Downtown New Residential Units

Issues concerning Downtown as described by the Downtown Council. River to 31st Street, I-35 to Bruce R. Watkins.
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normalthings
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Re: Downtown New Residential Units

Post by normalthings »

shinatoo wrote:
Tue Oct 27, 2020 9:22 am
normalthings wrote:
Mon Oct 26, 2020 11:08 pm
Image


New 20 floor condo tower in Lincoln Nebraska is fetching $400-550 per sqft. I can't help but think that KC would be just as capable of supporting a project like this. If they made it work, what are we (pre-corona) missing?


Height: 250 feet
Units: 37 condos, almost all have been sold; ground floor retail, 1 floor of office
Cost: $30 million

The floors have just 3 units each and the building was built up against an existing parking garage. The site formerly held a 1-floor residential building (this is very similar to the low rise structure on the north end of the Consetinos garage.

Image

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https://journalstar.com/business/local/ ... c5d31.html


https://liedplace.com/floor-plans/
I really like that layout. I wonder if that increases or decreases the cost per foot?
Single loaded corridor probably adds to the cost. However, they built out the entire lot having no space for condos on the other side of the corridor.

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normalthings
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Re: Downtown New Residential Units

Post by normalthings »

flyingember wrote:
Tue Oct 27, 2020 9:07 am
KCPowercat wrote:
Tue Oct 27, 2020 8:25 am
so we don't have these projects. It's frustrating for those of us wanting to buy downtown. Inventory sucks.
The building I gave the example of has 13 units that if you asked about I bet they would not renew the lease and sell to you.
There must not be as much demand as you say.

They've only sold 8 units since the building was completed and that was in ~2010 (floor 4 sold before completion and was setup as double units)

https://www.unioncarbidecondos.com/pricing

The lack of demand for existing condos is likely a big part of why new buildings aren't setup as condos.
10 years ago was an entirely different downtown KC and economy. I struggle to believe that we have 14,000+ residential units in downtown but can’t support 30 or even 13 condos.

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Re: Downtown New Residential Units

Post by flyingember »

normalthings wrote:
Tue Oct 27, 2020 11:37 am
10 years ago was an entirely different downtown KC and economy. I struggle to believe that we have 14,000+ residential units in downtown but can’t support 30 or even 13 condos.
There's new homes going into the West Side and Beacon Hill that compete with the condo market. These two markets aren't independent of each other. There's going to be some unique buyers sure, but the condo market also overlaps the renter market.

With these units why would someone build 30 condos when they can build 30 apartments?

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Re: Downtown New Residential Units

Post by beautyfromashes »

flyingember wrote:
Tue Oct 27, 2020 12:01 pm
With these units why would someone build 30 condos when they can build 30 apartments?
I think because many feel the rental market will start to be over saturated and rents will start to drop. Perhaps best to build and sell off the condos and remove yourself from the risk.

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Re: Downtown New Residential Units

Post by shinatoo »

Another acoustical layer to keep elevator noise out of the hallway. Also fire as you said. Fire safety and acoustical isolation tend to go hand in hand.
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Re: Downtown New Residential Units

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I still think the biggest reason you don't see new condos being built downtown is all financial based for the developers. There may be some demand but I just don't see any brand new buildings going up as condos for awhile. I do think as tax incentives start to expire for older buildings, like Chambers Lofts for example, you'll start to see those owners shift to a condo model. However politically and legally, I'm sure it's difficult to get the lower income renters out of the building in order to convert it.

Another exception are smaller projects, like the proposed conversion of the music building attached to the town pavilion parking garage.

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Re: Downtown New Residential Units

Post by normalthings »

DColeKC wrote:
Tue Oct 27, 2020 1:42 pm
I still think the biggest reason you don't see new condos being built downtown is all financial based for the developers. There may be some demand but I just don't see any brand new buildings going up as condos for awhile. I do think as tax incentives start to expire for older buildings, like Chambers Lofts for example, you'll start to see those owners shift to a condo model. However politically and legally, I'm sure it's difficult to get the lower income renters out of the building in order to convert it.

Another exception are smaller projects, like the proposed conversion of the music building attached to the town pavilion parking garage.
I used the Lincoln example because of its tall height, yet a relatively low unit count and construction cost. 37 units can't be that hard to sell can it?
Last edited by normalthings on Tue Oct 27, 2020 3:36 pm, edited 1 time in total.

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Re: Downtown New Residential Units

Post by dukuboy1 »

What is the typical age group of those who buy a condo? Is it a younger group, who want to live in a more urban area and take advantage of that, or is it older empty nesters wanting to be in a more dense, walk-able neighborhood close to restraints, etc.?

