Hill, The

[Pete]

How many units have been started?

How many would you say are occupied?

[Steve]

Pete, I'll see if I can do an update. Canfield isn't an easy guy to get to talk about anything, especially when things aren't going well.

[Spartan]

Pete, I'll see if I can do an update. Canfield isn't an easy guy to get to talk about anything, especially when things aren't going well.

Well, there's always the old paradigm that "no news is still news," especially with someone like Canfield that won't talk.

[warreng88]

Downtown dreaming
Urban housing developers find reasons for hope
By Brianna Bailey

OKLAHOMA CITY – From the master bedroom in the crown molding-bedecked model home at The Hill at Bricktown, prospective homebuyers have a view of downtown Oklahoma City’s skyline. The windows on the other side of the two-story home on Russell M. Perry Avenue look out onto rows of recently poured concrete foundations where more of the brick town houses are being built.

Construction on the 157-unit, $75 million complex wedged between Bricktown and Interstate 235 stalled when the housing market crashed two years ago. The project’s financing dried up, but resumed late last year.

Downtown’s housing market has cooled in the last few years, but developers are optimistic that demand will grow again as the economy gets better.

The high-end town houses at The Hill, which range in price from $350,000 to $815,000 for 1,650 square feet to 3,700 square feet, are attracting young professionals and empty nesters, said real estate agent Matt Marcacci.

Out of the 24 units at The Hill that have been completed, seven have sold so far, five of them this year. Marcacci said he is pleased with the pace of sales and expects demand for downtown housing to grow as more people get used to the idea.

“Urban living is new to Oklahoma, and people need to be familiarized to it,” Marcacci said.

Downtown housing in the lower price range is faring better in a down housing market than higher-end properties, said developer Pat Garrett.

Garrett is a member of Triangle Development Partners, which has developed several blocks of urban dwellings in the Deep Deuce area.

Sales have been slow in Triangle’s Brownstones at Maywood Park development, Garrett said, where prices start at $645,000 for a 2,371-story, 2.5-story condominium.

However, Triangle’s Second Street Lofts, which are in the $100,000 price range, are faring better, with 26 of the 55 units there selling in less than a year, Garrett said.

About half of the 30 units in Triangle’s Central Avenue Villas have sold, which start at about $187,800 for a 791-square-foot condominium.

“We’d love to see them all going right now, but for this market, it’s really going well,” Garrett said.

Architect Anthony McDermid, principal of TAP Architecture and also a partner in Triangle, believes downtown Oklahoma City still needs more housing and demand will eventually grow, once developers and planners figure out the right formula to recruit new urban dwellers.

“We have not nearly recognized the potential for housing downtown,” McDermid said. “It’s a puzzle we have not been able to solve yet.”

Developer Chuck Wiggin, president of Wiggin Properties, predicts downtown’s housing market will expand once the housing market recovers.

“The housing business is in the dumps, but that’s going to change,” Wiggin said. “Downtown has emerged in the last few years as a legitimate location for people to live and I think that’s a long-term trend with legs. I think it will accelerate over time. Housing looks like it’s a good investment place to be over time more than anything.”

[betts]

In their ads in some of the local magazines they show 2 sold and one pending. There are three that appear to be occupied.

[betts]

I did notice, on my recent walks, that they're finishing the exteriors of the units facing the street. That's a good idea, IMO, as I would be reluctant to purchase anything there with those units unfinished on the exterior. I don't know if they're going to move on to the units facing north or not, but I would think it would be a good idea.

[metro]

Well at least Canfield thinks he can attract people with deep pockets from the East Coast, at least that's what he told OCURA when he won the bid for the land. Man that meeting was depressing...especially for all of us who could see this outcome before the land was awarded.

[Pete]

I wonder if this is still controlled by Canfield or if it's now in the hands of a lender or someone else?

[Pete]

In researching the county assessor's site, it looks like four units have been sold.

The price range was from $333,000 to about $370,000. All of them were about 1,650 square feet.

Also, it shows that Canfield's LLC still owns the blocks where development was started (or completed) but OCURA still owns the balance, which is about 2/3 of the property:


http://www.oklahomacounty.org/assess...L+AT+BRICKTOWN

[mheaton76]

The price range was from $333,000 to about $370,000. All of them were about 1,650 square feet.

Way, way overpriced ... at this point anyone who buys is taking a big risk on the future property value. I would want to see a much steeper discount if I were on the market for one.

[Pete]

I wonder if the few buyers to date will have any recourse since it's pretty obvious the share amenities -- like the clubhouse and pool -- will never be built.

I would imagine that if they are finishing the remaining units (there were a total of 32 that were started) they are going to have to drop their asking prices substantially. Again, the existing owners may have a course of action if that is the case.

[betts]

At least the two on the page linked above were sold in the last couple of months. So, I'm sure it's pretty obvious to them that the clubhouse and pool probably won't be built.
Again, I'm not a huge fan of the Hill, I don't really like the location, they're stick built and I don't think the interiors look that expensive so I agree, I don't think I'd pay $200+ a square foot for them. I'd think they should probably be in the $150 a square foot at most.

[OUGrad05]

These are overpriced for Oklahoma City.

How many are occupied out of how many total units?

[betts]

These are overpriced for Oklahoma City.

How many are occupied out of how many total units?

Doesn't the article say they've sold five this year? Overpriced means no one will buy them. Price is relative. If people are buying, then they're not necessarily overpriced.

[OUGrad05]

Doesn't the article say they've sold five this year? Overpriced means no one will buy them. Price is relative. If people are buying, then they're not necessarily overpriced.

wow...

