Bartram Park: A suburban millennial paradise?
(https://photos.smugmug.com/Cities/Jacksonville/Neighborhoods/Bartram-Park-August-2017/i-JMXQvvQ/0/fb5e3502/XL/20170819_141237-XL.jpg)
Despite well publicized excitement about downtown revitalization, young adults are fueling rapid growth in suburban areas like Bartram Park across the country. Is it by choice, or necessity?
Read More: http://www.metrojacksonville.com/article/2017-aug-bartram-park-a-suburban-millennial-paradise
The reasons: lack of inventory and high prices in revitalizing/revitalized neighborhoods. and you don't have to spend 15/20k per year to send your children to "a good school" read: primarily white school
^ This. I don't think many people would look at that picture and think of it as "paradise." Haha
I wonder what the traffic will be like around there when the whole road is built out and the Gate project down the road is done? It looks to me like some of the town home developments on that road have more land behind them for an additional phase of development too...
There is almost no availability downtown. I really don't understand why more downtown residential tower projects have not materialized. I guess it is just a financing problem since there is little precedent for such development recently. Hopefully the projects on the south bank will go well and encourage some development on the north bank. I know several people, in addition to my wife and I, that were trying to find a first place after college now that we have better paying jobs, and there simply wasn't any viable availability below $2k per month that had more than one bedroom. Now we have the workforce housing being built, which is great to see, but I'm sure there are a lot of people that would like to be downtown if they could find a 2-3 bedroom place around $1,500 per month.
From my perspective, the urban core (downtown included), needs less towers, stick-built apartments, single-family homes, etc. and a lot more townhomes, rowhouses, duplexes, tri-plexes, quads, etc. That missing segment of housing types will help create availability in price points that new construction single-family housing and residential towers will never be able to compete with effectively.
^But isn't there not enough available land to build any meaningful number of townhomes? At least in that respect, towers are much more efficient and practical to build downtown.
There's tons of land in neighborhoods like the Eastside, LaVilla, Sugar Hill, etc. We have more than enough property to accommodate something for all segments of the population.
Spend a day down there and you can count the people using bicycles as their primary mode of transportation on one hand.
They drive everywhere. They don't walk at all. Look at their waistlines, too. All the evidence you'll need.
Stick built homes with OSB siding. Wait til a hurricane comes and go take a look. New building codes help but still.......................
Ultimately, this type of development is designed to maximize the developers profits. They are cutting down piney woods and building cookie cutter homes. Barf!
Quote from: remc86007 on August 30, 2017, 10:41:23 AM
I know several people, in addition to my wife and I, that were trying to find a first place after college now that we have better paying jobs, and there simply wasn't any viable availability below $2k per month that had more than one bedroom. Now we have the workforce housing being built, which is great to see, but I'm sure there are a lot of people that would like to be downtown if they could find a 2-3 bedroom place around $1,500 per month.
Downtown is more expensive, but there are still 3 bedroom homes in Springfield for under $1,500 a month. http://www.realtor.com/realestateandhomes-detail/410-E-3rd-St_Jacksonville_FL_32206_M62486-09778 (http://www.realtor.com/realestateandhomes-detail/410-E-3rd-St_Jacksonville_FL_32206_M62486-09778)
Several choices in San Marco under $2000. However that is not Downtown Jacksonville.
But I did a quick MLS check and your basic premise is true. Renting downtown is expensive.
You would think more developers would have noticed that by now.
^It's simple. The numbers don't work. The amount of rent needed to cover the land acquisition and construction costs in downtown exceeds what the local market is willing to pay. To fill the gap, public inventives need to be given or areas on the fringe need to be explored.
^I'm not convinced that the numbers don't "work" in the sense that it would be unprofitable to do so, I think the anticipated margins are just higher in other areas (with cheaper and more abundant land) and therefore, given a finite number of investors, downtown has to either wait for the demand to increase further or incentives are needed as you suggest. I do think that developers and lenders are vastly underestimating the demand for high-rise living downtown. Just look at the response to 220 Riverside, people want to live in the urban core, and people like living in buildings that are taller than four floors. Admittedly, the Fresh Market likely greatly enhanced the demand for 220, but I still think if a developer built a 20 story residential tower downtown (maybe where the Greyhound station is now), it would be a huge success.
