$10 Million Lofts - Brookside

[cannon_fodder]

quote:Originally posted by Double A

Just out of curiosity, can any of you afford a $300,000 mortgage or even a $200,000 mortgage?

Can I afford it?  Certainly. Do I want to allocate that much of my income to housing?  No.  Of course, I also drive cars I have paid for and general don't like spending money...

For all the people driving around in a Mercedes spending way too much money per month on car payments there are an equal number of less visible people who spend that money on a house payment. A $300,000 mortgage with taxes and insurance will cost you ~$2,000 a month.  A young couple each earning $50K could easily afford it if they chose to do so.

[FOTD]

quote:Originally posted by cannon_fodder

quote:Originally posted by Double A

Just out of curiosity, can any of you afford a $300,000 mortgage or even a $200,000 mortgage?

Can I afford it?  Certainly. Do I want to allocate that much of my income to housing?  No.  Of course, I also drive cars I have paid for and general don't like spending money...

For all the people driving around in a Mercedes spending way too much money per month on car payments there are an equal number of less visible people who spend that money on a house payment. A $300,000 mortgage with taxes and insurance will cost you ~$2,000 a month.  A young couple each earning $50K could easily afford it if they chose to do so.

ah, but what is the cost to our society if both work while they have children?

define "easily afford"....

[Double A]

quote:Originally posted by FOTD

quote:Originally posted by cannon_fodder

quote:Originally posted by Double A

Just out of curiosity, can any of you afford a $300,000 mortgage or even a $200,000 mortgage?

Can I afford it?  Certainly. Do I want to allocate that much of my income to housing?  No.  Of course, I also drive cars I have paid for and general don't like spending money...

For all the people driving around in a Mercedes spending way too much money per month on car payments there are an equal number of less visible people who spend that money on a house payment. A $300,000 mortgage with taxes and insurance will cost you ~$2,000 a month.  A young couple each earning $50K could easily afford it if they chose to do so.

ah, but what is the cost to our society if both work while they have children?

define "easily afford"....

Typical Republican "family values", don't forget the added cost of daycare, too. A young couple who are a teacher and a police officer would have to live on ramen noodles to afford one of these mortgages, if they could even qualify for one. Although, I doubt most of the elitists on this forum would consider them as "professionals".

[TheArtist]

quote:Originally posted by FOTD

quote:Originally posted by cannon_fodder

quote:Originally posted by Double A

Just out of curiosity, can any of you afford a $300,000 mortgage or even a $200,000 mortgage?

Can I afford it?  Certainly. Do I want to allocate that much of my income to housing?  No.  Of course, I also drive cars I have paid for and general don't like spending money...

For all the people driving around in a Mercedes spending way too much money per month on car payments there are an equal number of less visible people who spend that money on a house payment. A $300,000 mortgage with taxes and insurance will cost you ~$2,000 a month.  A young couple each earning $50K could easily afford it if they chose to do so.

ah, but what is the cost to our society if both work while they have children?

define "easily afford"....

What do you mean cost to society? My parents both worked throughout I and my sisters lives and they still work. All of my 3 sisters have children and they and their husbands work. Thats just normal. They are great parents and have great kids. What on earth are you talking about?

[RecycleMichael]

quote:Originally posted by Double A
A young couple who are a teacher and a police officer would have to live on ramen noodles to afford one of these mortgages, if they could even qualify for one.

A teacher and a police officer who have each been in their careers for five years in Tulsa would be making a combined salary well in excess of $80,000 per year. They could easily qualify and afford a mortgage on a $200,000 house.

Average teacher pay in Oklahoma for 2006/2007 was $42,124. Starting pay for a Tulsa police officer is now $42,470 and a corporal starting pay is $53,097.

They would have to be frugal and not eat out every night and spend a lot on entertaining or clothing, but they could probably survive without eating Ramen noodles.

[dsjeffries]

I don't think the entire point is how affordable these or ANY lofts are for the average joe-schmoe or couple... It's increased density leading to further development and ultimately to one the first live-work-play, walkable, urban neighborhoods in Tulsa.  It's one small development that adds to Tulsa's livability and attractiveness to the oft-sought Young Professional crowd...

I got my hair cut at iidentity this morning and traveled down 38th Street.. I noticed Shannonwood for the first time, and I agree that it would be a great benefit if someone with money came in and built the area up (density wise).

[spoonbill]

quote:Originally posted by DScott28604

I don't think the entire point is how affordable these or ANY lofts are for the average joe-schmoe or couple... It's increased density leading to further development and ultimately to one the first live-work-play, walkable, urban neighborhoods in Tulsa.  It's one small development that adds to Tulsa's livability and attractiveness to the oft-sought Young Professional crowd...

I got my hair cut at iidentity this morning and traveled down 38th Street.. I noticed Shannonwood for the first time, and I agree that it would be a great benefit if someone with money came in and built the area up (density wise).

DScott, You are absolutely right!  Too many people are missing the point when it comes to "re-development" or "re-vitalization."  

I've lived in several cities and worked with several types of developer.  When you get away from the "disposable architecture" that permeates our city now and build structures that increase the density of professional people and families in a desirable area you get a chain reaction that spills out to the surrounding areas and spreads economic growth like fire!

