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Wood Co's SN Northstar Bldg New Aprtmnts now leasing

Home Forums General Columbus Discussion Wood Co's SN Northstar Bldg New Aprtmnts now leasing

This topic contains 40 replies, has 0 voices, and was last updated by  goldenidea 1 year, 9 months ago.

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  • #533314
    peter
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    its going to add more residents to the inner city

    That’s debatable, but ok. :)

    #533315

    Analogue Kid
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    Walker said:
    How long ago was that?

    I ask because it sounds like the rental market has really jumped quite a bit all over the country in the past 24 months.

    It’s true, the relatively spartan 1 bedroom I rented in 5XNW for $500 a few years ago is $650 today.

    #533316

    goldenidea
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    I bet most of the new High Street apartments will come in well above average rent prices. Food and drinks at The Pearl are also going to be pricey. Rooms at the Joseph will also be pricey. The reality is much of today’s Short North commands and gets high prices. This is why they should start building market rate apartments in Weinland Park. We need some of the new housing within the walkable Short Nort to be more affordable to keep average rental costs within reach of more people. We also need more parking (IMO).

    My thought is that the exterior of Wood’s new building ALONE justifies the rents they’re looking to get. I can’t think of another rental building that has anywhere near that quality of exterior construction. I imagine with an exterior that nice, you have to follow through and build the interior as just as nice to protect the investment made on the exterior! It’s a shame they can’t condo in this market.

    #533317
    Walker Evans
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    Analogue Kid said:
    It’s true, the relatively spartan 1 bedroom I rented in 5XNW for $500 a few years ago is $650 today.

    Our last apartment was five years ago, but we paid $950/mo for a 2 bedroom 1600 sqft unit in the heart of German Village. I wouldn’t be surprised if it isn’t renting for closer to $1500 by now.

    #533318

    InnerCore
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    goldenidea said:
    I bet most of the new High Street apartments will come in well above average rent prices. Food and drinks at The Pearl are also going to be pricey. Rooms at the Joseph will also be pricey. The reality is much of today’s Short North commands and gets high prices. This is why they should start building market rate apartments in Weinland Park. We need some of the new housing within the walkable Short Nort to be more affordable to keep average rental costs within reach of more people. We also need more parking (IMO).

    My thought is that the exterior of Wood’s new building ALONE justifies the rents they’re looking to get. I can’t think of another rental building that has anywhere near that quality of exterior construction. I imagine with an exterior that nice, you have to follow through and build the interior as just as nice to protect the investment made on the exterior! It’s a shame they can’t condo in this market.

    This has been something I’ve been trying to address. Because of the limited investors/developers in Columbus right now we are currently not building enough. With a smaller pool of investors/developers and the inability for them to access easy financing what you have is local developers only building the best projects with the least amount of risk. So basically all the new projects are going to be toward the upper price points. You can expect high prices at Hubbard, High Point, etc.

    Meanwhile since there isn’t a lot of new product coming on line you have vacancy rates moving extremely low. That is pushing effective rents up between 5% and 6% in most submarkets. This is going to start eating into affordability because incomes aren’t increasing 5% to keep pace.

    In the past developers could just move out the next piece of inexpensive land in the suburbs allowing them to provide new product at affordable rates. But now the demand is in urban areas where the land cost more and the construction cost more. I would expect high effective rental growth for the next few years.

    #533319
    Josh Lapp
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    InnerCore said:
    This has been something I’ve been trying to address. Because of the limited investors/developers in Columbus right now we are currently not building enough. With a smaller pool of investors/developers and the inability for them to access easy financing what you have is local developers only building the best projects with the least amount of risk. So basically all the new projects are going to be toward the upper price points. You can expect high prices at Hubbard, High Point, etc.

    Meanwhile since there isn’t a lot of new product coming on line you have vacancy rates moving extremely low. That is pushing effective rents up between 5% and 6% in most submarkets. This is going to start eating into affordability because incomes aren’t increasing 5% to keep pace.

