http://jacksonville.com/business/2012-06-24/story/sunday-notebook-occupancy-residents-rise-downtown (http://jacksonville.com/business/2012-06-24/story/sunday-notebook-occupancy-residents-rise-downtown)
As of the end of 2011, 91 percent of downtown’s 651 residential rentals were occupied. That’s the highest figure since 2004 when 99 percent of the 139 units were full.
Downtown Vision’s 2012 report said that 89 percent of the 890 condos have been sold by their original developer. And that figure will be higher given sales so far this year.
Well that's nice to hear.
^+1
I'm finding more people who are interested in moving downtown. I recently had a conversation with an Everbank employee who wants to move downtown when his lease is up. He actually said there aren't very many options, which I guess makes sense considering 91 percent of the rentals are occupied. I know I miss living downtown, and have considered moving back.
Hopefully Mr Khan is reading this - there might be demand for the old barnett building to be condos/rentals after all!
A condo I wanted sold before I could move on it. Went for well below list though. From what I see almost all vacancies are at the Berkman, and the association fees are just way too high there accordingly.
Those numbers may sound good, but dig a little deeper and there's nothing truly positive about them. 91% occupancy with no construction on the horizon and no new deliveries, especially nowadays, is not spectacular and is hardly considered "stabilized". If you want to see new starts, you're going to need to show 95% occupancy, rent growth in the range of 3-5+% a year minimum, job growth, etc. Sorry to break it to you. And then for the cost of downtown living, not only rent growth, but a base line effective rent that's most likely a good bit higher than effective rental rates in DT Jax now (which are ultra low and don't seem to be on the up...conversely down from a few years ago).
Then on the condo front, that's not going to start back up until rentals are exhausted, and rentals in DT Jax are far from exhausted. 11% of developer condos remain...5-6-7+ years later (and the number, 890 units constructed, is not a big number at all).
Sorry to be a debbie downer, but the numbers just aren't there yet, otherwise you would see the same trend as has been occurring for 2 years now in other southern cities like Nashville, Charlotte, Raleigh, Charleston, etc with multifamily construction in the core.
Well we have the new starts in Brooklyn and are working on the Barnett condo portion of the Laura Street trio. Your point is well taken that it is a very small number but our rate is fine when you consider one property is really lowering the rate %.
Quote from: JFman00 on June 24, 2012, 06:47:09 PM
http://jacksonville.com/business/2012-06-24/story/sunday-notebook-occupancy-residents-rise-downtown (http://jacksonville.com/business/2012-06-24/story/sunday-notebook-occupancy-residents-rise-downtown)
As of the end of 2011, 91 percent of downtown’s 651 residential rentals were occupied. That’s the highest figure since 2004 when 99 percent of the 139 units were full.
Downtown Vision’s 2012 report said that 89 percent of the 890 condos have been sold by their original developer. And that figure will be higher given sales so far this year.
I think this can expanded beyond the Downtown boundaries to the greater urban core.
Riverside, San Marco & Springfield haven't been this popular in 40 years. Good rentals typcally don't last long.
Quote from: JeffreyS on June 24, 2012, 10:58:34 PM
Well we have the new starts in Brooklyn and are working on the Barnett condo portion of the Laura Street trio. Your point is well taken that it is a very small number but our rate is fine when you consider one property is really lowering the rate %.
So when you say they are working on the Barnett building, do you mean its actually happening or that they are trying to make it happen? I haven't seen anything about that in a while
At least one of the Brooklyn projects (220 Riverside) should break ground this Summer and the other possibly by the end of the year. The Laura Trio project isn't dead. I ran into the developer over the weekend. An update should be out in the upcoming weeks.
Lake I look forward to the update.
So is it still the project with the bank hotel? Or is this brand new?
^The same one.
All I have to say is that I'll keep my fingers crossed. If anyone can make a development in DT Jax pencil out, they should have their own statue!
Guess there is no demand for downtown/urban living in Jacksonville. If only I had deep pockets.
