Great news for downtown housing
I think this article just goes to show everyone the progress we've made with housing downtown! It's great to see!
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Validating a trend - in downtown housing
by Darren Currin
The Journal Record
7/30/2004
When news of the sale of the Deep Deuce at Bricktown apartments broke earlier this year, it sent a shockwave throughout the commercial real estate community. At a price of $75,170 per unit, the transaction marked the highest price ever paid for an apartment complex in the Oklahoma City area.
While the deal was definitely an indicator of improving local apartment values, it also served as a validation of the viability of downtown housing and showed that the trend is here to stay.
"I expect (downtown housing) to be a popular and growing trend," says Mike Buhl, president of Commercial Realty Resources. "There's so much activity going on downtown with MAPS and the developments centering around MAPS, that it's going to continue to be a growing trend."
Even before Deep Deuce changed hands, several local developers were formulating plans to redevelop existing downtown buildings into apartments and to construct new units. The high rents and occupancies boasted by such upscale downtown apartments as Deep Deuce and The Garage Loft Apartments at 113 NW 13th St. showed these developers that there was a demand in Oklahoma City for urban living.
The next entrance into the downtown housing arena will be made by The Montgomery at 500 W. Main Street that is being developed by Richard Tanenbaum. According to Renzi Stone, spokesperson for Tanenbaum's development group, a grand opening is being planned for Aug. 26 for The Montgomery with tenants expected to begin moving on Oct. 1.
While no leases have yet to be officially signed, Stone adds that The Montgomery has a waiting list of 160 potential residents for the 56 apartments.
"Our goal is to have it completely leased on Oct. 1 and have it remain that way," he says.
As The Montgomery nears completion, work on another highly anticipated urban housing project is also about to begin. JoeVan Bullard, executive director of the Oklahoma City Urban Renewal Authority, says construction will begin later this summer on developer Mike Henderson's $25 million-plus Legacy Summit at Arts Central. The complex will be located west of N. Walker Avenue between Robert S. Kerr Avenue and NW Fourth Street.
With these new urban housing projects coming online, Buhl adds that it will be interesting to see the impact the increased competition will have on downtown apartment rents.
"I think (downtown rents) will be the highest in the metro area; although you will start to see that level off a bit," he explains. "Deep Deuce set the trend for what is there. We won't see the rents escalate, but rather level off as these new properties come online."
According to John McIlwain, senior resident fellow for housing at the Urban Land Institute in Washington, D.C., Oklahoma City is just one of several secondary markets that have embraced urban living in just the past few years.
"The trend in secondary markets is not as strong as in the primary markets, but it's definitely noticeable," he says. "It is something that every city administration is trying to encourage because they have learned that 24/7 neighborhoods are stronger economically and socially."
McIlwain adds that one of the primary keys to creating a successful housing environment in an urban area is the creating jobs in downtown.
"You have to have downtown jobs that bring people in" says McIlwain. "If people can live closer to their jobs, they are happier."
In looking at Oklahoma City, McIlwain believes the city has an opportunity to grow urban housing by utilizing and building upon neighborhoods that surround downtown such as Heritage Hills and Mesa Park.
"You have not too far away some very beautiful, upscale and wealthy neighborhoods that are very strong," he adds. "You can build off those strong neighborhoods and feather into the downtown area."
If Oklahoma City is successful in its downtown housing efforts, then McIlwain adds that the city can expect to see retail return to the downtown area. He says the real estate adage "retail follows rooftops" applies the same to urban areas as it does to the suburbs.
While secondary markets are typically about five to 10 years behind primary markets in terms of the urban housing trend, McIlwain concludes that these markets like Oklahoma City that are making efforts to develop urban living options are poised to ride the wave of a growing trend that could last for at least another two decades.
"I think this trend will continue for sometime because I think that there are baby boomers and empty nesters who like urban living and will be looking for it," explains McIlwain. "There will be a market for that kind of living for the next 20 years so it's worth investing in (downtown housing) because it makes a difference for the city."
In addition to The Montgomery and Legacy Summit, several other urban housing projects remain in the works such as The Factory, a $40 million mixed-use apartment and commercial development that will be located in Bricktown.
Bullard adds that several developers are also showing interest in bringing high-density residential to the Walnut Hill area located east of downtown. The Urban Renewal Authority is in the process of preparing to send out a request for proposals from developers interested in the area that has been nicknamed "The Hill."
Bounded by Interstate 235 and Stiles Avenue on the west and east and between NE Second Street and a railroad right of way on the north and south, the area consists of around six areas of land that was cleared by the Authority in late 2003.
"What we hope to see in The Hill area is a mix of both for sale and for rent housing," explains Bullard. "We are not interested in single-family housing with huge spaces in between. We want something more dense than that."
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