Quote from: Kiva on August 30, 2017, 07:54:57 PM
Downtown is more expensive, but there are still 3 bedroom homes in Springfield for under $1,500 a month. http://www.realtor.com/realestateandhomes-detail/410-E-3rd-St_Jacksonville_FL_32206_M62486-09778 (http://www.realtor.com/realestateandhomes-detail/410-E-3rd-St_Jacksonville_FL_32206_M62486-09778)
Funny you should mention that, my wife and I are building a house with Terrawise very close to that house. (Actually, the proximity is kind of creepy haha)
Quote from: remc86007 on August 30, 2017, 09:38:46 PM
^I'm not convinced that the numbers don't "work" in the sense that it would be unprofitable to do so, I think the anticipated margins are just higher in other areas (with cheaper and more abundant land) and therefore, given a finite number of investors, downtown has to either wait for the demand to increase further or incentives are needed as you suggest. I do think that developers and lenders are vastly underestimating the demand for high-rise living downtown. Just look at the response to 220 Riverside, people want to live in the urban core, and people like living in buildings that are taller than four floors. Admittedly, the Fresh Market likely greatly enhanced the demand for 220, but I still think if a developer built a 20 story residential tower downtown (maybe where the Greyhound station is now), it would be a huge success.
Unfortunately, it's not about convincing a few of us on the blogs that the numbers don't work enough for the private sector to be willing to invest their money in DT Jax as opposed to investing them elsewhere. Developers aren't stupid. There's a reason they flock to suburbs and other downtowns all across the country. There's also a reason most projects not asking for incentives are either in Brooklyn, the Southbank or Northern San Marco, as opposed to the historic Northbank. Downtown Jax isn't a hidden gem. The market dynamics simply aren't strong enough for most to risk their own money when more sound investment alternatives are still plentiful. With that said, things will slowly improve.....until the market crashes again. Let's just hope we can get a few projects on the drawing board, underway before that happens. However, I doubt we see many new construction high-rise/mid-rise projects (that aren't subsidized) offer units at rates as low as you mentioned in your earlier post.
If the numbers don't work is it the cost of the real estate or construction that are prohibitive? I look at vacant parcels and my opinion is that most are way too expensive. And so they sit on the market for years................
PETRA has several large parcels for sale on Main Street in Springfield and are asking a million dollars (or more) for them. SERIOUSLY?
(1100 N Main asking $1,200,000 1400 N main asking $1,400,000 1148 N main 1 acre price not disclosed. SOURCE: LOOPNET)
There are NO COMPS to support those prices. I assume they think it's useful to decorate the vacant lot/building with a sign just so you know who owns it!?!
For comparison a one acre parcel on Ernest Street a block from Bold Bean just sold for low $300,000's. In a red hot neighborhood.
I feel the same way about most of the parcels downtown.
Asking $1,500,000 for a 1 acre parking lot on Pearl and Ashley? (Colliers International).
The old Ambassador Hotel currently listed for $5,500,000 as a redevelopment opportunity? Get real folks.
Lake, can you post the most recent vacant large parcel that sold Downtown? i can't find anything to support these numbers.
In general, budget busters would be cost of land and type of construction. If you can get away with a stick-built structure and surface parking (ex. Brooklyn Riverside), you'll be significantly better off than if you're dealing with the restoration of a long vacant structure, going vertical multiple floors or structured parking decks (ex. Berkman II or East San Marco). Those things drive your construction costs up. If the market can support the higher costs, in terms of higher leasing or asking prices, then no problem. If the market can't, then the project has a higher risk of success, which negatively impacts its chances of getting financing. You're also okay if you can get incentives to eliminate the higher costs (ex. Laura Street Trio, Houston Street Manor).