Something tells me Ron Chamblin won't have any trouble renting out the DT apartments he's renovtaing when they're through.
This is mainly due to the srength of the rental market...which has its pros and cons.
About 50% of the Parks @ cathedral townhomes are now renter-occupied....and some owners are looking to others to find places to meet their tenant demand.
That said, this also means its only 50% owner occupied...and we're having trouble finding enough volunteers who care about maintaining the community.
The Carling is 100% preleased until September, and 11E is 99% preleased until August I believe.
These numbers are positive, particularly with new units in the CBD on the way. Obviously not where we need or want it to be, but it's positive nonetheless.
Quote from: downtownjag on June 25, 2012, 09:08:55 AM
The Carling is 100% preleased until September, and 11E is 99% preleased until August I believe.
Do you mind sharing what you know about rental rates at these two properties? Also concessions. I'm interested in actual rents and unit size (vs advertised), and what kinds of concessions if any are given.
Thanks.
Quote from: Tacachale on June 25, 2012, 09:24:55 AM
These numbers are positive, particularly with new units in the CBD on the way. Obviously not where we need or want it to be, but it's positive nonetheless.
I agree. No one said that this was something to throw a parade about, but for JACKSONVILLE, this is a very positive news.
Better news would be to see what Simms3 said and see more development of NEW units. If you want downtown to grow, you can't do it with leasing the existing space. So why and where are the developers? Brooklyn, got it, maybe, but then again that talk has been going on since the boomtimes, so where are the new developments downtown, besides the trio? Shipyards? JEA space?
^^^For me in these times new development isn't actually happening until it's happening (past sitework and onto physical construction). It no longer counts that you have something in the pipeline (metro Atlanta has thousands of units in the pipeline, but a historical low actually UC). You'll know something is financed when tower cranes or any kind of cranes are on site and a construction fence is up to keep passerby out.
FTR, there are a few developments UC right now near me that would not have penciled/gone up without city assistance of some sort. And to add, without giving away a private proforma, effective rents at a notably cheaper tower are modeled to be in the $1.80-$1.90 range on average. This tower received millions of dollars in tax credits and is going up at bare minimum expense on cheap land. The most expensive rentals in DT Jax I can find (by memory) were $1.25-$1.50/SF if that, and I don't know what the effective rents are because I don't know what concessions are offered.
The new construction garden apts going up in Raleigh-Durham are renting at $0.85-$1.05/SF effective. Due to the cost of land, all infill in Raleigh is either a hybrid, costing $135-$150K per unit and renting at $1.25-$1.50/SF or mid-rise apartments 8-10 floors costing $150K++ per unit and renting at $1.50-$2.00/SF. These numbers are rough and at the top of my head (I track that market among others for various reasons). Jacksonville can probably expect a mirror image of that situation, give or take negligible amounts.
I would say a hybrid stick/mid-rise infill in Brooklyn (like the one proposed by Pope & Land) would then fall in the $1.25-$1.50/SF rent category. So for studios you can expect to pay something like $800+ for 500 SF or $1,680++ for 1,400 SF 2+/2s. Look to Villas at St. Johns (institutional ownership - Atlanta based Gables), the most expensive apartments in town for some idea of pricing. The 1,323 SF floorplan is advertised at $1,940-$2,065, or well above $1.50/SF. The smaller units here appear to be cheaper ($1.17-$1.31/SF).
I would guess that 220 Riverside is better/concrete construction, it's more than 5 floors. Therefore I would guess it would rent for a weighted average of above $1.50/SF. You can sort of guestimate that 500 SF studios could rent for $900+ and 1,600 SF 3 BRs could rent for $2,300+. Look to Strand for indication (though I believe Strand is underpriced for original proforma...can't recall the history there and why it might be renting for much lower than a luxury high rise anywhere should be renting). Strand has a 2/2 1,343 SF unit advertised at $1,599 (could be higher, could be lower). That's $1.19/SF. The studios are by far the most expensive here, advertised at $1.80-$1.90/SF for 651 SF, you do the math. Though I must add those are huge studios!