    In the past developers could just move out the next piece of inexpensive land in the suburbs allowing them to provide new product at affordable rates. But now the demand is in urban areas where the land cost more and the construction cost more. I would expect high effective rental growth for the next few years.

    One way to promote affordability would be to reduce/remove the parking requirements…

    #533320

    InnerCore
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    joshlapp said:
    One way to promote affordability would be to reduce/remove the parking requirements…

    I don’t know if that will do much in many of these areas because of the lack of better transit. Let’s take this building for example. Even if you cut the rent by 10% because you didn’t have to build parking you’re still going to be at price points that demand parking. The only way you get people that can pay these kind of rates to do without parking is when its in an area with quality public transportation that can get them to most of their desired locations. You can’t expect someone paying $1300 rent to ride the bus.

    #533321
    Josh Lapp
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    InnerCore said:
    I don’t know if that will do much in many of these areas because of the lack of better transit. Let’s take this building for example. Even if you cut the rent by 10% because you didn’t have to build parking you’re still going to be at price points that demand parking. The only way you get people that can pay these kind of rates to do without parking is when its in an area with quality public transportation that can get them to most of their desired locations. You can’t expect someone paying $1300 rent to ride the bus.

    I understand what you are saying but, if you take away the parking requirement you can up the density of the building. For instance: You are building a mixed use residential/retail building. You are required to have 1 parking spot per unit. Each spot costs $20,000 (parking garage prices). Developers are therefore encouraged to build larger units which will be at a higher price point. Instead of building 15 smaller units that are $900 a month they build 10 larger units that are $1,200 a month. My point is we should let the market decide.

    #533322

    mrpoppinzs
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    The extra mechanicals are much more expensive then the extra space. It generally is more profitable to build two bedroom apartments (with a higher rent) then more one bedrooms with added mechanicals in Columbus where land values aren’t particularly high. The SN is a high value area though. It would be interesting to see where the crossover happens.

    #533323

    InnerCore
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    joshlapp said:
    I understand what you are saying but, if you take away the parking requirement you can up the density of the building. For instance: You are building a mixed use residential/retail building. You are required to have 1 parking spot per unit. Each spot costs $20,000 (parking garage prices). Developers are therefore encouraged to build larger units which will be at a higher price point. Instead of building 15 smaller units that are $900 a month they build 10 larger units that are $1,200 a month. My point is we should let the market decide.

    I can tell you that is what I’m currently working on here in downtown Miami. We have land under contract to build 500 sf one bedrooms and no parking, that we think we can rent for $1400, when most rent for $1800.

    The reason developers are building to higher price points is because that’s the only way to get financing and justify the risk of development. Try going to the bank and asking them to loan you money for a development in Columbus without parking. Good luck.

    Right now financing is only available for class A core deals. And these residents demand parking. That’s is the market speaking not the requirements. I believe there aren’t parking requirements required for downtown and yet all the developments under construction have ample parking.

    But let’s take you $20k parking spot. Considering the financing that comes out to about $1,200 a year or about $100 a month in extra carrying cost for the developer. Which is why if you built a stand alone garage you would rent it for about $150 (added operation expenses). So the developers option is to either rent a one bedroom with parking for $1300 or a one bedroom without parking for $1200.

    You need to be in areas with limited supply of land and adequate quality public transit for it start making economic sense.

    #533324
    zp945
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    This building made sense to have parking and as the Short North continues to get more residents and density, I think we will all be glad that developers added what parking they could when they had the chance. The garage is in the back half of the first floor and wouldn’t have been very desirable for retail or residential.

    #533325
    Josh Lapp
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    InnerCore said:
    I can tell you that is what I’m currently working on here in downtown Miami. We have land under contract to build 500 sf one bedrooms and no parking, that we think we can rent for $1400, when most rent for $1800.

    The reason developers are building to higher price points is because that’s the only way to get financing and justify the risk of development. Try going to the bank and asking them to loan you money for a development in Columbus without parking. Good luck.

