Crossgate Condominium Project in Kingsport (Knoxville, Johnson City: lease, employment, tenants)

[Serious Conversation]

Originally Posted by Rangerred

I agree that downtown Kingsport's physical infrastructure is great, maybe the best in the Tri-Cities. The city just lacks the youthful energy and creative class that allow Johnson City to thrive. Kingsport is honestly just too conservative to develop the type of downtown scene that exists in Johnson City. The Little Chicago Festival last weekend had a body painting exhibition with practically nude, beautifully painted women parading down Main St. I doubt this would happen in Kingsport. And with downtown renaissances around the country being led by young, creative entrepreneurs, you have to cultivate a community in which these people want to invest. Chain restaurants and stores can't be relied on to revive a downtown.

Kingsport has real economic challenges, but I think the biggest barrier to growth and making it a nicer place to live, by far, is the cultural conservatism of the residents.

Most of the young people I know in Kingsport are very traditional in their outlook. These people are likely to be homeowners, marry/have children relatively young, etc. They're not the types who are going to be interested in high-end apartments. Owning is also going to be much cheaper than these rentals in that part of town.

Any time something new/interesting happens in Kingsport that isn't incentivized and falls outside the "culturally Kingsport" model, it almost always seems bound to fail because the locals will not support. Kingsport has had some interesting and good local restaurants over the years that have failed due to lack of support, while Cheddar's is full every night. It's that mindset that makes me think these new apartments will struggle.

[rccrain]

Homeownership, marriage, families... sounds like the backbone of a great community.

Drinking, parties, partial nudity... not what I want my community to be known for. Now the outdoor lifestyle... that is where JC can set the gold standard. I think Kpt has tried admirably in this area too, but I understand many concerns about smell and what's in the tailwaters.

[Serious Conversation]

Originally Posted by rccrain

Homeownership, marriage, families... sounds like the backbone of a great community.

Drinking, parties, partial nudity... not what I want my community to be known for. Now the outdoor lifestyle... that is where JC can set the gold standard. I think Kpt has tried admirably in this area too, but I understand many concerns about smell and what's in the tailwaters.

The mindset that Johnson City is some kind of little "sin city" is somewhat common among the more conservative crowd in Kingsport. Places like bars in downtown JC generate foot traffic. They get people coming downtown, who in turn get something to eat at restaurants, and maybe they'll pick up a shirt at Boomtown or something from Overmountain Outdoors while there. I don't think the bars/breweries in downtown JC, and most of the new ones are fairly upscale, are a problem. Barley Waters doesn't attract the same crowd that Hog Wild would.

The younger people I know (and younger people or possibly seniors wanting to downsize/be in town are probably the primary market for an apartment complex like this) in Kingsport are not the type for in-town hip apartment living. They're more of the "buy a house, have kids, stay here for life" model.

The people I know who are more flexible, and prefer renting for whatever reason, tend to want to live and socialize in Johnson City. Johnson City just has far superior options for dining, entertainment, socializing, shopping, and nightlife for the in-town apartment demographic.

These new apartments will attract some residents. I'm not saying they'll sit vacant, but the demographic they seem to be targeting will generally not find Kingsport appealing. If you're already working in Kingsport, a lot of folks will choose living in Kingsport to avoid the daily commute, and just go to Johnson City for social stuff as needed. If I was working in Johnson City, there is absolutely no way I'd choose to live in Kingsport and commute too. But if I was living/working in Kingsport, this complex's high rents and issues with being next to Domtar would probably remove it from consideration immediately.

[jjbradleynyc]

Drove by this complex today. The entire building is now 4 stories up and forms a "U-shape."

In the original convo that the leasing agent had with me--back in August when I visited, the first one was to open Dec 1st. Looks far from that happening--at least from my vantage point outside.

I would estimate a Feb 1st move-in date, at the earliest, at this point.

