TC developer

downtown journal

http://www.skywaynews.net/articles/2006/05/15/news/news02.txt

Jim Stanton was building in the North Loop before most of Downtown’s condos were a glimmer in a developer’s eye.

Stanton, the president of Shamrock Development, says he’s learned a few things over the last 44 years in the development business — when to speak his mind and when to stay silent, when to take risks and when to keep the reins tight. And all those years, he’s been churning out projects Downtown and around the metro.

“I’ve never had long-range plans,” Stanton said. “When the opportunity is there, I take it. I think most developers are like that.”

Now that he’s 70, Stanton says he’s starting to think about being “a little more hands off,” but he’ll never really retire.

“I heard somebody say once, ‘If you really like what you’re doing, you never have to go to work,’” Stanton said.

The pioneer

Stanton grew up on a Northfield farm, the first of a dozen children. “My dad and I were like gas and matches,” he said. After “barely finishing high school,” he took a construction job and moved up from laborer to foreman. At 26, he got a job as a real estate agent and eventually moved from selling to building.

In the 1970s, Stanton made his mark as a developer in Coon Rapids, where he said at one time he owned 80 percent of the vacant land in town.

In 1985, Stanton bought land in Downtown’s North Loop. He sold some land, including choice riverfront parcels. Other properties he developed, such as the Riverwalk Apartments and Lindsay Lofts — both in 1987.

“No one has been around longer,” said David Frank, president of the North Loop Neighborhood Association (NLNA) and a project manager for developer Schafer Richardson. “As a developer, I look at him as a pioneer.”

Twenty years later, Stanton is still right in the mix of a developing Downtown, with a half-dozen buildings recently built or converted, another under construction — the Bridgewater, at the old Liquor Depot site on Washington Avenue — and the 500-unit Eclipse towers, his most ambitious project to date, planned for the corner of Hennepin & Washington.

Hold the bells and whistles, please

Over his career, Stanton has seen the market ebb and flow. His early North Loop projects were a bit of a risk, he admits. “I used to have to give a free month’s rent to get a six-month lease,” he said. More recently, he’s answered the demand for Downtown condos with more than a half dozen projects converted, built, under construction or planned.

“Think of the fingerprint he’s put on this city,” said Andrea Christenson, a real estate broker for Colliers Turley Martin Tucker who bought a condo at 212 Lofts last June. After looking at other urban lofts, she settled on Stanton’s because it offered the necessary amenities — high-end wood floors, upscale appliances — but without all the “bells and whistles,” she said, at a good price per square foot.

“His buildings fit in well,” Frank said. “It’s not radical architecture. There’s a place for that, and the market has responded well.”

Unlike most developers, Stanton doesn’t rely much on banks to lend money for his projects.

On the one hand, it’s risky. “Developers are optimists by nature,” Stanton said. “If you wait for the sure thing, it’s probably already past.”

He recalls only one big regret, when a Chicago developer pulled out of a land deal. It cost him $6.5 million. “You can’t get burned often,” he said. “You won’t be here if you do.”

At the same time, Stanton keeps construction schedules tight and contract bids as low as possible, which in the end allows him to keep his prices lower than competitors, he said. It’s all part if his no-nonsense style.

“I don’t have the big groundbreaking and ribbon cutting,” Stanton said. “I just start a building, I sell it and then I build another one.”

In proper style, Stanton said he made a rule long ago not to speak publicly against another developer’s project. “I might take them out in the hall and have a talk,” he said, “but I never take a shot publicly.”

A notable exception, recalls Frank, was Stanton’s comment at a public NLNA meeting the owners of Trocadero’s nightclub, which was originally proposed as a topless bar.

“Jim doesn’t often speak in this kind of a setting,” Frank said, “but when his turn came, Jim very clearly, calmly, strongly said, ‘I was here first. This is something that goes counter to forming a new neighborhood. You need to know that I will be helping the neighborhood fight you.’”

