Just curious what the perspectives are on the prospects for Springfield. It looks to me like traction is building, but the property I'm looking to buy would be a very big bet and not make sense if the neighborhood remains cold relative to Riverside/Avondale/San Marco/Murray Hill for the forseeable future.
Here's some anecdotal evidence for you: My wife and I are building a house with Terrawise in Springfield. We signed the contract in November of last year. We were the last buyers to sign before they raised the base price $8k to cover the increasing land values and shortening supply of vacant land. Additionally, most of the lots we had to choose from had a substantial "lot premium." If you drive around Springfield now there are, at any given time, 5-10 new home constructions in progress. At this rate the builders that are there will run out of vacant land in the next few years and inevitably all of Springfield's land will start to appreciate rapidly.
Currently, there is still a good discount vs the other urban core neighborhoods, but I imagine that won't last. The proximity to downtown will become more of an asset every year that downtown progresses, and development along Main st seems to finally be starting.
Is this a residential or commercial project you are considering? (edit) Never mind, I missed the title of the post.
As a long time business owner, I would think a mixed use deal is still a bit of a risk. However, now is the time to get into it as if the other breweries and some of the other long awaited Main Street business actually come to fruition, that risk will go down dramatically. And by the time that happens, the prices will be higher. It's that two edged sword. Do you trust the others will succeed? if yes, then go for it.
As an example, the building on the NW corner of Main and 7th. Apartments normally rented but affordable. The commercial has spent more time empty than in use though it appears to be getting better.
Thanks for the advice. I'm approaching it with a cool head, but definitely will continue to run numbers and evaluate. It's a big bet to make and I'm exploring some more manageable residential only options as well.
Quote from: JFman00 on January 27, 2017, 01:08:23 PM
Just curious what the perspectives are on the prospects for Springfield. It looks to me like traction is building, but the property I'm looking to buy would be a very big bet and not make sense if the neighborhood remains cold relative to Riverside/Avondale/San Marco/Murray Hill for the forseeable future.
The residential market and commercial market are 2 different animals. Residential market is relatively healthy, plenty of renovations & new builds. Quality apartments are in demand. The commercial market is spotty, but given the sheer number of commercial projects underway, even if just half are successful it'd be a giant leap.
To take the mystery out of it since it's listed on MLS anyways, it's the two-story mixed use at Main and 8th with the Walgreens.
Lol I've had a busy night. Just seeing these posts now. I've been looking at that property for a couple weeks. There was also a guy on BP (social networking site for real estate investors) who started a thread asking about it. Another person on the site private messaged me to ask about it too.
I'll say it looks extremely enticing. I don't think it's a risk if you can get it for a discount, but then again considering how many folks are discussing it, discount may not be possible. Supposedly fully leased, right in the center of everything, decent enough CAP rate. Get a little discount off that list price and it's a very safe bet...imo.
That was my post on BP :-P I'm torn between it and doing a couple smaller investments with stronger current cash flow
Lol now I know who you are JFman!! And you know who I am. Anyway one other person talked about that space in a PM to me. Like I said I do like the space...not sure if there's really any room for rents to go up and it is fully occupied, but if you can get the price down should be a decent enough CAP rate to make sense over the long haul cause I do think this area will grow significantly midterm (5-10 years?)
I think with the breweries opening up along with the block skate supply, social grounds coffee, Crispy's and a few others ;) this area is going to boom in just a couple years. The foundation being laid now is very healthy and also attractive to millennials looking for something cheaper than Riverside so I believe Springfield is going to finally come into its own soon.
I have a similar gut feel, just have to balance the opportunity cost of locking up so much capital in one investment for that long relative to the payoff. So far the financing numbers aren't very appetizing :-\