A previously-successful developer takes on an ambitious beach project, pours millions of his own dough into it, hires a sales team but doesn’t offer the homes on the MLS, and then runs into untimely delays, cost overruns, and a bad economy.
Don’t you lower the price and get out?
Calls to the sales office during business hours went unanswered – does anyone know how much they are asking?
Jim Klinge
Klinge Realty Group
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Trustindex verifies that the original source of the review is Google. We sold a home with Jim and Donna and from beginning to end they were consummate professionals. Their initial walk through the property resulted in a list of items to be repaired or updated. They supplied a list of vendors and job quotes to do the repairs and updates. We originally wanted to sell ‘as is’ and just get it over with. They gave us a selling price for ‘as is’ and options for doing a few updates/repairs to doing it all with the selling price for each option. We agreed to do all they suggested and we sold for the exact price they predicted. For every dollar spent we got back more than $2 back in the selling price. And they got that price in a rising interest rate environment! Donna and Jim are extremely detailed and guide you through ever aspect of the sale. There were no surprises thanks to their guidance. We couldn’t be more pleased with their representation. Thank you Donna and Jim, Jerry and MaryTrustindex verifies that the original source of the review is Google. We have known Jim & Donna Klinge for over a dozen years, having met them in Carlsbad where our children went to the same school. As long time North County residents, it was a no- brainer for us to have the Klinges be our eyes and ears for San Diego real estate in general and North County in particular. As my military career caused our family to move all over the country and overseas to Asia, Europe and the Pacific, we trusted Jim and Donna to help keep our house in Carlsbad rented with reliable and respectful tenants for over 10 years. Naturally, when the time came to sell our beloved Carlsbad home to pursue a rural lifestyle in retirement out of California, we could think of no better team to represent us than Jim and Donna. They immediately went to work to update our house built in 2004 to current-day standards and trends — in 2 short months they transformed it into a literal modern-day masterpiece. We trusted their judgement implicitly and followed 100% of their recommended changes. When our house finally came on the market, there was a blizzard of serious interest, we had multiple offers by the third day and it sold in just 5 days after a frenzied bidding war for 20% above our asking price! The investment we made in upgrades recommended by Jim and Donna yielded a 4-fold return, in the process setting a new high water mark for a house sold in our community. In our view, there are no better real estate professionals in all of San Diego than Jim and Donna Klinge. Buying or selling, you must run and beg Jim and Donna Klinge to represent you! Our family will never forget Jim, Donna, and their whole team at Compass — we are forever grateful to them.Trustindex verifies that the original source of the review is Google. WeI had the pleasure of working with Klinge Realty Group to sell our home in Carmel Valley, and I cannot recommend them highly enough! Jim and Donna demonstrated exceptional professionalism, offering expert guidance on market conditions and pricing strategy, which resulted in a quick and successful sale. Communication was prompt and we were well-informed throughout the entire process. For anyone looking for a dedicated and knowledgeable real estate team, look no further! ---Trustindex verifies that the original source of the review is Google. Donna and Jim Klinge of Klinge Realty Group have our highest possible recommendation. From Donna and Jim’s first visit to our house through closing their advice and counsel was candid and honest in all dealings. They kept us fully informed throughout the process. The house sold less than three days after listing with a two-week closing. My wife and I have sold several houses during our lives. This was by far the best experience. Klinge Reality is a premium service realtor. You can’t make a better choice for someone to sell your home fast and for top dollar.Trustindex verifies that the original source of the review is Google. Donna and Jim provided exceptional support and professionalism throughout the entire process. We couldn't have been happier with their efforts. They made our house shine, and thanks to their expertise, it sold above the listing price in the very first weekend! Truly a fantastic experience from start to finish.Trustindex verifies that the original source of the review is Google. This year has been difficult on our family, mainly due to having to sell our home. Thankfully we knew God had a plan for us and working with the Klinge team was a key part of it. It was an obvious decision to work with them again after such an amazing experience when purchasing the same home we needed to sell. The challenge was, how will we do this in so little time with so much going on? Jim and Donna held our hand every step of the way. Whenever an unexpected issue arose they found and provided a solution. Never once did we feel pressured to make a decision and the Klinges were always reassuring after providing the information that the decision was ours to make. Despite the curve balls, they never panicked and exemplified the “can