Novare Targets Urban Jacksonville
Recently, the Novare Group announced plans to expand into the Jacksonville market in 2007, along with Houston and Phoenix. Find out why Jacksonville and Novare may be a match made in urban oriented heaven.
Full Article
http://www.metrojacksonville.com/content/view/440
Welcome to Jacksonville, Novare. I do wonder though whether Novare will be able to enter the market with another high-rise condo building given what appears to be a less than optimal (to put it mildly) environment for large residential projects like the Shipyards and St. John. Is there any scoop on sales for these high-rises coming along? How about for Kuhn's River Center building?
The problem is with Projects like the shipyards is, people who are willing to, or even WANT to move downtown cant afford high end. A company like Novare will allow the younger crowd to buy into downtown and not cost them 400K for a 1 bedroom loft...
Yes, that's where Novare separates itself from the typical urban highrise condo developer. They've found a way to successfully make a profit off of offering urban living at a price point, far below the Shipyards & St. Johns of the world. Hopefully, their introduction will spur additional development, at lower price levels, as well.
Shipyards is targeted to a higher end buyer. The river frontage, the boat slips, the extensive amenities are gearign to an older and wealthier clientele. They have 180 reservations on the 334 or so units. Not bad for a project that is completely on paper at this point. Better still, considering the current market. Of course that number may change once pricing and the contract details are released which should be pretty soon.
Supposedly the St. John is doing better during 2007 than it was doing in 2006, but they haven't released any numbers, so it's difficult to say how it's really doing.
Novare targets a young professional crowd that are often buying their first home. For instance, the Avenue in Charlotte is predominately 1 BR units, and those have sold out long ago. Some of the 2 BR units in that building are still available.
Novare is more of a competitor to Cameron Kuhn. They both primarily hit that same market. Riverwatch is in a stellar location, so it will be really interesting to see where Novare lands.
This is great news. Their projects look great. I love the one in Nashville.
Which one of these projects has the soonest projected "move in" date?
Who knows for sure? They'll have to achieve a certain level of presells before getting the go ahead to proceed with actual permitting and construction. Once construction begins on a on a high rise, it could take anywhere between 18 months to 3 years before a project is completed. So I'd say, regardless of whether its Novare, Riverwatch, the Shipyards or the St. John, you're looking at move in dates around 2009-2010.
"The company is known to only build in thriving retail centers or areas it bets will soon take off."
It won't be at the stadium. It won't be in La Villa. Where? Riverside Ave? The suburbs?
with the Southbank being the next most likely, IMO. Riverside Avenue is a possibility though. Novare doesn't build in the suburbs.
I'd put it right next to the proposed Riverwatch Tower. Both would be residential and within walking distance of the Landing, Skyway, Times Union Center, etc. Plus that lot is primed to be the site of Jacksonville's new tallest, IMO. An iconic tower in that location would look spectacular against the current skyline.
Here is the lot I'm talking about. Its the empty lot just to the north of the Omni.
(http://i3.photobucket.com/albums/y74/asonj23/Google%20Earth%20Snapshots/VacantLot-1.jpg)
Here is what the Riverwatch Tower should look like.
(http://i3.photobucket.com/albums/y74/asonj23/Google%20Earth%20Snapshots/4-1.jpg)
And here is what an iconic tower could do to the skyline.
(http://i3.photobucket.com/albums/y74/asonj23/Google%20Earth%20Snapshots/VacantLot-5.jpg)
That would be nice near the Landing. I was joking about the suburbs...I hope.
BRING IT ON!!! We need you, Navare! 8)
I'm definitely interested to know if they have a site yet, and where.
Is there any new news on Novare's coming into the Jax market?
No news yet.
well i doudt anything big will happen with the market the way it is
Figured I would dig this thread back up from the dead. I've talked about this project either on here or in another forum before, but Novare created a concept called "Skyhouse", which is a now mass-replicated 20-30 story standard low-cost Type I construction rental community. They started with Skyhouse Midtown, in Atlanta (where Novare is headquartered), and quickly moved on to Austin from there. They underwrote $1.85/sf average residential rents in the first year of stabilization for Skyhouse Midtown, and about 30% higher for Skyhouse Austin (which has the highest rents in the South along with Miami). In Atlanta they got about $2.05/sf at lease-up in 2012/2013 and I know they exceeded proforma in Austin as well, considering how hot that city is. In Atlanta they essentially did not attach underwriting to the ground floor retail (9,000 SF).
