I knew he would use Public Private Partnership again, he loves that phrase, he already has his slogan working for the next election.
QuoteJacksonville Mayor Alvin Brown plans to ask the city’s power players to chip in for a $200 million fund that would be used to complete key projects, like Downtown redevelopment initiatives.
After an architect expressed frustration over banks’ stringent lending practices at Thurday morning’s Urban Land Institute breakfast, Brown told those in attendance of his plans to start the investor fund. In his vision, the investors would be willing to settle for a lower rate of return in order to get certain projects off the ground.
“It’ll be seasoned investors â€" those who are well off, who’ve made millions selling the Jaguars,†Brown said, smiling and referencing former Jaguars owner Wayne Weaver. “You guys each put up $2 million, and we’ll raise a couple hundred million. By the way, Preston [Haskell], Peter [Rummell], and Wayne, let’s do a public private partnership and call it a ‘take Jacksonville to the next level’ fund.
“There are ways to work deals. There’s no limit to all the talent we have in this city. We have to take a step back and make it happen.â€
In November, Rummell told The Business Journal that it was easier to find equity for deals than to obtain debt financing.
“There’s so much money out there chasing deals â€" on some of the national work I’m doing, it’s unbelievable how much money is out there looking for things to do,†he said.
Brown said after the breakfast that he hasn’t had any formal meetings about the fund but he’s “put it out there.†He said the fund could be used for projects like Downtown redevelopment â€" a new movie theater and grocery store, and of course, the Laura Street Trio project.
He also named Gary Chartrand, chairman of the board of directors at Acosta Sales & Marketing; Robert Stein, president of Regency Centers Corp. (NYSE: REG); Michael Ward, president and CEO of CSX Corp. (NYSE: CEO); and fundraiser Robert Shircliff.
“You all know power brokers,†Brown told the ULI members. “I’m just a meat cutter from Winn-Dixie.â€
Paybacks are hell and the haves always want a return in many ways. This city is the cheapest to live in and our system including schools have suffered greatly due to conservative councils year after year incessant lowering of this tax and that fee....now we have a fucked up system that's killing our downtown year after year. Private money can help but at what cost? isn't that what has already happened? past investors that fucked it up through the hands of council. an historically white and wealthy council.
I'm not a real estate finance guy, but wouldn't be easier to just establish a REIT with the sole focus on Downtown Redevelopment? That way there would be some distance between the city and the investors. The board/staff of the REIT would then have the ability to pick which projects to finance or develop.
Or perhaps that is what Brown has in mind.
A REIT would also make it easier for Joe MetroJaxer to put in 5, 10, 20k or whatever.
mtrain, could you link to the source? Is that from the TU?
It's from the business journal, he spoke at a ULI event this morning. He's a very inspiring person. Glad I voted for him!
QUOTE: “There’s so much money out there chasing deals â€" on some of the national work I’m doing, it’s unbelievable how much money is out there looking for things to do,†he said.
US and multinational corporations have made a killing over the last 5 years, and that statement is proof of it. Sure would be nice of they decided to re-invest in the communities (like ours) that have such huge potential but need a kickstart to get it going.
Thanks, downtownjag. I was hoping to read it in its entirety.
PUBLIC PRIVATE PARTNERSHIP!
Quote from: Jimmy on May 03, 2012, 05:23:24 PM
Thanks, downtownjag. I was hoping to read it in its entirety.
Ask and you shall receive:
http://www.bizjournals.com/jacksonville/blog/2012/05/mayor-brown-calls-on-rich-and-powerful.html
Its this kind of partnership that could get the convention center ideas off the drawing board and into fruition.
This is very much needed and long overdue. The Laura St. Trio should be their first project, with other historic buildings getting a leg up too, such as the Ambassador Hotel.
I dont know why he keeps referecing a movie theatre or grocery store Downtown. Just focus on the Trio and get it done!
If you build cool downtown housing people can actually afford, with parking available, they'll move there. Not everyone can afford a high rise on the riverfront. Do open lofts, stained concrete floors, more affordable. (And there is a grocery downtown, just not in the very center of it.)
good points Debbie. I made that same statement at a ULI breakfast a few weeks ago. Directed at Ed Burr and Don Shea.
Quote: "Cool downtown housing that people can actually afford"
Can't get much cheaper than the units at City Place. 1 bedroom condos (somwe with great views) in the $20,000's.
Would that be cheap enough?