So using the Pearl and Ashley example, you're already out of $1.5 million on land alone and for only one-acre? That literally forces you to do something vertical, to create enough density to get your money back and make a profit. However, the vertical construction pushes your investment costs higher, meaning you'll need to make your profit through higher rents, asking prices, etc. Take a look at East San Marco, Bishopsgate and the high-rise project that ended up being townhomes at San Pablo and JTB. It's pretty obvious that type of market is limited in Jax at the moment. If you're going for something like that, you're better off investing in Charlotte, Orlando, Miami, Atlanta, etc.
It seems that many of the buildings on Main Street between 7th and 8th are now occupied. Do you think that we are getting to a point that new building construction can start? The ideal place in my eyes is the corners of 7th. If those empty lots were filled we could start to see some real progress out from what 8th has started. People would feel better about walking in between the two breweries. Hopefully those lots arent going for 1.2 million or something.
^There's already a market for new single-family homes in Springfield, and probably even lowrise multifamily. Perhaps even (gasp) townhomes!
Springfield's residential market has been booming for quite some time. Now, we're finally seeing some commercial activity take place on Main Street. There's still a lot of existing spaces that are underutilized, so I would not expect to see a massive boom of new construction infill mixed-use along Main. Nevertheless, people will feel just fine walking to the cluster of places opening between 6th and 9th now....even with the 7th and Main corner lots being vacant. Just having open storefronts clustered together in close proximity will be a game changer for Main Street. That ball of momentum will lead to more vacant buildings being retrofitted and eventual infill.
In reference to the ridiculous land prices: People are likely holding these properties as investments and taking deductions along the way. The good news is that that means that investors think the appreciation in value of the property they are holding is going to outperform market returns, but the bad news is we get to live with a bunch of vacant property. I imagine there are things the city could do to create some movement on these properties, but I doubt much of that will happen soon. If incentives are going to be used, I'd prefer that we fill the currently abandoned and asbestos ridden properties in the core first before we start messing with vacant land. How many buildings downtown does the city own that are vacant?
Sorry to further derail this thread...but BT Park isn't as interesting as the core.
Quote from: MusicMan on August 31, 2017, 09:05:23 AM
If the numbers don't work is it the cost of the real estate or construction that are prohibitive? I look at vacant parcels and my opinion is that most are way too expensive. And so they sit on the market for years................
PETRA has several large parcels for sale on Main Street in Springfield and are asking a million dollars (or more) for them. SERIOUSLY?
(1100 N Main asking $1,200,000 1400 N main asking $1,400,000 1148 N main 1 acre price not disclosed. SOURCE: LOOPNET)
There are NO COMPS to support those prices. I assume they think it's useful to decorate the vacant lot/building with a sign just so you know who owns it!?!
For comparison a one acre parcel on Ernest Street a block from Bold Bean just sold for low $300,000's. In a red hot neighborhood.
I feel the same way about most of the parcels downtown.
Asking $1,500,000 for a 1 acre parking lot on Pearl and Ashley? (Colliers International).
The old Ambassador Hotel currently listed for $5,500,000 as a redevelopment opportunity? Get real folks.
Lake, can you post the most recent vacant large parcel that sold Downtown? i can't find anything to support these numbers.
Singling out Petra tends to muddy up that question.
In general from my seat, construction costs and a stricter environment for financing such projects, are driving feasibility (or in Jacksonville's case, unfeasibility) of multifamily construction.
Labor costs are a very real problem. Given the wages being paid to skilled and even semi-skilled workers, it's very surprising to me that much of the labor force that exited the industry during the recession has not returned. I appreciate that working conditions are not ideal. But what unskilled workers building apartments (who aren't exactly choosing between the trades and say a job on Wall Street) are getting paid right now, I have to imagine the wage gap between that and the unskilled XYZ job in the a/c is quite wide right now... and wide enough where working in the elements and staying in hotels during the length of a project would entice more entrants into that labor pool.
Most of the proformas I see for urban apartment construction in Jax are
well North of $2.15 sq/ft. 200 Riverside, the mixed use building that will
hopefully break ground soon next to 220 Riverside in Brooklyn, had to add a number of floors to the building in order to make the numbers work. For perspective, land acquisition costs on that project were sunk more then 10 years ago.
