Tag: apartments

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At Large Opinion

Midtown’s Apartment Boom Explained. Sort Of.

It’s a simple question, really, one I’ve heard numerous times in recent months: “Who’s going to live in all these new apartment buildings in Midtown?”

New complexes have sprouted all along Madison — across from Minglewood, next to Cash Saver, at the corner of McLean. There are new apartments at McLean and Union and more going up at Sam Cooper and East Parkway. There is no doubt that there is an apartment-building boom.

So, who’s going to live in all these new apartments? The question got even more interesting on the heels of just-released U.S. Census data that show Midtown and Downtown (where another apartment-building boom has occurred) both actually lost a little population between 2010 and 2020. There seems to be a disconnect.

I asked two developers (both of whom asked to comment anonymously) and a former president of the Memphis Area Association of Realtors. Interestingly, all pointed to the recession of 2008 as a major turning point in the housing market.

“After 2008, it was the same all over the country,” said one of the developers. “The single-family home building business got decimated, so the supply of new housing was constrained for a number of years. There was a demand shift to less owner-occupied housing, more rental housing. Some of that is still playing out.”

“Midtown is really hot,” said the other developer I talked to. “Houses go on the market and sell within hours. There’s not much new housing stock, really — nowhere to build. Developers develop what the market demands, and right now, that’s apartments. And these apartments are getting leased.”

Kathryn Garland, immediate past president of the Memphis Area Association of Realtors agreed that the Midtown market is tight. “It’s gotten to where some people might want to sell, but they’re afraid they won’t be able to get another house in the area, and they can’t afford to close on a new house before selling their old one, so they stay put, which keeps the market tight. And many landlords lost a lot of money during the pandemic because of the eviction freeze. I know some who are turning rental units into BnBs, just to try to recoup. And that also tightens the available housing.”

So how do we reconcile population loss with an apartment-building boom? There are several possibilities, not all mutually exclusive. It’s possible, for example, that Midtown’s population fell lower at some point, say 2015, and started to pick back up in the past couple of years, which looks like a boom. It’s also possible that the demand for Midtown housing and the attendant rental increases have driven the less-affluent to other neighborhoods, countering the population growth of new people moving in.

“I’m still not convinced the data has caught up with any of what’s happened in the past couple of years,” said one of the developers. “The pandemic has impacted housing in ways we’re still not completely understanding. People whose company headquarters are in New York or Chicago are now letting their employees work from anywhere. Some of those people are moving to markets like Memphis because they can afford nicer apartments and homes. We haven’t been able to quantify that yet, but it’s happening.”

“The pandemic is affecting the commercial market, as well,” said Garland. “Commercial realtors will tell you that the office space market has changed entirely. Companies are downsizing their space, moving to Zoom meetings, letting employees work wherever they like. Things are in flux.”

But what happens when all the young people moving in get older, have children, want a yard and a dog? Does the apartment bubble burst?

“Of course, the apartment bubble could burst,” said one developer. “You’re always trying to figure out your next move. Sometimes, you just pull in your wings and see where the demand goes.”

“Often, apartment buildings become condo buildings as demand changes,” said Garland. “There are lots of older folks, retirees, who are moving into apartments and condos in Downtown and Midtown when they downsize. Their homes out east get bought by young families. It’s all a cycle.”

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News News Blog

Convention Center Hotel Planned for Plaza East of City Hall

CREDIT: Townhouse Management Company/Lowes Hotel & Co

Townhouse Management Company/Lowes Hotel & Co

Proposed luxury apartments at 100 N. Main

The city’s new convention center hotel is now planned for the city-owned plaza directly to the east of City Hall, Doug McGowen the city’s chief operating officer announced Tuesday at a Memphis City Council committee meeting. 

The hotel is being developed by Townhouse Management Company in partnership with the Lowes Hotel & Co. The plans originally called for converting Memphis’ tallest building at 100 N. Main into the hotel, but representatives with Lowes said the plaza was the best option to create a hotel with a vibrant campus around it.

