Is there demand for a $1,000,000 Condo in Downtown?

longknock · Post by **longknock** » Mon Feb 16, 2004 8:44 am

I seek your guidance and input to see if there is demand for really high end condo units in Downtown. Yes there is a project in the offing, but I can not disclose as of yet. Yes it has been awhile since you have heard from me, but you can tell that I have been drug back downtown once again. This time I bring a number of interesting people with me to the forum. I've been out in Western Shawnee, Lenexa and around the Village West development. I'm no longer appraising, I am brokering property.
I must say that this site has been invaluable to me and I sincerely appreciate the vision of its creator!
Longknock

KCPowercat · Post by **KCPowercat** » Mon Feb 16, 2004 8:46 am

Well there are 2 places on the market right now at around the $1M mark and neither has sold as of yet. Although who would buy those places until the building itself gets a little more complete.

I'd say most people that are going to spend a $1M+ at this time in KC are going to the Plaza but I'm sure somebody has a lot of cash that would like a big nice place downtown.

longknock · Post by **longknock** » Mon Feb 16, 2004 8:53 am

What two places are those KC and what does it take to justify the $1,000,000 mark? How many Sqft? What kind of amenities? Any design features that set it apart? Etc. Please advise.

KCPowercat · Post by **KCPowercat** » Mon Feb 16, 2004 9:02 am

Using my handy dandy reeceandnichols.com there are 2 places in the 64106 area code one at 600k the other at 1.2M both on top of the 909 Walnut.

What does it take? Sounds like a 35 story view, huge sq. ft....that purchase price is a warm shell if I remember right when I talked to the sellers.....so not many amenities. Just a huge place on top of a huge building.

longknock · Post by **longknock** » Mon Feb 16, 2004 9:24 am

I appreciate the input KC. Hopefully more people will chime in here and present their opinions. I think you'll be really impressed when I am finally able to present the new project. I should know this week.

Post by **dangerboy** » Mon Feb 16, 2004 10:01 am

There is currently a $1.4m loft in the Conover Place building, with a contract pending. http://www.reeceandnichols.com/SearchPa ... id=1150203
I believe there was also a $1 million unit there last year.

The unit at 909 Walnut will definitely sell once the builiding's renovation is further along and the developers have more progress to show potential buyers. http://909walnut.com/

The Downtown housing market only began getting condos within the last 2-3 years, so to already be at the million mark is amazing.

tat2kc · Post by **tat2kc** » Mon Feb 16, 2004 12:18 pm

If I'm not mistaken, a couple units at SF towers have gone for close to that much. I believe the market is there, but it really depends on the amenities and quality of construction, as much as sq. foot. You may want to check with some of the design and architecture firms downtown to see what they are doing. I know the Helix Design does only high end stuff, so they might be able to give you a handle on what the market it, at least from their perspective. I do know the higher end design folks are busy as they can be.

KCLofts · Post by **KCLofts** » Mon Feb 16, 2004 12:47 pm

Only one really big dollar unit in Conover. The $1,000,000 number that was often tied to Conover was the combined price of the two units that were purchased to make the $1.4M one.

Conover units sold pretty well when they were just sketches and renderings. There never was a completed model to see like at Western Auto or 1819 Baltimore. A large majority of the units were sold before major construction was started. The units that were not presold before construction finished took some time to sell. I think this is because of the relatively low quality of the units as compared to the price. The only difference between a $200,000 unit and a $600,000 unit was more space on a higher floor.

The $1.4M unit was completely custom-designed and built and is unlike anything else available in the city.

If someone wants to develop and sell million dollar lofts downtown, they better make sure they have a very high quality product. You'll be fighting for the people who would go to Kirkwood or other very high end places on the Plaza. They would be looking for the same level of quality and amenities.

For $1M I would expect: 3500+ sq. ft., high quality fixtures, lighting, appliances, cabinetry, wall, floor and window coverings, excellent craftsmanship and finish, 2+ covered, secure parking spaces, extra storage, excellent soundproofing. I would look for extra building amenities such as pool, fitness room, roof deck, possibly a doorman/security person and/or concierge. I would expect the common areas to be nicely designed and outfitted, with a spectacular entryway. Multi-story units with huge open spaces would be nice.

I would not want to just have a Plaza building/design copied downtown. Downtown is edgier, grittier, more urban. The people who will buy here want something different that cannot be found anywhere else in town. Offer a more modern/contemporary design. Make it look like a loft from NY or San Francisco, not a traditional condo. One plus about Conover, and perhaps its biggest selling point, is the lofty design of the interiors.

