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Grandview Yard - News & Updates

Home Forums General Columbus Discussion Development Grandview Yard – News & Updates

Viewing 15 posts - 316 through 330 (of 795 total)
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  • #452939

    InnerCore
    Participant

    rus said:
    So… a dense, walkable mixed use development is considered risky? Not arguing, just making sure I understand your point.

    Yes. In order to build more walkable dense mixed use developments a developer would have to take less desirable financing.

    Let’s say you wan’t to build residential and retail. A residential complex that cost $50M and a $10M retail strip. Being single use you can get 80% LTV on the residential and 70% on the retail. So the developer would would be borrowing $44.5M at very favorable financing rates, probably a 10 year loan at around 4%. Then he would have to go out and raise $15.5M of either his own money or more likely money from investors. Those investors are going to want 10% and probably close to 70% of the capital gain on the sale.

    Now let’s say a developer want’s to do the more expensive mixed use. The construction cost will probably be slightly higher so let’s say that instead of $60M the total is $65M. But now since it’s mixed use they can’t get the great financing so instead they get 65% LTV. So now the developer is only going to be able to get $42.25M in favorable financing at 4%. He then has to raise $22.75M and pay the same 10% with 70% of the back end.

    So would you rather have $15.5M at risk or $22.75M at risk. Then again he has to pay 10% on that money. So after the initial loan payment is made you’ve got another $1.55M payment to make on the $15.5M or another $2.275M to make on the $22.75M. So obviously rents are going to have to be higher on the mixed use project.

    Now in reality the rents could be considerably higher in the mixed use project and the developer could make more money. But regardless going that route would be more risk. More money up front, less financing in hopes of getting higher rents and sell for a higher price later.

    #452940
    rus
    rus
    Participant

    InnerCore said:
    Now in reality the rents could be considerably higher in the mixed use project and the developer could make more money.

    If that’s true, then why is financing that more difficult? Or is the “could” an indication that, in your view, mixed use is less desirable?

    #452941

    johnwirtz
    Participant

    Great explanation InnerCore. To me, this means that cities need to do a better job zoning for and demanding the type of development their residents want to see built.

    #452942

    InnerCore
    Participant

    rus said:
    If that’s true, then why is financing that more difficult? Or is the “could” an indication that, in your view, mixed use is less desirable?

    That’s what my original post was about. Financing is more difficult because it’s more complicated and therefore seen as riskier. You have a building with more than one uses in it. The guy that want’s to buy a 400 unit apartment building doesn’t know much about retail and vice versa. On top of which this is pretty new and not prevalent in the area. So sure there are large investors that specialize in mixed use but they buy in core markets, usually not Columbus. So you might be able to get a guy to come in and buy a mixed use project in SN arguable the best market here. But to do it in an unproven area is a bit of a stretch.

    Also to be clear it may not be that extreme. I was just using examples to highlight my point. A 10% swing in LTV can drastically change the expected IRR on a project.

    #452943

    InnerCore
    Participant

    jbcmh81 said:
    Not having an abandoned warehouse is not exactly the same as saying GY is even close to meeting its potential. I know developers can only build what the economy and area will support, but I’m also sure that half the development does not need to be surface parking and suburban layouts to be successful. I get tired of people excusing crappy development because it’s better than nothing. That’s not raising the bar, that’s lowering it as far as possible.

    This has been one of my points and why we need better zoning. The motive for developers is profit. And often they are going to build to the lowest standard they feel will get them to that profit. In fact you can make an argument that it’s their fiduciary responsibility to their share holders to do so. Which is why we should simply raise the bar through zoning.

    Demand is higher and financing is easy for a parking garage. Fine. But were going to mandate in the zoning that you have to line 70% of the ground floor of the parking garage with a use other than parking. So if demand skyrockets for garages we don’t let developers come in and build multiple garage with nothing at street level thereby destroying the urban fabric of a community.

    You wan’t to build suburban retail with parking lots. Fine. Were going to mandate that the retail be built up to the street through set back requirements and have you place the surface parking in the rear. That way at least we have walkable streets in the meantime.

    #452944

    GCrites80s
    Participant

    rus said:
    If that’s true, then why is financing that more difficult? Or is the “could” an indication that, in your view, mixed use is less desirable?

    It could have to do with the fact that there has been so much unneeded retail space constructed since the ’70s, especially out in sprawl.

    InnerCore, is that risk factor for all retail as a whole, or specific to retail within a mixed use format. If it is the former, I can certainly see where developments in sprawl such as Brice Road and Mill Run that lasted only a few years before tanking would increase the risk factor of retail development as a whole.

    #452945

    InnerCore
    Participant

    johnwirtz said:
    Great explanation InnerCore. To me, this means that cities need to do a better job zoning for and demanding the type of development their residents want to see built.

    Exactly, see my post above. It’s about balancing the wants of the developer with the needs of the community.

    Let’s say a developer wants to build a target. He needs to go to Target ahead of time and get a signed leased in order for the bank to finance the construction. Most banks aren’t doing speculative financing anymore. Well Target wants to the pay the lowest rental rates so the developer is trying to build as cheaply as possible to profit the most. That means one story and surface parking. Then Target wants a sea of parking in front of the store because they want the driver to see all the parking and say, hey I wont have a hard time parking here and therefore wont be deterred from stopping in.