The convention center hotel is slated to rise 26 floors and house 550 rooms, as well as 55,000 square feet of meeting space. A 1,200-spot parking garage is planned for 80 N. Main next door. The plans also include a restaurant, cafe, and three bars.

McGowen said the convention hotel will be “world class and once again give Memphis the chance to host a significant number of meetings and events.”

“It’s a one-time opportunity,” McGowen said. “We must have the deal closed by end of year and the hotel must be open by year 2023.”

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The hotel “will be big,” developers said, designed to stand out in city’s skyline, “announcing that Memphis is open for business.”

The goal is span economic development over a two-block area, leading to a “broad revitalization in this portion of Downtown,” developers said. In addition to the hotel, luxury apartments, 30,000 square feet of commercial space, and 65,000 square feet of hotel amenities are planned for 100 N. Main.

Townhouse Management Company/Lowes Hotel & Co

Entire site plan

Jonathan Tisch, CEO of Loews Hotels said when a convention center hotel gets constructed, “all boats rise,” other economic development is spurred, and areas become 24-hour neighborhoods. A hotel, along with commercial and residential space, is the “holy trinity,” he said.

The plan was recommended for approval by the council committee, and the full council is set to vote on the issue in two weeks. An up vote will allow the project to move forward in the approval process to be designated as a “quality public use facility” within the Downtown Tourist Development Zone. The State Building Commission also has to okay the plan.

Categories
Living Spaces Real Estate

No Vacancy?

When Jennie Hill returned home from college last spring, she knew she wanted something different from “my other life,” as she puts it, referring to growing up in the suburbs of Memphis. Close proximity to her job as an intern architect with Looney Ricks Kiss Architects was a priority, as was being a part of the hubbub of city life.

“I wanted to be downtown because that’s where stuff happens,” Hill says. “There’s always something going on, with plenty of cool things to do.”

Though it took time, she eventually found an apartment on Mud Island she liked. She put down $300 in May as earnest money to hold a place that wasn’t even available until September. And her rent, at $725 for a 630-foot studio, is steep. As more young professionals clamor to call downtown home, they may find locating a rental tricky — in a neighborhood that’s increasingly tight for apartment space.

Condo conversions have played a significant role in the shrinking of apartment stock downtown. Over the past several years, signature apartment buildings like the Shrine, the Lofts at South Main, Claridge House, RiverTower at South Bluff, and Paperworks (the first warehouse-to-apartment conversion in the South Main district), have all been converted to condominiums. According to figures from the Center City Commission, 593 apartment units have gone condo. And the conversion craze hasn’t stopped at downtown’s doorstep.

Memphis Is a Good Deal

Investors from across the country have been scooping up older high-rise properties from Midtown to Germantown. For example, the Glenmary at Evergreen (formerly Woodmont Towers) on North Parkway is being developed by the Gintz Group from Tacoma, Washington, and Nashville-based Bristol Development converted the former Park Place apartments in Germantown into a condo development called the Monarch.

Part of Memphis’ appeal is its high occupancy rate, coupled with a strong national economy and the relative affordability of properties compared to other urban markets. “Investors are seeing that nationally, Memphis might be the last bastion of condo conversions because it’s been overlooked for so long,” says LEDIC Management CEO Pierce Ledbetter.

From a development standpoint, conversions have been a good thing for properties that were in need of refurbishing. A case in point is RiverTower at South Bluffs (formerly the Rivermark), a downtown rental property that had languished in an ’80s time warp until being purchased and converted to condominiums by McCord Development, Inc., based in Houston, Texas.

RiverTower, overlooking the Mississippi, has gone from hotel to apartment house to condos.

While offering exceptional views of the Mississippi River, the 240-unit complex suffered from “an identity crisis,” notes Ledbetter, referring to the building’s history as a hotel and later apartment high-rise, which left it with an odd mix of both spacious and cramped apartment units. With its purchase by McCord Development, an assets management and development firm, the building received a complete renovation and is now selling stylish one-, two-, and three-bedroom condo units. McCord has developed similar high-rise communities in Texas, California, and Florida.