do” attitude, making us feel optimistic and taken care of. Their expertise and professionalism was superb. But of all the reasons to work with the Klinges, the most impactful and valuable is their compassion and genuine care for their clients. We pray that we can one day purchase our forever home and you better believe that Jim and Donna will be representing us - as long as they will have us of course. Thank you again Klinge team! Your execution, experience, and care are unmatched.Trustindex verifies that the original source of the review is Google. Jim and Donna were fantastic! Jim understanding my needs, recommending potential places, pointing out the pros and cons of each property was invaluable. Then when the offer was accepted Donna’s organized guidance through the inspections, paperwork etc made the whole process seem effortless. So grateful that I had them on my side!Trustindex verifies that the original source of the review is Google. We first found Jim through his blog at bubbleinfo.com, which really showcased his knowledge of SoCal real estate. Since then we've done three transactions with Jim and Donna, and they are an incredible full service agency, with Jim's deep market insight and Donna's deft contract and project management. We trust them implicitly in their analysis and strategy, which is based on years of experience. They're always available and on top of things, and we strongly recommend them to anyone.Trustindex verifies that the original source of the review is Google. The Good The Klinge Realty Group operates like a finely tuned machine, with a very personal touch. We contacted them on a Sunday and they were talking to us about our family and our needs on our living room couch the following day. They carefully listened to us and worked with us to identify the best and quickest path to listing within 2 weeks to take advantage of the low inventory conditions in our South Carlsbad neighborhood. They knew our tract specifically and had many previous sales there over the years - they came prepared with a thorough analysis of comparative sales and recommended a pricing strategy that they felt confident would yield offers the first weekend on the market. The Great Over the next two weeks Donna coordinated a range of vendors who she knew from experience could get the preparation to list work we needed done on time and with high quality. Our light tune-up involved excellent experiences with their stagers, landscapers, contractors, electricians, and plumbers. Throughout this period Donna's daily communication was clear, concise, and responsive. Any time we had questions Donna picked up the phone or texted immediately - but almost always, she answered our questions before we even knew we had them. The Outstanding We had a tricky situation with a shared fence that could have delayed our escrow. Donna used superb mediation skills to negotiate the terms of replacement and was personally on site with the fence contractor to make sure everything went smoothly. The fence looks great and escrow closed on time. The Truly Exceptional Our house came on the market on a Wednesday and between then and Monday morning Jim was personally at all three open houses. He was in constant communication explaining potential buyer reaction and strength. As he predicted offers began to come in on Saturday and each one was incrementally higher than the last. At the end we had 5 offers, 4 of which were over list, and the final accepted offer was $100,000 over list. In addition to being over list it included rent back terms that met our needs. The Recommendation For all of these reasons we would strongly recommend The Klinge Team to anyone wanting to sell in North County Coastal San Diego. I had been reading Jim's bubbleinfo.com blog for 15 years and knew when the time came to sell that he would be our first call. Jim Klinge is not your standard realtor. He is keenly aware of market conditions and sales strategies. And, works his tail off - though not as hard as Donna . At this point he's gone from realtor to friend and I plan to have him over to grill and chill at our new place to talk real estate, but also just about life and raising kids in San Diego. He's more interested in relationships than his sales numbers - and that's why his sales numbers are so high. We have already recommended the Klinge's to some close friends and another successful sale is on deck right around the corner...Trustindex verifies that the original source of the review is Google. We recently had the pleasure of working with Jim and Donna from Klinge Realty Group to sell our house, and we couldn't be more satisfied with the experience. From the initial meeting, they listened attentively to our needs and provided invaluable guidance on specific improvements to get our home market ready. Their responsiveness throughout the entire process was truly impressive. Anytime we had questions or concerns, they were quick to address them, ensuring we felt comfortable and informed every step of the way. What stood out the most was their team and extensive network of tradespeople, which made addressing any necessary repairs or updates seamless and stress-free. Thanks to their expertise and dedication, our house sold quickly and at a great price. We highly recommend Jim and Donna to anyone looking to buy or sell a home. They are a fantastic team who truly care about their clients and deliver exceptional results.Load more
Jim, I fear for “the silver ghost.” Drive or video but please be more careful. I’m looking forward to more shrimp at your 60th.
