Urbanlife,

 

I absolutely agree.  I think many developers are looking to capture the same small market that exists.  There are many more folks (younger ones) who would love to buy in downtown, but can't afford the $400,000 price tag.  If developers keep trying to build the same product, downtown housing will not take off like we all hope it will.

"Is anyone from the forum contemplating buying one of these units?"

 

Quite frankly the only downtown condos I could even begin to consider would be one of the lower-priced units at the Pointe at Gateway (around $85K).

Are you sure these properties were sold for $1? I thought they were sold for a little less than market rate.

Hey KJP, the developer paid market rate for all the lots, if that's what you mean.  Far more that $1.

BTW: The County Auditors website does show it as $0 transfer fee on most of the lots that make up the properties, but that is misleading.  ;)

My feeling is that most people don't have faith in the downtown real estate market right now.  Putting 400k on a condo downtown is alot of money and can you make the return off it in 5 years.  You would be much smarter to put 400k down on a house in Westlake for investment purposes however if your into the urban life, this works.  Personally, the 400k price-range is a hard one to make money off of.  There are alot of people that can't afford that, and there are alot of people that can afford way more than that (If you can understand that).  For instance, an 85k condo at the pointe at Gateway would probably be a good investment, and dt seekers can pay a little more than that.  Therefore it is likely to appreciate.  Also, a 1.5 million dollar condo at the Pinnacle will likely appreciate because there are very few condo's like that in Cleveland and a local pro athelete or a successful professional business person will pay big bucks for it.  But 300k to 400k is a risky pricerange.  Many people in that price range are not looking downtown.  My thought is young professionals with average pay and the very wealthy are looking dt.  The people that are looking for 300 to 400k are finally getting out of their starter home in Parma, Old Brooklyn and Westpark and are headed for their 3000sq ft home in the burbs. They by far do not want to downsize while spending alot of money.  So will some local developer please propose some new construction with condo's that range from 125k to 250k and give us a chance to buy them. 

We have had so much discussion about the need for housing in downtown.  Because there has been so little activity, we haven't really focused on the economics of it all.  With so much buzz about the new projects downtown, I do worry about market saturation.  How many $400,000 units can downtown absorb.  I wish that we would see a large scale development in a prime area that mainly featured 185,00 to 250,00o units.  I believe that they would sell faster and help to create the vibrant streetlife that would would create the necessary buzz and demand for the higher end products.

I was at the sales office today, and the site plan and the elevations are old.  There is a new version on display that doesn't look exactly like that. 

 

The Sales Manager did say that they were going to have lower priced types of units as well.  Just not on Block #1.  Block #3 will have condos starting in the mid to high $100's.  The Town Houses are supposed to be priced aggressively as well.  I've been told...South of $300,000 is their aim.

OK.  I went back and read the thread and found some interesting numbers.  First, it appears that Zaremba has bought the land, apparently 5.5m upfront and then 6m as the units sell.  Now, it is relatively easy to hide these numbers from online, however with all of the other backroom stuff that goes on in this city, i'd like to actually know how much was paid.

The parking lots, which Zaremba hopes to buy soon from the city for $11.5 million, mark unfinished portions of the Erieview urban-renewal plan of 1961.

 

Also interesting was the price points originally estimated at 187,000 to 333,000, which may end up being true in later phases, but the cap at 333,000 appears to be way understated. 

 

The reason I keep using price per square foot is because someone will offer a unit that has 700 square feet and costs 180,000.  In my mind it is about how much space you are getting for your dollar - and certainly location and convenience, but not at a premium that this market doesn't support. 

 

Having lived in Silicon Valley for a few years, I am somewhat immune to seeing high prices for housing.  However, one of Cleveland's strengths is it's affordability.  This market doesn't require people to live in small studios or 1 bedrooms at high prices, and it shouldn't. 

 

I hope all of these sell out, but I also hope someone starts developing a more mid priced product downtown to appeal to many others that want to participate. 

 

i agree that many of the pricepoints are ridiculous for those that are essentially taking on the role of an urban pioneer by moving into a part of downtown where there is little foot traffic.  perhaps that explains the elevated park/plaza that is only accessible to avenue residents? a sort of private greenspace in the city for those wiling to spend $400K. these pricepoints and design elements are certainly not the ideal for rebuilding the urban core.  but perhaps it's the only way?