Just checked the MLS. One unit at City Place, 1 bed 1 bath, 454 sq ft, for $17,500.
One unit, studio, 900 sf, for under $100,000 at Churchwell Lofts. Granite /stainless appliances plus washer dryer
and private parking.
One unit, 17th floor at City Place, 1 bedroom 1 bath, 543 sf, nice upgrades (granite + cherry cabs)
asking $59,000.
City Place isn't exactly inviting sometimes. I think she's referrring to 11E and Carling, which are above 95% occupancy.
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store? It takes me just as long to get to the Publix in Riverside, literally 4 minutes, as it does if I live on the Southside or at the Beaches.
While a grocery store Downtown would be nice and expected in some markets, it shouldn't be listed as a detractor to Downtown residential development. I still think I would drive, I don't want to walk with a weeks' worth of groceries in my hands any farther than I have to.
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Quote from: Kaiser Soze on May 04, 2012, 10:32:59 AM
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Why? Why can't you get in your car and go to the grocery store like the other million plus people that live in Jax? And if that's a necessity, why don't you walk your urban behind to Winn-Dixie? Again, current occupancy rates don't suggest we need a grocery store, they suggest we need more leasable product.
Quote from: downtownjag on May 04, 2012, 10:38:26 AM
Quote from: Kaiser Soze on May 04, 2012, 10:32:59 AM
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Why? Why can't you get in your car and go to the grocery store like the other million plus people that live in Jax? And if that's a necessity, why don't you walk your urban behind to Winn-Dixie? Again, current occupancy rates don't suggest we need a grocery store, they suggest we need more leasable product.
Because the type of person that moves to a downtown environment expects it. Look at other markets. Its easy for me to go out to my driveway and hop in my car. Its not when you live in a high rise.
If you've been to that WD, you know why someone at the LST ain't walking to it.
Quote from: Kaiser Soze on May 04, 2012, 10:41:48 AM
Quote from: downtownjag on May 04, 2012, 10:38:26 AM
Quote from: Kaiser Soze on May 04, 2012, 10:32:59 AM
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Why? Why can't you get in your car and go to the grocery store like the other million plus people that live in Jax? And if that's a necessity, why don't you walk your urban behind to Winn-Dixie? Again, current occupancy rates don't suggest we need a grocery store, they suggest we need more leasable product.
Because the type of person that moves to a downtown environment expects it. Look at other markets. Its easy for me to go out to my driveway and hop in my car. Its not when you live in a high rise.
If you've been to that WD, you know why someone at the LST ain't walking to it.
If your argument were accurate, all of our leasable and condo projects would be sitting vacant currently. People move here, despite the fact that we don't have the grocery store Downtown that you and I both want. Other markets have grocery stores downtown becuase submarket demands it, and it's financially viable. There is no civic-minded grocery store that is going to come downtown in an attempt to provide another amenity to downtown residents.
That's why I said it would be a benefit to DT, but shouldn't be a detractor. I agree, I never go to that Winn-Dixie (although they have a comparable amount of wine as Publix in Riverside).
Downtown has a LONG way to go before it gets a grocery store. Plenty of other cities of similar size (Nashville and Charlotte) have far more downtown residents and no grocery store (well Charlotte arguably, but again FAR more downtown residents, workers, students, etc).
And those who live in urban settings typically don't do the suburban "week's worth" grocery run. I go to the grocery store at least every other day to buy 2 nights worth of meat, some milk, whatever I need at the time. Also, those who live in urban environments typically don't have families to feed, work longer hours and eat out a lot more. My kitchen is about 50 SF including counterspace, if that. I grab a glass of milk, maybe some cheerios in the morning, and I cook a simple chicken and ramen or rice dinner at night. Many nights I just call in wings at Carolyn's or pizza at DaVinci's on the way in from work, as they are in my building or a block away and open til midnight or later depending on night.
Before downtown gets a grocery store, it probably needs a well-located urban market that sells the staples that everybody buys (and high quality staples from organic milk to organic sandwich meat to Tide to TP to Tostitos, etc). Downtown also needs eateries and restaurants to stay open late, and bars that are open and neighborhoody on Mondays-Wednesdays and Sundays.