“What [investors] like to see is a city with a reduced supply of land, high occupancy rates, and increasing rents,” says Ledbetter, whose company is the largest apartment and condominium manager in the city. “That makes it much easier for banks to underwrite the loan for the property. And with so many good things going on downtown, it keeps driving the trend.”

High Occupancy Rates

According to “The Source: Greater Memphis Area Multifamily Market Statistics for 2006,” a survey released by the Apartment Association of Greater Memphis, occupancy rates downtown hover at 94.6 percent, almost five points above the countywide rate of 90 percent. (The Center City Commission — CCC — pegs downtown’s rate closer to 91 percent.) Living downtown also costs apartment dwellers more. The survey, which canvassed 50,000 apartment units in 12 submarkets, looked at categories such as amenities, rents per-square-foot, and floor plans. Their findings: The average rent for a 950-square-foot apartment in Shelby County is $685, but downtowners can expect to pay $893 for a slightly smaller space, at 917 square feet. Though rents may be higher downtown, Leslie Gower, director of communications for the CCC, says their market research shows most people prefer to live where their social life is and commute to work. Since downtown’s entertainment sector has strengthened, so too has its desirability as a neighborhood.

Are more apartment complexes on the horizon for downtown? Such high occupancy rates would suggest they’re needed, particularly with the addition of the University of Memphis’ law school soon to call Front Street home. “Downtown is probably ripe for more apartment units,” agrees Amy Carkuff, who’s been involved as an interior designer with a host of condo projects downtown. “I think there’s a market for students and young professionals.”

Manny Heckle, president of the Apartment Association of Greater Memphis and HM Heckle, a properties management firm, says, for him, the question is simple: “How many condos are selling and how many will revert back to rentals? I would say too many condos have hit the market in the last few years. I think we’re condo-saturated.”

View of the Claridge House on Main Street: facade.

View of the Claridge House on Main Street: bedroom.

Those thoughts prompted developer Jason Wexler to put his money in the rental market. Wexler’s company, Green Hat Partners, already has completed two historic rehabs (Cornerstone and Main Street Flats apartments), and he’s now among a handful of developers working on creating additional apartment buildings downtown. Radio Center Flats, a project currently under way at the old WDIA building, is one of Wexler’s projects; and according to the CCC, there are 14 other apartment developments in the planning or construction phase for downtown.

View of the Claridge House on Main Street: lobby.

Paperworks in the South Main District is Memphis’ first warehouse-to-apartments conversion.

“We’ve been pretty cautious about condos and decided not to go that route because of the number that have come online,” Wexler says. “We thought there was a need for more apartments in the downtown core, in part because of the number of projects that were going from rental to condo conversion.” The combined buildings will eventually create 587 new apartment units. But when you consider that condo conversions have removed 593 rentals from the market, the likelihood is that the rental market downtown will continue to remain tight.

“We do minimal marketing or advertising, and our occupancy rate is 100 percent most all the time,” says Wexler. “We rely on word of mouth or put an ad on apartments.com to find new tenants.”

Glenmary, a high-rise located on North Parkway, was once Woodmont Towers.

And who knows? That may simply add to the luster of nabbing a downtown address. ■

Categories
News The Fly-By

Condomidtownium

When Midtowner Brittany Redmond moved out of Woodmont Towers on North Parkway last April, she had a good reason: The high-rise apartment building was being converted to condominiums.

Although the building’s management was still honoring tenants’ leases, the renovations were disruptive.

“At first, it was just pressure washing the building,” the college student says. “Then it became invasive. They were working on the balconies. They used jackhammers to rip up the tile floor in the apartment above us.”

But Redmond never imagined that, when she signed a new year-long lease for a Midtown apartment on Belvedere, she’d be moving again within the month — for the very same reason.

“I was there a week and [one of my neighbors] told me that these buildings are being bought and may be converted to condos. I thought, You’ve got to be kidding me. I haven’t even unpacked my boxes yet,” she says.

