Khan: Downtown's Laura Street Trio redevelopment deal 'alive but on life support

[downtownjag]

Lol guessing on trio, but yeah and Strand ownership is consistently getting higher than hallmark for their one beds and studios

Well, duh.  It's a luxury highrise on top of structured parking...they *should* be hitting close to $2psf for what I would estimate is the construction cost of that thing (a building like that would be getting closer to $2.50 in Austin, $3.00 in Chicago, probably $5-$6+ here in SF).  Also I looked into vacancies...I'm not surprised they aren't giving concessions.  Nobody anywhere is giving concessions right now, in any market.  Forecasters are thinking that with robust pipelines coming to fruition in some cities/submarkets that concessions might "temporarily come back".

As for concessions, just letting you know that's net effective. Yeah well look at the 2-3 beds they aren't getting it there. It's more so the demand for those than the Jacksonville market. And lol yeah sure we can talk construction cost but talk to Auchter about that. Hopefully it's indicating pent up demand and hallmark will be successful.

I bet San Fran is amazing. Thats all I have to say about that!

I only assume you're referring to net effectives brotha (not in the brokerage fluff puff business here ).  I've looked at the units and their pricing...I follow the Strand because in my mind it's the only true class A urban multifamily product in the city.  I do hope the Hallmark project is successful and I'm sure it will be...it's basically one of a kind in the city so it is easy to differentiate itself.  If they are below $1.50psf net effective once stabilized at 220 Riverside, I'll be surprised.  I won't be surprised if they deliver/pre-lease with concessions (I'm picturing a free TV, Wifi, gift cards, or something tangible before reduced rent...if reduced/free rent, I think it will speak to sticker shock in the market, which may not be good for urban multifamily going forward).

Lol yeah, it seems like a new trend too is offering yoga classes and such. I can see some move in incentives, hopefully its notma free tv though lol thats so gainesville! I'm really excited about that area with the new Y, fresh market, and these projects. The best food in Jax is in riverside as well. Yeah I don't know how it was underwritten that cheap either but I think the Bell project in riverside is more expensive as well.

[simms3]

BTS is another concept that doesn't compute with me (again been too far removed from that sort of scene to even think about that).  I know the portfolio deal you're talking about...made the news (one of those rare instances where Jacksonville, FL comes up in news bits related to real estate)

My whole point since we have even discussed multifamily on this site is that DT is not Main and Main for jobs or for anything, which will and does hinder demand for expensive infill multifamily.  I do think, though, that the site has so much potential and with better leadership (now being shown in the private sector?) that these pieces really could become Main and Main in short order - in fact, since this is ownership for ownership rather than ownership for investors, it would be much easier for Khan to "build the greater downtown community" through this single investment.  He's got his own backing, an easier timetable, no investors to satisfy or report to, personal appeal, ease of building relationships as who wouldn't want to work with the man, etc.  He's really the only local celebrity, and that can really help him with a project like this.

[simms3]

Lol guessing on trio, but yeah and Strand ownership is consistently getting higher than hallmark for their one beds and studios

Well, duh.  It's a luxury highrise on top of structured parking...they *should* be hitting close to $2psf for what I would estimate is the construction cost of that thing (a building like that would be getting closer to $2.50 in Austin, $3.00 in Chicago, probably $5-$6+ here in SF).  Also I looked into vacancies...I'm not surprised they aren't giving concessions.  Nobody anywhere is giving concessions right now, in any market.  Forecasters are thinking that with robust pipelines coming to fruition in some cities/submarkets that concessions might "temporarily come back".

As for concessions, just letting you know that's net effective. Yeah well look at the 2-3 beds they aren't getting it there. It's more so the demand for those than the Jacksonville market. And lol yeah sure we can talk construction cost but talk to Auchter about that. Hopefully it's indicating pent up demand and hallmark will be successful.

I bet San Fran is amazing. Thats all I have to say about that!

I only assume you're referring to net effectives brotha (not in the brokerage fluff puff business here ).  I've looked at the units and their pricing...I follow the Strand because in my mind it's the only true class A urban multifamily product in the city.  I do hope the Hallmark project is successful and I'm sure it will be...it's basically one of a kind in the city so it is easy to differentiate itself.  If they are below $1.50psf net effective once stabilized at 220 Riverside, I'll be surprised.  I won't be surprised if they deliver/pre-lease with concessions (I'm picturing a free TV, Wifi, gift cards, or something tangible before reduced rent...if reduced/free rent, I think it will speak to sticker shock in the market, which may not be good for urban multifamily going forward).