Anyway, back to topic. I happen to work on 3 funds for a syndicator, but I'm just not going to comment. I think the big picture idea is for the city to work with local business leaders, and for local business leaders to take risks in their own city. The city needs to lay the groundwork and infrastructure, and get out of the way. Local business leaders need to have pride in their own city and take risks in it. That's the gist. A private "fund" does not need to be created (nor can it really considering many factors). A REIT will never/can't ever happen. And there are tons of non-traditional lenders. Outsiders will not invest in Jacksonville - too risky and unknown. Locals need to get involved outside of the Jaguars (and I think the point there is that now that money is no longer restricted and can be put back to use in a different way).
I'm just pointing out that there are affordable choices downtown.
11 E and The Carling are puzzling to me. They have enjoyed 90% occupancy rates since they opened but
still claim they can't make it financially. The fact that they are always full is a great sign, you would think that
would attract another major player to develop the Trio into similar housing. Put a Trader Joes into the Marble Bank and downtown would be kicking (I can dream, can't I?)
Quote from: simms3 on May 04, 2012, 10:52:09 AM
Downtown has a LONG way to go before it gets a grocery store. Plenty of other cities of similar size (Nashville and Charlotte) have far more downtown residents and no grocery store (well Charlotte arguably, but again FAR more downtown residents, workers, students, etc).
And those who live in urban settings typically don't do the suburban "week's worth" grocery run. I go to the grocery store at least every other day to buy 2 nights worth of meat, some milk, whatever I need at the time. Also, those who live in urban environments typically don't have families to feed, work longer hours and eat out a lot more. My kitchen is about 50 SF including counterspace, if that. I grab a glass of milk, maybe some cheerios in the morning, and I cook a simple chicken and ramen or rice dinner at night. Many nights I just call in wings at Carolyn's or pizza at DaVinci's on the way in from work, as they are in my building or a block away and open til midnight or later depending on night.
Before downtown gets a grocery store, it probably needs a well-located urban market that sells the staples that everybody buys (and high quality staples from organic milk to organic sandwich meat to Tide to TP to Tostitos, etc). Downtown also needs eateries and restaurants to stay open late, and bars that are open and neighborhoody on Mondays-Wednesdays and Sundays.
Anyway, back to topic. I happen to work on 3 funds for a syndicator, but I'm just not going to comment. I think the big picture idea is for the city to work with local business leaders, and for local business leaders to take risks in their own city. The city needs to lay the groundwork and infrastructure, and get out of the way. Local business leaders need to have pride in their own city and take risks in it. That's the gist. A private "fund" does not need to be created (nor can it really considering many factors). A REIT will never/can't ever happen. And there are tons of non-traditional lenders. Outsiders will not invest in Jacksonville - too risky and unknown. Locals need to get involved outside of the Jaguars (and I think the point there is that now that money is no longer restricted and can be put back to use in a different way).
Your comment on the dining habits of the typical downtown demographic I would agree with. My point is largely that we aren't getting one anytime soon, so we need to deal with that. Occupancy in this submarket is great, to the point where we can't grow further until someone builds/rehabs. So while I do agree it would be of great benefit to our downtown, it's not happening soon and we have managed to keep occupancy downtown up. Penthouses rarely lease because we have no market for them.
Investors and Jacksonville... how many times I've heard us called a "tertiary" market, albeit accurate.
I agree that a smaller, local shop would suffice, and I was excited about the conceptuals for one that were displayed in the Burrito Gallery.
Quote from: MusicMan on May 04, 2012, 10:54:50 AM
I'm just pointing out that there are affordable choices downtown.
11 E and The Carling are puzzling to me. They have enjoyed 90% occupancy rates since they opened but
still claim they can't make it financially. The fact that they are always full is a great sign, you would think that
would attract another major player to develop the Trio into similar housing. Put a Trader Joes into the Marble Bank and downtown would be kicking (I can dream, can't I?)
Full doesn't mean a thing if the landlord is not making money.
Quote from: MusicMan on May 04, 2012, 10:54:50 AM
I'm just pointing out that there are affordable choices downtown.
11 E and The Carling are puzzling to me. They have enjoyed 90% occupancy rates since they opened but
still claim they can't make it financially. The fact that they are always full is a great sign, you would think that
would attract another major player to develop the Trio into similar housing. Put a Trader Joes into the Marble Bank and downtown would be kicking (I can dream, can't I?)
LOL, we'd all love that.
Carling and 11E struggle because of their "all in" number after purchase and renovation, I believe, and the fact that they can't lease their retail space doesn't help. Vestcor originally planned on turning them into condo's so I don't believe the buildout numbers in their proforma supports rentals. Could be wrong, but that's what I believe.