The John Wayne moment drew a round of applause.

“I just thought it was unfair,” Stanton said, noting that attorneys for Trocadero’s had claimed the zoning code allowed an adult use, even though it was within 1,000 feet of residential buildings (several of them Stanton’s).

“If the gentleman’s club had been there first and the neighbors were bitching, I would have been on the other side of it,” he said.

The friends and family plan

Stanton’s four children have followed his lead. His son Kevin and daughter Debbie Woodward all work for Shamrock. Another son, Dennis — a former employee — is in the mortgage business, and his daughter Colleen runs her own development company. There’s even a third generation at Shamrock — Stanton’s grandson Jesse works construction and maintenance.

Stanton credits his Shamrock employees for allowing him to lean ever so slightly toward retirement. That includes traveling; in the past two years, Stanton has been to Rome, London, Paris, Beijing and Bangkok.

When he travels, he’s finally starting to be able to leave work behind, he said. “It used to be, when I’d take a 10-day vacation, they’d place bets on how many days I’d be gone.

“They’d probably do better without me,” joked the developer of his team, offering a nugget of the half-joke, half-wisdom he’s always good for.

inman 2nd home article

http://www.inman.com/inmannews.aspx?ID=51637

About 60 percent of second-home buyers own two or more homes in addition to their primary residence, according to the results of a National Association of Realtors survey.

About 53 percent of investment-property buyers own two or more investment homes and 12 percent own two or more vacation homes. Also, about 21 percent of all vacation-home buyers own two or more vacation homes, and 34 percent own two or more investment properties.

The Profile of Second-Home Owners survey results are based on an eight-page questionnaire that was mailed in January 2006 to 45,000 households who own more than one residential property. The survey generated 416 usable responses from vacation-home owners and 619 from investment owners, the Realtor association reported.

Most of the survey respondents reported that they own multiple properties in addition to their primary residence.

Second-home purchases are no small trend: Second-home sales accounted for an estimated 40 percent of all residential transactions in the country in 2005, up from 36 percent in 2004, the Realtor group reported in April.

And U.S. Census Bureau data shows there are 6.8 million vacation homes in the United States and 37.4 million investment units, in addition to 74.6 million owner-occupied units.

The typical vacation-home owner is 59 years old, earned $120,600 last year, and purchased a property that is 220 miles from his/her primary residence. About 34 percent were less than 100 miles and another 34 percent were 500 miles or more away from this vacation home. Eight of 10 drive to their properties, and half of vacation homes are located within the same state as the owner's primary residence, the survey found. About 83 percent of owners are married couples.

Three-fourths of vacation-home owners purchased for personal use, one-third also wanted to diversify investments, and 18 percent intended that the home would become a primary residence in retirement. About 13 percent of vacation owners listed rental income as a reason to buy.

The typical owner spends 39 nights per year at their property, and three-quarters do not rent the property. Of those who do rent their vacation home, the median number is 12 nights per year.

The median age of an investment owner is 55, with an income of $98,600 in 2005; 75 percent of owners are married couples. Their investment property is located close by, within a median distance of 10 miles, the Realtor group reported.

Two-thirds of investment-home owners purchased their property to generate rental income, and half viewed the property as a way to diversify investments. About 80 percent spend no time in their property and 80 percent rent it out, with 73 percent renting for at least six months per year, according to the survey.

David Lereah, NAR's chief economist, said the market continues to be dominated by the baby boomer generation.

"Middle-aged, middle-income households are the driving factor in the second-home market, with favorable demographics providing a solid fundamental demand in this sector for the next decade," Lereah said.

"Boomers believe in diversifying their assets, and most second-home owners see their purchase as being a better investment than stocks. A surprising majority of survey respondents hold multiple properties, and they are interested in purchasing additional homes."

Minorities are a growing force in the second-home market and accounted for 11 percent of vacation-home purchases between 2003 and 2005, compared with 6 percent of purchases in 2002 and earlier. In the investment property segment, minorities accounted for 17 percent of transactions from 2003-05, compared with 11 percent in 2002 or earlier.

