Robb finds that reaction backward.

“We feel better than we did at the same stage of phase one,” he said.

When Riverfront Place holds its ceremonial groundbreaking for its second condo tower this morning, it will be a testament to the 15-story, $29.1 million project’s strength and the developers’ persistence in carrying out an ambitious development plan.

At a time when other developments can’t get funding, Riverfront Place has worked through its lender’s tougher oversight to obtain the loan it needs to carry out the project. Although the second tower has taken years to reach this point, developers say condo buyers are staying committed and continue to come on board.

“We always had a pretty understated confidence about ‘It was going to happen,’” said Robb, part of a team of out-of-town developers.

David Brown, president and CEO of the Greater Omaha Chamber of Commerce, said the Riverfront Place developers have overcome concerns about the local economy, the housing market and the lending climate to make their project happen.

Brown said the project is important for its effect on construction jobs and the statement it makes about consumer confidence.

“How many other places in the country are announcing a $30 million condo project today?” he asked. “There are so many reasons communities aren’t doing it.”

Robb said not every development can meet the standards necessary to pull off a project these days. The projects that will happen, he said, must have a great location and be well-capitalized.

“A-plus real estate is always A-plus real estate in good times and in bad times,” Robb said.

Riverfront Place has been in the works since 2003, when then-Mayor Mike Fahey chose the project and its urban neighborhood concept to redevelop six acres of city land fronting the Missouri River. The first tower, at 12 stories, opened in 2006.

A year later, the sales effort started on Tower II, with plans to start construction in spring 2008.

By summer 2008, about 40 percent of the project had been sold, still short of the 50 percent goal the developers had for moving toward construction. Soon after, the financial markets collapsed, and lending dried up.

But Riverfront Place was able to maintain its relationship with First National Bank of Omaha, although the project faced greater scrutiny and the developers needed to show a greater financial commitment.

Robb said the developers had to commit millions of dollars more in equity to the project, reinvesting — instead of taking out — profits from the first phase.

“They know us. They know our integrity,” Robb said. “It takes all that in this lending environment to get a loan done.”

First National Bank didn’t implement any new lending provisions, he said, but put “more energy” into existing ones, such as requiring more property inspections.

As the project moves to construction, Riverfront Place is largely following its initial plan. The second tower, however, will vary the floor plans more and have more smaller units in recognition of their popularity in the first tower.

Today, about 52 percent of the project is sold, amounting to $15.3 million in committed sales, Robb said. That’s beyond the bank’s requirement of $15 million in sales to approve the loan.

With the building due to open in summer 2011, Robb said he sees now as a great time to start construction because the country should be well out of the recession by the time buyers are moving in.

As of early this month, Riverfront Place was marketing 27 condos for sale at prices ranging from $255,000 to $1.25 million.

In some ways, the sales job has gotten easier compared to the project’s beginning. Potential buyers can see a finished product, not just a graphic rendering, and the riverfront is taking shape with the pedestrian bridge looming at Riverfront Place’s doorstep.

Ben Proctor, Riverfront Place’s sales manager, said potential buyers notice current residents’ enthusiasm about their new home.

“Having a group of 50-plus ambassadors is the best sales tool I can have,” Proctor said.

Chris and Lori Kirsten got $20,000 less than they might have in 2007 when they sold their Seattle condo earlier this year, but they purchased this suburban home for $425,000 — $86,000 less than the home’s peak value

(msnbc.com) BOTHELL, Wash. – After two years of married life in a 680-square-foot, one-bedroom Seattle condo, Lori and Chris Kirsten were ready to spread out in a real house with room for a home theater and a yard where the Labrador retriever they had always wanted could roam.

The Kirstens prepared to list their condo for sale and go house-hunting, banking on equity in the unit, which Lori had brought in 2003 for $130,000, to help with the transition to a larger place. Seattle’s hot real estate market had pushed the condo’s value to $215,000 or more at its peak in 2007.

But their home search lost some steam when their agent told them Western Washington real estate prices, although not in the freefall experienced elsewhere, had still declined to the point that their unit might now fetch $25,000 or $30,000 less than two years ago. When they saw condos comparable to theirs selling for as little as $170,000, “I thought, ‘I just can’t do it,’” Lori recalled.

Their mood brightened when they began shopping in the spacious neighborhoods of this suburb northeast of Seattle and found a 3,000-square-foot, four-bedroom split-level on a half-acre of towering fir trees that they wound up buying for $425,000. That’s $86,000 less than the $511,000 peak value placed on the home by real estate Web site Zillow.com, $64,000 below the original asking price of $489,000 and even well below the final asking price of $438,000.

A buyer’s market
The Kirstens — Lori, 36, is a physical therapist and Chris, 33, is a Microsoft manager — are among the relatively small number of home buyers across the nation who are taking advantage of the record drop in real estate prices and historically low interets rates sparked by the mortgage meltdown and foreclosure crisis to move up into bigger or fancier digs.