Do something different, make it the highest quality possible, offer extra amenities and I don't think there would be any problem selling this project. If the plans are to just make another Western Auto/Kirkwood/Crestwood/Westwood Place, then I think you'll have a tough time.

longknock · Post by **longknock** » Mon Feb 16, 2004 2:07 pm

Thank you very much! I sincerely appreciate and respect your perspectives and input. In comparison to other projects - this project has some very unique characteristics and all of the design characteristics that you suggest. Except that it lacks some of the amenities of a larger quantity of unit projects. This project - in my opinion - is unlike anything ever seen in downtown to date. If the sales price of the 4,487sf unit at Conover Place is $1,400,000, that would indicate over $310/sf. Is that realistic? What if I were to price the units at $280/ft?

tat2kc · Post by **tat2kc** » Mon Feb 16, 2004 2:30 pm

I'm not really sure that amenities that you are talking about that might be available in larger developments would apply to this type of develpment. I don't think that someone who is willing and able to pay a million plus for a home is necessarily going to be looking for a load of "community amenities" like a pool or fitness center. They'd be more happy with well designed public spaces, a well maintained greenspace, services like 24 hour doorman, conceirge services, good security, those kinds of things.

People are more than willing to pay 400,000 or more for a place less than 2,000 sf. If it is distinctive, well designed, and well built, it will sell with no problem. You'd have to be sure to bring in a great marketing firm, because first impressions are going to make or break a project like this. One of the really smart things that Kirkwood Circle did was to build a full scale model of a unit, so people could see first hand what they were buying into before any construction began.

KCLofts · Post by **KCLofts** » Mon Feb 16, 2004 2:33 pm

Last summer a 2100 sq ft unit at Conover sold pretty quickly for just under $600,000. Again, this unit was pretty highly customized, but not to the same level as the other one. The unit right across the hall was for sale at the same time. The sq ft was just a little less, but was essentially the same layout. It too had some custom work, but couldn't be sold at $450,000. I think the price dropped to $425,000, and then it was taken off the market without selling. The unit that sold had a great view of downtown, the unit that didn't overlooked the parking lot.

In order to get close to $300/ft, it is going to take something special. But its certainly possible under the right circumstances and with the right product. Obviously, the cheaper it is, the better chance it has at selling.

longknock · Post by **longknock** » Mon Feb 16, 2004 3:24 pm

Unit #5 = 5,650sf @ $180/sf = $1,000,000
Unit #4 = 4,900sf @ $190/sf = $925,000
Unit #3 = 4,150sf @ $200/sf = $825,000
Unit #2 = 3,375sf @ $210/sf = $700,000
Unit #1 = 4,580sf @ $245/sf = $1,125,000
22,655sf @$202/sf = $4,575,000

This was my preliminary, conservative estimate. Based on your input, I am inclined to think higher on a per square foot basis. We are talking three levels, with the second level being a lofted area and overlooking the two-story (20ft all glass wall) and the main floor level. The third level will have a similar foot print as the second but the open area will amount to an observation deck. Each unit will have its own private elevator and secured parking and storage in the basement which is actually at grade. The views will be spectacular. Unit One will have two walls that with two-story windows and open space with the same lofted second floor design.

trailerkid · Post by **trailerkid** » Mon Feb 16, 2004 3:41 pm

Isn't it also important to pinpoint the market?

Just from what I have heard the market for these projects are the boomers and older who want to move away from their Mission Hills/Ward Parkway/Leawood estates to be closer to cultural attractions and downsize their property for upkeep and the like. Because there seem to be only a few new high-end projects happening, it would be interesting just to find out the market demand considering what is already available on the Plaza or at Crown Center and what is being built.

longknock · Post by **longknock** » Mon Feb 16, 2004 4:14 pm

Trailerkid - thanks for chiming in. Who is the target market? Anyone have an input into that aspect?

KCLofts · Post by **KCLofts** » Mon Feb 16, 2004 4:52 pm

That sounds very intriguing. The fact that it is a small complex should help. It will raise the exclusivity factor and negate the need for some amenities that one would desire/need with a larger complex. That, along with a downtown location and the copious space are the selling points.