 

there are however interesting properties to be had on the fringes,  the painter's loft on franklin near 84th have beautiful  2 level units of about 1500 sq.ft for around $160K.  the neighborhood appears to be quite nice with lots of new construction around including the neo industrial franklin townhomes.

also, mueller lofts (e. 31 near payne) and payne avenue lofts at e. 37 have units around 900 sq.ft priced from $119k

Are the Painter's lofts and Mueller's conversions?

^I concur, the stuff directly downtown price points are very expensive, and I don't think many greater Clevelanders would buy stuff at those price points. People in NE Ohio know what a 400k living space looks like, and it is not something that is a bit bigger than an apartment.

 

You have to grow the urban housing market; you can’t plop down the top and hope the people with money come. The people that have the money to drop on this have some pretty large suburban McMansions, with a lot of amenities and space, and you really can’t compete along those lines. There is no comparison of the two ways of living, so it would be pretty difficult to sell urban life to suburbanites. There needs to be more units at lower price points, to entice bunch of people to live in an urban environment. Get the people love the urban living, then over time people will want nicer/larger housing in the urban environment; then housing like avenue district would work better.

 

There needs to be a gradual ramp up to units like this, pyramid shaped housing market in downtown. Also not a price per square foot that isn’t significantly more than suburban developments.

 

Only developers that seem to get that concept are the ones doing muller lofts, franklin artists lofts, and Payne ave lofts. Redevelopment of older buildings, meeting price points more in line with what people expect to pay

 

I respect everyone's opinions, and there are some valid points in there, but the negativity does not help Cleveland.  A few things are true.  Cleveland is not New York, Chicago, or even Minneapolis.  These price points work in places like Kansas City and Denver.  Denver actually has less downtown housing than Cleveland.  They did say it's going to be an upscale community with their mid pricing to be in the mid $300's.  I agree, the first phase doesn't cater to the average buyer, but it future phases will.  At least, that's what they say.  On top of that, you can get Tax Abatement, and with all the new developments being announced downtown, there's some great synergy about to happen.  Maybe, I'mtoo optimistic, but I think they'll do well with the diversity of product types.  Also, their finishes are pretty high end.  Unless you have a ton of money...there won't be any need for upgrades.  Hardwood floors, tile, granite countertops, nice appliances are all included in the prices.  Thoughts?

the other vibe i am getting with opinions here is colored by how young this board skews. why shouldn't the avenue also try to cater to older retired folks and empty nesters too? certainly they would like a walking around nabe better than a car oriented suburb. and to be able to stay around family in the region. i say they offer amenities to go for that demographic too. since they are in effect building a neighborhood from scratch, i hope zaremba keeps in mind that a well rounded neighborhood is a much healthier neighborhood. it needn't be strictly the post-hs/college party apt nabe it looks like the warehouse district apts often seem to appeal to.

 

Does anyone know what the amenities in the new neighborhood are? I checked out the website and it talks about creating a new neighborhood, but it doesn't give any specifics. I think that if they landed some retailers ahead of construction it would boost pre-sales.

DowntownDreamer, thanks for your post. You're right, I think all the doom and gloom is premature. We don't have any information on how well the pre-sale is going; perhaps they've sold a bunch. And mrnyc is right; we're all pretty young around here and that's shading our views.

 

I think it's just that having seen District Park and Domain on Lee tank because of poor pre-sales (in about this price range), I'm a little gun shy. But I have to trust that Zaremba did his market research and knows what he's doing.

I thought District Park tanked because of high steel prices at the time? I also remember their sign at the site saying that prices were too start at about $170K? Perhaps the combination of their low asking prices for housing units and the high price of steel was the killer. Perhaps someone can refresh my memory.

I believe District Park got off to a rough start for a couple of reasons.  1. I think the numbers they worked with as far as cost of the building were old, and by the time they went to sell, their pre-sale pricing was way off from their costs.  They would have lost their shirt.  2.  They hired a PR firm from out of town, which wasn't in tune with Cleveland, which hurt pre-sales. 

I appreciate all the commentary here and I have a few points in response:

 

My first reaction was the same as WimWar's...that some of the more middle-market units should lead the charge and establish the neighborhood, giving it more allure and that buzz that you mentioned.  That would make the high-end units easier to sell.

 

Or would it?  What's the issue with for sale Downtown housing right now?  Is there too much of it or too little?  All the market folks are saying that there's a shortage.  Which would suggest that those units that are coming into the market...and especially those at the higher end of the spectrum...could demand higher prices.  Why?  Because they're scarce!  (Sorry, but I just came from an econ course...) 