I still have a hard time seeing who will be moving into this complex. It is so luxury/millenial-focused and expensive for Kingsport as a whole. I imagine there will have to be significant rent-reduction/cost-cutting coming up in the future.

[Serious Conversation]

Not to mention it seems way too big for the demand.

[jjbradleynyc]

Originally Posted by Serious Conversation

Not to mention it seems way too big for the demand.

Yeah, this is very true. It's a large complex, roughly 12 apartments per floor, x 4 floors x 3 buildings. That's approximately 148-150 apartments +.

Factor in a LOWEST per month apartment at $840/month (!!), and they need 150 households earning at least $50k a year + to qualify. That may not seem like much, but in the Tri-Cities, it can be a lot.

Add in competition with other new apartment complexes just built (The Villas, The Overlook, The Retreat at Meadowview), the slower population growth of the Tri-Cities (it is not booming like Atlanta, Nashville, Greenville, SC, or even Asheville) and overall hesitation of folks living in the Tri-Cities to rent apartments, and it seems like a very tall order to fill.

I think this complex will wind up renting out about 30-40% max the first few months, and will have to offer major concessions to slowly get them rented. But, we will see...

[Page2]

Originally Posted by jjbradleynyc

Yeah, this is very true. It's a large complex, roughly 12 apartments per floor, x 4 floors x 3 buildings. That's approximately 148-150 apartments +.

Factor in a LOWEST per month apartment at $840/month (!!), and they need 150 households earning at least $50k a year + to qualify. That may not seem like much, but in the Tri-Cities, it can be a lot.

Add in competition with other new apartment complexes just built (The Villas, The Overlook, The Retreat at Meadowview), the slower population growth of the Tri-Cities (it is not booming like Atlanta, Nashville, Greenville, SC, or even Asheville) and overall hesitation of folks living in the Tri-Cities to rent apartments, and it seems like a very tall order to fill.

I think this complex will wind up renting out about 30-40% max the first few months, and will have to offer major concessions to slowly get them rented. But, we will see...

One assist that should be considered that will help the opening numbers is the number of apartment potentially reserved for interns or short termers etc and on retainer by local industries. The complex is also likely to offer preferred employer discounts as move-in incentives.

[Serious Conversation]

I had to run an errand in downtown Kingsport on my lunch hour yesterday, and I couldn't help noticing that probably a third of the balconies they have framed have a dead-on view of Domtar. You can't see over the plant. You're looking over a grocery store parking lot and a factory. That's not even mentioning the smell.

I don't know who thought this was a bright idea, but we'll see.

[jjbradleynyc]

Originally Posted by Serious Conversation

I had to run an errand in downtown Kingsport on my lunch hour yesterday, and I couldn't help noticing that probably a third of the balconies they have framed have a dead-on view of Domtar. You can't see over the plant. You're looking over a grocery store parking lot and a factory. That's not even mentioning the smell.

I don't know who thought this was a bright idea, but we'll see.

Domtar would be visually appealing as a structure, if it were brick, or brown, or some other type of eye-pleasing exterior. That blue vinyl siding is just pretty unattractive to look at.

Imagine paying $1000 per month for an apartment that is 1 block from a smelly factory!? Plus, downtown Kingsport in that immediate area does not have a ton of options, restaurant or amenity-wise.

The more I think about it, these prices are just very much out of wack. They would be deemed as "good deals" if 1 beds were $525 to $600/mo, 2 beds, $600-700/mo, and 3 beds @ $700-850/mo. Then, they might rent decently well.

^Those prices are more in line with the Kingsport area.

[Jim37680]

Originally Posted by Serious Conversation

I had to run an errand in downtown Kingsport on my lunch hour yesterday, and I couldn't help noticing that probably a third of the balconies they have framed have a dead-on view of Domtar. You can't see over the plant. You're looking over a grocery store parking lot and a factory. That's not even mentioning the smell.

I don't know who thought this was a bright idea, but we'll see.

Actually, those are fire escapes which is an important consideration with these light wood frame structures.