anyway, clearly what is happening is that the developer has a construction loan with trigger covenants that start when he closes the first unit. He’s burning the construction loan hoping for a turnaround and will continue to do so until someone pushes him off the pot.
I recall seeing these listed on the website quite some time ago as around $1.5M give or take. It is hard to see anyone paying so much for these because the view is pretty well blocked by motel. If you’ve got the money for these, you can get something much better.
Linky – http://www.theloftsatmoonlightbeach.com/residential/floorplan3.html
Click on the unit to see the price.
Additionally – Bluwater Crossing is open in Carlsbad. Work/live loft concept at Poinsettia Station. I’ve toured those – no oceanview (even from the third floor), too close to the tracks, and very over priced. But, I like the general concept for certain work applications.
These were supposed to start at 2 mill. Right down the street from me.
To each their own I suppose, but you could buy a house in LJ with an ocean view for that kind of scratch.
I wonder if this development will mysteriously burn to the ground some day soon.
I was by the area a few days back ande noticed a banner that read 10% down owner financing–thought that looked interesting!
Obviously the project isn’t going well. The big problem that I read about was that they don’t have the money to pay for the development fees. In Encinitas you pay these before receiving you final certificate of occupancy. Without the cert you can’t close escrow. It’s stand off with the City. Don’t know what’s happened since.
Of course, they are probably looking to re-work their loan and I would guess switch to rentals.
They want $1000 psf. There are superior pending comps in La Jolla for $435 psf and one sold comp in Carlsbad for $458. Developers havent made a payment since January. I spoke to the sales agent a few days back and they said they had a few letters of intent but none have sold. They are asking $3.60 NNN for the commercial units. The market might support $3.00 in that location.
See them at the trustees sale!!!!!!!!!!
Past a certain point, you can’t lower the price without defaulting. And once that threshold has passed, you won’t care because it’s not your money.
I knew one person who was desperately trying to sell and come out ahead by $20K, but the market kept falling and once he realized he couldn’t sell he was totally complacent and not motivated to sell. There was no money to salvage, so it didn’t matter if his house fell another $20K or $200K. Makes no difference to him*.
*It used to fairly recently, when forgiven debt was treated as income.
Way overpriced. That developer is screwed.
Maybe they’ll knock em down like they did in Victorville.
sdbri,
I think that’s right. I think that also explains the complex at 144 N. Rios in Solana Beach, where nothing is selling but they won’t cut the price.
It’s not just the developer who’s screwed. How about the bank?
Did you see what happened to the downtown W Hotel?
Nice, but not $1.7 mill nice
detective jim, nice work
“They are asking $3.60 NNN for the commercial units.”
Holy cow, you can get class A in downtown San Francisco for less than that. Probably Class A in Manhattan now that most of the big banks want to sublease their space out, too.
I’m not sure these prices would have even worked during the boom. I saw a couple of offices like that in Mountain View right next to the Caltrain and a couple miles from Google that got built with these sorts of numbers. They had at least 12 units available. Leased 2 of them and I doubt either tenant will be there long-term. If the Bay Area can’t support it, no way San Diego can.
Maybe they were hoping to lease to real estate agents. 😉
-Erica
This from somebody in the know (allegedly):
14 of the 18 residential units are sold , 10 of the 15 retail/office units are sold. Original price point was $1000 a foot, Price point was lowered 10% to 20% and units are mostly sold.
No delays, project went very smoothly. Just finished and still doing punch list items. There was procedual problem with the city regarding occupancy all at once instead of individual closings but that has been resolved.
