urbanSTL

Is it just because St. Louis is a slow growth region?

Regional population growth (negative in St. Louis City and County) is a concern, as is the lack of job growth (downtown or otherwise).

You can point to occupancy and population growth in Downtown all you want, but without regional growth institutional investors will question its sustainability.

The good new is there is hardly any new market rate apartment development in the region outside of Downtown.

mattonarsenal wrote:

Is it just because St. Louis is a slow growth region?

Regional population growth (negative in St. Louis City and County) is a concern, as is the lack of job growth (downtown or otherwise).

You can point to occupancy and population growth in Downtown all you want, but without regional growth institutional investors will question its sustainability.

The good new is there is hardly any new market rate apartment development in the region outside of Downtown.

Yeah I hear you, but it still seems like there is a general consensus in this region among the large private and public institutions that urban redevelopment = bad investment while suburban sprawl = good investment, when all signs point to a pint up demand for an urban lifestyle that the region is in short supply of. I guess it has never dawned on leadership that maybe the reason St. Louis is a slow growth region that cannot retain business and talent is because we haven't leveraged our greatest asset. A great, historical built environment. I really cant think of a city that has done a worst job in realizing it's potential than St. Louis. I mean Washington Avenue has been a huge success, but that success will not be retained if we dont build on it. The Loop is a great regional asset, but it seems like U City is doing everything in it's power to water down and otherwise very progressive plan for the future. When will St. Louis ever reach that tipping point? When will St. Louis ever realize that we need to stick our neck out there in order to compete or people will just leave for green pastures. Sometimes I really worry about the sustainability and future viability of this region. We are just not doing enough, fast enough, the time is YESTERDAY.

Richard Baron said it best. http://www.news.stlpublicradio.org/post ... enges-2012

Now we have this....

http://www.bizjournals.com/stlouis/morn ... Journal%29

The mezzanine space in this building is primo. High ceilings and massive windows that provide close up views of the OPO. The big fish 10 years ago was Borders Books.

My wedding reception is at the OPO. Sure would like to see some progress on the Arcade and Chemical building in 2013.

downtown2007 wrote:Now we have this....

http://www.bizjournals.com/stlouis/morn ... Journal%29

Full article here: Arcade building at center of messy lawsuit

goat314 wrote:That's what I'm saying. Banks and developers act as if downtown is still this super risky market. Yet somehow building two mega outlet malls in a flood plain is a good investment? Does downtown have to be 100% occupancy before we can get some lending for rentals? How many other cities in the country have such stringent lending practices when all trends are going towards downtown revitalization? Is it just because St. Louis is a slow growth region? The downtown area did grow 300% over the last decade. The demand is there and we could easily fill up some rentals. I honestly think we could double the population by 2020 if lenders were more bullish. People want to live in areas that are perceived as booming!

It's not that lenders aren't bullish on downtown, it's that the sponsors (developers) aren't capitalized well enough to qualify for loans.

mattonarsenal wrote: Regional population growth (negative in St. Louis City and County) is a concern, as is the lack of job growth (downtown or otherwise).

You can point to occupancy and population growth in Downtown all you want, but without regional growth institutional investors will question its sustainability.

The good new is there is hardly any new market rate apartment development in the region outside of Downtown.

Exactly right.

^ So are you implying that Downtown St. Louis hasn't attracted the big time developers needed to push certain projects forward, because the current market is saturated with people that are relatively small time and lack major capital?

So how do you propose we get the big names to invest in downtown? Is it just a waiting game?

It seems like downtown and St. Louis in general is kind of stuck in the chicken-egg paradigm. We have to make strategic investments in our urban core to attract young talent, jobs etc. but we dont have the growth and demographics to support a robust urban core. What is left for St. Louis? Death spiral and continued brain drain? How will things like the Arch Grants and T-Rex incubator change the dynamics? Is local govt. not making the right investments?

rawest1 wrote:

rbeedee wrote:

downtown2007 wrote:Now we have this....

http://www.bizjournals.com/stlouis/morn ... Journal%29

Full article here: Arcade building at center of messy lawsuit

“That's absolutely false,” he said, upon hearing the basics of the suit. “This is extremely frivolous and without merit and we will vigorously fight this one. Period. Exclamation point. This is just crazy.”

Hopefully Stacy Hastie is right. The sooner this is resolved, the better for Downtown St. Louis.

Or, alternatively, if there's some truth to it, the City could build in a partial (or full) payment to Barket in its sale of the Arcade to cover his initial investment share. Which would also resolve the issue and quickly get the building under new ownership and quick development. And give another investor some deserved capital back to hopefully fund some new projects!

goat314 wrote:^ So are you implying that Downtown St. Louis hasn't attracted the big time developers needed to push certain projects forward, because the current market is saturated with people that are relatively small time and lack major capital?

Yes, due to local fundamentals (population growth, job growth, crime) outside developers can get "better", safer returns elsewhere. No the current market isnt saturated with developers. We only have a few and they're either preoccupied or they can't get financing.

So how do you propose we get the big names to invest in downtown? Is it just a waiting game?

To attract "big name" developers, we need more jobs (look at Detroit). Housing wont come without jobs. Jobs wont come without more housing and "more livability".

It seems like downtown and St. Louis in general is kind of stuck in the chicken-egg paradigm. We have to make strategic investments in our urban core to attract young talent, jobs etc. but we dont have the growth and demographics to support a robust urban core. What is left for St. Louis? Death spiral and continued brain drain? How will things like the Arch Grants and T-Rex incubator change the dynamics? Is local govt. not making the right investments?

