Ally Charlotte Center (f/k/a Tryon Place) - 26 floors - 427'

[KJHburg]

The real estate cycle is winding down in my opinion (the commercial real estate market) construction costs are way up, financing is tougher and there is some worldwide economic angst out there. With 1 million sq feet of new office space (615 S College and 300 S Tryon) underway and only 300K announced preleased it might be prudent to delay a start. I think this is a viable tower and once an anchor tenant commits (again most likely to be an already in the market tenant) then it will start. Duke is planning to move a lot of people out of 400 South Tryon in the future and under the radar it seems they are constructing a huge campus in the University Research Park under the name Project Gator! Site development work is well underway. That doesn't mean they would not shuffle some people to some new space in uptown just that some jobs will be moved out of uptown too. 

[tozmervo]

First and foremost, I see construction costs killing off a lot of projects. We're seeing brutal construction cost estimates all over the region - there's way too much work for far too few capable subcontractors, especially in electrical, masonry and wall trades. (If you know anyone looking for career prospects: electrician is where it's at.) When I say brutal, I literally mean bids coming in 30-40-50% higher than expected. 

[HopHead]

Wow, didn't realize people were so sensitive to the point that they would attempt to delete their account. My comment was in reference to this thread alone, which I made clear, and not UP in general. Tryon Place in particular has been very back and forth in terms of getting off the ground and the only people that have consistently been right about these sorts of things over a long period of time are just a handful of posters who most of us trust with their sources. But when you start off your post with something like "well, don't ask me how, but supposedly, heard through the grapevine that AA was looking to ..." it doesn't exactly scream "being definite" Sorry, that's just my opinion. My apologies for holding only certain proven, reliable people to a gold standard. 

Edited June 14, 2016 by HopHead

[rancenc]

1 hour ago, HopHead said:

Wow, didn't realize people were so sensitive to the point that they would attempt to delete their account. My comment was in reference to this thread alone, which I made clear, and not UP in general. Tryon Place in particular has been very back and forth in terms of getting off the ground and the only people that have consistently been right about these sorts of things over a long period of time are just a handful of posters who most of us trust with their sources. But when you start off your post with something like "well, don't ask me how, but supposedly, heard through the grapevine that AA was looking to ..." it doesn't exactly scream "being definite" Sorry, that's just my opinion. My apologies for holding only certain proven, reliable people to a gold standard. 

Agreed!

[jwntim]

To be fair I think piedmont raised a valid argument. I mainly just lurk here (for various reasons) but there have been numerous times where users who post here frequently have pushed back on other peoples comments in an overly aggressive manner (ie jayvee saying "Yeah I don't see a shot in hell AA has, or had, any interest in office space uptown"). Theres no reason to post trash like that. Its condescending. Obviously they were trying to hint at their insider info ("I can't mention the specifics...").

Jayvee is a reporter. He does not work in real estate, he covers it. To me there is a big difference. For someone who is a "Development expert since 2015" you seem to think you have a little more weight behind your punches than I would hope. 

Then again im just a lurker who doesnt know anything.  ¯\_(ツ)_/¯

[alb1no panther]

Lol you guys... Could Jayvee had been a little nicer with the "no way in hell..." Cimment? Yes. Do you have to have thick skin on the internet? Yes. Moving the thread along now....

[15895]

But he was absolutely correct. So.... I mean. But lets be real anyway, it was just an attempt to ask "any updates" without coming out and directly asking "any updates."

[CLT704]

Woah, okay. That took a turn for the worst. I think we all need to respect everyone else's posts, if someone asks about updates on a project, don't be blunt, be courteous and polite. Also, hate to say this, but a certain poster needs to turn it down a little. 

 

Anyway back to Tryon Place, if it going to be completed for 2019/2020 then surely demolition on the site and construction would have to begin fairly shortly? 

Edited June 14, 2016 by CLT704
Courteous not cautious

[CLTProductions]

1 hour ago, CLT704 said:

Woah, okay. That took a turn for the worst. I think we all need to respect everyone else's posts, if someone asks about updates on a project, don't be blunt, be cautious and polite. Also, hate to say this, but a certain poster needs to turn it down a little. 

 

Anyway back to Tryon Place, if it going to be completed for 2019/2020 then surely demolition on the site and construction would have to begin fairly shortly? 

i would think this would be a 3 year construction timeline max. So they're still okay even if they don't start until next year

[deleted]

On 6/14/2016 at 8:39 AM, tozmervo said:

First and foremost, I see construction costs killing off a lot of projects. We're seeing brutal construction cost estimates all over the region - there's way too much work for far too few capable subcontractors, especially in electrical, masonry and wall trades. (If you know anyone looking for career prospects: electrician is where it's at.) When I say brutal, I literally mean bids coming in 30-40-50% higher than expected. 