The ultimate question is - can Jacksonville support the rents necessary to bring more expensive new construction out of the ground in infill areas? I think the "positive" numbers presented by DVI are positive for Jax, but overall I think the numbers for DT are comparatively weak (to a Raleigh or Charlotte or Nashville or Orlando or Tampa or even Birmingham).
A developer needs investors and debt, especially the latter. Jacksonville is no New York/San Francisco, where developers are stacking new speculative construction (office, condos, etc) with mostly equity and very little debt. It's hard enough to secure a construction loan or mezzanine debt in those proven strong markets, let alone a weak market like Jacksonville with no "proven" downtown submarket.
I'll definitely commend any group who can secure good solid debt to build in/near DT Jax, even with the uber popular multifamily product.
I believe both 220 Riverside and Riverside Park will be wood frame instead of concrete.
Well, good for prices...so 220 Riverside is going to be 5 or fewer floors, as well? Also, looking at Villas at St. Johns, which is not new construction but a similar idea and a market comparable, do you think there is demand in Jacksonville, particularly in that area, for 2 ~200-350 unit infill developments with rents at or higher than Villas at St. Johns?
Yes. If there's demand for the same building product on the Southside for twice as many units, I believe there could be a demand for a location one block west of the river, directly located between DT and Five Points. Quite frankly, I;m surprised these types of projects didn't pop up during the height of the building boom like they did in nearly every other city across the US.
Quote from: thelakelander on June 25, 2012, 10:43:21 PM
Yes. If there's demand for the same building product on the Southside for twice as many units, I believe there could be a demand for a location one block west of the river, directly located between DT and Five Points. Quite frankly, I;m surprised these types of projects didn't pop up during the height of the building boom like they did in nearly every other city across the US.
Beside Villas at St. John, which is really the only real comp given area and design, product and renter profile (most likely), there's Tattersall at Tapestry Park, which has a 2BR floorplan called the Gingham, which by the space plan looks to be the most common floorplan. They advertise it $1250-$1915, or $1.07-$1.64/SF. It probably usually lies somewhere in the middle in the $1.20s and $1.30s.
Then there's the new 5000 Town UC near the SJTC. It's being constructed for north of $150K/unit all in, and has only
130 units, though they will be large and have luxury features (10 ft ceilings are way high). You can bet it will be about the most expensive thing in town when delivered this November. It'll be interesting to track its progress. Note how the desirability of SJTC has driven up land prices in the suburbs immediately around that center - $360K+ an acre. (sarcasm here...residential lots in nice communities are back to going for this price and higher)
Other than that SS Apts are all garden style and just aren't the same product. They will offer lower rents all the time. Pope & Land payed $615K an acre for most of its Brooklyn land (discounted) and the original developer payed $30/land-foot or over twice what P&L just paid at the height of the market.
edit for sarcasm
Found this quote from a 2006 article referring to a site now containing a topped off 23 floor rental high rise with rents in the $1.80s and $1.90s/SF. This same development received $2.5M tax abatement from Invest Atlanta (formerly Atlanta Development Authority) to get it off the ground.
A similar size tower is going up 1 block away. It will be more expensive.
Quote
Novare Group purchased a 1.72-acre tract, including a 35,000-square-foot Class C office building, on the west side of West Peachtree Street, near the intersection with 11th Street. The purchase price was $11.4 million and the seller was Atlanta’s McWhirter Realty.
Cathy High, director of corporate communications for Novare, confirmed the purchase, calling the site a “good opportunity†but said the company has yet to nail down development plans. The site, directly south of the West Peachtree post office, is only a few blocks from the site where Novare and Pope & Land Enterprises announced their intention to develop Twelve 14th Street, a combination hotel/office/condo building at the corner of West Peachtree and 14th streets.
The price Novare paid for the land -- approximately $6.6 million per acre if you assume the office building is of little value -- is “strong,†said Shawn Sudderth, managing director for Transwestern Commercial Services.