We don't need another grocery store downtown, we already have one plain and simple. Now a CVS or Walgreens would be nice. Also, I looked at purchasing a condo in City Place as an investment, the place is totally dated and reminded me of something out of the Soviet Block. I couldnt do it.
City Place, several units there under contract right now. I wonder if the buyers are Russian?
I don't remember seeing parking at City Place and, yes, it does look like collective housing in the USSR. Not exactly what I meant by cool, affordable housing. Although something simple like curb appeal, some landscaping/streetscaping, and available parking would go a long way on that project.
What's wrong with "that" Winn Dixie? I shop there. There is nothing wrong with it except they don't have everything I want to buy. But they have most of it. When I lived in Jacksonville Beach, I shopped at Terry's Country Store on Penman Road. It's not nearly as big or nice inside as "that" Winn Dixie, and they didn't have everything I needed either. Sometimes I had to go to a 2nd store to get the rest of what I needed.
When I lived in East Arlington, the nearest grocery store was about the same distance as the Riverside Publix is from Springfield. No one in Ashley Woods was complaining that Publix needed to build a store at the entrance to our subdivision so we could walk to it.
If downtown dwellers EXPECT restaurants and grocery stores right outside their front doors, they are fooling themselves. And if they live elsewhere in the city, they have to drive to them anyway. We all do. That excuse for not living downtown simply doesn't hold water. People can use it all they want, but it doesn't hold water. It's silly, truly it is. There's enough downtown right now, with the various restaurants, bars, performing arts, library, etc, to support the beginning of a vibrant living scene, and the rest would come. It's already there. It just needs a nudge, that's all.
I'm not sure how well capitalized Vestcor is. That could be a factor. Terms of the loan and the timing could have been a factor. Jacksonville is also soooo inexpensive. Do some quick math -
On a stabilized project:
$15M Equity
$35M standard loan at 4.75%
250 units
avg $1.25 psf effective monthly rate (this may actually be high for Jacksonville, where it may be more like $1.10 downtown/southbank)
95% occupancy
avg unit size 1,000 SF
Revenue: $300,000
Opex: at 33% operating revenue = ($100,000)
Debt service: ($182,000)
Levered CF: $18K
DSCR: 1.1
If effective rates are $1.10 or occupancy falls to 90% or expenses are really closer to 40% or debt terms are unfavorable (not hard to imagine for a risky market like Jax), then project is well in the red. Condos are even more difficult and I bet you money was lost on almost every developer unit that sold in 2008 and later.
Then look at a 5 year hold with 3% revenue and expense growth and the numbers look BAD. You cap T3/T12 NOI after 5 years at 6.5% and you're barely paying back your loan, let alone making back your investment. This in particular is why you can't develop mutifamily in downtown Jax. You can't command rents high enough for a reversion that will allow you to pay back the lender, pay back your investors with a return, and generate a profit. You just can't. Sure you can scrape by on an operational basis, maybe, but that reversion is going to kill you. Condo sales are the same way, though timing is different, debt facilities are different, and it's a piecemeal payback. There is sometimes more flexibility there, but demand for condos is so cyclical and dependent on risky factors, and they are expensive to build and require a substantial wealth base and a need for them in the housing market. Some markets are just better condo markets than others.
There is an affordable high rise rental project going up near me where the effective rent is about $1.87 psf and the debt service coverage ratio is projected to be 1.2 and the equity multiple (like a cash on cash at the end of the day) is well below 2x. The proforma projects a reversion cap rate of 5.25%, which is probably not a number that will be seen in Jax for a long time, but is a number that allows that particular model to work (they are banking on that reversion, and probably banking on rent growth because they are starting quite low for the submarket).
I just had lunch with a friend, who just moved back to Jax he looked at place for rent in the Strand 2/2 24th floor $1,900 a month. Wow.
Quote from: fsujax on May 04, 2012, 01:33:51 PM
I just had lunch with a friend, who just moved back to Jax he looked at place for rent in the Strand 2/2 24th floor $1,900 a month. Wow.
