http://jacksonville.com/business/2009-09-27/story/downtown_property_market_in_search_of_a_bottom
QuoteAlthough downtown office leasing and condominium vacancies have risen from 15 to 20 percent since 2007 and landmark downtown buildings are for sale, commercial real estate professionals say lower sales prices are starting to attract investors.
However, those investors aren't yet in a mad rush to buy those buildings, because while the majority of those buildings are completely sound, they're at least 50 years old and several need millions of dollars in renovations to bring them to modern standards and code requirements. Many also lack nearby parking.
"They can be bought cheap, but the renovation cost is expansive," said Bob Knight, broker associate with Addison Commercial Real Estate Inc. "Many people are bottom fishing, looking for distressed properties with potential."
Knight said one group of out-of-town investors has a contract on the gutted 1926 Barnett National Bank building at West Adams and North Laura streets and the "Laura Street Trio" across the street. The trio, also gutted, is being sold as one unit and consists of three buildings - the Florida National Bank building, the Bisbee Building and the Florida Life building, all of which are at least 97 years old.
"I'm sure their intention is to renovate the buildings," Knight said of the investors, but he declined to disclose the buyers or details of the pending deal. The contract is the second one this year; another contract fell through, he said.
The 18-story Barnett building is on the market for $5 million, the same price tag as the three buildings in the trio. If all four buildings are sold, the total cost would be about $10 million - less than the $11.35 million Orlando developer Cameron Kuhn paid for them in 2005 and 2007 before defaulting on their mortgages in 2008, which returned them to the market.
Some of downtown's most visible historic landmarks listed for sale are generating more investor interest than others, Knight said.
"I've shown Barnett and the trio a lot. But there are other listings downtown that haven't had the attention," he said.
Knight said overall, downtown sales are still slow, mirroring a downturn in occupancy in downtown's offices for lease or sale as condominiums.
CB Richard Ellis measured downtown's vacancy rate in the second quarter at 20 percent and expects it to be 19.7 percent in the third. The firm said the vacancy rate downtown was 18.8 percent in the fourth quarter of 2008 and 17.2 percent in the third quarter of last year. In the third quarter of 2007, vacancy was 15.3 percent.
At least one commercial real estate specialist said he doesn't expect it to get much worse.
"We're all cautiously optimistic we've hit the bottom of tenants moving out, businesses contracting and just basically going away," said Buddy Register, senior director of commercial real estate consultant Cushman & Wakefield Florida. "We're at the bottom of the trough and seeing a few signs of movement and interest."
Many downtown lessees are hanging on but have empty space themselves, Knight said.
"A lot of businesses have contracted during the recession, so there's a lot of sublease space that's on the market as well. Most of the primary leases are still intact. As for occupancy, it clearly hasn't clicked up. It's been going down."
Some say there may be more commercial building bargains in the future if foreclosures further pummel commercial real estate as they have residential real estate in recent months.
Jim O'Donnell of Watson Commercial Realty Inc. said more commercial buildings could be forced onto the market in coming years. Balloon payments coming due at the end of this year, the end of 2010 and the end of 2011 could throw more owners into default, landing foreclosed commercial buildings on the market.
"There's cause for concern," O'Donnell said.
Distressed sales have driven down prices in residential real estate in recent years, and commercial prices could drop, too, if they follow the same trend. Ron Barton, executive director of the Jacksonville Economic Development Commission, said dropping real estate prices are good for downtown because high commercial real estate prices during the real estate boom were an impediment to deals that could lead to improvement projects.
"I see down cycles as very exciting opportunities," Barton said. "The nature of the real estate cycle is that on any highs and lows, the behavior is always very similar. This [economy] is an extreme example, but no different than any cycle."
But Knight said the low prices create an imbalance in the market because they have pushed the costs for some existing buildings unrealistically below the cost of constructing new buildings.
Knight, who's sold downtown commercial real estate since 1981, said the 24 downtown buildings on the market today doesn't rival the biggest glut he can remember. In the wake of the late 1980s savings and loan meltdown, the former St. James Hotel, Woolworth's, JC Penney, American Heritage Life, Carling, Furchgott's, Western Union, YMCA and many others were available, he said.
And there could be other vacant or near-vacant downtown buildings on the sidelines today, he said. Those owners could be biding their time, waiting for the economy to improve, Knight said.
"If a building goes empty, it's arguable that it's worth less," he said. "Some owners want to hold a building, wait for it to fill up and then sell it. There are some who can't hold out that long. Holding power is everything."
A new tenant in the formerly vacant 1917 Woolworth building at 5 W. Forsyth could bear out that trend, said Petra Management Inc. broker Rich Trendel. It was announced Wednesday that Perdue Office Interiors would be moving into the building's first floor next month, leasing 9,100 square feet. That development could enhance the building's former $2 million asking price, he said.
