PITTSBURGH | Development Rundown II

[BrianTH]

So keep in mind you are talking about apartments that start around 700 sqft and can be a lot more, and they look like this:



If you can deliver modest studio apartments that are around half that size and not nearly as fancy starting around $800/month, say, then that is going to count as affordable for Downtown.

By the way, I don't know if people have looked at rents for places like Bakery Living, but they are pretty comparable:

http://bakeryliving.com/floor-plans/

The problem is even their "micro" and "studio" apartments are expensive, and it looks like availability is sharply limited. That shouldn't necessarily be the case, and it does speak to the possibility that simply a lot more small units in the market would help bring down rents at that end, while still leaving decent margins for developers.

[Evergrey]

First time I've ever heard the term "18-hour city"...

http://www.post-gazette.com/business/dev...sts-residents-clubs/stories/201502050218

Developers: Pittsburgh's Downtown will draw tourists, residents, clubs

February 5, 2015 9:28 AM

...

Ethan Fellheimer, a Philadelphia developer who turned a six-story office building on Seventh Street into apartments, said that area already is attracting interest with the conversion of the former Salvation Army into a hotel. It’s only a matter of time before others follow, he said.

“Within … 10 years, money will chase those properties and people will bet on them, and they will be good bets,” he said.

Asked for his vision of Downtown, Mr. Piatt, president of Millcraft Investments, one of the city’s top developers, said he sees it bustling into the late night — an “18-hour city,” as he put it.

Millcraft expects to develop four new restaurants in the coming months and years. Mr. Piatt also said there are “several quality operators” looking at bringing new nightclubs into town. “I think we are focusing now on quality nightlife. I think that’s something Downtown is missing right now,” he said.

...

[BrianTH]

Originally Posted by photoLith

Those are like NYC prices, thats insane.

Apartments of that size and quality in good Manhattan locations are still typically going to cost you at least around twice as much in rent or more.

[BrianTH]

Originally Posted by Evergrey

First time I've ever heard the term "18-hour city"...

Pretty handy term, though.

[greg42]

Originally Posted by BrianTH

So keep in mind you are talking about apartments that start around 700 sqft and can be a lot more, and they look like this:

Oh yeah, I wouldn't argue those are wrongly priced. They do look quite amazing and should easily justify their rate increment over other recent renovations in downtown. 700 sq is a pretty generous 1BR; I used to live in a 1BR about that size years ago. Then I moved to an even bigger 2BR and never had enough furniture to fill it (but at the time I thought I really wanted two closable rooms for various reasons). Then I moved to a 3BR house (small, but still larger than the apt) with another person and we don't seem to have enough room for everything. LOL

Originally Posted by BrianTH

If you can deliver modest studio apartments that are around half that size and not nearly as fancy starting around $800/month, say, then that is going to count as affordable for Downtown.

I suppose. What I'd really like to see is modest units in varying types (e.g. smaller 1BRs, small 2BRs), but I think that's just not going to happen if there's a never-ending market for the higher end stuff.

[BrianTH]

Originally Posted by greg42

What I'd really like to see is modest units in varying types (e.g. smaller 1BRs, small 2BRs), but I think that's just not going to happen if there's a never-ending market for the higher end stuff.

I don't think that is impossible, particularly in a building that is going after the lower end of the Downtown market in general. In a building with 350-400 sqft studios going for $800, I could see including some 500-550 sqft 1BRs going for $1100, that sort of thing.

[Evergrey]

Behind Biz Journal's paywall is this article on the wave of development taking place all around Mellon Square (that recently refurbished modernist passive space that will apparently be off-limits half of every year)...

http://www.bizjournals.com/pittsburgh/pr...lon-square-imbued-with-new-vitality.html

Mellon Square imbued with new vitality

The Pulse
Jan 30, 2015, 6:00am EST

In the aftermath of the Great Recession, Mellon Square was surrounded by some of downtown's most desolate properties, accounting for nearly one million square feet of vacancy.

Today, the area is poised for a dynamic revitalization, following a $10 million renovation of Mellon Square Park.

To understand the turnaround, consider this real estate roll call, circa 2011:

• The Union Trust Building, more than 70 percent empty and facing foreclosure;

• The James Reed Building, completely vacant and headed to foreclosure;

• The Regional Enterprise Tower, the aluminum-clad former headquarters of Alcoa, taken back by ...

[Austinlee]

Morrow Park city apartments from Rob Pfaffman's FB page:

[photoLith]

^
Wheres that going to be?

[greg42]

Originally Posted by BrianTH

I don't think that is impossible, particularly in a building that is going after the lower end of the Downtown market in general. In a building with 350-400 sqft studios going for $800, I could see including some 500-550 sqft 1BRs going for $1100, that sort of thing.