[semisimple]

Prices of $220/sq ft and higher are a joke, as for literally less than half that cost per sq ft you can get a nice house in a nice part of OKC that's 20 minutes or less to downtown. Moreover, downtown OKC hasn't yet gotten to the point of having offering the environment and amenities to charge those kind of prices relative to the rest of the city. I'd love to see these places fill up with residents--which would only serve to spur new development due to a "strong" demand for downtown housing--and I think they would if prices were lower.

[betts]

It may be that builders need these kinds of prices to break even. I don't know that, but I would think that if a builder has a lot of fat built into prices and their houses aren't selling, he or she would drop prices to make sales. If they're not doing that, perhaps their costs are higher than in those $100 per square foot houses 20 minutes away. I know that the materials used in some of the downtown housing are quite a bit nicer than what you see in a house half that price in other parts of the city. I suspect that $100/square foot prices in downtown would require using materials that might not stand the test of time, just as will happen with many of the cheaper houses farther north and south. I've not been very impressed with most of the new construction in Oklahoma City, in terms of quality and durability. We'll see if the current downtown housing withstands the test of time better, but if it does, then perhaps the prices are warranted.

[OUGrad05]

It may be that builders need these kinds of prices to break even. I don't know that, but I would think that if a builder has a lot of fat built into prices and their houses aren't selling, he or she would drop prices to make sales. If they're not doing that, perhaps their costs are higher than in those $100 per square foot houses 20 minutes away. I know that the materials used in some of the downtown housing are quite a bit nicer than what you see in a house half that price in other parts of the city. I suspect that $100/square foot prices in downtown would require using materials that might not stand the test of time, just as will happen with many of the cheaper houses farther north and south. I've not been very impressed with most of the new construction in Oklahoma City, in terms of quality and durability. We'll see if the current downtown housing withstands the test of time better, but if it does, then perhaps the prices are warranted.

Good post and it does lead one to believe their costs are high. But the market in OKC makes it quite difficult to sell homes at 200+/sq ft no matter how nice they are.

[betts]

Good post and it does lead one to believe their costs are high. But the market in OKC makes it quite difficult to sell homes at 200+/sq ft no matter how nice they are.

Depends on the neighborhood. I know someone who's asking price for their house here is 500+/square foot. Look at housing prices in Nichols Hills, Gallardia and some of the nicer neighborhoods in OKC and you'll find $200/ft is low end.

[semisimple]

Depends on the neighborhood. I know someone who's asking price for their house here is 500+/square foot. Look at housing prices in Nichols Hills, Gallardia and some of the nicer neighborhoods in OKC and you'll find $200/ft is low end.

$500/sq ft sounds downright crazy for Oklahoma, and I find the idea of average prices over $200/sq ft in even the nicest neighborhoods hard to believe. Trulia lists $146/sq ft on average in Nichols Hills, $96/sq ft in Edmond, and $73/sq ft for all of OKC.

http://www.trulia.com/real_estate/Ni...ills-Oklahoma/
http://www.trulia.com/real_estate/Ok...City-Oklahoma/

Obviously, the prices are going to vary substantially depending on the neighborhood--but, looking around on this map, I can't find any OKC neighborhoods listed where homes are going for over $140/sq ft on average.

Especially in light of these numbers I think those prices in downtown OKC are simply too high.

[betts]

These, post recession, are all about $300/sq foot in Nichols Hills, which I know is less than they were selling for pre-recession on the average. If the average in Nichols Hills is $146/sq foot, that's probably because the majority of houses that have sold in the last year are the small not completely updated ones on the perimeter. And there is one, not in the multilist, that has an asking price of over $500 a square foot, and I happen to know that this family paid over $400 a square foot for it a few years ago.

http://www.zillow.com/homes/nichols-..._zm/1_rs/1_fr/

Here's one in Crown Heights that recently sold for about $221/sq foot

http://www.zillow.com/homedetails/71...21849457_zpid/

Also, you have to remember that asking price is not selling price and frequently negotiations result in a slightly lower price per square foot after sale. If people are buying, and that article said that they've sold just over half of the Maywood Lofts and 5 of the townhouses on the Hill this year, then someone thinks that price per square foot isn't outrageous. I don't, personally, and I've bought ten different houses since moving to Oklahoma City. But again, if they don't sell, at some point in time the builders will have to adjust the price to make them sell. The market ultimately determines what an appropriate price is.

[flintysooner]

If you are the developer and have inventory that has not sold then you are either paying interest to carry that inventory or you are losing investment income or both. In the latter case of lost investment income that figure is about as near to zero as one can get. In the former case of interest paid we are in one of the lowest rate periods of history. The lender or lenders certainly do not want any properties back.

Another issue in an area that is still developing is that reducing prices now would have the effect of reducing prices for future projects -- a cheapening of the brand so to speak.

Besides that this is a rather small geographic area and there will be a limited number of units available. Unless one is entirely pessimistic about Oklahoma City urban development it makes sense to believe the future holds more economic opportunity than the present. And it is hard to be entirely pessimistic given the state of Oklahoma City development downtown in the midst of the worst economic climate since the Great Depression.

Then there is the fact that this is new construction and better than average quality which adds to the cost of the product.

And the price itself is not that far out of line with other new construction around the area for the same target audience.

Unless we are willing to only build developments that are heavily subsidized by government (and I don't mean TIFs) then the market will decide but the market is far more elegant than we generally recognize.

[yessir69]

I do agree with the overpriced argument. When they developed Harbortown and South Bluffs in downtown Memphis, they were MUCH cheaper and the construction was superior to what they are building on The Hill. I don't know what happened down there...

[flintysooner]

The several Harbor Town listings I viewed were all above $150 per sf and claimed big discounts from built price.

[blangtang]

$100-125 a sq foot seems fair to me, but i'm not a pioneer...