Old U.S. Courthouse

[smh]

I think there is demand for new market rate apartments in downtown.  The rental market downtown has always been tight and vacancies low--for the most part.

...

New Quality Hill hardly ever had vacancies drop below 95 percent because the apartments had those things downtown, and even had washer/dryers inside the units.

I think Market Station is a great example of the current state of the market in line with your post. I have heard that occupancy there is very high and that it filled up quick when it came on line. New construction, market rate, etc etc.

Here's hoping someone announces something market rate soon. Please.

[kboish]

I agree.  Last I had heard was DT's occupancy rate was and has been close to 95% for some time.  I would hope East Village could move foward with their plan and construct some of their proposed high-rises.  I don't understand why it is contingent on the GSA building getting locked-in.  makes no sense to me.

[smh]

I wish we could get some Vancouver-esque highrise apartment buildings here. Perhaps those would look out of place here, but I like 'em.

[loftguy]

Fang, a point of clarification.  The Quality Hill Apartments that were purchased (250 unit +/-) by the Lippert Group were all either completely nenovated or continued as rental units.  Those that were finished to Condo standards have continued to hold their value and have been selling steadily through the past couple of years of dismal real estate.  (side note: can not identify even one foreclosure in Q-hill these past years)

A part of Quality Hill was retained by McCormick-Salazar-Baron and some form of partnership was established that intended to sell these as low to moderate income purchases.  Only a few have been sold the past few years and most of these units (approx 60) were removed from the rental marketplace and have sat idle in some crazy screwed up limbo that makes no sense.  Somebody(ie's) messing up badly.

FYI....Market Station is 100% occupied as of last week.

Your points on market rate rental housing are totally correct.  Lending for market rate apartment development is virtually nonexistant.  This is true for even the most well established developers who have impeccable track records of success, and this is true in a marketplace that is experiencing overall occupancy of 98%.

We are living in bizarre times.

[FangKC]

Thanks Loftguy. I was mostly talking about the Quality Hill Square units, which indeed turned into a cluster%$&#.

It's so sad that so many units are just sitting unoccupied--especially since the demand for downtown rental housing remains high.

[TfromKC]

Your points on market rate rental housing are totally correct.  Lending for market rate apartment development is virtually nonexistant.  This is true for even the most well established developers who have impeccable track records of success, and this is true in a marketplace that is experiencing overall occupancy of 98%.

We are living in bizarre times.

Loftguy has a great handle on things obviously, but this is STARTING to change. At least nationally, probably not here in KC(we always seem to be a couple years behind). The ONLY bright spot in residential construction right now is New Apartment Starts. Other parts of the country are starting to build new apartment buildings as quickly as they can. Rents are going up, occupancy is going up, and they severely under-built the past couple years. In fact, multi-family(apartment) COMPLETIONS will be at an all-time low this year.

To clarify, Multi-Family typically takes at least a year to complete. So, because almost no new multi-family was started in 2009 and 2010, there are almost no "completions" this year. As the rental market is booming, developers are now starting to build new multi-family, but those units won't come on line until 2012 or 2013. So nationally, at least for the next 12-24 months, there will be a severe shortage of apartments. Particularly when you consider all the people who have given up or been forced out of home ownership.

The GOOD news is other big cities are recognizing this and starting to build, and the people who control the purse strings also recognize this and are starting to finance these buildings. It is absolutely happening on the coasts, so hopefully within the next 12 months you'll see some new market rate(or conversion) projects in KC. As always, we are about a year (too) late.

[loftguy]

Hope you are right, T. 

At present, lenders (local/regional/national) are telling local developers that they will provide 50% of the cost of new development.  And they are saying they don't see improvement coming.  So, a development like Market Station (323 units) would require the developer to put up $20 million of his own cash in order to borrow the balance of $20 million to build the project.  Uhhhh, if I had $20 million in cash, would I be developing an apartment project?  Perhaps if I had a portfolio of a few hundred million plus, and a development organization to keep working.

It has been my understanding that the coastal developments that are occuring are those self-funded by deep pockets, or are developments funded by closely related entities or subsidiaries.

The interesting developments that I'm finding, are those that are being financed or otherwise being creatively supported by city governments that understand the need and the opportunity.  We can dream..........

[TfromKC]

You are absolutely correct about the current lending environment. It still largely has to be self-financed or financed privately. Still almost impossible to get bank lending. But, hopefully as the bankers start to see the trends, they'll loosen the purse strings.

In the meantime, hoping private equity and other deep pockets are willing to finance new projects, they are usually ahead of the curve. That is what is happening on the coasts.

[DaveKCMO]

toured the courthouse lofts tonight. pretty nice digs for affordable housing. the community room has a wall made up entirely of relics from the courthouse (mailboxes, doors, etc) that must be seen. should have taken a pic.

Former downtown federal courthouse formally reopens as apartment complex

Mayor Sly James gaveled the historic U.S. Courthouse at 811 Grand Blvd. to formally begin its new career as a 176-unit downtown apartment building Monday, concluding an arduous redevelopment process that began five years ago.

“I’ve come full circle,” the mayor told the audience gathered in the restored lobby of the courthouse that opened in 1939. “I tried a number of cases in this courtroom and as a lawyer; the last place you wanted to be was in federal court.

[FangKC]

I really like the sound of this.

The city also would like to duplicate the success of the 466-unit Quality Hill residential development which was built in the 1980s with the help of private philanthropic contributions. There have been calls for a similar big housing development, this time with a thousand apartments, to help propel downtown to the next level of residential life.

I wish the City could convince Tower Properties and the Kemper banks to build apartments in their parking gulag in the North Loop. Tower Properties already owns three suburban apartment complexes in Mission, Merriam, and Kansas City North: Peppertree Apartments, Hillsborough Apartments, and New Mark Apartments, and Oakbrook at New Mark.

It would seem that with a 95 percent occupancy rate downtown, in a long recession period to boot, that there would be demand for new, market-rate apartments. Construction costs are down right now, so it's cheaper to build, and there are plenty of contractors needing work--who might bid in lower.

One of the things about providing new housing over renovation of old buildings is that developers can provide amenities and floorplans not available in renovated buildings. Many renovated buildings have strange layouts, and lack of ample storage space. New buildings can offer balconies, large open spaces, half-baths, or second baths, soaker or whirlpool tubs, built-in washer and dryers, and hidden ductwork, etc. They can be designed to take into account wider and longer furniture--specifically entertainment centers, sofas, and larger-sized beds. New spaces can be designed to accommodate disabled people and seniors.

So there is a whole market niche that new buildings can accommodate more easily than renovated old buildings. Large apartment buildings with common entrances can also provide a doorman amenity. This has great appeal to women and seniors who are security-conscious.

http://towerproperties.com/