I think that's already being done at that price isn't it? I didn't think River Vue's 1BR were more than that, for example, or 201 Stanwix. Although I'm going only by fuzzy memory. They may be more like $1200. Which is really where I was starting from. Undercutting that $1500 loft price is one thing, that's easy and already done. I was thinking more along the lines of undercutting the downtown average by a notable amount, like a sub-$1k 1BR (not a lot sub-$1k, mind you, $950 or whatever would be enough to be more significant I think) figuring an average of around $1200. Sure every 100 bucks matters but $1100 1BR doesn't quite strike me as lower-end even in the new downtown market. I'm looking for a middle and not finding it. Not that it really matters in the grand scheme of things necessarily, just something I noticed. Back in the day it might have mattered because I thought of moving down here, but at this point we likely wouldn't do that even if it were in the right price range.

It doesn't look like the Strip is going to be the place where something like this happens either, as the rents there are basically the same as downtown.

[Urbana]

Originally Posted by photoLith

^
Wheres that going to be?

https://www.google.com/maps/place/5216+L...!1s0x8834f2159e6ffd5f:0xd25b9cc29f3b0f17

[greg42]

Originally Posted by Evergrey

Behind Biz Journal's paywall is this article on the wave of development taking place all around Mellon Square (that recently refurbished modernist passive space that will apparently be off-limits half of every year)...

Yes, now 3 hotels and 2 residential buildings, was thinking about that recently, and so lame lame lame to just throw up your hands and close it for half the year, WTF. I assume there's no official word on the closure or if anything will be done to try to rectify it?

[Urbana]

Originally Posted by Austinlee

Morrow Park city apartments from Rob Pfaffman's FB page:

As much as I am glad this parcel is being developed, this building is not going to age well at all.

[greg42]

Originally Posted by Austinlee

Morrow Park city apartments from Rob Pfaffman's FB page:

Oh this is the Liberty/Baum thing. Hm. I'm going to guess there are balconies behind the wall of circles?

[BrianTH]

Originally Posted by Evergrey

Behind Biz Journal's paywall is this article on the wave of development taking place all around Mellon Square (that recently refurbished modernist passive space that will apparently be off-limits half of every year)...

I will note that I was poking through the Hotel Monaco's website the other day, and there were in fact a lot of positive references to Mellon Square proximity, Mellon Square views, and so on (of course praising the view is consistent with the look-but-don't-touch complaint).

[Austinlee]

I think Mellon Square should also be closed off the other 6 months in case the ground gets wet and slippery.

[BrianTH]

Originally Posted by greg42

I think that's already being done at that price isn't it? I didn't think River Vue's 1BR were more than that, for example, or 201 Stanwix. Although I'm going only by fuzzy memory. They may be more like $1200.

According to this, Rivervue 1BRs start at $1235 (up to $1975). 201 Stanwix, however, may have 650 sqft 1BRs for as low as $1100.

I was thinking more along the lines of undercutting the downtown average by a notable amount, like a sub-$1k 1BR (not a lot sub-$1k, mind you, $950 or whatever would be enough to be more significant I think)

Yeah, I agree I don't see that happening much if at all without some sort of rent subsidies. I just don't see how that could make economic sense for a developer.

That's why I have personally been focused on the possible development of a lot more smaller apartments--outside of subsidies, I don't see another plausible way to deliver a significant number of new units under $1000.

I'm looking for a middle and not finding it.

Of course everything is relative. These days, nicer buildings in good locations all over the City are getting well over $2.00/sqft. At $1100 for 650 sqft, you are already down to about $1.69/sqft. At $950 for 650 sqft, you'd be looking at around $1.46/sqft. It is indeed going to be quite hard for a developer to justify going that far down, but I'd still suggest that at $1.69 you are in fact doing much better than at well over $2.

[Brentsters]

To those complaining about the closure, how many people utilize a passive park in the winter? Enough to justify the damage and costs of snow/ice removal?

[eschaton]

I happened to be driving down 5th Avenue in Uptown today (a rarity for me). I was looking at the new Action Housing buildings, and I sadly noticed that yet another historic building is getting demolished. I believe it's this one.

It was bought last fall, along with an alley house which is in an adjacent parcel. Not sure if the alley house is getting demoed. Weirdly the new owner doesn't own the parking lot next door, nor is it the social services agency on the other side. Doesn't seem like it was condemned either. I wonder if someone bought it with the intent of restoration, and then decided they didn't have the money to spend on the project. Either way, another historic Uptown house is gone.

[BrianTH]

Originally Posted by Brentsters

To those complaining about the closure, how many people utilize a passive park in the winter? Enough to justify the damage and costs of snow/ice removal?

Tons of stuff happens in Market Square over the winter, PPG Place over the winter . . . maybe that is because they are not "passive parks," but then the question would be why does this have to be a passive park?