Kelley USA
09 January 2004, 02:04 PM
Apartments moving east of Central
Builders take advantage of lower land prices to compete with Uptown
By STEVE BROWN / The Dallas Morning News
The distance across North Central Expressway can be measured in yards. But for some Uptown apartment developers, the gulf has been as wide as the Grand Canyon. While dozens of rental complexes have been built in Uptown neighborhoods in the last decade, only a handful of projects have gone up on the east side of North Central. But that may be changing. First Worthington is building two apartment communities east of Central. Lower land prices are prompting an eastward migration of apartment building. "It's a great urban address that is affordable and close to everything," said developer John Allums, executive vice president for First Worthing Corp. The developer has just broken ground on its second apartment community east of the expressway, a 221-unit project on Fitzhugh Avenue at Alcott Street. First Worthing is already building a 238-unit apartment complex farther east at Peak and Live Oak streets.
Both developments will take on the developers' new "Cityville" name. "We are actively looking for other development sites in that area," Mr. Allums said. "There is enough good stuff going on in the neighborhood to make us feel better. "It's evolving, and there are lots of pockets of new development," he said. Just a few blocks down Live Oak from First Worthing's Cityville project, developer JPI is leasing its 302-unit Jefferson at Texas Street apartments. JPI built an earlier project in the Bryan Place neighborhood. Also on the east side, Phoenix Property Co. is building the 150-unit Easton apartments on Henderson Avenue at Manett Street. As for an opening date, "At this point, our best guess on timing is early February for first units and May completion," said Phoenix Property's Jim McGinley. The Easton is about three blocks southeast of the 169-unit Eastbridge project Phoenix built in 1997. And Phoenix would like to do more in the area. "I have offered letters of intent on several [sites] over the past year," Mr. McGinley said. "We still have a strong interest in the right locations."
'Untapped market'
One reason apartment developers are interested in the area east of North Central is the run-up in land prices in Uptown and parts of Oak Lawn. Apartment sites are now selling for $40, $50 and even more per square foot on the west side. East of Central it's 50 percent or less in cost for land," said broker Newt Walker. "All the land in the Uptown market has been so expensive, and there are few good sites left." "The east side has been somewhat of an untapped market," he said. The obstacles are fractured ownership and a limited number of building sites that allow apartment construction. But developers are still bullish on the neighborhood. Retailers are bullish, too. Shopping center developers are scouting locations in the Ross Avenue and Live Oak corridors east of downtown for additional projects. "The demographics tell us that area is underserved with retail," said Mickey Ashmore, president of United Commercial Realty. "Many major retailers would like to be in that area." This week, Margaux Development announced plans for a 350,000-square-foot retail center at Live Oak and Good Latimer Expressway. The two-block center will be anchored by a supermarket.
Attracting renters
Apartment builders say the new retail will make the area even more attractive to renters.
Developer Carleton Residential has built three apartment projects east of North Central in the last seven years. The latest is its 170-unit Linden complex on Carroll Avenue, east of North Central, in 1999.
Developers are eager to expand into the new market, but will tenants follow?
"I think they will go east of Central, because the prices in Uptown are going to be driven higher pretty rapidly," said apartment analyst Mike Puls of Foley & Puls. "The renter today is more price-sensitive than he was three years ago." With rents for new units topping $1.50 per square foot in Uptown, east side developers can offer units at 20 percent less or cheaper. "If you go east of Central, you can build a good product at a good location, but it is priced better," Mr. Puls said. "You will attract the renters."
Builders take advantage of lower land prices to compete with Uptown
By STEVE BROWN / The Dallas Morning News
The distance across North Central Expressway can be measured in yards. But for some Uptown apartment developers, the gulf has been as wide as the Grand Canyon. While dozens of rental complexes have been built in Uptown neighborhoods in the last decade, only a handful of projects have gone up on the east side of North Central. But that may be changing. First Worthington is building two apartment communities east of Central. Lower land prices are prompting an eastward migration of apartment building. "It's a great urban address that is affordable and close to everything," said developer John Allums, executive vice president for First Worthing Corp. The developer has just broken ground on its second apartment community east of the expressway, a 221-unit project on Fitzhugh Avenue at Alcott Street. First Worthing is already building a 238-unit apartment complex farther east at Peak and Live Oak streets.
Both developments will take on the developers' new "Cityville" name. "We are actively looking for other development sites in that area," Mr. Allums said. "There is enough good stuff going on in the neighborhood to make us feel better. "It's evolving, and there are lots of pockets of new development," he said. Just a few blocks down Live Oak from First Worthing's Cityville project, developer JPI is leasing its 302-unit Jefferson at Texas Street apartments. JPI built an earlier project in the Bryan Place neighborhood. Also on the east side, Phoenix Property Co. is building the 150-unit Easton apartments on Henderson Avenue at Manett Street. As for an opening date, "At this point, our best guess on timing is early February for first units and May completion," said Phoenix Property's Jim McGinley. The Easton is about three blocks southeast of the 169-unit Eastbridge project Phoenix built in 1997. And Phoenix would like to do more in the area. "I have offered letters of intent on several [sites] over the past year," Mr. McGinley said. "We still have a strong interest in the right locations."
'Untapped market'
One reason apartment developers are interested in the area east of North Central is the run-up in land prices in Uptown and parts of Oak Lawn. Apartment sites are now selling for $40, $50 and even more per square foot on the west side. East of Central it's 50 percent or less in cost for land," said broker Newt Walker. "All the land in the Uptown market has been so expensive, and there are few good sites left." "The east side has been somewhat of an untapped market," he said. The obstacles are fractured ownership and a limited number of building sites that allow apartment construction. But developers are still bullish on the neighborhood. Retailers are bullish, too. Shopping center developers are scouting locations in the Ross Avenue and Live Oak corridors east of downtown for additional projects. "The demographics tell us that area is underserved with retail," said Mickey Ashmore, president of United Commercial Realty. "Many major retailers would like to be in that area." This week, Margaux Development announced plans for a 350,000-square-foot retail center at Live Oak and Good Latimer Expressway. The two-block center will be anchored by a supermarket.
Attracting renters
Apartment builders say the new retail will make the area even more attractive to renters.
Developer Carleton Residential has built three apartment projects east of North Central in the last seven years. The latest is its 170-unit Linden complex on Carroll Avenue, east of North Central, in 1999.
Developers are eager to expand into the new market, but will tenants follow?
"I think they will go east of Central, because the prices in Uptown are going to be driven higher pretty rapidly," said apartment analyst Mike Puls of Foley & Puls. "The renter today is more price-sensitive than he was three years ago." With rents for new units topping $1.50 per square foot in Uptown, east side developers can offer units at 20 percent less or cheaper. "If you go east of Central, you can build a good product at a good location, but it is priced better," Mr. Puls said. "You will attract the renters."