 

It may sound weird, but this may be a precedent that Downtown developers want to set.  They don't want high-end housing in this neighborhood to be the same price as the Warehouse District.  They want it to be something more special...more upscale.  This may sound exclusionary, but if the precedent they create is that this is a neighborhood for homeowners who care enough about their property to drop $400k on it, then I can see it working.  This won't be the Warehouse District with its all-night bars and rabble-rousers.  It'll be a neighborhood where an empty nester (don't forget that this is THE BIGGEST target market right now) can live down the street from Playhouse Square and Gateway and see the lake from their balcony and grab a coffee downstairs without having to step through some vomit from last nights club crowd.

 

I think it'll be a while before the new Avenue District is that polished, but I think that's what Zaremba (and the City) are going for.

It may sound weird, but this may be a precedent that Downtown developers want to set.  They don't want high-end housing in this neighborhood to be the same price as the Warehouse District.  They want it to be something more special...more upscale.  This may sound exclusionary, but if the precedent they create is that this is a neighborhood for homeowners who care enough about their property to drop $400k on it, then I can see it working.  This won't be the Warehouse District with its all-night bars and rabble-rousers.  It'll be a neighborhood where an empty nester (don't forget that this is THE BIGGEST target market right now) can live down the street from Playhouse Square and Gateway and see the lake from their balcony and grab a coffee downstairs without having to step through some vomit from last nights club crowd.

 

this is exactly why I'm interested in this project and stonebridge.  They offer the a) space  b) luxury living c) amenities I have on Shaker Square without having to walk more than 5 minutes away from my crib.

 

After seeing the units in the pinnacle, people will spend $300k-$400k for a great space WITH  lake view in the heart of the city.  Besides, isn't this project suppose to be one of the catalyst for Cleveland's NEW "lower east side"

I thought District Park tanked because of high steel prices at the time? I also remember their sign at the site saying that prices were too start at about $170K?

 

It was a combination of sluggish pre-sales and rising steel prices, according to what Arne Goldman told one of our classes a few months back.

i may have to agree with mgd.  i have forgotten about the good work done by the levin college's resident urban housing guru, dr. tom bier.  somewhere, about two years ago, he wrote about the grave need for for-purchase luxury housing for downtown.  anyone have a link to the article?

yes, i suppose the fact that i only make $12K per year has colored my views. 

there's certainly lots of old money here, most certainly in the empty nesters demographic. 

 

I think that there's a lot of old money and a rising group with new money in town, it's just that Clevelanders don't flash it around like in other cities.  I've been following this topic on the Avenue District and was recently in NYC where I read an article about some rehabbed condos in SOHO going for around $2,000 per sq ft.  MY GOD!  I know, I know, it's a different marketplace, etc.... but 2k a sq ft... woah.

 

Has anyone gone to the sales office in the Galleria to ask them what kind of demographic(s) are showing interest? (instead of all of us guessing)

 

So what does everyone think of the revised floor plans for block No. 1?

^I have not really looked too much at the floorplans. What is the main difference between the two?

^I have not really looked too much at the floorplans. What is the main difference between the two?

 

there are about 10/15 floor plans to view on the website.

Unlike other floor plans i've seen at Stonebridge IV or some of the rehabs in the warehouse, the ADB1 (ave. dist. bl. 1) units have wider floorplans, which I imagine will allow for more natural light to filter in. 

 

Also, I like that the master bedrooms all have windows (i've been to WAY too many loft/condos where the master bedrooms are so dark it's depressing.) 

from cleveland.com today (2/16)

http://www.cleveland.com/newslogs/plaindealer/index.ssf?/mtlogs/cleve_plaindealer/archives/2006_02.html#113647

 

People Lining Up for New Downtown Housing Project

Twenty people have put down deposits for for-sale lofts and penthouses in Nathan Zaremba’s Avenue District in downtown Cleveland. That level of demand is stronger than Zaremba expected. The first building will have 55 units and will start construction this summer. Prices will start at $230,000 and range up to $1 million.

 

^

Great News!

 

I was really impressed with the floorplans that Zaremba had posted on the website, especially the first of the penthouses.  Pretty impressive to have what appears to be three fairly sizeable terraces in one unit.  The floorplans seemed more traditional than other new construction such as the Pinnacle, which certainly would pull in a crowd that may not have considered other buildings downtown.

 

On the whole, it's great to hear that presales are going quite well given how long the sales office has been open.

^ people lining up? yay for that tidbit of great news !!!

That's fantastic news!

That should also help other downtown housing developers line up financing for their projects as well. I'll bet that, in the next few months, you'll hear other prospective downtown developers announcing their projects (just a gut feeling -- I'm not privvy to any info however).