Yeah I don't know how it was underwritten that cheap either but I think the Bell project in riverside is more expensive as well.

It is...if I remember correctly it already pushes $1.55-$1.60.  This for cheap wood frame stucco apartments wrapping a tilt construction garage.  That's a factor of location, though.  Brooklyn to your average local renter probably looks like an urban prairie with nowhere to go and potential crime around the corner.

[downtownjag]

Lol guessing on trio, but yeah and Strand ownership is consistently getting higher than hallmark for their one beds and studios

Well, duh.  It's a luxury highrise on top of structured parking...they *should* be hitting close to $2psf for what I would estimate is the construction cost of that thing (a building like that would be getting closer to $2.50 in Austin, $3.00 in Chicago, probably $5-$6+ here in SF).  Also I looked into vacancies...I'm not surprised they aren't giving concessions.  Nobody anywhere is giving concessions right now, in any market.  Forecasters are thinking that with robust pipelines coming to fruition in some cities/submarkets that concessions might "temporarily come back".

As for concessions, just letting you know that's net effective. Yeah well look at the 2-3 beds they aren't getting it there. It's more so the demand for those than the Jacksonville market. And lol yeah sure we can talk construction cost but talk to Auchter about that. Hopefully it's indicating pent up demand and hallmark will be successful.

I bet San Fran is amazing. Thats all I have to say about that!

I only assume you're referring to net effectives brotha (not in the brokerage fluff puff business here ).  I've looked at the units and their pricing...I follow the Strand because in my mind it's the only true class A urban multifamily product in the city.  I do hope the Hallmark project is successful and I'm sure it will be...it's basically one of a kind in the city so it is easy to differentiate itself.  If they are below $1.50psf net effective once stabilized at 220 Riverside, I'll be surprised.  I won't be surprised if they deliver/pre-lease with concessions (I'm picturing a free TV, Wifi, gift cards, or something tangible before reduced rent...if reduced/free rent, I think it will speak to sticker shock in the market, which may not be good for urban multifamily going forward).

Yeah I don't know how it was underwritten that cheap either but I think the Bell project in riverside is more expensive as well.

It is...if I remember correctly it already pushes $1.55-$1.60.  This for cheap wood frame stucco apartments wrapping a tilt construction garage.  That's a factor of location, though.  Brooklyn to your average local renter probably looks like an urban prairie with nowhere to go and potential crime around the corner.

Wouldn't dispute that but we know how quickly those areas can become hip. That's where I think the new Y and fresh market will help. What a perfect time for the old fire station right there to be teed up for reuse, maybe Bar 1901??

[simms3]

Exactly.  I agree that Brooklyn could explode, but we have never seen anything explode in Jax...so I'm skeptical until it happens.  Also, net of the current proposals on the table + 220 Riverside, future developments will have to be more creative, perhaps denser, to really accommodate the type of urban explosion I personally envision for the area.  I am *not* a fan of the Y proposal in the least bit in terms of land use, and Riverside Park is expansive land-wise (so is the retail proposal).

[downtownjag]

BTS is another concept that doesn't compute with me (again been too far removed from that sort of scene to even think about that).  I know the portfolio deal you're talking about...made the news (one of those rare instances where Jacksonville, FL comes up in news bits related to real estate)

My whole point since we have even discussed multifamily on this site is that DT is not Main and Main for jobs or for anything, which will and does hinder demand for expensive infill multifamily.  I do think, though, that the site has so much potential and with better leadership (now being shown in the private sector?) that these pieces really could become Main and Main in short order - in fact, since this is ownership for ownership rather than ownership for investors, it would be much easier for Khan to "build the greater downtown community" through this single investment.  He's got his own backing, an easier timetable, no investors to satisfy or report to, personal appeal, ease of building relationships as who wouldn't want to work with the man, etc.  He's really the only local celebrity, and that can really help him with a project like this.

It hasn't happened yet the main problem has been fighting existing inventory but class a vacancy is around 7% so there aren't many options left. Plus a lot of users will commit to a guaranteed takedown but won't take all the space upfront which is where there are computing problems.

Definitely agree with your thoughts on Khan and the trio. I wonder though if he just financed the acquisition or is also planning on backing construction? I guess with a credit tenant in hand he would.

