VIKING INVESTMENTS (Principals)
ROLE FOR PAT OLAFSON
You run Viking Investments, a U.S. corporation that has been primarily involved in real estate development. Your investments and development projects tend to be concentrated in the area surrounding Edgewater,
Illinois, an affluent town in a rural area. Viking is one of six major developers in the local area, who occasionally have to compete with out-of-state developers who are attracted by the affluence and abundance of acreage at reasonable prices.
The comfortable times for real estate sales have come
to …show more content…
Because of your vacation travel, however, nothing was put in writing, and no money has yet changed hands. The new tenant is a reliable local business owner, and will have no difficulty paying the rent.
The final issue on your agenda with Sandy is to resolve problems that have arisen during Sandy's work as a subcontractor on your 100-unit condominium development. This issue is complicated and may be difficult to resolve.
You talked to each of your subcontractors about your concern for quality and received assurances of their full cooperation. (With their economic futures looking bleak, they were willing to be very accommodating toward a big developer like you.) For example, you amended the contract with your appliance supplier in order to upgrade to top-of-theline equipment; windows were upgraded to tripleglazed, energy-efficient Andersen units; and the landscaper's specifications were changed to provide more “upscale” landscaping. These contract amendments raised your costs from $140,000 to
$145,000 per unit, but you figured at the time that you could still make a healthy profit selling the 100 units for $160,000 each (a bargain price even in a soft market); the rival developer has announced a price of
$169,000 for the competing 75 "no-frills" units.
The Condominium Development Problem