That should also help other downtown housing developers line up financing for their projects as well. I'll bet that, in the next few months, you'll hear other prospective downtown developers announcing their projects (just a gut feeling -- I'm not privvy to any info however).

 

Don't worry, KJP. No one here would ever think that you somehow know of developments before they appear in the press. ;)

^  :-D

From cleveland.com:

 

Luxury housing going fast at E. 12th

20 downtown lofts, penthouses reserved

Friday, February 17, 2006

Christopher Montgomery

Plain Dealer Reporter

 

Twenty people have reserved lofts and penthouses for sale at Nathan Zaremba's $200 million Avenue District development in downtown Cleveland.

 

If that level of interest continues, it should put the developer on track to begin construction of the first building late this summer.

 

More at cleveland.com http://www.cleveland.com

 

 

This is great news. :clap: To tell the truth, I was not feeling good about this project earlier in the week.

^some of us, including myself, had a little nervous fit. :)

^some of us, including myself, had a little nervous fit. :)

I don't understand, why was that.

^

I think people were starting to come down with Clevelanditis earlier this week.  :lol:I started getting over mine last night.

^some of us, including myself, had a little nervous fit. :)

I don't understand, why was that.

 

Character flaw.

GREAT NEWS!!! :clap:

Sometimes I feal as though when the weather turns cold/snowy (as we have been having) the momentum of these projects seem to stall.  When we get spring fever, we start hearing good news about them again.  I don't know if it's because I work in the industry or not, but it seems to follow that trend. 

Sometimes I feal as though when the weather turns cold/snowy (as we have been having) the momentum of these projects seem to stall.  When we get spring fever, we start hearing good news about them again.  I don't know if it's because I work in the industry or not, but it seems to follow that trend. 

 

Its a great time to hear such good news.

Yay!  I'll admit that my heart leapt a little when I read that headline!

Sometimes I feal as though when the weather turns cold/snowy (as we have been having) the momentum of these projects seem to stall.  When we get spring fever, we start hearing good news about them again.  I don't know if it's because I work in the industry or not, but it seems to follow that trend. 

 

Homebuying slows down significantly in the winter months.  Most people go homeshopping in spring and early summer.

More news from Ave. District, they just sent out their floorplans in there weekly email. 

http://www.theavenuedistrict.com/newlayout/articles/avenue-district-exterior-renderings.asp

 

Wasn't sure what to expect, but they look pretty sharp.  I would like to see them in a larger format on their web site though.

the avenue district email was highlighting the phase one renderings today. i dk if they have been posted here & am too lazy to look back, but even if so they are totally worth another looksee! also, note they look a heck of a lot better on here than on the avenue website itself:

 

 

The Avenue District is not just a single building – rather it is a collection of buildings built up over time, creating a lively and diverse neighborhood.  Thus, we have several buildings, each with their own style and personality.  Some of the buildings are glassy and modern, while others are more classically derived.  Yet within that difference, the entire neighborhood becomes unified by employing a commonality of details, quality of building materials, and correct proportions.

 

The Avenue District’s scope spans three blocks and construction over several phases.  These renderings reflect Block One and four phases of construction.  Each of these elevations responds to a wide variety of complex conditions with regard to the look and scale of the adjacent properties.  For example, the east 12th street elevation responds to the Erieview tower across the street by reaching 10 stories in height and contiues the ‘downtown’ feel of East 12th street.  The circular bay on the corner helps to define the important intersection of E 12th and St. Clair. 

 

St. Clair is another important street that requires our buildings to create an urban street condition, but does not need to compete with the importance of that on east 12th.

 

The East 13th elevation is scaled to fit more with the midrise buildings that make up that streetscape. 

 

 

wow....overall great project!!!  I am very jealous of a wonderful project such as this...good luck to those developers :clap:

im really glad the 10 story buildings will be nearest erieview, but i wish they were more along the lines of 20-25 stories.  that would make it feel more "downtown"

i am happy with the present height.  We need more urban residential presence on the streets in this area.  If we put too many the units in one building, it will take too long to sell it out.  It would be less of an experience to walk around the area.  We have plenty of room to build 20-25 story structures, let's focus on creating a solid series of residential blocks first. 

Very good point wimwar......markets like cincy and cleveland dont need to build a bunch of 20-35 story bldgs.  This would oversatturate the housing market in these cities.  However, you can cover more land and create a more neighborhood feel (on a human scale) by building 10 story bldgs.