[simms3]

I think if he is smart he'll forgo the major effort and $$$ it will take to buy a credit tenant for any use there.  I hope he treats his new acquisition as the birth of a mid-life real estate baby, and I hope he feeds and nurtures that baby into a really cool young adult.

My uneducated dream would be to create a really cool hotel concept or two in the Trio along with a shining star of a F&B business helmed by locally big name chefs/pastry chefs/mixologists (something that caters to unique things like Supper Club events, dining in the dark, full on shows, "club/restaurant" events, etc...exactly where you'd host a company party), get RevPar and ADR up to sustainable but noticeably strong levels over years of developing the hotel brand, and go for credit that way either by selling the entire thing to a major hotel operator who will flag it themselves, or by leasing the entire thing to a hotel group like Kimpton.

I would sit on Barnett Bank...it's cookie cutter, which to me says office, rentals, something easy.  It's bordering on too small to do mixed-use...I just don't see the feasibility of doing something there right now.

[simms3]

7% is really low, isn't it?  Or is that citywide Class A?  At 7% in a CBD don't you start getting into development mode if there are no large block spaces left?  (though high floor rents in the city's tallest building are like $22-$23 FS right? ... laughable)  Also, I find that DT Jax Class A seems to mean something different from tower Class A in other Sunbelt cities.  I have a hard time calling a building such as Aetna or BB&T tower or really even WF at this point true class A.  Lower slab to slabs, outdated lobbies, cheap elevator cabs (though I'll comment that BofA's elevators are FAST...love 'em, I work about 400 ft up and it takes me about 35 seconds to get up here) limited amenities, ancient building systems, signage on the buildings (ewww from a LL's perspective LoL).

What shocks me, too, is that BofA doesn't have automatic elevator guards...aren't like the 2 or 3 major silk stocking law firms with presences in Jax all in there?  Go to any major city and you can tell if a major fin. institution or law firm is in the building by how extensive the security is...I can go into BofA and go to any floor I think, right?  I don't recall even needing a card to get up.  In my building, we have barricades, human security guards at each elevator bank entrance, AND cards to get up...overkill, LoL.

[downtownjag]

7% is really low, isn't it?  Or is that citywide Class A?  At 7% in a CBD don't you start getting into development mode if there are no large block spaces left?  (though high floor rents in the city's tallest building are like $22-$23 FS right? ... laughable)  Also, I find that DT Jax Class A seems to mean something different from tower Class A in other Sunbelt cities.  I have a hard time calling a building such as Aetna or BB&T tower or really even WF at this point true class A.  Lower slab to slabs, outdated lobbies, cheap elevator cabs (though I'll comment that BofA's elevators are FAST...love 'em, I work about 400 ft up and it takes me about 35 seconds to get up here) limited amenities, ancient building systems, signage on the buildings (ewww from a LL's perspective LoL).

What shocks me, too, is that BofA doesn't have automatic elevator guards...aren't like the 2 or 3 major silk stocking law firms with presences in Jax all in there?  Go to any major city and you can tell if a major fin. institution or law firm is in the building by how extensive the security is...I can go into BofA and go to any floor I think, right?  I don't recall even needing a card to get up.  In my building, we have barricades, human security guards at each elevator bank entrance, AND cards to get up...overkill, LoL.

Sorry friend I should have specified. 7% class A in the butler/SS market. Yeah it's quite low; but about 130K has opened up with two call centers closing in Libertys Butler Plaza. Those should backfill pretty quickly with the tenants in the market. Those are right around $20 PSF.

CBD you're right on with A class rents and I don't disagree with you on the amount of class a buildings. Yeah I love B of A's elevator speed. That building, as I know you know, was built for the bank and they spared no expense. Maybe 1 enterprise is class A, they just need a credit tenant and I'm sure ownership will spruce it up a bit.

Some of the floors are locked down; that's kinda market standard.

[simms3]

Plus a lot of users will commit to a guaranteed takedown but won't take all the space upfront which is where there are computing problems.

Just saw this...we deal with this in sophsticated markets, too (NYC and SF).  I'm working on a 220,000 SF lease as we speak where the prospect thinks it's doing us, the landlord, a favor and wants all this flexibility in return...sorry folks it doesn't work that way!  We *are* willing to work with you to improve the building to woo you in (i.e. if you want barricades for elevator lobbies, we'll install them...if you need an expanded restroom core because you pack'em in there, we'll even shoulder that freakin expensive cost), but we want a straightforward commitment in return.

