urbanSTL

dredger wrote: ↑

Jan 06, 2023

^ t think the County/City vs St Charles comparison definitely has some dynamics at play.  

Start with the fact that City/County by population & job development should have had more single family then it has been so clearly underperforming but I believe in last couple of years you have same decent sized parcels at more favorable land values and probably by perception open up for development (say around Chesterfield, or the old S County insurance campus, Crestwood, so on) as well as city land/property values nil so an uptick as of recent from a low bar.   Where as St. Charles/Exburbs single family is almost exclusively hinged on the mortgage interest rates for which it makes sense that the marked is finally down after some robust years.

Not sure Beer city if this is what your getting at with my next comment.  But I do think it is interesting in the trends might suggest the migration farther and farther out is not really or nearly as relevant to the single family residential market for the region as it used to be.  A good thing.  

Your last point would be my hope, but this could well just be a fluke year will have to watch if a real trend.

There could be many things in play here, much of St. Chuck growth was/is fueled by N. Co white flight, that could have reached peak and now in decline.

The Powell Hall permit got us on pace for $1B for the year. Feels doubtful we can keep it up.

Do we expect the Albion this year?

I think so, but interest rates.

$403M issued halfway through the year. It's not looking great to hit $1B this year. We're going to need 909 Chestnut and/or Crunden Martin to be issued and that's assuming Albion is for sure.

909 won’t be issued this year if at all.

We all knew the slowdown was coming, it's frankly a miracle anything is being built at all with interest rates where they are.

Surpassed $500M in permits issued in the city.

Due to the snail's pace of comments on this board about new developments, as well as the inactivity at NextSTL.com, where there have been a grand total of 6 posts in 3 months, I'd say development is careening downwards, with no bottom in sight.  I don't think this board was this quiet during the Great Recession of 2008-2010.    

many believe that rates will drop soon, so I would believe that many developers are simply on pause. No reason not to wait a year to see how the market bears out. Good time for the city to focus on improving basic services, homelessness, and spending the Covid and rams money.


Sent from my iPhone using Tapatalk

rates shouldnt have a huge impact for all projects...i guess everyone gets a construction loan from a bank but after construction its paid off with investor money....maybe investors are finding better no real estate deals instead of getting 8-10% 

Regional banks aren’t letting their loan officers touch the deposits. Increasing deposits is everyone’s focus right now.

Lots of banks, including many that are key to the StL economy, were slapped with downgrades from Moody’s and S&P (I believe, could have been Fitch) because of their deposit position.

People don’t realize how freaked out a large portion of the banking industry is by what happened to Silicon Valley, Signature, and Republic Banks and they’re not over it yet.

dbInSouthCity wrote: ↑

Oct 18, 2023

rates shouldnt have a huge impact for all projects...i guess everyone gets a construction loan from a bank but after construction its paid off with investor money....maybe investors are finding better no real estate deals instead of getting 8-10% 

It's having a huge impact on most new projects.  The permits you're seeing are projects that were pretty well baked before or just after rates started to rise, or institutional projects that need to be done and don't need to show returns (think BJC, WashU, SLU) and/or capital improvement projects that require permits. 

After construction, the construction loan is either converted to a permanent loan or refinanced at a slightly lower rate.  No project of significant size is backfilling their construction debt with equity.  Outside equity carries higher expected returns than even this current interest rate debt, so it wouldn't make sense to replace expensive debt with even more expensive investor equity.

^^ & ^--Thanks. These are the kinds of insights that keep me coming to this forum. 

Finally over $700M

oh wow, the drop off for FPSE is kind of shocking. The last time the number/value was so low was in 2015.

I think it’s just a poor timing thing. I can think of 4 large FPSE projects in the works right now. There are probably others I’m forgetting too.

FPSE is the last neighborhood in the city I'm concerned about not getting enough development. They've had an enormous amount of projects in the last few years, the Manchester strip is vibrant in a way I'm not even sure the CWE is now and most of the vacant land in the neighborhood as of a few decades ago has been developed. 

2023 total was $738M. Interest rates are expected to come down a bit this year. Also the predicted (and hoped for by some) recession didn't happen.
Here's hoping that unsticks some of the stalled proposals.

^ I think St Louis City will see about the same just based on what I read on ENR forecasts, construction indexes.  This interest rate will come down but no real big push for any commercial/office and or retail.   Warehousing is tapering off.  Bright spot might be manufacturing and believe south city has the EV battery material plant being constructed, just not sure how much is permitted, construction start?  

It would be nice if a couple proposed residential high rises could start whether it be BPV, Kingshighway & Lindell or even AHM proposed wood frame tower. which will keep things to 2023.   Would be even nicer if City/Developer can somehow get Railway Ex and or a 909 Chestnut project moving forward but might take at least another year just to get those projects even on a path forward.    

But, I think the big difference in not seeing a billion dollar year is that I don't see any big institutional project for 2024.  Could be mistaken on the institutional project, maybe Convention Phase II kicks off, but don't believe VA construction won't kick off until 2025/2026 at earliest. Nor do I believe Barnes Jewish/Wash U medical have any projects in 2024.  Someone have some better insight on timelines or if I'm missing something?

VA won't have city building permits (neither did NGA). The Feds do their own thing.

An upcoming big $$ institutional project will be the new Cardinal Glennon Children's Hospital, but we'll have to see if big permits start to flow this year. (I assume either this year or next if 2027 is still the goal for opening.)  

The student-oriented apartment building at 3800 Laclede also likely will get going this year even if interest rates don't fall; that one is awaiting issuance of an $85M building permit.