Some people consider that "inexpensive." I called that highway robbery. I pay $1,200 less for a 3 bed 2 bath house. For housing to be affordable in our downtown rent would have to range from $600-$1200. I know people who dont mind paying $1000 for a one bedroom apartment ( I think its crazy but hey Im very cheap also). anything more than about $1200 is not affordable for Jacksonville. AT ALL. not to rent anyways
^^Is he going to get 1st month free? How long is the term? He must be moving into the St. Johns floorplan, the largest and most expensive of the 2 bedroom floorplans, which also has a waitlist (all the other floorplans have availabilities, so there must not be that many of this particular unit).
Still, suppose $1900/mo is for 12 months (which at that price it sounds like a 6 month lease), no concessions, no free months rent or TV deals, etc and size is 1,343 SF, that's still an effective rate of only $1.41 psf.
The most expensive price they are advertising as far as my research can tell is $1,599, with most of the 2-bedroom pricing in the $1,399 to $1,549 range, which is low. I was paying $1,550 for an unfinished ground floor 2BR in a Post property my junior year in college.
I do some work in NYC and have begun to learn that market pretty well. You can actually find studios for $2500 in the Clinton/West Midtown area in older re-used hospitals and what not. Rents in Manhattan are at the ~4.50-$7.50 psf range. Rents in Midtown/Downtown/Buckhead Atlanta are in the $1.50-$3.00 range. Rents in downtown Jacksonville are in the $0.75-$1.25 range. Atlanta is considered CHEAP and risky. Jacksonville is not considered an investor market at all.
QuoteI'm not sure how well capitalized Vestcor is.
Oh yeah, John Brood is dead broke ::)
Quote$600-$1200
You're not going to pay $1,000/mo for a place like Strand on the 24th floor in any city in America. $600/mo that high up is called a federally-subsidized housing project
(http://msnbcmedia1.msn.com/j/MSNBC/Components/Photo/2010/November/101130/101201-cabrini-hmed-6a.grid-8x2.jpg)
Post properties are over rated! well, if he can afford $1,900 a month for a 2/2 good for him. He is paying for the view, which he wants. Yes, I know Simms Jacksonville is nothing, not even to be mentioned with the big boys. I left Atlanta to come back here, hopefully to make it a better place, that one day an investor might like us.
Quote from: downtownjag on May 04, 2012, 10:38:26 AM
Quote from: Kaiser Soze on May 04, 2012, 10:32:59 AM
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Why? Why can't you get in your car and go to the grocery store like the other million plus people that live in Jax? And if that's a necessity, why don't you walk your urban behind to Winn-Dixie? Again, current occupancy rates don't suggest we need a grocery store, they suggest we need more leasable product.
Publix will be moving forward with their San Marco Square site in another year or so. There's also a Winn-Dixie operating in downtown right now. By the end of the year, it will be joined by a Julie's Urban Grocery adjacent to the Kings Avenue Skyway station. Julie's will also have a Springfield location at 5th & Main. Grocery needs in downtown Jacksonville should be covered.
http://www.jacksonvillegrocery.com/
Quote from: thelakelander on May 04, 2012, 02:12:11 PM
Quote from: downtownjag on May 04, 2012, 10:38:26 AM
Quote from: Kaiser Soze on May 04, 2012, 10:32:59 AM
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Why? Why can't you get in your car and go to the grocery store like the other million plus people that live in Jax? And if that's a necessity, why don't you walk your urban behind to Winn-Dixie? Again, current occupancy rates don't suggest we need a grocery store, they suggest we need more leasable product.
Publix will be moving forward with their San Marco Square site in another year or so. There's also a Winn-Dixie operating in downtown right now. By the end of the year, it will be joined by a Julie's Urban Grocery adjacent to the Kings Avenue Skyway station. Julie's will also have a Springfield location at 5th & Main. Grocery needs in downtown Jacksonville should be covered.
http://www.jacksonvillegrocery.com/
Add Julies with the two 7-11's and downtown's grocery needs are way better than they have been in the last decade.
I really can't emphasize enough how nice a 24 hour convenience store is going to be for this area. It serves a very basic need that has been unmet downtown for quite awhile. It's not 'sexy' like the Laura Trio or the Shipyards, but these are the little things that functional, walkable neighborhoods require.
Quote from: thelakelander on May 04, 2012, 02:12:11 PM
Quote from: downtownjag on May 04, 2012, 10:38:26 AM
Quote from: Kaiser Soze on May 04, 2012, 10:32:59 AM
Quote from: downtownjag on May 04, 2012, 10:30:07 AM
I'm tired of people talking about the need for a grocery story downtown (not referencing your comment Debbie). What other part of town can you live in where you walk to a grocery store?
