I think our discussion yesterday and today has been fruitful. Maybe some other media folks (other than Richard) will tune in for a crash course on contracts. You make many fair points and and I appreciate the extent that you often go to be tactful. In turn, I will from this day forward endeavor to be a kinder and gentler Jeeper. Respectfully, Jeeper

My good friend, Plasticman, you've hit the nail on the head. There is absolutely no reason for Tony or any other developer NOT to report every bit of legitimite progress because, as you say, it tends to "fuel more sales". Same is true for Alex Palmer. Naming the tenants constituting his claimed 40% would only lead to more tenants and more condo buyers. So, just a little bit of common sense suggests that these guys will report every inch of progress (with a press release, no doubt) to help sustain (or generate) momentum. BTW, I don't fault the developers for trying to spin no news into news if they can get away with it. I simply offer you and the others some ability (if you lacked it previously) to see through some of the smoke and have a more informed opinion about the true status of things.

I may be sounding like a definitional hardass but I don't think we need to concern ourselves with the distinction between binding contracts (with substancial non-refundable deposits) and closed units for the purpose of defining "sold". Obviously, no closings will occur until a project is completed but it's probably more useful to know where the developer stands w/ his buyers contractually. So, I wouldn't be critical of Tony or anyone else for claiming to be "30% sold" if they had binding non-refundable contracts representing that amount of their project. (However, I may still chuckle or crack a joke if the deposit amount at risk is so paltry that it amounts to less than 4-5 days skiing in CO.) I think it's more important that everyone simply be aware (and at times weary) of the distinction between the binding contract and the refundable $5k reservation that tends to evaporate like a mirage when put to the conversion test.

I don't need to contact them. If what you say is true, and I still contend (admittedly without "proof") that it is not, the media will be lined up outside of Tony's office in the morning (go get 'em, Richard !!) after reading this scoop on UP for the opportunity to have first shot to report that Tony has essentially converted almost all of his reported reservations to binding contracts. Who knew ? Now THAT would indeed be a big story and you would hear nothing out of me except congratulations to his team for clearing a hurdle that I thought they wouldn't. Of course, it wouldn't be the last of the problems needing a solution but, again, it would be an important milestone IMO worthy of some media ink. So, why don't we all just chill for a day or two and wait for the story....or titanhog's confirmation that Tony's staff was just being a wee bit loose with the definition of "sold" again. I've never suggested anything like that about most of the forumers. And for the record I think the tendency of some to overstate the progress on this project stems more from skyscraper boosterism than any educational or IQ deficiency. I've never discouraged anyone from posting, but again, don't take it so personal when someone with a different opinion offers respectful criticism of some comments/posts. I certainly don't. No, I just think it would be kind of neat if all the regulars on this forum regularly posted in a way that demonstrated reasonable working knowledge about some of the things we've spent so much time discussing today and in the past. Nevermind whether I think you may have fallen off of a turnip truck (I don't btw). I just think it would be more important to post in a way that doesn't cause UP'ers from bigger markets that might occasionally drop in for a look to come away feeling that way; "Do those hillbilly's on the set of heehaw have a clue what it takes to get a project off the ground ?". That means if a reporter or a developer (one you like or one you don't like) says something stupid or just delivers info in a way that suggests their audience just fell off a turnip truck, try not to simply "regurgitate" it without at least demonstrating you understand the distinction. Just my opinion though. Peace. P.S. I'm a big country music fan and consider myself a hillbilly at heart.

You guys can post anything you want and "regurgitate" as much of the propaganda as you deem appropriate. But don't be personally offended when myself or another Planeteer take the opportunity on occasion to set the record straight so unsuspecting readers (members, media or otherwise) don't get mislead by certain posts. A newcomer to the board shouldn't have to absorb 4 months of discussion behind a thread in order to draw a reasonably informed opinon about issues related to the topic at hand. Obviously, not everyone (including the news 5 reporter) necessarilly understand the differences between a refundable reservation and a binding sales contract but, like it or not, everyone of you that posted gripes today have been clear on this point for many months. The ST isn't 1/3 sold and to date there's been no indication that they've even begun the process of converting reservations to contracts. We've had ridiculously ample discussion on this board about how big a hurdle this is so it's misleading (intentionally or otherwise) to suggest (or regurgitate suggestions) that this milestone is behind this developer. In hindsight I agree with you that my post yesterday could have probably been made more effectively with a little less sarcasm. But if you endeavor as much as I do to see this board realize its potential to be a valued and trusted resource for the Nashville public to become more informed about issues relating to the built environment you'll join me in trying to make sure that posts aren't misleading, regardless of where you come down on a given topic or issue.

^ Of course I did. Do you think the developer is really going to point out that he still hasn't a single binding contract ? Of course not. He's going to attempt to continue spoon feeding the media hoping to sound more "certain" of the July groundbreaking so he can try to maintain more credibility with ptential buyers and the public at large. I don't blame the developer for this but I do have to chuckle at how gullible the media continues to be. And, again, I think it's ridiculous that posters on UP continue to digest it and base new optimistic predictions on same.

The messenger of what ? You guys are starting to sound like a broken record playing the same old garbage over and over. It's really getting to the point that you're just insulting your own intelligence with these posts. After all the discussion on this thread are you still unable to distinguish a reservation from a contract ? Wow, 1/3 sold without a sales center!?!?! Of course, that's bunk but how many sales since the sales center opened ? Unless I missed a pr release disguised as a City Paper article I think the balloon rides still outnumber the hard sales contracts. Thanks for the update though.