It’s a trend that many in the languid real estate industry would like to encourage.

Despite signs of broader economic recovery, number of foreclosure filings hit a record high in the third quarter – a sign the plague is still spreading.

NEW YORK (CNNMoney.com) — Despite concerted government-led and lender-supported efforts to prevent foreclosures, the number of filings hit a record high in the third quarter, according to a report issued Thursday.

“They were the worst three months of all time,” said Rick Sharga, spokesman for RealtyTrac, an online marketer of foreclosed homes.

During that time, 937,840 homes received a foreclosure letter — whether a default notice, auction notice or bank repossession, the RealtyTrac report said. That means one in every 136 U.S. homes were in foreclosure, which is a 5% increase from the second quarter and a 23% jump over the third quarter of 2008.

Nevada continued to be the worst-hit state with one filing for every 23 households. But even tranquil Vermont, where the foreclosure crisis has barely brushed the housing market, saw foreclosure filings jump nearly 170% compared with the third quarter of 2008. Still, that resulted in just one filing for every 5,023 households in the state — the best record in the country.

The RealtyTrac report also unveiled the results for September, and it found that there was slight relief from foreclosure filings. Last month, notices totaled 343,638, down 4% compared with August. Unfortunately, that total accounts for 87,821 homes that were repossessed by lenders.

That deluge contributed significantly to the quarter’s record 237,052 repossessions, a 21% jump from the previous three months. So far this year lenders have taken back 623,852 homes.

“REO activity increased from the previous quarter in all but two states and the District of Columbia, indicating that lenders may be starting to work through some of the pent-up foreclosure inventory caused by legislative delays, loan-modification efforts and high volumes of distressed properties,” James Saccacio, RealtyTrac’s CEO, said in a statement.

Most disturbing is that all foreclosures — not just repossessions — are rampant despite efforts to corral them. Not only has the Obama administration’s Making Home Affordable foreclosure prevention program taken a bite out of REOs but lenders themselves have scaled back repossessions over the past few months to give the program time to work.

And in some low-price markets, lenders simply aren’t following through on foreclosures, according to Jim Rokakis, treasurer for Cuyahoga County, Ohio, which includes Cleveland.

“They’ll even set the date for the sheriff’s sale, but they don’t file the final papers,” he said. “They hold it in abeyance and let the residents stay in the house.”

In ever more frequent cases, delinquent borrowers want out of the mortgage worse than the lenders. There are no firm statistics for it, but many industry watchers claim the percentage of REOs caused by borrowers voluntarily walking away from their homes is skyrocketing.

A study of the trend by the Chicago Booth School of Business and the Kellogg School of Management determined that when home price declines drop home values 10% below the mortgage balances, people start to give up their homes. When “negative equity” approaches 50%, 17% of households default, even when they can still afford their mortgage payments.

The foreclosure crisis may not diminish anytime soon. “The fastest growing area is in the 180 days late-plus category, the most seriously delinquent borrowers,” Sharga said. “It’s going to be a lingering problem.”

Plus, the RealtyTrac statistics may understate the depth of the foreclosure mess because lender and government actions have delayed many filings. As a result, some delinquencies have not been counted on the foreclosure tallies. That means the crisis may not end quickly.

And because there are so many delinquent borrowers, Sharga predicts the banks will be slow to take back their properties and put the repossessed homes back on the market.

“It’s hard to envision [the banks] putting millions on properties up for sale and cratering prices,” he said. “Recovery will be slow and gradual. I don’t see home prices getting much better until 2013.”

To keep track of federal stimulus grants, states must spend their own money

Nebraska’s governor’s office told lawmakers it expects to spend more than $1.2 million over two years to oversee disbursement of about $1.5 billion Nebraska stands to receive in federal stimulus funds.

Other states are in similar straits. But Washington — at least for now — isn’t handing out money for states to hire auditors and accountants, and the stimulus law requires stringent reporting from states to ensure transparency and curb abuses.

AP photo by Nati Harnik – Nebraska state Sen. Heath Mello of Omaha, left, member of the Appropriations Committee, goes over a spreadsheet with panel chairman Sen. Lavon Heidemann. . “I don’t really have a good solution of where to come up with the money,” the Nebraska governor’s chief of staff, Larry Bare, told lawmakers this week on the Appropriations Committee. Not doing so isn’t an option: “We ignore doing a good job of that at our own peril,” Bare said.

Under the law, if states miss a deadline or don’t spend the money fast enough, they lose the cash. Vice President Joe Biden warned last month that if states misspend the money, “don’t look for any help from the federal government for a long while.”