Thomas M. Stevens, NAR president and senior vice president of NRT Inc., said, "The fact that so many owners of vacation homes and investment property have additional properties is a bit of a revelation.

"We've always known that a certain segment has invested heavily in the rental market, and some people earn their living simply by holding and managing investment property. What we see now is a crossover between largely vacation- and investment-home owners, with people recognizing the value of those investments and pouring more assets into real estate," Stevens said.

For all second-home owners, their most recent property was purchased a median of six years ago, and most have held additional properties for longer periods.

Among vacation-home owners, two-thirds want to be close to an ocean, river or lake; 39 percent close to recreational or sporting activities; 38 percent close to vacation or resort areas; and 31 percent close to mountains or other natural attractions.

Vacation-home owners said they enjoy leisure activities such as beach, lake or water sports (57 percent); boating (38 percent); hunting or fishing (32 percent); golf (21 percent); biking, hiking or horseback riding (20 percent); ski or winter recreation (17 percent); and tennis (9 percent).

Half of vacation homes are located in resort or recreational areas, 18 percent in small towns and 16 percent in rural areas. Four out of 10 are detached single-family homes; 22 percent are cabins or cottages; 21 percent are condos in buildings with five or more units; 7 percent are townhouses or row houses; 5 percent are mobile or manufactured homes; 3 percent are units in two- to-four-unit structures; and 1 percent are other property types. Six percent said their vacation home is a timeshare unit.

The median size of a vacation home is 1,480 square feet, 29 percent were new when purchased, and owners estimated the current value to be a median of $300,000 – 68 percent said the value of that property was lower than their primary residence. Sixty-five percent of owners said their vacation property was a better investment than stocks.

Six out of 10 investment properties are located within metropolitan areas; half are single-family homes; 21 percent are duplexes or apartments in a two- to-four-unit structure; 13 percent are condos in a building with five or more units; 8 percent are townhouses or row houses; 3 percent are mobile or manufactured homes; 2 percent are cabins or cottages; and 4 percent are other property types.

The median size of an investment property is 1,520 square feet, 15 percent were new when purchased, and owners estimated the current value to be $200,000. Three-fourths said the value of their investment property was lower than their primary residence, and 70 percent said their property was a better investment than stocks.

Four percent of vacation-home owners and 8 percent of investment owners said they intended for their child to occupy that property while in school.

Among buyers of second homes in recent years (since 2003), two-thirds purchased through a real estate agent. Eighteen percent of vacation homes and 17 percent of investment properties were purchased directly from owners, while 14 percent of vacation homes and 7 percent of investment properties were purchased directly from builders, the Realtor group reported.

Thirty-two percent of all vacation-home owners and 24 percent of investment property owners paid cash for their property. Combined with mortgages that have been paid off, 82 percent of vacation homes and 75 percent of investment properties are owned free and clear.

Of owners who purchased with a mortgage, the median down payment on a vacation home was 27 percent and the median down payment for an investment home was 23 percent.

When asked about the source of down-payment money for more recent vacation-home owners with loans who purchased since 2003, half said savings, 23 percent used money from the sale of other real estate, and 19 percent identified equity or sales proceeds from their primary residence.
http://www.inman.com/inmannews.aspx?ID=51637


For more recent investment owners who purchased with mortgages, half said down-payment funds came from savings, 28 percent used equity or sales proceeds of their primary residence, and 18 percent used money from the sale of other real estate.

Eleven percent of vacation-home owners said they were planning to buy another home within two years, and 10 percent said they planned to sell.

About 35 percent of all investment-home owners said they were planning to buy another home within two years. For those who currently own four or more investment units, 64 percent said they plan to buy another property within two years, and 17 percent said they plan to purchase five or more additional properties.

Twenty-eight percent of investment owners plan to sell a property within two years, according to the survey results.