Seems like a developer with deep pockets (Crescent) would be smart to wait until the market turned.  Building in 2009 would have saved a developer a lot of money and they would be the first to deliver a building when the market recovers.  I assume it's not done this way and that most projects of this size and scope rely on financing from institutions who will be skittish when there is no demand for what you are proposing.  If you believe in the project, saving ~40% would be meaningful and your project more competitive.  

I also wonder about developers (NWR and others) who presumably paid premiums for land that they could have bought for significantly less 5 years ago...then possibly sit on it for the next cycle.  I assume financing is the reason again but the land on Stonewall could have been purchased for much less 5 years ago.  That said, 7 years ago we thought the world was ending, financially.

[DEnd]

On ‎6‎/‎15‎/‎2016 at 3:56 PM, JBS said:

Seems like a developer with deep pockets (Crescent) would be smart to wait until the market turned.  Building in 2009 would have saved a developer a lot of money and they would be the first to deliver a building when the market recovers.  I assume it's not done this way and that most projects of this size and scope rely on financing from institutions who will be skittish when there is no demand for what you are proposing.  If you believe in the project, saving ~40% would be meaningful and your project more competitive.  

It's not really worth it.  There is pretty good reason to use financing, it's a good practice that adds another layer of review to ensure the viability of a project.  Also Crescent doesn't really have deep pockets.  I mean they are way deeper than mine, but they aren't deep enough to cover the types of losses it might get from a project like that, especially during a down turn when they will have other challenges as well. 

Also you will likely get a better Return on Investment if you use financing, assuming interest rates are reasonable. For example I was looking at buying a house a bit over a year ago, using cash (which my Dad and I had the option to do) I calculated an annual return of about 8%.  Using financing my return jumped to above 12% (I want to say 14.5% but that may have been at a lower interest rate, or less down).  Why the difference?  Leveraging.  If interest rates are below the return on total investment  (total investment including expenses, my capital, and any loan amount we get) then the return on my investment is greater.  ie: If I borrow $25,000 at 5% (annual) and I put in $25,000  for a total investment of $50,000.  If I get a 10% annual return on the total invested ($5,000), then I pay the bank $1,250 (I actually pay the bank more than that but that mostly becomes my equity, which in the end increases my return even further but I'm not counting it here)  so I get annually $3,750, from my $25,000 investment or a 15% annual return.  It's a bit more complicated than that (ok a lot more complicated) but that shows the basic Idea.  So in some ways I lower my risk (the bank approves in my plan so It's not crazy, I lower my cash outlay, I'm likely forced to buy insurance, etc...) and on top of that I increase my ROI, I do have a bit of a risk increase as I'm not straight cash out of pocket, so If I'm not careful with my debt load I could end up owing more than I have (the housing market could collapse and I might not be able to even give the house away, but I'll still owe taxes and the mortgage).  But as long as I keep my debt in line the risk reduction and increased ROI is worth the bit of additional risk I got with the plan. 

Edited June 17, 2016 by DEnd

[alb1no panther]

2 hours ago, DEnd said:

It's not really worth it.  There is pretty good reason to use financing, it's a good practice that adds another layer of review to ensure the viability of a project.  Also Crescent doesn't really have deep pockets.  I mean they are way deeper than mine, but they aren't deep enough to cover the types of losses it might get from a project like that, especially during a down turn when they will have other challenges as well. 

Also you will likely get a better Return on Investment if you use financing, assuming interest rates are reasonable. For example I was looking at buying a house a bit over a year ago, using cash (which my Dad and I had the option to do) I calculated an annual return of about 8%.  Using financing my return jumped to above 12% (I want to say 14.5% but that may have been at a lower interest rate, or less down).  Why the difference?  Leveraging.  If interest rates are below the return on total investment  (total investment including expenses, my capital, and any loan amount we get) then the return on my investment is greater.  ie: If I borrow $25,000 at 5% (annual) and I put in $25,000  for a total investment of $50,000.  If I get a 10% annual return on the total invested ($5,000), then I pay the bank $1,250 (I actually pay the bank more than that but that mostly becomes my equity, which in the end increases my return even further but I'm not counting it here)  so I get annually $3,750, from my $25,000 investment or a 15% annual return.  It's a bit more complicated than that (ok a lot more complicated) but that shows the basic Idea.  So in some ways I lower my risk (the bank approves in my plan so It's not crazy, I lower my cash outlay, I'm likely forced to buy insurance, etc...) and on top of that I increase my ROI, I do have a bit of a risk increase as I'm not straight cash out of pocket, so If I'm not careful with my debt load I could end up owing more than I have (the housing market could collapse and I might not be able to even give the house away, but I'll still owe taxes and the mortgage).  But as long as I keep my debt in line the risk reduction and increased ROI is worth the bit of additional risk I got with the plan. 

Market forces (e.g., your own inputs) limit your arbitrage profit, but yes, being levered on your investments has great rewards.  And great risks; not all of us can be Warren Buffett.  

