Pioneering developer keeps at it
Hoyt Street Properties bought a rail yard and started a boom, and it’s not done
By RANDALL BARTON Issue date: Fri, Apr 28, 2006
The Tribune Having already reached the Pinnacle — a Pearl District condominium completed by Hoyt Street Properties in 2005 — what remained was for the developers to hit the heights.
They’re doing that with the Metropolitan, which at 225 feet will be the Pearl’s tallest structure to date. It is the latest chapter in a success story begun almost a decade ago when Hoyt Street Properties purchased a former 34-acre rail yard and ignited an urban renaissance.
The 19-story, glass-walled building, designed by John Meadows of BOORA Architects, is scheduled for completion in the summer of 2007. It also ups the ante in amenities offered in the Pearl, with wine lockers, a library for relaxing and entertaining, an exercise room, conference facilities, separate guest rental suites, and a raised outdoor plaza with a fireplace and teahouse.
It took a year to gain city approval for the additional height, achieved by borrowing footage from a 100-foot building that faces Tanner Springs Park and setting back the taller, 225-foot tower to avoid shadowing the park.
Taller buildings make for a more diverse and interesting skyline, Hoyt Street President Tiffany Sweitzer says.
“Instead of one building taking up a whole 40,000-square-foot block, you can do three different things on a block and create more light and air architecturally. There’s a lot of ‘Yeah, but are you making more money?’ You can, but also I think you’re doing something a little more unique with the property as well. If you’re building the Metropolitan on a 12,000-square-foot footprint, you have fewer units to a floor.”
Of the 136 units in the Metropolitan, 97 are sold and an additional 19 are on “developer hold” until the building is finished, at which time they will be offered at market price. Ten of the available units are live-work units — affording owners the opportunity to live or work in the apartment, or both — priced between $479,000 and $640,000. The median price in the building is $650,000 for a 1,486-square-foot, two-bedroom unit with den. The lowest priced unit sold for $370,000, and the most expensive was a penthouse that sold for nearly 10 times that much: $3,445,000.
When Riverstone, the first Pearl condominium offered by Hoyt Street, opened in 1998, a third-floor, 1,915-square-foot apartment sold for $180,500. Prices have risen dramatically since then. The average price per square foot today in the Pearl is $550 versus $200 in ’98, Sweitzer says.
Developers may be making more money than they did eight years ago, but as she points out, construction costs, including the price of steel and other materials, have risen dramatically. Also, buyers have become more sophisticated about condominiums and are demanding finished apartments instead of unfinished lofts, a greater selection of finishes and more amenities.
It isn’t as easy as “if you build it, they will buy,” Sweitzer insists.
“The Metropolitan has all of this open space, and club facilities that you’re not really getting anything for. But you’re selling those amenities. So I thought, ‘Can you ask for more?’ because you’re offering something unique that’s costing a lot more. Let’s say you take that risk, you price those units and you hope that two and a half years from now when the project is completed the market is still there … There’s an incredible amount of risk, and costs are increasing as you’re going. You never know what you’re going to get into.”
‘We’re seeing more babies’
A favorite topic at cocktail parties around town is, Who’s buying these condominiums? Marilyn Andersen, sales manager and principal broker for the Hoyt Realty Group — the sales arm of Hoyt Street Properties — says it is a misconception that buyers in the Pearl are largely empty nesters divesting of possessions.
“A lot of them never had children,” she says. “We get people who don’t have children who have lived in the neighborhood houses and have had no choice but to live in those houses. Now there’s some other choices.”
On the other hand, “we have a lot of younger couples moving into the neighborhood. Since they’ve moved here they’ve had children and have wanted to stay. So we’re seeing more babies around here.”
Single males purchasing at the Metropolitan outnumber single females by nearly 2-to-1, and there are nearly twice as many single people as couples. The age distribution is about equally distributed among those in their 30s, 40s and 50s. Real estate agents lead the pack in terms of professions, but there also are techies, doctors, engineers, teachers and attorneys.
Sales records show only the buyer’s most recent ZIP code. Thus, those who may have moved here from out of state a few months before their purchase are listed as coming from Portland. Sweitzer believes most of the buyers are Portland residents seeking a front porch that opens onto the city.
“It’s kind of going back to the old neighborhood but in a more efficient way of doing it,” she says. “Your front porch is Piazza Italia over here, and you walk in and Gino knows what dish you want and he knows your name. Or it’s going out to Jamison Square and you know the five dogs and the owners of those dogs and you know they’re going to be there at 5:30 every night and that’s your social hour.”
The first units in the Metropolitan were offered in a lottery. Andersen says they learned from the madhouse sales opening of the Lexis condominiums in 2005 — with people pushing and shoving — that they had to come up with a better system.
“We had so many people that we had established relationships with who had come into our office that wanted to be the first to buy at the Metropolitan,” she says. “Who do we choose? Who gets the first pick? We have a lot of really nice people who live in our buildings already who wanted to live in the Metropolitan. It just came about that we would do the lottery so that we would make it fair.”
Opening night and for a few days afterward prospective buyers were given floor plans and a lottery ballot for specifying their preferred units. Several days later Hoyt Realty Group began drawing names from a pool of 500 prospective buyers.
To prevent people from buying on speculation, Hoyt Realty Group is not selling to investors. Buyers sign a contract agreeing that the unit will be owner occupied for two years. Andersen explains that financing becomes difficult when more than 30 percent of the units in a building are nonowner occupied.
8 more buildings considered
Sweitzer, 39, reckons it will be 10 years before Hoyt Street has completed its development in the Pearl with what probably will be eight more buildings. The company still is in the process of completing its master plan.
“So many people are coming to Portland and asking, ‘How did this work?’ ” she says. “Portland is a unique town, and it’s a process town. You’ve got to go through all the hand-holding and work with your neighborhoods and work with the city to get things done. I think that’s what made this city unique. We formed a partnership with the city of Portland and at the time that was such a strange thing, it hadn’t been done.
“I think the biggest thing that people don’t understand is it’s not just building a building. The parks have to work, and there have to be open spaces here. Transportation has to be thought about and planned. The retail has to work in conjunction with the building. There have to be all the pieces coming together, and they don’t always come together at one time. So when you start to see them working like it is around Jamison now, then you feel like you’ve accomplished something.
“I feel very good when the lights come on in a building because you know it’s taken three years to get there,” she says. “You see people start to move in, and you know you’re a part of someone else’s life. That’s a big deal.”
randallbarton@portlandtribune.com
http://www.portlandtribune.com/pearl06/index.html
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