The appetite for these kinds of projects within the investment community/capital markets has also changed. Whereas 3-4 years ago, equity partners may have been interested in your 2 for $7 hamburger combo... they are now more likely interested in that $15 kale salad.
Singling Petra out doesn't really speak to the issues mentioned above. Appreciate that Petra quite often prices their holdings well above market (that's not an uncommon practice in the CRE world, everything is a negotiation). Would you pay $120/sq ft for land on roughly an acre in Springfield to build an apartment complex that's going to require a complete teardown and site remediation? I couldn't see where that would be viable given overall market conditions and lot size (IE- would need a parking structure and probably seven floors of net leasable space at a high price point). But, would it be reasonable to spend maybe upwards of $140/sq ft for an urban commercial property that didn't need a new roof nor had environmental issues? You could probably work in that price point and lease the building out (instead of tearing down the structure and building new on top). I've seen some CRO properties in Riverside sell for around $125/ft within the past year, so I could see a CCG-1 type property hold a premium of around $140/ft depending largely on the condition of the building (given that, some of the buildings you singled out have issues). Would I pay between $150/ft-$175/ft like some properties that are listed for sale in Riverside/Five Points right now? No, probably not. But that's a hyper specific question that does not speak to why there have not been more residential units added in the Northbank.
PETRA owns half of Main Street. Wonder what they paid for all that? If you look there are some interesting properties, though.
It's not all crazy. 300 West Adams at $3,250,000 seems reasonable. Finished building (34,000 sf) with long term tenants in place (77% occ) flexible interior. Good location. (NAI Hallmark Partners)
My beef is there are no comps to support the PETRA asking prices. So price it to sell and move the product.
QuoteMy beef is there are no comps to support the PETRA asking prices. So price it to sell and move the product.
How does that commercial go 'I like properties to sell, not sit' ;D
I have personally found Petra reasonable to work with, and they have helped several of my market vendors into permanent homes.
My point is that I am of the strong belief that Petra's asking prices on a few properties along Main Street and in downtown are not what's holding back market-rate residential construction on the Northbank... which was the basis of your original question. If not, then I apologize for the confusion.
8)
PETRA has been responsive to me as well. But I have not closed anything with them. But I have tried. Small stuff.
Visited Bartram Park's pearly gates today, by necessity.
My assessment: still a hellish, beige, suburban wasteland.
Here's my take. I'm beyond the suburbs vs urbanity crap, so I'm not gonna go there. As long as there is a market for a suburban community like Bartram Park, and it's not the next thing to The Compound in Palm Bay, FL I'm cool with it. Good schools are a problem for families in metros all over the country, and places like Bartram Park provide that.
One of the most overrated costs that people say with something like this is "these new roads costs taxpayers 90 million dollars each year just to maintain" yeah, not really, that's hyperbole...I'm down with successful urban projects, and also successful suburban ones (caring more about actual occupancy, and less about classic aesthetics concerning the new suburban places).
That's a hot take.
#hottake
A K-8 charter school in the Cathedral district or Lavilla would be appealing to young families inclined to live downtown. It would also appeal to many downtown workers.
^^^True that.
Quote from: I-10east on September 03, 2017, 01:00:27 PM
Here's my take. I'm beyond the suburbs vs urbanity crap, so I'm not gonna go there. As long as there is a market for a suburban community like Bartram Park, and it's not the next thing to The Compound in Palm Bay, FL I'm cool with it. Good schools are a problem for families in metros all over the country, and places like Bartram Park provide that.
One of the most overrated costs that people say with something like this is "these new roads costs taxpayers 90 million dollars each year just to maintain" yeah, not really, that's hyperbole...I'm down with successful urban projects, and also successful suburban ones (caring more about actual occupancy, and less about classic aesthetics concerning the new suburban places).
Truth.
Disrespecting what purchasers want, prefer and are willing to buy has never been a winning formula.