Most condos (2-3 bedrooms) are going to be 250k-400k, plus monthly HOA dues, maybe even parking fees. There are perks of them being maintenance supported but when you can still buy a single family home with 3-4 bedrooms in that range it makes it hard.

You can live in the Northland, and be about 10-15 mins from downtown in a home for what you can spend on a condo. Plus the refi benefits of having a single family home vs. condo.

I would say cost/value is the big issue. I would love to see more condos mixed in with rentals, and such. I think condos would be more appealing if you could buy and have amenities included in the price. Maybe reduce HOA to like $500 a year but still get the access to the perks. Those high monthly HOA's turn people off. Condos need to get creative with the amenities but allow for them to be included.

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Re: Downtown New Residential Units

Post by shinatoo »

normalthings wrote:
Tue Oct 27, 2020 2:34 pm
DColeKC wrote:
Tue Oct 27, 2020 1:42 pm
I still think the biggest reason you don't see new condos being built downtown is all financial based for the developers. There may be some demand but I just don't see any brand new buildings going up as condos for awhile. I do think as tax incentives start to expire for older buildings, like Chambers Lofts for example, you'll start to see those owners shift to a condo model. However politically and legally, I'm sure it's difficult to get the lower income renters out of the building in order to convert it.

Another exception are smaller projects, like the proposed conversion of the music building attached to the town pavilion parking garage.
I used the Lincoln example because of its tall height, yet a relatively low unit count and construction cost. 30 units can't be that hard to sell can it?
maybe i don't understand money, but wouldn't you have to charge, on average, one million per unit just to break even?
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Re: Downtown New Residential Units

Post by flyingember »

normalthings wrote:
Tue Oct 27, 2020 2:34 pm
DColeKC wrote:
Tue Oct 27, 2020 1:42 pm
I still think the biggest reason you don't see new condos being built downtown is all financial based for the developers. There may be some demand but I just don't see any brand new buildings going up as condos for awhile. I do think as tax incentives start to expire for older buildings, like Chambers Lofts for example, you'll start to see those owners shift to a condo model. However politically and legally, I'm sure it's difficult to get the lower income renters out of the building in order to convert it.

Another exception are smaller projects, like the proposed conversion of the music building attached to the town pavilion parking garage.
I used the Lincoln example because of its tall height, yet a relatively low unit count and construction cost. 30 units can't be that hard to sell can it?
Yes, the financing is a mess. Look at the combination below.

This is 2007, showing how far back things shifted. I doubt this changed much.
https://www.multifamilyexecutive.com/bu ... projects_o
Typical bank construction loans to condo projects are getting smaller, covering just 75 percent of the cost at the maximum, compared to up to 85 percent two years ago. Mezzanine lenders refuse to fill the gap. A typical mezzanine loan added to a 75 percent commercial bank construction loan will now cover only up to 80 percent of a condo project’s total cost, Garfield said. That’s a big change from two years ago, when Hudson’s mezzanine loans added to bank financing could cover up to 90 percent of the cost of condo deals.
If you're a developer you're looking at taking on a LOT more risk.

So your risk tolerance is lower and you'll look at single family homes as your competition because it's easier to get a loan for them.

And it's hard to get a loan so a large part of the market is people who can buy the unit outright.


This is 2019
https://www.moneyunder30.com/condo-fina ... -different
In order to secure an FHA loan to purchase a condo, however, the condo you are purchase must be FHA-approved. Unfortunately, that approval process includes a variety of factors that you, as a buyer, cannot control. Some of the current requirements include:

At least 50% of the condo units must be owner-occupied.
No more than 15% of the units in the complex can have association dues that are more than 30 days behind.
No more than 30% of the units in the complex secure existing FHA loans.
Think about the idea that if people you have never met don't pay their HOA fees, you can't move there. It impacts the ability to sell the unit.


So for a bank, that's a risk someone defaults and they're left holding a unit that was already hard to sell. Single ownership of the whole building means they can default on the entire building. If the developer sells half the units and then defaults the bank can only get half the units still owned by them because the HOA likely owns the common areas.
Last edited by flyingember on Tue Oct 27, 2020 3:09 pm, edited 1 time in total.

