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But what I'm saying is that if developers were chomping at the bit for these apartments to go CONDOS FOR SALE after 5 years, then you would see some of the buildings that are being constructed from the ground up (20 Midtown, Venue at the Ballpark, Iron City Lofts, etc. etc.) go condo from day one. I understand the Thomas Jefferson and Pizitz have that requirement, but nothing was stopping any of the other new developments from being condos instead of apartments but market forces (in 2015-2016) dictated they would be rentals.
The company that developed the Venue at the Ballpark is -- get this -- a company that specializes in campus apartment housing. They build apartments, not condos. As far as 20 Midtown, et al, I have zero idea why they went apartment vs condo, but I'm pretty sure that it has zip to do with whether or not they see the market running out of road. In truth, I'd bet the proximity to UAB and city of Birmingham incentives independent of the Alabama tax credits had a great deal to do with it. Or perhaps they might like the long-tail revenue that you get from multi-family. Build the property, enjoy a revenue stream, let it appreciate for five-ten years, then sell. I mean heck, you might ask well as why any company anywhere in the country chooses to build multifamily versus condos. Why single out the developments near Railroad Park?
There are a billion ways to skin the cat in this industry based on a given company' prevailing philosophy. Some like to build and sell. Others like to build and hold. Why would you think that there's only one model? Oh, right. You have a pre-existing thesis and will go through these gyrations to cast current events in a light that fits it.
Back to the Vesta building. It's not like that episode of the Jetsons where Cogswell Cogs put up a skyscraper in fifteen minutes. Instead, the planning and preconstruction take a long time. And even after completion, it can take long months to enjoy full occupancy. The Vesta project is moving ahead. Sorry to disappoint you.
What I'm trying to figure out why you have this one-size-fits-all notion, not to mention truly circular logic. For some weird reason, you look at a ton of people building and renovating downtown as a sign that nobody wants to live downtown. I mean, you seem to think that these developments that cost tens of millions of dollars were undertaken without a marketing plan or an absorption study. I've seen the absorption studies that show that, barring some catastrophe such as UAB being swallowed up, there's room for more.
Now, all that being said, I'm pretty sure that one of these projects, maybe two, will take a short-term hit. It is inevitable in this industry that is always boom and bust. Someone who didn't allocate enough capital, or didn't secure enough long-term financing. Happens all the time in just about every city. Hell, eight years ago, guys like you were bewailing the commercial real estate bust in Atlanta based on the lackluster absorption rates in that city. But time took care of that. So even in the very unlikely event that a major project such as the Pizitz goes belly-up, the assets would simply get snapped up by a new owner.
Last edited by MinivanDriver; 06-14-2017 at 03:20 PM..
The company that developed the Venue at the Ballpark is -- get this -- a company that specializes in campus apartment housing. They build apartments, not condos. As far as 20 Midtown, et al, I have zero idea why they went apartment vs condo, but I'm pretty sure that it has zip to do with whether or not they see the market running out of road. In truth, I'd bet the proximity to UAB and city of Birmingham incentives independent of the Alabama tax credits had a great deal to do with it.
I can assure you if a developer thought they would make more money selling condos, they would sell condos. All I said was market forces are dictating rentals instead of owner-occupied units. Nothing you said disputes that.
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Or perhaps they might like the long-tail revenue that you get from multi-family. Build the property, enjoy a revenue stream, let it appreciate for five-ten years, then sell. I mean heck, you might ask well as why any company anywhere in the country chooses to build multifamily versus condos. Why single out the developments near Railroad Park?
Because the downtown developments constitute about 95% of what is discussed on this forum... at least when it comes to new buildings in the city.
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There are a billion ways to skin the cat in this industry based on a given company' prevailing philosophy. Some like to build and sell. Others like to build and hold. Why would you think that there's only one model? Oh, right. You have a pre-existing thesis and will go through these gyrations to cast current events in a light that fits it.
Moderator cut: personal attack Why are you assuming I think there is only one model? Again, the lack of condos being developed in the city center speaks to the market forces.
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Back to the Vesta building. It's not like that episode of the Jetsons where Cogswell Cogs put up a skyscraper in fifteen minutes. Instead, the planning and preconstruction take a long time. And even after completion, it can take long months to enjoy full occupancy. The Vesta project is moving ahead. Sorry to disappoint you.
Again, what are you talking about? It was Harbert themselves back in 2013 that were expecting a March 2014 construction start and units being rented by the following spring. It is 2 years after that and construction has not started. There were thousands of developments nationwide that were announced a decade ago that never got off the ground when the market cooled. I'm not saying that is what is happening here but what I am saying is that when you've got a project that sees delay after delay and competing properties saturating the market... that it has to cross your mind.