"We have not run our new numbers," he said.
LMFAO
They really could've used a different title, or you named it so just to get more looks.
Would things be different if Jacksonville had invested in rail? In sprawling Phoenix they are....
QuoteThe rail was projected to attract 26,000 riders per day, but the number is closer to 33,000, boosted in large part by weekend riders. Only 27 percent use the train for work, according to its operator, compared with 60 percent of other public transit users on average nationwide.
In some part thanks to the new system, downtown Phoenix appears to be one of the few bright spots in an otherwise economically pummeled city, which like the rest of Arizona has suffered under the crushing slide of the state’s economy. The state, for years almost totally dependent on growth, has one of the deepest budget deficits in the country.
In the first quarter of 2009, downtown Phoenix saw its revenues increase 13 percent, while the rest of the city saw a fall of 16 percent, according to Eric Johnson, a redevelopment program manager for the city’s Community and Economic Development Department. (Businesses along the line suffered greatly during the many years of construction, it should be noted.)
“It is bringing us new customers who didn’t have time to get in the car and drive out here before,†said Joel Miller, a co-owner of Maizies Cafe and Bistro, which sits right along the rail line.
http://www.nytimes.com/2009/09/20/us/20rail.html?_r=3
Even then, downtown won't be able to save the city from it's ballooning deficit. Phoenix is in for a lot of troubling times ahead, as they're not going to recover for a few more years, even behind us.
There really isn't a whole lot to do in downtown Phoenix, unless the Diamondbacks are playing. All there other pro sports are played in Glendale.
I was there earlier this year, and just not really impressed, other than the excellent street grid and light rail.
Well then it sets up as a perfect example to follow. They say rail brings sustainable economic development. Lets see how the downtown Phoenix you know compares to the one with rail in five years for so.
Still waiting to see any signs of positivity from some posters.
Never been to Phoenix, but a close friend/coworker lives there. He likes it very much, and says I should come. I'll have to ask him about the uban core, and whether he uses the transit system. He is a suburbanite.
Poenix's rail tied the Central Avenue corridor in better to downtown. Any view from the east or west shows a very elongated skyline, which is along Central. This works to downtown's advantage as it ties their "midtown" in better to central Phoenix. If they can send another line to Phoenix-Sky Harbor they'll really get the ball rolling. Downtown Phoenix has a long way to go, but with this city as one of the poster children of sprawl, it'll take a lot more than rail to help them out.
Phoenix is a descent city, but really needs to focus on the core more, just like us.
You bring up a good point Stephen, keep it coming.
The answer is, "JUST ADD RAIL", light rail, or streetcar, are the modes that are causing the booms around the world right now. Phoenix, is already seeing an investment commitment to downtown in the $5 Billion dollar range, due to the new light rail system. This in a city where a summer day is so damn hot that the street pavement sticks to your shoes!
Oh, but don't forget, we have a plan too... BUS RAPID TRANSIT - "Just like rail only cheaper..."
Someone please tell COJ and JTA to look up the meaning of the word CHEAPER!
BTW, Phoenix looks a LOT like Jacksonville will after Mickey drains the damn river!
OCKLAWAHA
No one has said rail is the final answer but its certainly a major player in urban vibrancy. Its good for Phoenix that they have figured this out. When will Jax wake up and smell the coffee?
They refuse to Lake.
"Light Rail is not a good fit for Jacksonville..." JTA, Scott Clem. Lord have mercy Scott, what do you guys think this city was built on? BRT? Buggy Rapid Transit?
(http://farm3.static.flickr.com/2392/2064360004_64bde7a439.jpg)
Riverside Car Line, probably near 5-Points.
OCKLAWAHA
No Ock..........that would be FRE...........Foot Rapid Express!
Quote from: stephendare on September 27, 2009, 05:55:11 PM
Ock, where are you seeing this light rail quote from Clem?
904 Magazine, pg 62-63
http://904mag.epubxpress.com/ninmag1
Here are a few quotes from the article:
QuoteWith its sprawling 900-mile service area, lack of population and concentrated activity centers--all prerequisites needed to justify an option like rail--JTA officials say Jacksonville can be more effectively served by the 40-foot bus.
"What we've found is that given our level of population growth, it's going to take time before we can justify any sort of light rail system here," says JTA Executive Director Michael Blaylock. However, JTA does see the possibility of running trains on existing railroad tracks--a "commuter rail" option they say may work in certain areas.
QuoteBecause rail construction is expensive and bus routes are easier to move, the JTA projects that buses will be the backbone of its system for years to come. Along with existing bus routes, the bulk of the JTA's future transit plan is centered on Bus Rapid Transit (BRT). With BRT, buses travel on dedicated bus lanes, sometimes even in rail corridors themselves,thus traveling at higher speeds, resulting in shorter trip times for passengers.
