Birmingham's Downtown has 93% of condo properties sold
BIRMINGHAM, Alabama -- Downtown's residential real estate market was not spared from the blows of the economic downturn that walloped virtually all parts of the metro area, but officials says the condominium and apartment properties in the city's core are nearly full again. Now, there is talk that new projects soon could be ripe for development.
Operation New Birmingham's breakfast meeting this morning will take a look at the downtown residential market and its changing fortunes.
An ONB survey, which is being officially released today, shows that 93 percent of the downtown condo properties are sold. The downtown apartment and rental market was even tighter at 99.4 percent leased, according to the survey prepared by the downtown advocacy group.
Tom Carruthers and Charles Robinson, principals of Red Rock Realty Group, will lead the discussion of the downtown residential market at this morning's ONB meeting at the Harbert Center. They said their findings are in line with ONB's survey.
"If you want to rent an apartment downtown today, you almost certainly are going to have to get on a waiting list," Carruthers said in an interview Wednesday.
Carruthers and Robinson said there continues to be demand for apartments downtown, with a strong need for small studio or one-bedroom units priced in the $700- to $900-a-month range. The problem is it's nearly impossible to pay the costs of renovating an old building and charging rental rates that low, they said.
While lenders aren't ready to finance new for-sale condo projects, Robinson expects new apartments will be built in the near future.
"I think you could justify new construction of multifamily projects today," he said.
In fact, the $15 million 29 Seven project at 29th Street and Seventh Avenue South is under construction after the economy and other factors caused it to be delayed a few years. Retail Specialists Inc. is building the four-story building with 54 apartments and 19,450 square feet of retail space, with a target opening in August.
Robinson said he believes property around the proposed $64 million baseball stadium near Railroad Park is also ripe for new construction that will likely include a residential component, be it apartments or condos.
Carruthers said although it is still difficult to find financing for condo projects, the right renovation project could have perfect timing if it started today.
"If you started a condo project now, it would likely take you two years to finish and you could have 40 units sold within that time," he predicted.
David Fleming, president of ONB, said a recent review of U.S. Census data by the Birmingham Regional Planning Commission highlighted the momentum of downtown residential development between 2000 and 2010. Among those findings:
- 670 percent increase in the number of owner-occupied households.
- 31 percent increase in the number of total households.
- 18 percent in the number of occupied rental units.
- 17 percent decrease in household vacancy rates.
Fleming said The Regional Planning Commission, relying on Census reports, calculates that downtown is home to about 8,900 residents, an increase of 32 percent between 2000 and 2010. He said the planning commission found that the boost was partially due to UAB's growth and partially due to the rise in loft development for apartments and condos.
"Currently our supply is pretty much at near 100 percent occupancy," Fleming said.
Having people live downtown is a major factor in the overall vibe for the area, he said.
"Downtown living is one of those critical elements that adds up to a vibrant city center," Fleming said. "The more people who live downtown add to the street life and give it an entirely different image even to those who don't live downtown."