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Re: Downtown New Residential Units

Post by flyingember »

dukuboy1 wrote:
Tue Oct 27, 2020 2:50 pm

You can live in the Northland, and be about 10-15 mins from downtown in a home for what you can spend on a condo. Plus the refi benefits of having a single family home vs. condo.
Dramatically less. 10-15 minutes is homes at $150k

There isn't a new condo on the market that will be below $300k + HOA fees

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Re: Downtown New Residential Units

Post by Critical_Mass »

^ but the catch is you have to live in the Northland

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Re: Downtown New Residential Units

Post by normalthings »

shinatoo wrote:
Tue Oct 27, 2020 2:58 pm
normalthings wrote:
Tue Oct 27, 2020 2:34 pm
DColeKC wrote:
Tue Oct 27, 2020 1:42 pm
I still think the biggest reason you don't see new condos being built downtown is all financial based for the developers. There may be some demand but I just don't see any brand new buildings going up as condos for awhile. I do think as tax incentives start to expire for older buildings, like Chambers Lofts for example, you'll start to see those owners shift to a condo model. However politically and legally, I'm sure it's difficult to get the lower income renters out of the building in order to convert it.

Another exception are smaller projects, like the proposed conversion of the music building attached to the town pavilion parking garage.
I used the Lincoln example because of its tall height, yet a relatively low unit count and construction cost. 30 units can't be that hard to sell can it?
maybe i don't understand money, but wouldn't you have to charge, on average, one million per unit just to break even?
To clarify, its 37 units, 4 floors of office, 1 floor of retail. I'm just saying it can't be that hard to presell ~75% or ~30 units. (evidently it is that hard)

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Re: Downtown New Residential Units

Post by DColeKC »

Several years ago I looked into condos downtown considering I was playing close to 2k/month in rent. At first, it seems like a great deal when you figure your mortgage payment would be $1000-$1200 with no money down for example. However, $800+ a month in HOA's is the deal breaker. You're right back to spending a big amount monthly on something you won't get back. And for what, to use a crappy gym and a roof top pool?

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Re: Downtown New Residential Units

Post by KCPowercat »

HOAs pay for much more than the amenities that you have to pay for separately in a house but yes upkeep of amenities can skyrocket the HOA and be unsustainable even at those high rates. Just look at the special assessments that have happened at Wallstreet Towers.

Definitely a big piece to consider when looking at total cost of ownership

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Re: Downtown New Residential Units

Post by earthling »

I've bought 2 condos in last 20+ years. High HOAs aren't too bad if it includes major utilities and building insurance, something that can be high for a single family home. Then it's just a matter of what amenities you're willing to pay for, especially if it has doorman security, which is worth a lot in urban areas and if you travel often.

Assessments are a reality too and when condo shopping is important to look at how well the building/grounds are kept up as well as how much the building has for reserves. Replacing a roof/HVAC/etc for single family home is costly too but when in condo the mgmt typically chooses, not you individually. Is important for the building to stay on top of issues before they become problems. Check the grounds and common areas carefully, like if exercise equipment/etc are taken care of. If they can't take care of the small things, the bigger things that later come up could be a major issue.

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Re: Downtown New Residential Units

Post by beautyfromashes »

San Francisco Tower had an amazing penthouse, two floors with interior elevator, huge deck facing DT and US, all new everything. Couldn’t sell it. Price dropped from $1m+ to $70k and still didn’t sell. HOA fees.

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Re: Downtown New Residential Units

Post by normalthings »

beautyfromashes wrote:
Tue Oct 27, 2020 5:39 pm
San Francisco Tower had an amazing penthouse, two floors with interior elevator, huge deck facing DT and US, all new everything. Couldn’t sell it. Price dropped from $1m+ to $70k and still didn’t sell. HOA fees.
Seems like no amenities could be the best path forward. For example, a skinny condo tower to the north of Consentinos could share the One Light pool & gym and use existing garage spaces.

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Re: Downtown New Residential Units

Post by beautyfromashes »

normalthings wrote:
Wed Oct 28, 2020 12:51 am
Seems like no amenities could be the best path forward. For example, a skinny condo tower to the north of Consentinos could share the One Light pool & gym and use existing garage spaces.
Yes, I agree. We are starting to burn through the upper market now that has to have a saltwater pool, a spa and a wine storage locker. The mid market is wide open and much larger. The amenities will be cut because downtown IS the amenity!
Last edited by beautyfromashes on Wed Oct 28, 2020 11:41 am, edited 1 time in total.

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Re: Downtown New Residential Units

Post by shinatoo »

normalthings wrote:
Tue Oct 27, 2020 3:38 pm
shinatoo wrote:
Tue Oct 27, 2020 2:58 pm
normalthings wrote:
Tue Oct 27, 2020 2:34 pm


I used the Lincoln example because of its tall height, yet a relatively low unit count and construction cost. 30 units can't be that hard to sell can it?
maybe i don't understand money, but wouldn't you have to charge, on average, one million per unit just to break even?
To clarify, its 37 units, 4 floors of office, 1 floor of retail. I'm just saying it can't be that hard to presell ~75% or ~30 units. (evidently it is that hard)
That makes more sense. I assume the office and retail leasing help fund the building maintenance and note?
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