While smaller cities than Jacksonville (Charlotte, North Carolina, for example) have built light rail systems, Blaylock notes that that city's rapid growth allowed it to justify the cost to build about 10 miles of light rail--and attract the federal dollars to support construction.
However, Blaylock and Scott Clem, JTA director of strategic planning and research, do see commuter rail in Jacksonville's future. "Light rail is normally very expensive, into the billions to build, especially when it comes to acquiring the right of way," Clem says.
This was said a few weeks back, when JTA first came out with some of the TPO? Information. I think it was the TU and we carried a copy of the article. I know Lake saw it too.
OCKLAWAHA
What a crock of bull puckey! To expensive my left ham hock.............expensive because of all of the add on's from the GOB Network wanting their cut off of the top! ROW is already there and its been proven that rail and auto's can co-exsit on the same avenue of travel! JTA is run by amatuers just the COJ. JTA's Budget was not cut a drop (Thanks Finanace Committee & Council with no cajones) and bus's suck fumes I think!
I understand the point they are trying to make but sometimes they do a horrible job of explaining it. Imo, JTA looks at these projects strictly from moving their existing riders from point A to B, the easiest way they know how. In more progressive cities, there is another dimension that JTA and our city leaders do not understand. From Portland and Houston to Charlotte, Salt Lake City and Phoenix, these cities see rail as a way to "city shape" or a viable "place-making tool."
With that said, whether its LRT, Streetcar or commuter rail, it really isn't about attempting to serve a sprawling 900-mile service region. No one is suggesting that JTA find a way to get light rail or any type of rail to a place like Argyle or Mandarin. Instead, its more important to find that 10-15 mile spine that can connect a few of the destinations we do have and promote infill development between them. Start with that, benefit from TOD, TAD and TND development in areas where the infrastructure already exists and expand from there.
Btw, I'm sure Ock will let everyone know, but streetcars are a form of LRT. Also, Blaylock's Charlotte example makes no sense because Norfolk is getting LRT also. Their population growth has been either negative or stagnant for over 50 years.
QuoteThey say rail brings sustainable economic development.
Then the JTA skyway can finally be justified???
As I have said before, the $ky-high-way has traumatized every corner of the City, including JTA, about rail oriented transit. Until it fades away, I don't see how we are going to get, politically speaking, public officials to stick their necks out over light rail when the $ky-high-way will be thrown up in their faces by an unknowing and uncaring constituency. Abandon the $ky-high-way, wipe the slate clean, and start anew. That is what I think it will take.
All it takes is a visionary leader or two to force it through. Places like Salt Lake City and Houston were anti rail too. Once their leaders got a starter line up and running and success could be seen, the rest of the community jumped on board. Skyway in place or not, its going to take the same kind of effort to get things going in Jacksonville.
Wouldn't a light rail connection going from Jax Intl. Airport to Downtown and then to the Beaches make sense ?
Note: Ideally, you would be able to connect to Amtrack and Greyhound Busses in DT, as well. One should not under estimate the positive effects of having a city that is both easy to get to and easy to get around in.
One good example of intermodal transportation (really well done):
http://www.fraport.com/en/our-expertise/frankfurt-airport-development/intermodality.html (http://www.fraport.com/en/our-expertise/frankfurt-airport-development/intermodality.html)
Has the downtown bottom been found yet? Asking for a friend :-*
Downtown Miami,Florida; circa July 2014 25 acres +/- , searching same.
We are the "empty" North,sport about four times the acreage,just counting (waterfront!) dirt.
Leadership quality seemed to fade after the late 70's. I found a planning document that had plans, budgets, strategy all laid out. As Stephen advised me, when it came to execution of it in the 80's, it got dragged down in cliques, GOB's, me too's, peanut galleries and such until we are left with what we have today.
Walking back through history
To the mighty city
I put my feet on the streets of Babylon
The gold and glitter
Towering wonder
It's all within the walls of Babylon
Strength and security
Comfort and safety
What could be better than living in Babylon
But their strength was just an illusion
Now this city lies in broken ruins
Rocket ride through time and space
It's 2088
They're diggin' around in the dust of what we've
done
Now people study me
I'm a part of history
Oh, did we leave them another Babylon
Is there evidence of urban revival
Or did we leave a land of broken idols
"Bye Bye Babylon" by WhiteHeart (1988)
(with some adjustments)
Quote from: stephendare on July 03, 2014, 06:55:18 PM
The original search for the bottom started back in 2009 with the Business Journal.
Thanks for the tip. I've alerted them to existence of Grindr.