[Crown]

Brian Leary on Tryon Place in today's CBJ

http://www.bizjournals.com/charlotte/news/2016/06/28/crescents-brian-leary-on-setting-the-bar-for.html

What’s the latest for Tryon Place? Is it expected to break ground this year?

I’ve been so happy with the latest momentum, particularly in the last three to six months, on multitenant interest. Folks that are in uptown right now that want to grow really cannot grow in place. If you look at what’s available, there aren’t a lot of options for Class AAA, new space, LEED-certified, wellness-certified, direct access to transit, in and out on the interstate, a gateway to South End.

We’re actually kind of stressed out because of the different options that we’re going to have to make a decision on, but our goal is to get moving and go vertical this year. We’ve had tremendous traction also at at the street level for the shops and restaurants — primarily food and beverage, recruiting the best from Charleston, Atlanta, Nashville, right here in Charlotte and out to Raleigh. We’re excited about what we’ll be able to get moving on this year.

If you pull up the market reports, the buildings are full, in general, up and down Tryon Street. If (companies) want to expand, they can’t expand in place. There’s room in the market. If things change, we believe that we have flight-to-quality, flight-to-location. We like where we’re sitting.

[cltbwimob]

Hopefully there will be some movement soon out of Tryon Place according to Brian Leary:

http://www.bizjournals.com/charlotte/news/2016/06/28/crescents-brian-leary-on-setting-the-bar-for.html

They are still wanting to go vertical by the end of this year.  One thing that stuck out to me is the articles mention of a boutique hotel at Tryon Place.  I thought the hotel was going to be along the lines of a large (approx 400 rooms) JW or Hyatt Regency, not a boutique hotel which is typically smaller.  Can someone of the Jayvee/RDF/Prodev variety comment as to whether this is a misprint on CBJs part or a change of plans on Crescent's part?

 

[KJHburg]

More from that article Brian Leary about Tryon Place and the competing new towers is encouraging too for both of them. 

What are the things you look for that says maybe you’re heading toward a real estate bubble? Rampant speculative development. It’s really not occurring. I know we have two office buildings underway (in Charlotte) right now, but one is filling up very fast (and) the other is a smaller building that has some great traction from what we’re hearing in the market.  Brian Leary Crescent is quoted in the article

He says in the article he hopes to break ground on Tryon Place later this year. 

 

[CLTProductions]

Brian is just the best. My god is he smart. 

Anywho. Yes this project will definitely get off the ground this year. This will be a 3 year project without a doubt. So much work to do. 

As far as the hotels go, technically Loews is a boutique brand for example. And boutique brands can also have 300+ rooms. That said, where does it say something about boutique hotel?

"Folks that are in uptown right now that want to grow really cannot grow in place." = hello Duke (TOTALLY SPECULATIVE) 

 

Edited June 28, 2016 by Jayvee

[cltbwimob]

14 minutes ago, Jayvee said:

That said, where does it say something about boutique hotel?

 

Hmmm.... I could have sworn the article stated boutique hotel but I went back to read it and it just says it will have a hotel. i must just be seeing things.

[CLT704]

Because I don't have a subscription to CBJ and I'm too cheap to buy a year subscription (I'd pay monthly), can someone summarise the main points regarding Tryon Place?

[CLTProductions]

30 minutes ago, CLT704 said:

Because I don't have a subscription to CBJ and I'm too cheap to buy a year subscription (I'd pay monthly), can someone summarise the main points regarding Tryon Place?

Already been stated in Crowns post above.

[CLT704]

Sorry. Just checking, I assumed that was just a part of the article.  

[Spartan]

On 5/24/2016 at 11:08 AM, alb1no panther said:

This the plan you mentioned earlier, @ricky_davis_fan_21 ?

 

Catching up here.... I like the old site plant a lot better. It doesn't bother me that they are expanding their site... but it does bother me that they aren't keeping the parking deck in the middle of the block. having a slightly taller hotel is super lame if it means that the parking deck will be visible (even if its screened). Hopefully they'll have office/retail space on the ground floor.

 

 

On 6/14/2016 at 2:23 AM, Deleted. said:

You know what?!! I give up posting here! It all just seems like you worship RDF or Jayvee. And whenever anyone else posts something, you all think it's never true because RDF or Jayvee hasn't posted it. I work for American, okay? I think I'm more in know than a majority of you. 

I see why people left urbanplanet and I'm going to be one of them. 

Not sure what this is about either. Who left the site? 

[SentioVenia]

Piedmont

[Nick2]

9 hours ago, CLT704 said:

Because I don't have a subscription to CBJ and I'm too cheap to buy a year subscription (I'd pay monthly), can someone summarise the main points regarding Tryon Place?

When the page is loading, right after the text loads, hit escape. The pay wall is usually the last thing to load on a website and this prevents it from popping up.

[CLT704]

Where will the construction camera go? Westin? DEC?

[urbanlover568]

1 minute ago, CLT704 said:

Where will the construction camera go? Westin? DEC?

??