    Right now financing is only available for class A core deals. And these residents demand parking. That’s is the market speaking not the requirements. I believe there aren’t parking requirements required for downtown and yet all the developments under construction have ample parking.

    But let’s take you $20k parking spot. Considering the financing that comes out to about $1,200 a year or about $100 a month in extra carrying cost for the developer. Which is why if you built a stand alone garage you would rent it for about $150 (added operation expenses). So the developers option is to either rent a one bedroom with parking for $1300 or a one bedroom without parking for $1200.

    You need to be in areas with limited supply of land and adequate quality public transit for it start making economic sense.

    I like your perspective. At what point do you think denser lower priced point units make sense? I can see a demand for small, even utilitarian units, in the most high value areas but I can also see where the numbers and financing would be less worth it for a developer trying to make money when they can build larger more expensive units.

    I should add as a caveat that I recently moved in to a ~325 sq ft apartment near first and high that rents for $475/month with utilities. I can see more people willing to sacrifice space to live in a great location and still have the disposable income to enjoy the very perks that make the neighborhood great (restaurants, bars, boutiques). There just aren’t that many spaces that aren’t old SFH converts for rent (and even very few of those at lower price points).

    #533326
    Walker Evans
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    InnerCore said:
    You can’t expect someone paying $1300 rent to ride the bus.

    Something I was thinking about the other day… instead of requiring a developer to build X number of parking spots, require them to buy X number of COTA monthly bus passes per unit. It then becomes built into your rent like a water utility, and you get a new free monthly pass in your mailbox on the first day of every month.

    I think we’d see a higher rate of adoption for bus ridership in urban apartment units if everyone had a “free” bus pass they could just swipe and ride any time day or night.

    #533327

    mrpoppinzs
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    ^ Interesting concept. I think it is highly dependent on the location but there are few locations servered better by COTA than the High St corridor near downtown.

    I live in the AD and use COTA a lot. I am not sure I would be comfortable going completely carless, but there are hardier souls than I.

    The other issue that has not been brought up is that the parking space may also be desired for visitors. There are no communal spaces in my building and sometimes visitor parking becomes a bone of contention.

    #533328

    InnerCore
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    Walker said:
    Something I was thinking about the other day… instead of requiring a developer to build X number of parking spots, require them to buy X number of COTA monthly bus passes per unit. It then becomes built into your rent like a water utility, and you get a new free monthly pass in your mailbox on the first day of every month.

    I think we’d see a higher rate of adoption for bus ridership in urban apartment units if everyone had a “free” bus pass they could just swipe and ride any time day or night.

    The problem is that is has to be market driven. So let’s take your example. So normally a developer is going to provide 1.5 spaces per unit and probably another 10 percent for visitors. So If I’m building 100 units that 160 parking spaces.

    As I mentioned before if a typical parking spot is about $20k that results in an additional $100 more I have to rent or an additional $20k if I’m selling condo. So now you give me the option to provide an monthly pass instead of a parking spot. So basically instead of paying $100 per month for that spot I’m paying $60 for the bus pass. Let’s make it $50 because you’re giving me a discount for buying 150 of them (don’t need passes for visitors).

    So the end result is that I can offer my 1 bedroom for rent at $1300 with a parking space or $1250 and they can ride the bus for free. That’s to much risk to take for $50. I would be turning away the vast majority of the market. Sure it would be okay if I lived here and worked along high as well. But I would still have to park my car to get to the grocery store, Easton, Polaris, and that fabulous casino ;).

    Buses are great for what they do but their is a reason that even in places that love public transit you can only get a small percentage of the population to ride the bus. The rents we are talking about are at the upper end of the market. The average one bedroom is around $700. And that’s the average. Many people are paying $400 for a one bedroom. Here were talking about $1300.

    Like it or not these people aren’t going to get on the bus no matter what. I guess if you created a bus that only went from nice area to another nice area, in a direct and efficient pattern, so that the majority of the people riding were the same people living and working in predominantly these nice areas then more people would ride the bus. But at that point the bus would essentially be rail.

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