tkm0911

I think people will be surprised in the next 9-12 months with deals that will bring in large-money investors into the city for [re]development. This is certainly a good start, and also nice to see its not just the CBD that is getting all the love.

I believe that, in general, steel goes up quicker than pt concrete. I know there are some on here who could chime in with a more detailed answer, but that is what I've been told when looking at different construction types.

Approximately how old is it? I think this idea for the site is a few years old, I remember seeing another brochure that quoted the same $30psf ~3 years ago

And make it pretty difficult for heavy, large planes to land/taxi/etc. Its a great idea though! Maybe theres some way to make it all work

First, you have Mariner's Watch under construction. Next, keep an eye on some of the under-utilized parcels and parking lots on West 25th north of Franklin and on Detroit west of West 28th -- including the current site of Max Hayes. The new rule of thumb for any major city's urban core in America today -- if a property is under-utilized, it probably won't be for long. Wasn't the CMSD planning on keeping Max Hayes open, and delaying construction on a replacement school elsewhere? At least, that was what I had heard ~9 mos. ago

I think you hit on the biggest issue right there, the discrepancy between the costs (and therefore the rents needed) versus the rents that the market will pay. Anything similar to those renderings would easily be over $2psf in rent, and I'm not sure you could rent out a few hundred units for that much. All that being said, I hope that area does get developed sooner rather than later.

Who would the tenants be? I think thats the biggest issue holding a development like this back. You can only have so many restaurants and clubs. Without more businesses absorbing office space (at new construction rents none the less) and residents that would be willing to pay for new construction apartments (double the current rents?), its hard for someone to start spending hundreds of thousands of dollars to develop a plan and get the ball rolling (and find financing).

Glad to hear the project is finally moving forward. I think it has the potential to do a lot for that area, and allow/encourage further development to the West/North.

I disagree. First, any residential, particuarly rental needs serious subsidies to work in Cleveland with our cost of living that's not unique to this property (though the reason we see more conversions than newcon is because there are more tools available... fed and state tax credits, vpi, etc). And this garage was built for the purpose of having additional construction above. So the "costs" were already built into the superstructure of the garage. As far as facing out looking at buildings... that is what city living is. If you have been inside 668 on the euclid side, the windows look directly out at the garfield and guardian buildings framing one of the most beautiful vantage points in the entire city. All that being said, its really tough to do residential right now... especially if you don't have access to the tools available for repurposing older historic structures. So I wouldn't see this happening any time soon. Sorry for the misunderstanding, I didn't mean that it would be more expensive than just building on a fresh site, if anything, this project could have saved someone about $20 million in costs because of a 7 (or 8 ) story garage already built, and it being purchased for less than half of the costs plus land. I meant that it would just be plain expensive (as it would on a fresh site) to build some high-end resi, and if you want to have the A property in the market, having a few floors of views of an office space is going to hurt prices a little bit. 668 does have some bad views, but their rents are much less than you would need to get for a new high-end building.

Has anyone been to the top of the garage? It looks like you would have 3-5 stories of buildings (depending on the side) right next to any tower built above it, which would kill views (and prices for all of those units, shifting even more weight on the other units pricing). Unfortunately I think building on top of the garage would be such an expensive endeavor, you would need some serious subisdies from the City/State/Etc to make the project work. The North facing units of a building there would have an amazing view though, right up the mall to the lakefront 8-) I would love to see someone come in and take the risk, however I think the best bet at new and high end apartments being built would be a retrofit of an existing building, or a smaller tower somewhere else, with less cost/risk

1. apartments. not luxury, but not slum-like either 2. developer tried to turn it into apts, could get the loans. too costly per sq ft 3. recently foreclosed on. up for auction. not able to be snagged by any reputable developer. 4. this has long been an assisted living home for people with disabilities 5. these are renovated and very nice condo/townhomes 6. someone bought this and is/has renovated it into a single unit 7. renovated apartment townhomes 8. renovated apartment townhomes 9. West Virginia bldg--renovated, market rate. beautiful 10. developer is actively working on putting apartments on the upper floors as part of a larger redevelopment effort Any more info on #3? Anything about the auction?

That was a rough number I got from a friend in Boston, it may be a little high due to their slightly increased costs, but I have seen numbers in the $210-260 range for local construction estimates. Again, that does somewhat depend on the methods used, but a high end building would need to encorporate some of the "bells & whistles". I agree its up to the developers to push the projects and get something new out there to show that the market can hold it, its just another story when you've got to shoulder an eight figure loan because banks won't underwrite the project alone (due to the deviation of rents from all the market comps). Yes the new building will bring up the rents, but banks won't underwrite a project based on rents that are more than a few percentage points out of the current market rent. They're conservative and thats just how they operate. And mixed used won't help that much. Retail rents are pretty soft right now as well.

I also wish someone would build a mid/high rise residential project, unfortunately the rents in Cleveland wouldn't come close to making it a profitable venture. If apartment rents were around $3PSF, then you would definitely be seeing someone building vertical, but they're much closer to half of that downtown. :-( Please explain your methodology? What is the basis of your statement? The economics of building mid/high rise apartments. If it costs you $260PSF to build, not including a parking garage or land cost, people can't be paying $1400 a month for a 1,000SF apartment. Even if you believed that there are enough people that would be willing to pay the premium for a new building, you won't be able to get adequate financing because you are so far off of the market comps. Not only would someone have to be confident in a market for high-rent apartments, they also would need to have private financing that is as confident. When everyone in the market is paying $1.10-1.90PSF, its hard to build a model for rents that are double that.

I also wish someone would build a mid/high rise residential project, unfortunately the rents in Cleveland wouldn't come close to making it a profitable venture. If apartment rents were around $3PSF, then you would definitely be seeing someone building vertical, but they're much closer to half of that downtown. :-(

Agreed. I was thinking that exact same thing the other day. The demand is there. I hear periodically on this board that the finances of building a new residential complex still aren't there in downtown Cleveland. I dunno, I get about $1.25/month/sq. ft. for my place in the Warehouse District. What kind of rental rates do there need to be for someone from out of town to come and build something too? Is everyone too focused on hotels right now? For something new, you probably need to get $2.50-3/SF for a mid/high-rise building with good finishes, maybe a little less with stick. At $1.25 you won't be building new product without grants/gov't funding. Its more likely things will be redeveloped, with the Historic Tax Credits and the absence of building costs, you could renovate and probably make something work for $1.60/SF. In the large costal markets, many rents are in the $3-3.50 range for new product with height and good finishes, and the returns aren't as spectacular as you'd think. Exactly