But states across the country are asking how they’re supposed to oversee the disbursement of billions of dollars intended to boost the economy with no budget to do so. At a conference last month at the White House, state officials asked whether they should use templates for reporting and whether there’s any way of centralizing the information among states.

The White House said help is on its way and it is looking at ways for states to get more money more quickly for oversight.

“The administration has been working with state officials to tackle the oversight challenges that they are facing,” said Tom Gavin, a spokesman for the White House Office of Management and Budget. “We want to states to have the resources and the flexibility — on top of what is already in place — to make sure that Recovery Act funds are invested smartly to create jobs today and build a foundation for the country’s long-term economic growth.”

As with all federal money distributed to states, government rules allow states to allocate a portion for administrative costs. But states are complaining that the money isn’t enough to cover the cost of increased oversight and reporting obligations, and that it may arrive too slowly to cover expenses they need to pay immediately.

In South Carolina, staffers are working nights and weekends.

“We’re doing it on the cheap because we really don’t have a choice,” said Richard Eckstrom, South Carolina’s comptroller general. Eckstrom is head of a task force that will set up a state system to track how federal stimulus money is used.

“We’re not being paid to do it,” Eckstrom said. “We’re doing it with existing staff. We’re doing it with existing technology.”

In Colorado, state officials have complained they’re trying to make stimulus spending transparent but haven’t been given money for a Web site or publicist.

Every state is moving through the same process at the same time, said Todd Haggerty, research analyst with the National Conference of State Legislatures, so if one state solves a problem, another state could benefit. But with new directions coming daily from Washington, “it’s definitely a moving target,” Haggerty said.

By DIANA GOLOBAY
April 16, 2009 11:13 AM CST

This property in  Omaha consists of 4 buildings with a total of 31 rental units. The list price is $395,000.

The property is located near the new Midtown Crossing at Turner Park, the $250 million mixed-use urban development of Mutual of Omaha. Midtown Crossing is bordered by 31st and 33rd streets, Dodge to Harney streets.  Construction on Midtown Crossing is well under way with the project ready for occupancy in the summer of 2009.

My 31 unit complex, at 31st Avenue and Jackson, is located in close proximately.  You can review the Douglas County property records on the listing HERE.

If you’d like to discuss this property or other sound investments, please give me a call or drop me an email.

Michelle Jarboe of the Plain Dealer has some good news for those investing in apartment buildings.  Here is her story.

Amid the rubble of the commercial real estate industry, there’s a little bit of sparkle.

Apartment buildings are holding up, even as developers are benched, retailers go bust and real estate groups beg for a bite of the government bailouts. 

Sure, economists expect some pain for apartments in 2009. Mounting job losses and the sour economy could result in fewer new households — a blow to occupancy levels and landlords’ abilities to raise rents.

But apartments are looking pretty stable compared with other sectors of the ailing real estate industry.

Marvin Fong/The Plain Dealer . Earl Franklin works on a piece of drywall inside new apartments overlooking East Fourth Street and Euclid Avenue in downtown Cleveland. The Cleveland area has seen limited apartment construction, and economists expect local apartment rents and occupancy rates to bounce back quickly once the economy improves.

“For as long as we’re in this period of economic turmoil, it’s going to be the most important product choice for us,” said Peter Rubin, president and chief executive officer of the Coral Co. in University Heights.

Coral, a developer and homebuilder, can’t find the large sums of cash needed to back up new projects. So the company has launched an aggressive plan to buy apartments in northern Ohio, Rubin said. Since November, Coral has purchased apartment buildings in Shaker Heights and Cleveland.

The reason: Even when they’ve lost jobs and are forced to cut spending, people need a place to live. And despite depressed home prices and low mortgage rates, there are plenty of renters out there – consumers who feel gun-shy about the tumultuous housing market, people who can’t qualify for a loan, or recent college graduates who just prefer to rent.

“What really caused damage to most markets in the apartment business was when interest rates were at a historical low and anybody who could check a box got a loan to buy a house,” said Jeffrey Friedman, president and chief executive officer of Associated Estates Realty Corp., a publicly held apartment owner based in Richmond Heights.

“I don’t expect that to happen again,” he said.

When housing slumped in 2007, apartment vacancy rates in the Cleveland-Elyria-Mentor area dropped to 5.6 percent, their lowest level since the economic downturn of the early 2000s. Cleveland-area apartment owners reported rent growth of 4.5 percent in 2007, according to real estate research firm Reis Inc. of New York.

Last year’s financial slide largely put the freeze on commercial real estate lending. What little credit was available didn’t come cheap. But mortgage giants Fannie Mae and Freddie Mac kept up their work with lenders to support mortgage debt for apartments – even after the government took over the government-sponsored entities last fall.

