KCRag Forum

wahoowa wrote:is it more pervasive than that?

nope. just anecdotes from people in the market to rent.

wahoowa wrote:most of the datapoints i have for that are for terms where the full set of amenities weren't completed for the whole duration of the lease term (e.g. p&L tower before north building constructed) or for early renewal commitment incentives (1light). is it more pervasive than that?

I've mostly seen the same. A lot of new places giving deals, but I didn't hear it much from any established place. I'd be very interested though.

I think 3 light will be a big tell. If they move straight forward or push back

DaveKCMO wrote:i hear lots of buildings are offering deals or lowering prices. how long does that happen before projects in the pipeline start to get jittery?

Going back to the basics supply and demand says prices should have risen in recent years.

I bet we're just seeing a return to more normal rates with a lot of supply coming online soon.
The two clear tells are is if these buildings are older, smaller or have less amenities and what's been said, if Three Light begins construction quickly.

The craziest I remember was talking to the maintenance staff of the Union Carbide building around 2013 say they could empty and fill a unit in the same week.

We could be entering a bubble or a simple cooling of what has been a red hot market. Do not forget downtown's population has more than doubled in the last decade and there will soon be an additional 20-30% increase in the housing stock based on current projects underway.

If phase II of the streetcar passes, I would expect the boom to continue for another 5-10 years. While I would love nothing more than to see this boom continue, downtown is still very underserved by basic urban necessities.

If streetcar extension passes sounds like it may be up to 6 years before going live. That might keep developers focused generally more on downtown for quite a while. What's important is that even if there is a slowdown, the current buildings in progress equate to totaling nearly 35K downtown residents, which urban planners say is the sweet spot for a highly functioning downtown. It would be nice if the momentum continues but units over $2/sqft might hit a saturation point resulting in a slower momentum. But even if the focus moves towards midtown, that's still close enough to downtown to have overall beneficial impact for both areas.

What's been said over and over is clearly going to determine the next phase, jobs. The streetcar won't do this by itself.

And as we clearly know this will depend on suburban transit as much as urban. A commuter rail line, streetcar expansion, true commuter and urban express bus service would all help here.

By no means is it a perfect plan, but next week's Q2 will help set the stage for what the year 2030 looks like.

DaveKCMO wrote:i hear lots of buildings are offering deals or lowering prices. how long does that happen before projects in the pipeline start to get jittery?

When new buildings come on line, people involved are always jittery.
There is pressure to perform and get cash flow going.
As result, 'a month free with a thirteen month lease' is quick to emerge.

It's my read that most people are still underestimating the marketplace.
However I would not want to have a big supply of $2,500 per month 2 bedroom apartments coming on line.
That looks like the potential point of saturation right now.

I'm really not sure why developers aren't trying to build smaller infill development with affordable/non-luxury/below market rate rental units. Is the return on those types of developments really that marginal?

loftguy wrote:However I would not want to have a big supply of $2,500 per month 2 bedroom apartments coming on line.
That looks like the potential point of saturation right now.

then perhaps it's encouraging that two light disagrees, as they are throwing 30+ ~ $2500 2BR apartments into the mix https://twolight.prospectportal.com/Apa ... 564/tab/2/

.

Two beds at $2500 is the same as a $400,000-450,000 house payment. It's going to be hard to keep filling those units up at those prices. Especially when schools are still suspect and traffic isn't that bad. The pioneers that "really just want to live downtown" will move in. But those that think with their wallet will be scared off.

pash wrote:

JBmidtown wrote:I'm really not sure why developers aren't trying to build smaller infill development with affordable/non-luxury/below market rate rental units. Is the return on those types of developments really that marginal?

Less than marginal. Smaller buildings typically have lower returns than bigger ones, and the bigger buildings we've recently started to see go up around downtown are only financially feasible at the top-of-the-market rents they're asking.

Having seen the cost of everything that goes into a home, if they can command a 20% discount per unit because they have 100 units that's a huge deal for a project.

It's means that $400k equivalent unit cost then $320k. And that's how they afford the extra cost of everything else not for a unit like common areas, elevators and such

Fox 4 on the downtown residential boom, pointing out empty nesters moving downtown too..
http://fox4kc.com/2017/08/04/strong-dem ... ls-growth/

Apparently, there is another CityScape project in the works for the Crossroads...

DaveKCMO wrote:Apparently, there is another CityScape project in the works for the Crossroads...

rental?

DaveKCMO wrote:Apparently, there is another CityScape project in the works for the Crossroads...

MIXED FEELINGSSS

smh wrote:

DaveKCMO wrote:Apparently, there is another CityScape project in the works for the Crossroads...

MIXED FEELINGSSS

Tell us more. Why? I like the looks of their first project.

Of course each downtown is different but here is a warning shot about future development of apartments.
https://www.msn.com/en-us/money/realest ... li=BBnbfcN

"Scan the downtowns of the nation's largest cities, and you are likely to see a staggering array of cranes.

Most of them are helping to build luxury apartment buildings. In fact, multifamily construction is now at a 40-year high; the trouble is, developers are putting up the wrong kinds of buildings. The luxury market is largely overbuilt, while there is a shortage of affordable rental housing, and developers are hamstrung by the now record-high cost of construction.
Apartment completions in the 150 largest U.S. cities jumped to 395,775 units in 2017, beating 2016 production by a staggering 46 percent and more than doubling the long-term average, according to RealPage, an apartment management software and data company. Luxury, upscale buildings accounted for between 75 and 80 percent of the new supply in the current cycle."

kboish wrote:

smh wrote:

DaveKCMO wrote:Apparently, there is another CityScape project in the works for the Crossroads...

MIXED FEELINGSSS

Tell us more. Why? I like the looks of their first project.

Scratch that. I was thinking cityscape=Cityclub apartments at 19th and main.

Now I see that cityscape did the "Crossroads Westide" apartments, Apex and Summit at quality hill. Yeah, I'm skeptical of their urban abilities. They did one building in the Apex development that looks great (where Spokes Cafe is located). The others all look like apartments from 120th and Holmes. Summit in quality hill is just meh...

kboish wrote:

smh wrote:

DaveKCMO wrote:Apparently, there is another CityScape project in the works for the Crossroads...

MIXED FEELINGSSS

Tell us more. Why? I like the looks of their first project.

I do like their crossroads project a lot better than their quality hill projects. I've just found that in dealing with this developer he has a pretty suburban mindset--which of course because they do tons of suburban projects.

I'd just rather see some more daring development than what I figure we'll get from Cityscape.