Tag Archives: housing market

Dornoch ‘dead in the water’ on The Savoy

“We’re dead in the water right now.” That’s how Glen Fishman, managing partner of Dornoch Holdings, described to Redevelopment Agency commissioners his firm’s situation with The Savoy.

In a rare appearance at the agency’s meeting Wednesday night, Fishman was invited to provide an update on the firm’s stalled projects and activity at its properties. He started with the good news (filling rental properties), but we’ll get to that in our next post. For now, the bad news.

“We’re a little stuck here, I wish I had better news,” Fishman told commissioners, adding that they’re still negotiating with Wachovia. Rahway’s real estate fundamentals still exist, with its location and proximity but housing prices have made it hard to get people to invest. “People are still confident in Rahway, it’s just the economics,” he said. Condos can’t be built when they’re selling for $150,000 a unit, he said, but expressed confidence in “getting something there” in 12 months.

Dornoch spent a lot of money acquiring properties along Main Street for the four-story, 36-unit development, many of which were razed. Archaeological and historical issues relating to cisterns at the Savoy site cost Dornoch $1 million and a year’s time, he claimed, which “blew the budget on the Wachovia loan.” At one point there was a possibility of financing from Valley National for rental apartments but the deal could not get done, he said.

Fishman told commissioners he hopes “at some point the economics make sense, whether selling to another developer who can make it work” or otherwise. Dornoch has fielded offers from some local developers, he said, but so far three offers that have been made “have not been acceptable to the lender.”

(By my estimate, via PropertyShark and other sites, Dornoch acquired almost 20 downtown parcels at a total cost of almost $9 million or more — mine may be an incomplete list — pretty much the height of the real estate market in 2006.)

Redevelopment Agency Chairman William Rack asked if the steel beams, which went up at The Savoy site in summer 2008, might be taken down at some point, assuming they probably won’t be used in whatever ends up at the site. Fishman said it’s not necessarily a certainty that the steel would go unused. Steel doesn’t really go bad so it still has value, he said, adding that Dornoch doesn’t have the money to remove it anyway, and doing so might actually reduce the value of the property.

A look back at 2009

What kind of a year was 2009 in redevelopment? Perhaps up-and-down might be the most accurate description.

Continue reading A look back at 2009

First sale of ’09 for Sky View at Carriage City Plaza

For the first time in about 50 weeks a unit sold in Sky View at Carriage City Plaza, according to property transaction records.

Continue reading First sale of ’09 for Sky View at Carriage City Plaza

Catching up on some reading

I’m a little late with this but in case you missed last Sunday’s Ledger, here’s their story about Union County home sales in the first half of 2009. It was a county-by-county breakdown of a larger project, “N.J. real estate bust hits urban home sales the hardest.”

Compared to the first half of 2008, “prices dipped 8 percent” in Union County, with only Elizabeth, Fanwood and Springfield seeing more home sales during the first half of this year compared to the same time in 2008. Berkeley Heights (0%) and Scotch Plains (7%) were the lone towns to see median home prices remain the same or rise over last year, and nine towns saw double-digit declines. Only Summit (2%) was up last year over 2005 median prices.

For Rahway, the analysis indicated a median price of $267,000 this year, compared to $307,500 last year (-13%) and $281,000 in 2005 (-5%). Those figures were still good enough to rank Rahway among the top third among the 21 Union County towns in both years, matching Clark and Mountainside in 2008.

The number of home sales was down 18 percent in Rahway for the first half of this year, which was about the ninth lowest rate within the county.

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I also came across this New York Times piece yesterday. It talked about “municipal governments and arts groups pouring hundreds of millions of dollars into larger, flashier exhibit spaces and performance halls,” believing it was “the answer to what ailed cities everywhere — a way to lure tourists and economic development — and a potential boon to cultural institutions.”

The specific projects mentioned are of a much larger scale and in some cases very different, but it did bring to mind the $6-million expansion and acquisition of the local arts center by Union County, which also was pushed in part by the idea of spurring economic development earlier this decade.

The most provocative quote came from a senior fellow at the University of Chicago studying these projects: “These were situations in which ‘nobody actually asked: Is there a need here? If they build it, will they come?'”

Housing market, bad; rail towns, good

The Transit-Friendly Development newsletter is one of those wonk-ish things that probably doesn’t get much pub outside of public policy and bureaucratic circles. So, of course, I subscribe.

A joint effort between NJ Transit and the Alan M. Voorhees Transportation Center at Rutgers University, the newsletter publishes three times a year. In the previous edition, it reported on the Town Center plans and has featured Rahway in the past. The January edition reported on a presentation at the League of Municipalities Conference last fall by a real estate appraisal and research group. Basically they said the housing market is a nightmare — with one exception:

“Affected by the strength of the Manhattan housing market, as well as a national trend showing distinct preferences among 20-somethings and baby boomers for live-work-play locations such as New Jersey, one bright spot in this slumping sector is housing in transit-rich locations. While expensive suburban homes languish on the market, with 48 weeks of inventory, housing near locations with excellent rail connections to Manhattan is flourishing with less than a six-month supply of unsold homes.”

The piece fails to mention either the North Jersey Coast Line or Northeast Corridor, instead pointing to Glen Ridge and Montclair on the Montclair-Boonton Line; South Orange, Maplewood, Millburn, Summit and New Providence on the Morris & Essex Gladstone Branch; and Roselle Park, Cranford, Westfield and Fanwood on the Raritan Valley Line.

Granted, most of the towns cited are more affluent than Rahway to begin with. However, say what you will about NJ Transit or its service, the city probably has better rail connections than any of them. It’s one of the few places Rahway can be mentioned in the same breath as those (and one thing it has in common with Summit, which like Rahway is where its two train lines split). While the Morris & Essex line also has a train to Hoboken, the Raritan Valley only goes as far as Newark Penn Station and weekend service doesn’t exist on the Montclair-Boonton.

P.S. The newsletter also has an update on downtown redevelopment efforts further down the Northeast Corridor line in nearby Metuchen.