Novare has partnered with UBS as equity partner and lender, as well as Batson Cook as master general contractor across each project (or most of them at least), and has truly created a manufactured high rise. Below, in order of construction start, is the current list of Skyhouse projects.
Skyhouse Midtown - Atlanta - delivered December 2012
Skyhouse Orlando - delivered November 2013
Skyhouse Austin - delivered January 2014
100 6th St - Atlanta (Midtown) - delivered February 2014
Skyhouse Houston (downtown) - to be delivered Summer 2014
Skyhouse Dallas (Uptown) - to be delivered Summer 2014
Skyhouse Raleigh (downtown) - to be delivered Winter 2014
Skyhouse Buckhead - Atlanta - to be delivered Spring 2015
Skyhouse Charlotte (Uptown) - to be delivered Summer 2015
Skyhouse River Oaks (Houston) - to be delivered Summer 2015
Skyhouse Tampa (Channelside) - to be delivered Summer 2015
Cities getting knocked up by Novare for Skyhouse include so far:
Atlanta (3x)
Houston (2x)
Dallas
Austin
Raleigh
Charlotte
Orlando
Tampa
Nashville is a notable contender not on the list, however, Novare has partnered on at least 3 separate deals in downtown Nashville already. Will Jacksonville make the Novare radar soon? Could be worthy of a good discussion. Novare has really covered its risk with this product, and it has entered really iffy markets as well (downtown Houston for instance). However, its partner is UBS. Novare would likely have to make the case for investing in Jax to UBS. Do we see this tower happening here? Why or why not?
Links:
Construction cams on all of the currently UC or already completed versions of Skyhouse:
http://oxblue.com/open/SkyHouseApartments
Skyhouse Midtown (100% leased)
http://skyhousemidtown.com/
100 6th
http://skyhousesouth.com/luxury-apartments-atlanta/
I see rents for 1 BR $1327-$1873 and sizes from 685-885 SF ($1.94-$2.12/sf). Studios start at $1400.
Skyhouse Austin
http://www.simpsonpropertygroup.com/apartments/austin-apartments/rainey-street-downtown-austin-apartments/skyhouse-austin/floorplans/plans#
I clicked on a random 16th floor 1BR (on the side that's clearly less desirable since they were mostly available) and for 760 SF you can rent it for $2,055 ($2.70/sf). Studios start at $1685, clearly the most expensive city on the list.
Skyhouse Orlando
http://skyhouseorlando.com/
The same exact unit (1608, 760 SF) in this building as Skyhouse Austin is renting for $1560, or $2.05/sf. Remaining studios here start at Floor 13 and at $1245, clearly the cheapest of the buildings on the list.
Skyhouse Houston
http://www.simpsonpropertygroup.com/apartments/houston-apartments/downtown-houston-apartments/skyhouse-houston/home
A similarly sized unit here is running $1825/mo, though I don't know floor or view. Studios start at $1490.
Skyhouse Dallas
http://www.simpsonpropertygroup.com/apartments/dallas-apartments/downtown-dallas-victory-park-apartments/skyhouse-dallas/home
The same floorplan (760 SF) ranges from $1785-$2785 in Dallas ($2.34-$3.66/sf). Studios start at $1379 but go up to $2520 (Dallas seems to have a huge price range in this building versus the other cities' buildings).
I don't see this tower happening in Jax anytime soon. I'm not confident they can justify the construction costs with this market's rental rates. From a risk standpoint, they'd be better off putting up a second product in a place like Dallas.
2007 was a loooooong time ago, wasn't it?
I thought that, once upon a time, they had a site in mind, but any further action was curtailed.
I don't see the market yet or the neighborhood. All those things walking distance, parks, entertainment and public transportation y'all have been talking about need to be present. Plus it has to be in an area with jobs nearby.
However just a note there is a seperate and often larger than necessary parking garage attached which they often lease out a floor or two to a local resturant. One of those dedicated parking garage spaces things the Landing is always talking about when it comes to national resturants and downtown.
Quote from: billy on May 01, 2014, 06:37:10 AM
I thought that, once upon a time, they had a site in mind, but any further action was curtailed.
correct...it was next to the YMCA on Riverside Avenue....given the attention that area is getting now, I could see Novare looking at it again.