You can be tired of that talk all you want but a nicer grocery store is absolutely necessary. This is not some other part of town; its downtown and one of the primary necessities must be a grocery store to which you can walk.
Why? Why can't you get in your car and go to the grocery store like the other million plus people that live in Jax? And if that's a necessity, why don't you walk your urban behind to Winn-Dixie? Again, current occupancy rates don't suggest we need a grocery store, they suggest we need more leasable product.
Publix will be moving forward with their San Marco Square site in another year or so. There's also a Winn-Dixie operating in downtown right now. By the end of the year, it will be joined by a Julie's Urban Grocery adjacent to the Kings Avenue Skyway station. Julie's will also have a Springfield location at 5th & Main. Grocery needs in downtown Jacksonville should be covered.
http://www.jacksonvillegrocery.com/
Think you covered that issue pretty well! I'm sold.
Quote from: fsujax on May 04, 2012, 02:08:26 PM
Post properties are over rated! well, if he can afford $1,900 a month for a 2/2 good for him. He is paying for the view, which he wants. Yes, I know Simms Jacksonville is nothing, not even to be mentioned with the big boys. I left Atlanta to come back here, hopefully to make it a better place, that one day an investor might like us.
Post is not a superior product, which is why I menioned it (and it is stick construction and often suburban in nature). Post is a good operator, however. The older Post property I lived in (Post sold it to a different operator this year) was an urban concept with exposed brick and cement floors (and really cheap finishes), and filled with Tech students, and yet 2 BRs were $1550-$1750. Now studios are $1230-$1235 with the large E20L floorplan at $1730, 1BRs are $1375-$1535, 2BRs are $1880-$2145. That demonstrates decently strong pricing for inferior product but good location (1-2 blocks off Peachtree) and it demonstrates strong rent growth (I lived there only 3-4 years ago). Rents are in the $1.50-$1.80 psf range. It is half occupied by students. Students. (dorm life/student housing was not any less expensive, in fact more expensive for a lot less) This property is similar to what has been proposed for Brooklyn (albeit more urban with 5 floors of "loft-like" apartments around a courtyard and garage surrounded by thousands of other units within 5 blocks).
You really take my posts out of context (or you're just 10 steps behind). I mentioned rate ranges for urban product in other cities to shed light on where Jacksonville falls and how far behind it is before it can see new development, and also to shed light on why Vestcor's developments may not be the most profitable. A penthouse at 11 East is going for $1.55psf, which is the most expensive unit in Jax, most likely. ($1700 for 1,097 SF) 11 East cost an estimated $24.1M for 225 units ($107K per unit, which is pretty low), and Vestcor put in $1.1M equity and the project benefits from $3.2M in tax credits. I think these projects are combination of too low rent, no rent growth (just consulted a BizJournal article from 2002), higher costs, they probably require higher capital costs due to the building's age, and they seem to be over-leveraged. $1.1M in equity? That's like a limited partner's equity in the smaller developments I work on.
Ultimately the city is and has been doing something wrong, or more developers, locally and outside of Jax, would have looked into doing similar things. As it stands now, there is no reason for any private equity to be invested in downtown without the city's help and backing. It's a sure loss. Something needs to be done at the city level first and then all that money parked on the sideline or elsewhere may start allocating bits and pieces to downtown real estate.
Quote from: fsujax on May 04, 2012, 02:08:26 PM
Yes, I know Simms Jacksonville is nothing, not even to be mentioned with the big boys. I left Atlanta to come back here, hopefully to make it a better place, that one day an investor might like us.
Here is my quote:
QuoteAtlanta is considered CHEAP and risky.
Did you not read? It's a secondary market to the gateway cities such as DC, Boston, NYC and San Fran. When those markets become overheated and buyers can't justify the pricing to their investors or to their model, then they look at Atlanta, which is what is happening now in droves with Metlife, Manulife, Northwestern Mutual, UBS, Batson Cook Development, Hines, and all sorts of guys getting into the multifamily game in droves to park money.
Make no mistake about it there will be a bubble and the rent growth that has occurred over the past few years will stop. Rent growth and fundamentals are what lenders and equity are looking at. They want to see NOI growth because they are planning to sell the damn thing. They want to make sure their ground-up development won't be in a hyper-competitive situation where they will lose out on rent or need to increase concessions. They need rents to be at a level where they can justify construction or a certain pricing, and they need enough people in the market to be able to afford the rents and the rent growth.