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What I'm trying to figure out why you have this one-size-fits-all notion, not to mention truly circular logic. For some weird reason, you look at a ton of people building and renovating downtown as a sign that nobody wants to live downtown. I mean, you seem to think that these developments that cost tens of millions of dollars were undertaken without a marketing plan or an absorption study.
You must have me confused with someone else. Where have I said nobody wants to live downtown? What in the world are you talking about? And no... I am well aware that developers putting tens of millions into projects have market research. And what I am saying is that very market research led them to build apartments instead of condominiums. Nothing more, noting less.
I can assure you if a developer thought they would make more money selling condos, they would sell condos. All I said was market forces are dictating rentals instead of owner-occupied units. Nothing you said disputes that.
Because the downtown developments constitute about 95% of what is discussed on this forum... at least when it comes to new buildings in the city.
Moderator cut: personal attack Why are you assuming I think there is only one model? Again, the lack of condos being developed in the city center speaks to the market forces.
Again, what are you talking about? It was Harbert themselves back in 2013 that were expecting a March 2014 construction start and units being rented by the following spring. It is 2 years after that and construction has not started. There were thousands of developments nationwide that were announced a decade ago that never got off the ground when the market cooled. I'm not saying that is what is happening here but what I am saying is that when you've got a project that sees delay after delay and competing properties saturating the market... that it has to cross your mind.
You must have me confused with someone else. Where have I said nobody wants to live downtown? What in the world are you talking about? And no... I am well aware that developers putting tens of millions into projects have market research. And what I am saying is that very market research led them to build apartments instead of condominiums. Nothing more, noting less.
By essentially stating, "Oh, they're building apartments rather than condos. That means they don't have faith in selling condos," it advertises that you really don't know a lot about commercial real estate. Some companies like to build apartments. Others like to build condominiums. It's nothing more than a preference for them. And you ignore that ongoing development of smaller historical properties into condos keeps taking place downtown. Hey, the big projects right now are apartments, but so what?
On to Vesta. Harbert had no idea that construction would be derailed by a frivolous lawsuit, something that took place after initial engineering and demolition took place. Things are once again moving ahead on Vesta. I've tried repeatedly in this thread to discuss delays that were beyond their control, but you ignore that and insist on this narrative like a broken record like some guy with an ax to grind.
What's more, your opinion that the new development in Five Points somehow affects the decision of the Vesta project to move ahead isn't founded on anything either. Vesta and the new development are two completely different projects designed for two completely different demographics. You do understand market segmentation, don't you? I mean, when Kia started importing cars, it didn't affect the sales of Audi and BMW. Same kind of thing. The people who will be affected by the new Five Points development will be the independent apartment owners.
Here's the deal. I'm not some sunshine pumper. I'm not Mr. Chamber of Commerce. But delays happens all the time for reasons that have bupkis to do with market conditions.
Yet you continue to float speculation based on zero information. And I keep shooting you down.
Last edited by MinivanDriver; 06-15-2017 at 08:03 AM..
while not a huge complex, I do know anecdotally that the owners of Burger Philips converted their units from rentals to condos over the past few years. So we are starting to see some of that fortunately.
"Berkadia said today it is marketing the top 18 floors of the 30-floor AT&T City Center building for hotel and residential redevelopment . . .
. . . One proposed mix for the building shows 163,000 square feet of office space on floors 2 through 10, a 130-room boutique hotel on floors 11 through 14, and 200 residential apartment units on floors 15 and up.The marketing plan includes updates to public spaces in the building, such as exterior improvements on the lower floors, conference center space, retail or restaurant tenants on the ground floor, and rooftop deck, and even a pocket park . . .
. . . The summary mentions that a feasibility study for the multifamily opportunity found nearly 45,000 jobs within one mile of the building. It also said there is an expected demand for 911 units of rental housing in the immediate area over the next three years, even as thousands of apartment units have come online in Birmingham in the past couple of years. Apartment units would consist of 1 or 2-bedroom units.
At this time, the marketing materials do not represent an active plan for the building, but show a potential opportunity for a developer."
That would be awesome for that building! This is the AT&T building, which is currently very boring at ground level, and these renderings makes it look much more interesting. I wish they would update the entire facade. Man, downtown Birmingham is on fire!
well speculation appears to be at an all time high for the CBD and Southside. At this point I can't imagine half of the proposed conversion/renovation/construction projects that have been announced within the last 2-3 years will see the light of day unless triggers start getting pulled soon. It's starting to look something like a "Good, Bad, and Ugly" standoff. That and there is no such thing is bad PR, even if there is no chance for some of these projects to take place the more news and positive imagery that comes out the better chance of something sticking. A lot of points have been touched over the past day or so about financial feasibility going into the future and there appears to be some uncertainty over the amount of absorption the city center can handle over the next few years. I'd have more concern over the multi-family market more than anything at this point going forward, but hey what do I know, it's only an opinion
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