    Now of course putting the retail at the back behind a sea of parking creates a street that nobody wants to walk down. Then the street gets designed for the car only. And Target doesn’t care because 99% of their customers are coming by car anyway.

    So the developer needs Target on board to get financing. Which way do you think he is going to develop the project for?

    So Targets needs are in direct conflict with the community. It’s not like you’re going to pay more for a toaster because it’s in a walkable community. But if you change zoning and require proper setbacks and parking placement then it shifts the equation.

    Sure target want’s the parking up front but now it can’t happen anywhere that way because of the zoning. So now the questions becomes do you want to be in that market or not. It’s not like they can say screw this developer and go down the street to another developer.

    #452946

    GCrites80s
    Participant

    People need to start making the assumption that they don’t build stuff like Targets without parking (because they pretty much don’t) rather than forcing everybody to deal with these awful front parking lots. That would allow parking in the back to become the norm.

    InnerCore said:
    Most banks aren’t doing speculative financing anymore.

    Good.

    #452947

    InnerCore
    Participant

    GCrites80s said:
    People need to start making the assumption that they don’t build stuff like Targets without parking (because they pretty much don’t) rather than forcing everybody to deal with these awful front parking lots. That would allow parking in the back to become the norm.

    I’m not sure I understand what you are trying to say here.

    #452948

    GCrites80s
    Participant

    What I meant was a big box store is almost always going to have lots of parking. It may not be as visible in dense areas, but it does exist. People shouldn’t have to see a massive lot front and center to know that the place does have parking; it should be assumed that there is going to be enough parking at a Target.

    #452949

    News
    Participant

    Miller’s Ale House Expanding Soon to Columbus
    Published on June 12, 2013 8:00 am
    By: Ayana Wilson

    Columbus is a sports town. Home to the Clippers, Blue Jackets, the Crew, and, of course, the Buckeyes, there is never a shortage of games to watch and pregames to be had. So when Florida-based Miller’s Ale House decided to expand to Ohio, they searched out a market that would support their sport-themed décor and feel. Columbus won.

    READ MORE: https://www.columbusunderground.com/millers-ale-house-expanding-soon-to-columbus-aw1

    #452950

    wpcc88
    Participant

    Walker said:
    Going, going, gone…

    FROM HERE: https://www.columbusunderground.com/construction-roundup-may-2013-part-2

    Framing is going up already on the new building. I wasn’t able to snap a picture but it’s more towards the fish market than third and about the same distance from the street as their building.

    #452951

    futureman
    Participant

    Looks another phase might be kicking off sooner than later.

    NRI also is working on putting together the next phase of the Yard, which would be similar to the first phase, he said. “We hope to identify an anchor office tenant to kick off the office development,” Ellis said. “We are in negotiations with an anchor tenant.” The developer also has a soft commitment from a large restaurant that would serve as an anchor for the site, which is expected to include a multi-tenant office building, he said. “We hope we’ll be back in front of you yet this year” with plans for the office development, Ellis told the commission.

    The rest of the article…

    Giant Eagle stalls, but ‘overall vision’ remains intact
    Supermarket’s opening pushed to next year, but interest from retailers is high, developer says
    By ALAN FROMAN
    ThisWeek Community News

    Before the Grandview Heights Planning Commission voted July 17 to approve Nationwide Realty Investors’ plan to construct mixed-use buildings as part of the Grandview Yard project, NRI President and Chief Operating Officer Brian Ellis presented a review of the progress and plans for the development.

    “We’re making good progress toward our overall vision and goals for Grandview Yard,” Ellis said.

    “It never goes fast enough,” he added, but said about 729,000 square feet of development has taken place in the project area over the last 21/2 years.

    READ MORE: http://www.thisweeknews.com/content/stories/grandview/news/2013/07/23/grandview-yard-update-giant-eagle-stalls-but-overall-vision-remains-intact.html

    #452952

    myliftkk
    Participant

    News said:
    Miller’s Ale House Expanding Soon to Columbus
    Published on June 12, 2013 8:00 am
    By: Ayana Wilson

    Columbus is a sports town. Home to the Clippers, Blue Jackets, the Crew, and, of course, the Buckeyes, there is never a shortage of games to watch and pregames to be had. So when Florida-based Miller’s Ale House decided to expand to Ohio, they searched out a market that would support their sport-themed décor and feel. Columbus won.

    READ MORE: https://www.columbusunderground.com/millers-ale-house-expanding-soon-to-columbus-aw1

    How did I miss this…

    When I used to joke about never going to places where the placemat served double duty as the menu, this was the place I was referring to. Who knows, maybe they moved on to print real menus in the 8 years since I left Orlando.

    #452953

    GCrites80s
    Participant

    Don’t all restaurants in Orlando have the menu on the placemat? Perhaps that’s been skewing your results… ;)

Viewing 15 posts - 316 through 330 (of 795 total)

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