San Marco Publix Site Plan and Renderings

[jaxnyc79]

Interest rate sensitivity.  In this environment, it's tougher to get "pioneering" projects through.  This is not a property alongside a compelling landscape feature like the river or beach, so it's unclear whether there's proven demand for this sort of "stacked mixed use" at a location like this.  Is the retail component not diversified enough?  For example, instead of committing tons of ground-floor space to Publix, would breaking it up further among many different retail uses make it more attractive?

[thelakelander]

^No. That's not going to get the construction costs down.

[jaxnyc79]

I've not seen their models, but he did mention costs of debt financing, and the risk premium on interest rates would factor in a multitude of assumptions about the risk of the project.  Development doesn't really appear to be extravagant.  Maybe the potential upside and associated cash flows aren't being "sold" effectively enough to the sources of funding.  Maybe they are.  Part of the fun of this message board is speculative intrigue.   

[jaxjags]

My guess is that Healthy Town may have similar issues.

[Non-RedNeck Westsider]

I'm not sure I follow.

I have noticed a greater than normal demand for construction over the past 2 years, but I haven't really noticed costs (i.e. material / labor prices) move that much in either direction, but definitely showing a slight downward trend.

Based on current projections, I'm still only using 3.5% yearly escalation when putting bids together, which is down from the 4.25% I was using this time last year. 

[jaxjags]

I am not involved in these things, but my guess is depends on the risk, type of project and size of company. For instance the SJTC has no issues, smaller infill with government assistance have no issues. But San Marco and Healthy Town are different.

[thelakelander]

SJTC also has no building type similar to East San Marco.  I'm not sure the numbers would work for them if they did not have their massive surface parking areas to support the outdoor mall and associated outparcels.

[jaxjags]

SJTC also has no building type similar to East San Marco.  I'm not sure the numbers would work for them if they did not have their massive surface parking areas to support the outdoor mall and associated outparcels.

True construction is different for San Marc, although one apt. complex at SJTC is building a garage. From what I've seen in other equivalent cities, Richmond, Savannah for instance I still think a San Marco design at SJTC would be easier to finance.

[spuwho]

Too funny. They talk about interest rates and the cost of construction, but no one talks about raising their equity stake.

If the financial marketplace is saying its priced correctly and the developers dont want to commit, it usually means the financiers want more equity up front.

I also find it interesting that I am seeing multiple residential developments being built throughout Jax, but a single block residential with a retail anchor cant kickoff.

Clearly the banks think this has more risk components than a speculative suburban single family development. 

Something is amiss here.

[thelakelander]

SJTC also has no building type similar to East San Marco.  I'm not sure the numbers would work for them if they did not have their massive surface parking areas to support the outdoor mall and associated outparcels.

True construction is different for San Marc, although one apt. complex at SJTC is building a garage. From what I've seen in other equivalent cities, Richmond, Savannah for instance I still think a San Marco design at SJTC would be easier to finance.

I believe the Ravella apartment complex building the garage across the street from SJTC is no different from what Broadstone is building on the Southbank.  Both of them are five or six stories of stick construction surrounding a parking garage.  With East San Marco, the garage appears to be a part of a single mixed-use structure.

[jaxjags]

Too funny. They talk about interest rates and the cost of construction, but no one talks about raising their equity stake.

If the financial marketplace is saying its priced correctly and the developers dont want to commit, it usually means the financiers want more equity up front.

I also find it interesting that I am seeing multiple residential developments being built throughout Jax, but a single block residential with a retail anchor cant kickoff.

Clearly the banks think this has more risk components than a speculative suburban single family development. 

Something is amiss here.

Agree - it is all about the risk involved which impacts equity required and finace terms. In a way no different than buying a house just more complicated

[FlaBoy]

If they could take this thing 8 or 9 floors for more units, I wonder if that would change the economic equation.

[jaxjags]

SJTC also has no building type similar to East San Marco.  I'm not sure the numbers would work for them if they did not have their massive surface parking areas to support the outdoor mall and associated outparcels.

True construction is different for San Marc, although one apt. complex at SJTC is building a garage. From what I've seen in other equivalent cities, Richmond, Savannah for instance I still think a San Marco design at SJTC would be easier to finance.

I believe the Ravella apartment complex building the garage across the street from SJTC is no different from what Broadstone is building on the Southbank.  Both of them are five or six stories of stick construction surrounding a parking garage.  With East San Marco, the garage appears to be a part of a single mixed-use structure.

Lakelander - Could this not be similar to 200 Riverside and Broadstone with a two level concrete layer for Publix and retail, with 4-5 levels of stick build out on top of it. They could even use the pre-poured garage concept used at Broadstone for the garage. This would lower construction costs. I like others now wonder if something else is amiss.

[thelakelander]

Broadstone, like the development at SJTC, is a frame complex built around a parking deck.  I believe 220 Riverside has what essentially is a surface parking lot with a building constructed over it.East San Marco has six levels parking, five of which are on top the Publix (see floor plans below). All three are quite different examples of infill design and construction techniques.

I like others now wonder if something else is amiss.

I'll just take their word at it. Whatever it is, the numbers associated with this specific deal don't work enough for the Atlanta developer to want to go with it, as currently structured.  They claim they're attempting to iron something out with Regency over the next month, one way or the other.

[MusicMan]

Iron away.  I've been a doubter cause it has been vacant for so damn long. But I really want something there.

(Chant) Trader Joe's! Trader Joe's! Trader Joe's!!!!!!!!!!!!!!!!