About $200/ft seems to be the typical ballpark for most recent projects. You get the extremes approaching $300/ft. The nature of this project certainly could demand higher figures, but I would think going over $225 -250 might be too rich for most people's blood, given the square footage you're talking about.

Its not like people are lining up to spend $1M on a condo right now. For the few that are selling, there are several that have been languishing on the market for years. There's been a 5000 sq ft unit at 2004 Grand on the market for about two years now for $650,000. Another one in the same building went up recently for $800,000 (I doubt it has any chance of selling). Plans for the upscale Adler Building at 10th & Broadway seem to have fizzled. The basketball building at 14th & Grand couldn't sell any big units.

The Conover unit was on the market for more than a year, and the sale's not final yet. In that price range, its the only thing available in the core right now that you can move into. Everything else is on the drawing board or under construction. They spent about $400,000 on the interior build out and it has tons of custom made items.

If and when construction ever starts on the Lighthouse Lofts next to Conover Place, I would expect to see some higher end units. George Birt indicated that they had been reworking the plans for that building based on what they learned from the sales of Conover Place. However, I would still expect the same subpar level of fit and finish in that building.

The area you're looking at will also help determine values. The more established "neighborhoods" like the River Market will be an easier sell than something like the west side.

Post by **dangerboy** » Mon Feb 16, 2004 5:03 pm

Size doesn't always mean more expensive. You have to weigh both quantity and quality.Someone may not need a large space, but may want high end design, architecture, amenities, etc. For example, someone looking for a second home or someone who travels regularly and just wants a nice place between business trips.

Post by **staubio** » Mon Feb 16, 2004 5:10 pm

Personally, I wouldn't focus entirely on space. While I may never be in the market for one of these properties, they do represent my "ultimate" dwelling. For me, location would be the overwhelming factor. I'm willing to pay a big premium to have a walkable neighborhood with activity. Unique elements of the space and floorplans usurp raw square footage concerns for me. My current apartment is fairly small but efficient and I chose it for it location, wood floors and big windows.

Because people often view these properties as investments, I'm sure that the status quo or the potential of neighborhoods is considered when condo buying, but something has to be in place already that entices. Visible signs of momentum should add a lot of value.

I'm hoping that some of these properties aren't selling because people in the market don't feel the need for that much space, considering the marginal benefits.

tat2kc · Post by **tat2kc** » Mon Feb 16, 2004 7:03 pm

the space sounds great. In order to get the premium price, the building materials will need to be top notch, definately not something that one would typically find in this area.

longknock · Post by **longknock** » Mon Feb 16, 2004 10:23 pm

Great input folks. What's wrong with the west side? Any idea how 16th & Summit is selling? I would be surprised to verify that another 24 unit condo project is going up on McFarlands lots. Is that area worth investing in? Could it bear $1,000,000 units? I wonder what that L shaped building on the east side of Jefferson overlooking the Crossroads district is worth. There is some land adjacent that I think would be ideal for a condo / apt project. Anyone know anything more about this area?

Any opinions on who the people are that would be in the market for $1,000,000 units? Who is the person who built out the 4,487sf unit at Conover? Maybe I should talk with them.

KCLofts · Post by **KCLofts** » Mon Feb 16, 2004 11:30 pm

The couple who built the unit at Conover never got the chance to move in. They live in Texas. He travelled to KC for business. This was just a place to hang while they were in town. Shortly after building the place his employment situation changed and there was no need for a place in KC. I think he did get to spend 1 night there.

They've been renting the place out for the last couple months. Not sure who the new buyer is.

There's nothing wrong with the west side. Its one of the hottest areas in town. Its very close to the city, has some great views, and you can build anything you want there. Can the west side support $1M units - I doubt it, at least not right now. The true visionaries (artists) moved into the area about 10 years ago. Most of the area is still very low income working class, primarily hispanic. Speculators have snapped up most of the available property and every one else is holding out to see how high prices will go. The face of the west side is changing, but it is very slow. There is no concentrated development plan for the area. And any plans would most lilkely involve displacing many of the people who currently live there. There would be huge opposition to this from the various neighborhood organizations.

The highest priced units at Summit at 16th were about $450,000. They have awesome, unobstructed views of downtown. You can check the MLS or their website to see what's left. Completion is scheduled for this spring.

About 2 years ago someone bought the empty plot of land just east of I-35 that has the huge stone retaining wall that is popular with the local graffiti artists. That will no doubt become a premiere development soon. Don't know what the plans are, but that space is awesome.