Friday, June 19, 2009

market misjudgments in real estate(2)

the problem of market misjudgments is not limited t office buildings.In st.Louis the pruitt-Igoe public housing project was completed in 1954 and heralded worldwide as a model for a generation of postwar public housing projects that followed. Unfortunately, this 33-balding complex for 10,000 occupants was found to be ill-designed for the needs of the occupants and uninhabitable,setting a pattern for similar projects in the year that followed when it was completely demolished and replaced. In 1962 Robert Simon launched the new community of Reston,virgini,in suburban washington,D.C., which was heralded by architects and planners of the western world as a model example of new town. By 1967 he had lost control of the struggling community due to inadequate prospects for cash flow. in 1971 Walt Disney world in Orlando,florida,opened to its first year with sensational success,receiving some 12 million visitors. Nearby,at the intersection of I-4 and the Florida turnpike, sometimes referred to as the "bull ُs -eye" of Florida real estate, gulf oil company is development subsidiary launched Florida center,another in its series of "new communities" as it had done many times throughout the world. Only this time Gulf was building for the local market rather than its own employees. But the local market never came, and the project collapsed with gigantic financial losses. About the same time, the residential condominium was discovered in Florida and elsewhere. In the first half of the 1970s,close to a quarter million condominium units were launched. but the market turned out to want far fewer than that number. Thousands of units were either never completed or, in some cases, torn down shortly after being constructed to make the land available for more viable uses.

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