High barriers to entry are the key factors in the gateway/mature markets, which is why Atlanta is excluded. Job growth is also key for multifamily. Job growth drives multifamily. Income growth, job growth, barriers to entry/lack of supply and fundamentals regarding vacancy are what drive rent growth. Dallas and Houston and Raleigh have the lowest barriers to entry, but are all attractive markets because of crazy job growth.
The fact that all new multifamily construction and Class A transactions are on the SS is indicative of all the job growth occurring on the SS and that area becoming the "center" of town. The city needs to do something to make downtown the center of town again, and you'll get more fringe developments as proposed for Brooklyn...and eventually it will move into the center where land prices are higher and construction costs much greater as momentum builds.
sorry. i take it back, quick reading, since I am working!
QuoteBecause the type of person that moves to a downtown environment expects it. Look at other markets. Its easy for me to go out to my driveway and hop in my car. Its not when you live in a high rise. If you've been to that WD, you know why someone at the LST ain't walking to it.
+1
Hey, the Weaver's house on the river is up for sale, so they are asking 5.5 million for it, maybe Wayne and Delores can take the proceeds and give them to Alvin. Of course they are still trying to unload John Gorrie, which they are in debt to around 13 million, with only a few units sold. I can't see them ponying up funds for Alvin's Private/Public Partnership until they have sold that albatross.
I lived in a Post Peachtree Hills apartment when first built in the early 90s. Nothing like being the first tenant in NEW space. My 1 BR was about 800 sq ft and cost me $645 per month. What a deal it was back then, compared to the mortgages I pay now.
That Winn Dixie would be smart to operate a courtesy van to the major residential properties in downtown, Cathedral Lofts, 11E, Berkman, Churchwell Lofts, The Carling, anything with 20 units or more. Even the hotels.
Great PR and folks who might have never gone there before might start going on a regular basis.
Quote from: fsujax on May 04, 2012, 09:12:14 AM
I dont know why he keeps referecing a movie theatre or grocery store Downtown. Just focus on the Trio and get it done!
The Library (old Haydon Burns library) is a far, far, far less expensive project, is further along in planning, and is much more viable. Doesn't hurt that it's a relatively successful downtown location, either.
Needs a mill or two.
Back to The Strand. Hence my comment about affordable housing and that not everyone can afford riverfront living. When we moved to the urban core, Berkman was still apartments, as was 11 E, just being completed. I'm not into paying rent instead of mortgage (although between buying at the top of the market, and with the economic downturn, that may not have been smart of me after all...but I digress.) However, once Berkman went condo, and Berkman II was announced, we looked into it. A one bedroom unit was about $250K, and condo fees on top of that. For that price, one can purchase a beautifully restored single family home in Springfield or Riverside. Yes, the view was great, but you have to have room to live. And if a studio isn't big enough, then you can't spring big dollars for the river view.
Had right sized dwellings with mortgage payments in the $1000 to $1200 range, and reasonable condo fees, been available downtown, it would have been something we would have considered, definitely. And there is a large chunk of the population in that same price range. Working stiffs like us who can't afford "luxury high rise riverfront views" but would still like the cool factor of living downtown.
^This is why I think the old city hall annex building that some are rushing to tear down is worth looking at as potential market rate housing. There aren't too many sites in DT Jax that can be revamped for a product offering units at a certain price point. Given that the city already owns the structure and site, its much easier to make the numbers work.
I am sure everyone thinks the old annex site is a gold mine even with the condos next door available on the cheap. I say don't tear it down without something concrete in the works for the site.
Quote from: thelakelander on May 04, 2012, 02:12:11 PM
Publix will be moving forward with their San Marco Square site in another year or so.
Do you have any details about this? I've heard rumblings, but nothing that would lead me to believe it is imminent.
Quote from: Bill Hoff on May 04, 2012, 06:57:11 PM
Quote from: fsujax on May 04, 2012, 09:12:14 AM
I dont know why he keeps referecing a movie theatre or grocery store Downtown. Just focus on the Trio and get it done!
The Library (old Haydon Burns library) is a far, far, far less expensive project, is further along in planning, and is much more viable. Doesn't hurt that it's a relatively successful downtown location, either.
Needs a mill or two.
All good points, but the Trio has a limited life span in it's current condition, it seems. Time is running out, so something needs to happen soon.