Meanwhile according to Curbed this AM there is a 225 SF studio in Chinatown for rent for $1750 here in SF.
https://sfbay.craigslist.org/sfc/apa/4436690092.html
QuoteBill Harkins Brokerage #01230576
www.billharkins.com
Video at http://youtu.be/i2kNO0vkedo
10 Brooklyn Place #6
Mini Chinatown One Bedroom - 225 Square feet
Great use of small space. Super location central to downtown, Union square, Chinatown and transportation. Hardwood floors, high ceilings, 4 windows and gas wall heater. 1st room has a wall kitchen with lot's of cabinets, granite counter, gas range and small under counter refrigerator. 2nd room has closet, frosted window opens to fire escape. A full size tiled bath is off this room. Full tub, little sink, alcove toilet and window with ledge. The apartment is 25 feet long including kitchen and bath and 9 feet wide.
LoL Novare would make a killing here!
I think Jax rents are probably similar to Orlando's, which has a Novare tower. Orlando as a market, though, is a lot less scary. Their downtown residential seems a lot more developed and it's a bigger, higher growth city that is at least superficially appearing to create high tech jobs/jobs in the life sciences arena, both of which are very appealing economic conditions to lenders and investors.
At the end of the day, it's about a certain return and how that syncs up with perceived risk. Jax land is probably dirt cheap compared to the other cities', and this tower itself is quite cheap, so a very low basis in land and low construction costs can allow for lower rents. Parking is prefab/tilt and not pretty or glorious.
Novare was willing to partner with my former employer on another site in Midtown for a Skyhouse that would have included podium style parking, however, I think my former employer felt the rental market would reject a 3rd Skyhouse in the same submarket (4th in the city) and chose another partner out of Texas to develop a site. So Novare has already received push back to build more of these on its home turf, which could entice them to expand the markets they attempt to go to.
Simms, are they holding these or stabilizing and taking them to market?
I don't think they have sold any to date, and at least a few are stabilized (lease-up seems to take 3-4 months on average upon delivery). UBS is a predominantly (exclusively?) core fund shop, and class A new-construction multifamily is typically hyper-core product irrespective of market (so long as Tier I/II market), so I wouldn't be surprised if it's a super long hold for UBS in some way shape or form (Build-to-Core strategy). Novare is an opportunity equity investor, and the GP in this partnership. The only way I see their partnership with UBS working is if there is a clean and solid buyout where Novare receives its promote and UBS continues owning the asset (this is assuming it's already an investment by their large open-ended core fund).
I once had a copy of the pitch book used to land UBS as equity/debt partner, and so I saw the "pitch" proforma of one of these things, as well as the partnership structure, but I can't honestly remember what I saw. I paid more attention to the underwritten rents. I've also been involved in a Novare deal, so I know they are opportunity investors, typically.
We could be looking at some sales happening soon, and quite frankly, given that UBS is familiar with the assets, UBS could just buy Novare's position out. Novare's equity position is likely so small compared to UBS's that a non-arms length transaction that isn't marketed publicly (obviously) could occur. In fact, this may already be happening. Novare is a smaller shop that went through a restructure after some of its condo development deals went sour in the recession. It could quickly and easily recycle capital of this nature through partner buyouts by UBS (could be part of the reason we are seeing so many Skyhouses pop up all over the place so quickly...this strategy could conceivably lend itself to that). Novare has investors, but also has wealthy principals that put in.
Quote from: tufsu1 on May 01, 2014, 10:16:17 AM
Quote from: billy on May 01, 2014, 06:37:10 AM
I thought that, once upon a time, they had a site in mind, but any further action was curtailed.
correct...it was next to the YMCA on Riverside Avenue....given the attention that area is getting now, I could see Novare looking at it again.
I went to the Tampa Skyhouse recently. It is very nice. I could see Brooklyn/Riverside being the type of area Novare would want to build in especially with the views they would get there for pretty cheap in comparison to another city. Brooklyn could have a very Channelside in Tampa feel if we can get more construction going. Hopefully now that 220 and the Brooklyn are doing well, they might take another look.
Maybe they would be interested in the site of where the Beacon was supposed to go as well with 5 points being an established retail district?