That’s not to say that deals were easy. Marcus & Millichap Real Estate Investment Services saw its apartment sales in Northeast Ohio fall to $102.8 million last year, from $174 million in 2007. The firm’s local office estimates that the combined value of all apartment sales in Cuyahoga, Lake, Summit and Stark counties fell nearly 19 percent last year.

Sales topping $5 million have been difficult, as some large banks and insurance companies have moved away from commercial real estate lending, said Michael Barron and Daniel Burkons of Marcus & Millichap. And first-time or small-scale investors looking at properties worth less than $1 million have become more skittish.

But mid-size deals are still happening. Coral paid $1.35 million for Parkland Drive Apartments in Shaker Heights and $3.7 million for the 1900 Euclid Avenue Lofts in Cleveland. Smaller banks, such as FirstMerit Bank, which financed the 1900 Euclid Avenue deal, have filled some of the gaps left by large lenders.

“We’re seeing interest,” said Doug Price, whose apartment company, the K&D Group of Willoughby, is trying to sell buildings in Euclid and Cleveland. “It’s not what it was, but there’s definitely interest, because the multifamily sector, of all the real estate sectors, has held up fairly well.”

Barron and Burkons expect apartment sales to continue this year, though more deals could involve seller financing, to cover the distance between the available mortgage and the amount a buyer can put into a purchase. The brokers also expect more sales of “distressed” apartments, including properties in or near foreclosure.

The apartment industry is taking a cautious approach to 2009. The National Multi Housing Council and the National Apartment Association are asking the government to boost the secondary market for apartment debt – through efforts such as buying bundles of apartment mortgages.

Industry groups also are particularly worried about the future of Fannie and Freddie, which face size limits on their mortgage portfolios and which still are evolving under the government’s hand.

“Apartment borrowers, if they’ve got maturing debt anytime in the next year or two, ought to consider refinancing as soon as possible,” said Daniel Walsh, an executive vice president with KeyBank Real Estate Capital.

Walsh described 2009 as “transitional” for apartments. Property owners are watching carefully to see whether college graduates move back in with their families or renters facing job losses or pay cuts move in together to reduce expenses. Apartments, particularly in once-hot housing markets such as Florida and California, might feel more pain as condominiums and houses that haven’t sold transform into rentals.

In more humdrum Midwestern markets such as Cleveland, however, apartment owners say they’ve seen strong interest from renters and aren’t worried about occupancy levels, despite mass layoffs in the automotive industry and manufacturing.

“We can stay full,” said Friedman, whose company owns or manages 52 apartment properties, including buildings in Greater Cleveland. “It’s just a question of how much we can charge in rents.”

In the Cleveland-Elyria-Mentor area, vacancy rates will rise to 6.3 percent this year, according to recent projections from Reis. Local rents could fall to $688 per month, from a peak of $705 last year.

Victor Calanog, director of research at Reis, expects apartment owners to make more concessions – such as a month’s free rent for a new tenant – and muddle through the year. But limited recent construction of new apartments in Cleveland and other parts of the country should help ease the pain. And once the economy turns around, apartment owners will be able to raise rents again as their buildings fill up.

“This is the sector that will bounce back,” Calanog said. “If you wanted to put money on it, I would short retail and long multifamily.”

Just take a look at these renderings.  The stadium will be composed primarily of metal, glass and brick. Included is a brick base and translucent glass that will glow at night, while allowing daytime visitors to view the activity within. A metal canopy placed atop the park’s seating bowl will serve as both a modern architectural element and sunscreen. The stadium will also feature 24,000 seats, 26 luxury suites, 1,000 club seats, a retail area with bullpen and field views, and an open, 360-degree concourse.

According to Omaha mayor Mike Fahey, “The Omaha Baseball Stadium will enhance Omaha’s reputation as one of America’s great sports communities and will create a dynamic new gateway into our city.”

A building that some call a midtown Omaha eyesore has become a red hot property after a new owner takes over the Twin Towers residential-office project.

Troy Strawhecker, of West Des Moines, Iowa, purchased the property’s north tower, according to legal documents. Omaha leaders said Strawhecker plans to turn the long-vacant building into apartments and give them a new look.

The Twin Towers have stood over Omaha for 43 years, but the north tower has been vacant, boarded up and allowed to deteriorate for most of the past decade. News of the purchase has made residents in the south tower happy.

“Everybody’s really excited that it has been sold,” said south tower resident Ethan Bondelid.

Legal documents said the building sold for $437,000. It was recently appraised at the same price.

“I think it’s going to be a real positive for the city,” said Shawn Ilg of Deeb Real Estate.

Local experts said the revamped north tower will fit in well with the new development already going on in the Turner Park area.

“There’s a need for apartments in downtown and midtown,” said Ilg.

“The location is perfect for development,” said Connie Spellman of Omaha by Design. “Conservation of old buildings is good for the economy, good for business and good for environment.”