Although a staple of the current downtown real estate market, luxury condominiums are gaining a foothold within Midtown, too. Across the country, condo communities are popular with both young professionals and empty-nesters. And even in an area of town known for its unassuming craftsman bungalows and lack of amenities such as extra closets and bathrooms, developers see opportunity.

Woodmont Towers became the Glenmary at Evergreen in May. The brand-new Pie Factory condos opened in Cooper-Young in June. Park Terrace, a ’60s-era high-rise apartment building across from Overton Park, was recently renovated, and its 35 condos will be on the auction block Saturday, August 18th. Belvedere’s Ashley Manor is in the process of a condo-conversion. And work just started on two other condo properties near McLean and Peabody.

Dick Willingham is one of the developers behind the Park Terrace project.

“What we have found over the years is that people want to move in-town,” Willingham says. “They’re tired of the commute. They’re tired of coming in from way out of downtown. They want to be in more urban areas.”

Willingham and his partner Randy Sprouse were actively looking for conversion opportunities. The out-of-town developers both have family in the area.

“This property came to our attention. It had all the ingredients of success,” Willingham says.

The $2.6 million renovation included stainless-steel appliances, a new roof, and retooled kitchens. The choice that has made them stand out the most, however, is that the building’s 35 condos will be offered by auction, something Willingham says is becoming more popular. Part of the proceeds will be donated to the Children’s Museum of Memphis.

“Years ago, people thought auctions were all distress situations. The world is becoming more familiar with the auction process. There’s no question the Internet has opened people’s eyes,” Willingham says. “Having an auction is a very efficient way of determining what the true market value is.”

Other condo properties are still being sold the traditional way.

At the new Glenmary at Evergreen, 190 apartments were converted to 150 condominiums with new cabinetry, granite countertops, gas ranges, and other amenities. Some of the apartments were combined to create large two-bedroom, two-bath units. Prints from the Jack Robinson Gallery on Huling — including Lauren Bacall at a birthday party and a 17-year-old Donald Sutherland — dot the interior.

“We have great traffic through here,” says Tommy Prest, a member of the Glenmary sales team. “We have a lot of graduates of Rhodes who are starting jobs. We get a lot of Midtowners who have raised their kids and want to be able to lock the door and leave whenever they want.”

Prest says the building isn’t competing with the booming downtown condo market.

“We’re a convenient location to downtown and East Memphis. We’re five minutes from St. Jude and five minutes from Sam Cooper.”

Kendall Haney, president of the realty firm selling condos at the Pie Factory, agrees.

“I think it’s more affordable than downtown, and a great alternative to downtown,” he says. “It’s really a different market. … [Buyers] still get what they want. They’re still in a neighborhood that offers restaurants within walking distance. The infrastructure is all there. And if they work downtown, it’s still convenient.”

The condos might also sustain aging neighborhoods by pumping them with new investment.

“I think it encourages other people in the neighborhood to improve their property, as well,” says Haney. “It gives everybody hope that the neighborhood is going in the right direction and that people are putting money into it.”

Park Terrace’s Willingham agrees: “Whenever a developer comes into the area, blighted or not, it creates energy for the rest of the community to clean up.”

But if Midtown is going condo, 21-year-old Brittany Redmond wants to stay out of the way.

“I knew it was happening downtown …,” she says. “I just hope it doesn’t happen again.”

Categories
Living Spaces Real Estate

Lofty Digs

CREDIT: Courtesy of the Lofts

Courtesy of the Lofts

The Lofts from the corner of Tennessee and G.E. Patterson

Asking when the Lofts was developed is tricky business. Sure, the building was converted to condominiums from apartments pretty recently — starting in March 2005, with the first closings coming in December of that year. But that answer neglects, oh, about 100 years of the building’s life and ignores much of the charm inherited by the Lofts.

The building was born in 1909, and its first identity was as the Orgill Bros. & Co. Hardware and Saddlery Warehouse, which served as a distribution center. There was a system of pull carts for transportation of items to different parts of the building and a circular slide system to send packages down from floor to floor. (There’s still an example of a slide on the first floor of the building.) Orgill Bros. made an addition to the building in 1917.