Property is well capitolized, the owners are doing the lending themselves and they are being sold through a mostly private network to customers thus no MLS listing.
A few of the stores are just now opening. Residential occupancy is about a month away.
Project bodes well for the larger pacific station project now under construction, 12 months from opening. The 47 residential units will be in the $500 to $600 a foot range. The commercial, 40,000 sq. ft. is entirely leased as is the 9000 sq ft. office.
But then again, there is an outstanding $20 million construction loan from Vineyard Bank, so Rob Dawg probably nailed it.
Here’s a link to the NCT article on the groundbreaking of Encinitas Pacific Station in September, 2008:
http://www.nctimes.com/articles/2008/09/11/news/coastal/encinitas/z89fa104469d85538882574c20012fe13.txt
“This project is going to inject life into our downtown. … Next we’ll work on those quiet zones,” he said, referring to the campaign to silence the train horns that regularly interrupted the groundbreaking ceremony.
Attendees included City Council candidates, downtown business owners, consultants, bankers and others with a keen interest in the development, which is under construction between E and F streets.
City officials and the project’s developer, John DeWald of Cardiff, said Pacific Station marked the start of a new era for Encinitas. Plans call for the project to include a 25,000-square-foot Whole Foods Market, a yet-unnamed restaurant, a series of small shops, office space, and 47 condominiums.
From the NCT article in Jan. 2007:
DeWald said Tuesday that he expects to break ground on the project later this year. A timeline submitted to City Hall pegs the complex as ready for occupancy in early 2009.
DeWald said he is negotiating with grocers and other retail tenants. He would not disclose the names of the businesses.
He said he also is taking names of people interested in buying the condominiums, which would range in price from $500,000 to $900,000.
About Pac Station- these types of developments are hitting all over the nation. Young people are eating them up. Whole foods is very good sign for that area, it means young people, people with money.
But… as seems to be everywhere in SD, there are not going to be many young people with enough money to pay 500k for a 2 bed townhome and shop at whole foods.
250-350k is the mark for this group, so Pac Station may have to find another group of buyers.
There still something just not quite right here in SD.
So much for N. County Coastal being immune to the downturn. A new low in my book was seeing a dollar store shopping cart abandoned in my old neighborhood.
Jim, is it just me or does you new camera have a rubbery kind of image? Whenever you shake a bit the objects seem to stretch left/right. Slow scanout from the sensor?
Mortgage rates going up.
Prices coming down.
Simple math right? But don’t worry, bottom is here according to some experts out there. For those itching to buy, jump in before the interest rate goes up!!
$3.60 NNN?
PPTTHHHT.
We’re special in Orange County. I’ve seen Class A that was $6.50 NNN. Namby Pamby.
This is the true place to make money. Mortgage guys were more than willing to fork out that kind of dough.
That’s why we have see-through buildings galore in Irvine.
Chuck Ponzi
“anyway, clearly what is happening is that the developer has a construction loan with trigger covenants that start when he closes the first unit. He’s burning the construction loan hoping for a turnaround and will continue to do so until someone pushes him off the pot.”
Rob Dawg | June 8th, 2009 at 11:28 am
This is exactly what happened with Barratt in Bressi. All those houses were just shy of finishing (even thought the sales office would tell you they were “sold”) because the construction loan terms ended once the home was finished–sold or not and the construction loan had MUCH better terms. Then all their “buyers” realized that prices were tumbling and they were locked in at too high a price. Barratt refused to lower their prices. All deals collapsed, the banks are left hanging with these unfinished homes now.
JtR- if your source is right, they are kicking ass. I was waaay off.
A few years back they closed down the whole foods grocery store in the current lumberyard Ace Hardware location. Unless the yoga studios start offering classes in printing counterfit money I don’t see pac station making it.
Another wonderful So Cal fantasy comes to life! I bet every unit is sold by the end of June to Arizona Business people who want a second home near the train tracks, err, I mean the ocean…