“You’re starting off with $12 million in land costs, more after you do the site work,†Sudderth said, adding that the site, which goes all the way to Spring Street, is well suited for the type of dense development that a $12 million land cost would require.
This deal was north of $150/land-foot and in a no-man's land 2 blocks from Peachtree (where land has sold for north of $500/ft or $15M-$20M per acre). This is what begins to happen in urbanizing cities, which drives up costs of everything and gets passed on to the end user...so there has to be an end user, a population that can afford it.
Here's a more from a more similar market - Raleigh.
http://www.newsobserver.com/2011/09/22/1507348/jp-morgans-cash-keeps-glenwood.html
All cash development, $2.5M+/acre in the city's prime area (Glenwood South). Recent multifamily sales in area of $150-$167K per unit. New construction of mid-rises in the 6-8 floor range with interior garages at $155K-$165K per unit.
http://www.bizjournals.com/triangle/print-edition/2011/03/25/downtown-raleigh-to-get-195-unit.html
http://www.bizjournals.com/triangle/print-edition/2011/06/17/more-downtown-apartments.html
http://www.bizjournals.com/triangle/print-edition/2011/12/09/another-apartment-building-planned-for.html
http://www.bizjournals.com/triangle/news/2011/10/26/raleigh-apartment-complex-sells-for-56m.html
I'd just like to hear thoughts on whether MetroJacksonville participators are a) willing to pay those prices themselves or b) if they think the market can support higher rental prices. That's really what it's going to boil down to. I just don't know or even have an opinion anymore...I know Jax typically hasn't been able to support much in the past, but things could be changing.
Quote from: mtraininjax on June 25, 2012, 06:03:02 PM
Better news would be to see what Simms3 said and see more development of NEW units. If you want downtown to grow, you can't do it with leasing the existing space. So why and where are the developers? Brooklyn, got it, maybe, but then again that talk has been going on since the boomtimes, so where are the new developments downtown, besides the trio? Shipyards? JEA space?
Yeah, but with brand new development comes higher rent prices. And frankly I don't think a lot of people here are going to be drawn in by that when they could pay similar (or cheaper) prices somewhere that actually has amenities, is unique, has its own vibe & is already alive.
Typically with forgotten downtowns, you want cheap rents (leveraging older housing stock) to attract a particular group of people in to get the ball rolling. The problem with Jax is we leveled TONS of this stock, so its hard to grow organically now. You're basically left with a few overpriced high rises in a barren urban landscape full of surface lots, unusable transit & a few places to eat.
With interest rates so low and prices in the basement, I don't know why anyone in Jax would pay more than a $1 a foot (if that) per month for rent, unless they knew they were moving in a very short time.
Quote from: vicupstate on June 26, 2012, 07:45:42 AM
With interest rates so low and prices in the basement, I don't know why anyone in Jax would pay more than a $1 a foot (if that) per month for rent, unless they knew they were moving in a very short time.
The urban housing stock is very limited in general, and many of the types (young, newly married, carrying college debt) who would love to buy something like a John Gorrie condo don't have the cash on hand to afford the downpayment, despite the low interest rates. So, not many options for buying or renting, and with buying difficult to impossible for those without cash (especially considering the more stringent lending standards for condos/multifamily), you have a lot of people chasing the same narrow rental market.
^^^Exactly. I'm paying $2.33/SF in rent for a 22 year old 5th floor studio with no balcony/tiny window beginning July, which may sound expensive, but conversely if I wanted a decent starter home in a nice intown urban/walkable/SAFE neighborhood, I'd be looking at $400K and up, which means I'd be looking at even higher mortgage payments (not much at 3.25% fixed 30 year) and an $80K give or take down payment, which is definitely more than I have right now by about a factor of 80...LoL.
http://www.trulia.com/GA/Atlanta,2676,Virginia_Highland/
I guess I did find a 628 SF home for $160K, or roughly $255/SF...but I might as well stay in the studio!