When Systems Fail…

Last Sunday morning I was enjoying my typical and much loved Sunday tradition of reading the newspaper with a cup of coffee.  My cat, Scudder, was comfortably perched in my lap and all was well in the world.

Suddenly the fire alarm went off!  Not only does it go off in my building (100 Wisconsin Ave.) but a very stern female voice follows stating “A fire has been detected in the building.  Please proceed immediately to the stairwell.  Do not use the elevator!” 

My first reaction to this was searing pain.  Scudder, the cat, is a little, no a lot skittish.  When the alarm first sounded he sprang from my lap using his hind claws to give him added distance and launching power.  Much to the cost of the flesh on my legs!  At second sounding he flattened himself on the floor with his tail puffed out like that of a racoon.

I shut off the TV, grabbed a baseball cap and headed for the staircase.  After 9 flights down I found myself with a few other residents in the alley behind the building.  We proceeded to walk to the front of the building, all the while looking up the building for signs of “the fire”.   There weren’t any signs.  About 10 minutes later, the firetruck arrived.  3 firefighters got off of the truck and walked into the building.  Notice I said walked.  My guess is due to the long response time and the nonchalant way they approached the building they already knew there wasn’t a fire. 

After about 15 more minutes they gave us the “all clear” sign and we were allowed to resume our Sunday morning.  Seems a sensor in one of the commercial spaces on the lower floors was malfunctioning, thus sending out the alarm.  I’m told this was only the 2nd time in the building history that an evacuation has occured.  Glad to know this isn’t a regular Sunday morning occurance.

Anyway, I also know that I’ll NEVER be able to sleep through another fire alarm.  WOW, it was very loud.  Good to know.

Metropolitan Place Phase II Hits Foreclosure Filings

Another victim of the real estate bubble?

Not enough people want to live in downtown Madison?

Development that was underfunded?

Misunderstanding between the developer and his bankers?

YOU DECIDE.

 Below are the local press articles regarding the recent foreclosure filings against the developer of Metropolitan Place Phase II and his lending/funding sources.  Since word of this hit the media yesterday there has been a lot of speculation as to the cause of this foreclosure action.  Time will tell what truly happened.

I do know a few things:

1)  Development of a large residential condo tower is definitely different than developing a group of 4-8 unit buildings on the fringes of a city.  What I mean by this is on the fringe developments, the developer typically pre-sells 50% of the building before the lender will allow construction to start.  This lessens the risk of the market corrections, interest rate jumps etc…  In Metropolitan Place Phase II’s case, they had to build all 164 units at the same time with the hope that market conditions didn’t affect them too much in order to keep the lender happy.

2.  The market did shift.  The number of units available downtown increased tremendously and unfortunately pricing couldn’t be adjusted to meet the change in demand.

3.  A project with the size and scope of Metropolitan Place is enormous.  When completed and occupied the number of dwelling units between Phase I and Phase II is at 338 households.  Think about this in terms of single family subdivisons in the ‘burbs.  That large a subdivision would typically take 5-10 years to build out and complete.   This has created a small village on 1/2 of a city block!

4.  Finally, there’s talk of the courts forcing the project into receivership with a court appointed entity taking control of the project and it’s sales.  What might happen in this case is that prices on the remaining units could drop substantially to get them sold and sold quickly.  For those unit owners who have already bought, this is bad news in the short term.  If they needed to sell during this time frame, they’ll more than likely see a loss as they’ll be competing directly with new lower priced units.  Long term, however, they should be OK as once the remaining units are sold the market can take back over and units should sell at fair market rates.

5.  I don’t think it’s time to panic!   In fact the faster the developer can resolve this issue with its lenders the better off everyone will be.  It’s hard to sell real estate under the stigma of foreclosure especially when it’s a condominium development.  That hurts everyone both current owners and potential buyers.  A fast resolution, whatever that outcome may be, it essentially best in the short and long term.

For more insights on this check out the following:

Wisconsin State Journal Cap Times

Channel 3000 Newscast

Madison Voted Best City for Empty Nesters

Madison has always lured back hometown kids and UW-Madison grads, but increasingly it’s attracting empty nesters who are ready to trade in the suburbs for easy urban living. Madison offers plenty of amenities — the arts, ethnic restaurants, pubs and shopping — and includes the city’s four in-town lakes plus many parks and trails. Although the state government and university still dominate employment, Madison is becoming a biotech center, too.  

From Kiplinger comes the following:

Best Cities for Empty Nesters