So when the building was ready for conversion to accommodate residents, the developer, Henry Turley Company, paid particular mind to its historic characteristics. Demolition was never considered. As Henry Turley says, “It’s the best loft I’ve ever seen. Why would you tear it down?”

Courtesy of the Lofts

The Skyline Club at the Lofts

According to Lofts sales associate Mike Parker, “Whatever we could keep in its natural state — the timbers, the concrete beams, concrete pillars, concrete ceilings — we left them as they were. Some of them even had graffiti on them.

“It’s a recycled building,” Parker adds. “It could’ve been torn down, and we could’ve put up some new condos, but we thought that would be a little plain. We wanted to get good use of the building, and the people here love the exposed brick and the exposed timbers. They don’t make them like this anymore. They don’t make beams that are three feet by three feet much anymore.”

The neighborhood’s no slouch either when it comes to character, both historically and naturally. The Lofts is located at 505 Tennessee Street, about as far west you can go in Memphis without getting wet. Turley says, “[A]lmost invariably, industrial lofts are in industrial districts, next to railroads. It so happened that our industrial spot was next to the Mississippi River. It is a singular location.”

Courtesy of the Lofts

The lap pool at the Lofts

The roof deck of the Lofts offers a panoramic view of the river and city that’ll make you wish you had eyes in the back of your head just so you can take it all in. Among other features on the top of the building — called the Skyline Club — are a lap pool (from which “you can basically hang over the side of the building and overlook South Bluffs,” Parker says), grills for cooking, a fireplace that burns a no-muss denatured ethanol, a kitchenette, a sauna, and a workout facility.

Courtesy of the Lofts

The view from the Lofts looking north

Parker says, “We talked Henry into taking the workout facility from the first floor back in a corner, in the least desirable unit, and converting one of the most desirable units, a roof garden unit, into the workout facility. … We had some really nice workout equipment, and, as Henry says, ‘Don’t hide your light under a bushel.'”

But just because preservation of the past has been key in the design of the Lofts, don’t get the idea that the place isn’t as high-tech and forward-focused as possible. Wireless Internet is provided, as is basic cable. “It’s complementary to the building and the type of people who like this loft style of living,” Parker says.

But one of the best features is sure to satisfy your checkbook and higher sensibilities both: the energy-efficient system installed in the Lofts. “We’re a common-source water heat pump system, so our utilities are very low,” Parker says. “You’re not paying to heat or cool the water with your utility bill. You’re paying to blow [the air] throughout your unit once you’ve sent the prescribed temperature to your unit via your thermostat. Water and sewer are paid out of condo fees, but you still have control of your thermostat 365 days a year.”

Mike Parker

That translates to utility bills that run about $20 to $40 a month for a studio, for example. One resident, who lives in a 2,010-square-foot unit, had a $28 bill one month.

The need for a car is diminished for many residents by the proximity of the Lofts to the trolley line. “You can literally sit on the steps, wait for the trolley to come by, wave it down, and it’ll stop at the front door, pick you up, and take you to a Redbirds game, whatever,” Parker says. “You’re saving gas and saving the environment by cutting down on how much you take your car out.”

So far, 57 units out of 122 have sold. Remaining units start at $139,000 and range in size from 860 to 2,300 square feet. Of the bigger units, Parker says, “Forget watching football. You can play football in them.”

The Lofts also has a unique lease-to-own program. According to Parker, “If you’re not quite ready to buy, you can rent within the building for three to six months, and at the end of that period, we’ll give you half of up to six months back toward closing costs, homeowner’s fees, or upgrades, when you purchase in the building. You don’t even have to purchase the same unit. You can purchase bigger or smaller.”

The Lofts is the complete package, Turley says: “We argue that it is the best and the greenest loft in America.”

For more information on the Lofts, contact Mike Parker or Ashley Bonds at 578-6915.