Downtown Living Tour 2010 - thoughts

[Larry OKC]

I think they will, but the problem is that property is so expensive downtown that you have to build high end stuff to make the numbers work.

That was a point brought up a couple of times in the ULI presentation. That there needs to be a mixture of residential price points. To do so, there will have to be public subsidy in some form, otherwise, like you said, the numbers don't work and all you get is the high dollar.

That is one point that I take issue with on the ULI presentation. It seems time after time, they were saying it was going to take public investment to get these things to happen...not just building the public elements (Park, Streetcars etc). Downtown retail (subsidized by $40M just to get ONE major retailer, IIRC); housing (see above); about $50M for the adjoining Convention Center hotel.

I see most of that as similar to the Bass Pro deal etc. The City shouldn't be putting itself in the position of being a landlord. IMO. Public investment for public projects is one thing but this more direct co-mingling of taxpayer funds, not so much. It would be one thing if OKC was flush with cash and had the extra $40M, $50M etc just laying around, but we don't.

[MikeOKC]

Several mentions of The Montgomery. Are those apartments only or are some of them owned? Does anyone know the starting apt. rental rate? If any are condos, what the cost is? Just curious.

[bluedogok]

I think they will, but the problem is that property is so expensive downtown that you have to build high end stuff to make the numbers work.

Not really, it's just the investors have to look at the returns in a longer time frame than what the typical investor turnaround time seems to be, which is just another symptom of the short attention span society. The idea of "building high end" with a trickle down in pricing works in suburban apartments/rentals where there is an existing stock move down market like it also works in commercial properties but when there is no existing stock there is nothing there to move down market. In that case there needs to build properties built at different price points, which is done all the time in suburban residential. Investors need to understand not everything is going to have a 3-5 year payoff.

[betts]

Or perhaps if land doesn't sell, prices for land will drop. I haven't really looked around at other smaller cities, but in big cities, there frequently aren't a variety of price points immediately adjacent to downtown. You have to move out a ways. But, those cities are so big that even moving out a ways, you still feel as if you're in an urban environment. That's why building in Midtown/SOSA might be a really good idea. I suspect the land is quite a bit cheaper right now in comparison to immediately adjacent to downtown, and if it's going to be on the streetcar line it's close enough to downtown to be a very reasonable location for almost everyone. That's where I'd be buying land, if I was a developer who wanted to build at cheaper price points.

[DirtLaw]

Or perhaps if land doesn't sell, prices for land will drop. I haven't really looked around at other smaller cities, but in big cities, there frequently aren't a variety of price points immediately adjacent to downtown. You have to move out a ways. But, those cities are so big that even moving out a ways, you still feel as if you're in an urban environment. That's why building in Midtown/SOSA might be a really good idea. I suspect the land is quite a bit cheaper right now in comparison to immediately adjacent to downtown, and if it's going to be on the streetcar line it's close enough to downtown to be a very reasonable location for almost everyone. That's where I'd be buying land, if I was a developer who wanted to build at cheaper price points.

If things do not sell, people will just hold onto them even longer. My family has a few pieces of property downtown and it took us forever to finally acquire them because the people who owned them had been holding onto them for 30 or 40 years.