Maybe not a death spiral, but we'll bounce around the bottom until public sector steps up and invests in itself or until the private sector grows some balls. Arch Grants and T-rex are doing what they can; but attracting talent is still tough. And if a company cant grow here, Im sure they would relocate to a better city.

I wish someone would do something, anything so I don't have to commute to Maryland Heights

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the count wrote:Occupancy in downtown is around 90%. Even Park Pacific, which is priced about 50% higher than average market rate, filled up six months earlier than planned. And we're talking about 230 apartments.

The downtown rental market is strong. We need more residential to keep downtown's momentum going. Arcade and Chemical are prime candidates for development, provided tax incentives (like HTC's) will remain available. (Then there's the eternal issue of adequate parking space inside the building.)

“I was right there with everybody else in thinking that there were too many apartments coming on the market at the same time, but that didn’t turn out to be the case,” Harris said.
Deborah Done, president of locally owned rental agency Apartment Search, said there is a lot of demand for the Laurel Apartments because of their location and amenities.
“Overall, the downtown market is strong and availability it tight,” she said. “Most of the properties are bringing their rents back up.”

http://www.bizjournals.com/stlouis/prin ... l?page=all

^ That's what I'm saying. There is not a glut of affordable apartments in Downtown St. Louis, as many on this forum seem to believe. I know plenty of young people that ended up in the suburbs, because they could either not afford the available apartments or were told that buildings were at capacity. Lending institutions, developers, investors etc. are not as bullish on downtown as they should be...period! The downtown partnership could easily surpass 20,000 by 2020 if more units were made available.

How strong a market is 90% occupancy? From the Minneapolis Star Tribune....

(The influx of hundreds of new apartments in the Twin Cities area has in no way put a lid on rent costs, and it also hasn't pushed up vacancy rates, a report released this week showed.

Throughout the region, the average vacancy rate was 2.7 percent during the second quarter, down slightly from the previous quarter, according to Marquette Advisors. Average rent during the quarter was $951, up from $935 the previous three months.

The Twin Cities rental market remains tight despite a construction boom that has brought several hundred apartments online. And developers have proposed thousands of units in the coming years to satisfy what seems to be an unyielding appetite for rental housing. The housing bust has made many would-be buyers wary of homeownership, so some are choosing to rent instead.

"The rental market is quite healthy right now," said Mary Bujold, president of Maxfield Research Group, a Minneapolis housing research firm. "Until people really gain some good confidence in the for-sale market, it's going to be this way for a while."

While the broader market has shown signs of tightening, demand isn't robust in all markets. In Minneapolis, the average vacancy rate was 1.8 percent, down from 1.9 percent during the first quarter. By contrast, the average vacancy rate in downtown St. Paul was 3.4 percent, and in several suburbs outside the seven-county metro it was much higher.)

Link to article...

http://www.startribune.com/business/163798606.html

Seems like the demand for rental housing is on the rise nationwide.

The occupancy rate downtown is 90%, meaning a 10% vacancy rate, but how long will that last? Seems to me that some apartments should be coming on line sooner or later. The Twin Cities is also a different animal entirely, probably the fastest growing metro in the Midwest and a very progressive urban policy from what I've heard. I really think Downtown St. Louis is just lacking supply and variety. Within a few months we will probably have similar occupancy rates downtown if more supply doesn't come on line.

What does the occupancy rate downtown have to be before more apartments are built anyway? 98%? Or is it market determined?

The fact remains that there is a pint up demand for downtown/urban living nationwide, including St. Louis. Obviously, MSP is going to have thousands upon thousands of units come on line because of their robust regional growth, but that doesn't negate the desire for downtown living in our metro area, does it?

Wasn't there a survey done a few years back by the partnership that came to the conclusion that at least 2% of any metropolitan region desired downtown living? That would give us nearly 60,000 people to work with, obviously everyone isn't gonna move downtown tomorrow, but I still think the market is underestimated. Don't take my word for it though, just ask the MX developers.

They have taken down the large photos that decorated the entrance, which allows you to see into the arcade, pretty cool.

Big news coming?

http://www.stltoday.com/business/column ... f6878.html

^Very big news, indeed!

http://www.stltoday.com/business/column ... f6878.html

Dominium (sp?) same developer behind the leather trades and the Metropolitan Building in grand center. (WOOHOO! A REAL DEVELOPER!!!)

~169 lower rent apartments (Like their other two developments)
~70 Market rate apartments on the top 4 floors
~3 floors of commercial (office) space on the first 3 floors
AND!
Re-hab of the arcade into commercial retail.

Amazing proposal. Quality (from experiences here already) developer. Real $6M offer for the building. $100M project.

HOME. RUN.

Let's hope all gets going quickly according to plan. REALLY starting to like Dominium!

^From the sounds of it, they enter negotiations with the city on a purchase agreement and redevelopment plan. They buy the building back from the city, get financing, commence construction.

I would say the chances of this actually happening are on par with those of their other projects (Leather trades and Metropolitan building) which are complete, and being completed respectively.

Very excited. This is a big one for downtown. After this there are two or three more potential rehabs and then anything to meet increased demand will need to come from the ground up. Let's hope this one goes smoothly.

Also, should increase the attractiveness of the Chemical by a large amount. This area is going to be very vibrant if this comes online and when the Robert's finally liquidate their tower.