Since you and I seem to be the rare poster that actually works in RE, what are your thoughts for the Barnett component, and for Trio?  You're obviously much closer to the Jacksonville market than I could ever hope to be.

[tufsu1]

Can someone name 5 restaurants downtown that are thriving that do not serve burritos or hamburgers/pizza/wings?   Hooters does not count!

in downtown (northbank only)....Pho, Juliette's, Benny's, Vito's, and Indochine...then we can add the Hyatt restaurant (Currents?), La Cena, Zodiac, and even Fionn MacCool's....I know some aren't jam packed, but they are all still open.....so that's 9 restaurants without counting the 3 on the southbank riverfront or the private clubs.

Next question please

[simms3]

DT doesn't yet have a cool restaurant.  Juliette's is about the most dated place I have been (I think they are or have recently upgraded, but can't imagine it being much better).  Was never impressed by Chew (though as ya'll know I Love Orsay and Black Sheep).  Bistro Aix has rested on its laurels for like 2 decades now, but has traditionally been what I would consider one of the only "appealing" restaurant concepts from a theme, menu, design standpoint.  San Marco.

I think Marble Bank could really be something that most in the city just can't even fathom due to lack of exposure resulting from living in Jacksonville.  Marble Bank could be a restaurant/bar-lounge/event space like none other in NE FL.  It needs work and a serious capital initiative, but the right creative team and operators can pull it off.  Restaurant industry is exploding across the country right now...Jacksonville can join in, too.

Restaurants thrive based on menu, good marketing/PR, price point, decor, following the right trends (or setting them) etc.  Black Sheep could do just as well DT as it does in Riverside, same concept...it's the concept that makes it, not necessarily the location that breaks it.  I look at Nashville and the hottest retaurant area is now basically still a ghetto.

http://www.nytimes.com/2012/06/20/dining/the-food-scene-in-east-nashville.html?pagewanted=all&_r=0

Here in SF the hot restaurant district is the Mission, which is literally gang turf still and you do risk getting caught in a turf war, LoL.  I went to Kronenburger last week...no sign, dilapidated building, really dim lighting, grungy rock/house music, the place was filled with a mixture of executive types, hipsters, techies, etc...the place worked, food was fabulous, bar service top notch, the chef has a name around here (he's even from the South, which is so popular nowadays), etc

[thelakelander]

DT doesn't yet have a cool restaurant.  Juliette's is about the most dated place I have been (I think they are or have recently upgraded, but can't imagine it being much better).

I believe Juliette's is being renovated and upgraded now.

[PeeJayEss]

DT doesn't yet have a cool restaurant.  Juliette's is about the most dated place I have been (I think they are or have recently upgraded, but can't imagine it being much better).  Was never impressed by Chew (though as ya'll know I Love Orsay and Black Sheep).  Bistro Aix has rested on its laurels for like 2 decades now, but has traditionally been what I would consider one of the only "appealing" restaurant concepts from a theme, menu, design standpoint.  San Marco.

La Cena has the location of a cool restaurant. Unfortunately, that's it. Indo/BG is cool, however. Oh, and Chompx2 is real cool.

[MusicMan]

Pho?  I have eaten there (3x). Food was good. I went at night. Never more than 2 tables occupied.

Juliette's: ate there couple months ago: not bad, not special, reasonable value.

Zodiac?

Sorry that I put that qualifying word "Thriving" in my question. Thriving means waiting for a table, like they do at French Pantry. "Thriving" means reservations are possibly required

For the record I think somewhere on MJ we counted 52 restaurants in Riverside-Avondale. Less than 10 are thriving.

Simms, you are very well informed poster but I disagree with your comment about Black Sheep doing just as well DT as in Riverside. I am under the impression they could have put that restaurant anywhere they wanted, and they did not choose downtown. There are a couple hundred apartments/condos within 2 blocks of that location plus a couple thousand people within the neighborhood who have a track record of spending money on food. I don't believe there is anywhere downtown that can deliver that demographic today. The entire RAP area enjoys a
busy nightlife, pretty much throughout the week.

You left out Casa Dora, the only restaurant I have ever been to where the owner screamed obcenities at customers as they left. That was a special evening.

So perhaps this new venture will fill the void nicely pointed out by Simms, "DT doesn't yet have a cool restaurant."
One where folks stand in line to get in. THAT I would look forward to.