It's so simple, but most Tulsa developers miss it.

A desire to live in the area must exist first!!!

A fancy building or pretty renderings will not create this!

Proximity to negative influences (jail, trash, bad streets, no parking, bears, vampire bats) will negate this completely!

Hint: The best way to test the waters if you feel like your "desireability" perception is wrong, is to get an agreement with the current land owner to put up a sign that says "future home of XXX street lofts, reasonably priced.  Call now for information."  

Works every time.  Can save you a bundle.  You learn where your price point should be, and you also learn who your opponents will be.  As a bonus, you can also get a lot of investment offers this way.

[CoffeeBean]

I drove by the area slated for this development.  No doubt it will stand out among the neighbors.  Hopefully the less than desirable property surrounding the development will undergo the same transformation.  

On a related note - does anyone know the status of the loft project just to the east of Pei Wei?

[pfox]

I am not sure the developers are "missing" it.  I just think it is a combination of a few things: first, the cost of developing infill projects and making decent margins doing so, the market's general wariness of condos (here in Tulsa) as good investment property, and financing multifamily projects.  

These projects are tricky to finance.  Many lenders require you to have commitments for at least 50% of your units before they will release the loan.  Also, Tulsa had a burgeoning condo market in the 80's, but the real estate market went upside down, and no one could sell their condo. Locally, lenders, builders and buyers are still a little gunshy about it.  Should the market warm up to the condo, I think you will see it change.  You need to account for the fact that places like the Dallas Metro add nearly 50000 jobs a year to their market.  That is a huge boon for the housing industry.  We need more jobs if we want more young people and more growth.

[YoungTulsan]

quote:Originally posted by pfox

I am not sure the developers are "missing" it.  I just think it is a combination of a few things: first, the cost of developing infill projects and making decent margins doing so, the market's general wariness of condos (here in Tulsa) as good investment property, and financing multifamily projects.  

These projects are tricky to finance.  Many lenders require you to have commitments for at least 50% of your units before they will release the loan.  Also, Tulsa had a burgeoning condo market in the 80's, but the real estate market went upside down, and no one could sell their condo. Locally, lenders, builders and buyers are still a little gunshy about it.  Should the market warm up to the condo, I think you will see it change.  You need to account for the fact that places like the Dallas Metro add nearly 50000 jobs a year to their market.  That is a huge boon for the housing industry.  We need more jobs if we want more young people and more growth.

They don't just have to be $400,000 condos to be good infill.  New apartments, midrise, just any sort of modernized living that both improves quality of life and gets more people living in the area is needed for an area like Brookside.  New apartment construction with amenities, good urban design, and close proximity to Brookside's entertainment district would go in high demand.  The current slumlord properties are probably making a neat profit from the Brookside area since they can overcharge for substandard housing and basically get away with it.

People are paying $400-600/month for apartments that are probably worth $300/month.  I think demand would be great for $750/month apartments that are actually worth $750/month (in construction quality, maintainance, modern features, amenities, etc)

[Double A]

Commentary: Garage Loft validates OKC's downtown housing
Journal Record, The (Oklahoma City),  Apr 28, 2006  by Darren Currin

As new housing development in downtown Oklahoma City has kicked into high gear with several projects either under way or planned to start construction this year, many developers and investors are continuing to keep a close eye out for signs as to how downtown housing is being accepted. Downtown housing has seen some early validation with the early success of such projects as The Montgomery, as well as the initial reaction to the Centennial condo project being developed by Stonegate-Hogan in Bricktown.
Related Results

   * Competition heats up for...
   * Tulsa's Sager lofts project...
   * The Garage lofts still going...
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More importantly, investors and developers are watching for validation of the financial rewards downtown housing has promised. In May 2004, the market was given its first glimpse of the high values housing was affording downtown when the Deep Deuce at Bricktown apartments sold for around $75,000 per unit, which at the time set a record. Earlier this month, downtown housing values were given another boost when The Garage Loft apartments sold for a near record $2.4 million.

While the 24-unit property did transact for $2.4 million, the actual price per unit was not approximately $100,000 as first surmised due to the fact that The Garage Loft contained 7,200 square feet of retail space that was included in the purchase price. As a result, the actual price-per-unit was probably closer to the $81,000- per-unit price paid for the Renaissance at Norman apartments in May 2005, which is currently listed as the highest price per unit ever paid for an apartment complex in the Oklahoma City metro area.

Let's see, the lofts in Tulsa start around $200,000, yet the highest priced loft in that article was $81,000? For those moaning and groaning about OKC surpassing Tulsa, here's your sign.

[tulsa1603]

quote:Originally posted by Double A

Commentary: Garage Loft validates OKC's downtown housing
Journal Record, The (Oklahoma City),  Apr 28, 2006  by Darren Currin

As new housing development in downtown Oklahoma City has kicked into high gear with several projects either under way or planned to start construction this year, many developers and investors are continuing to keep a close eye out for signs as to how downtown housing is being accepted. Downtown housing has seen some early validation with the early success of such projects as The Montgomery, as well as the initial reaction to the Centennial condo project being developed by Stonegate-Hogan in Bricktown.
Related Results

   * Competition heats up for...
   * Tulsa's Sager lofts project...
   * The Garage lofts still going...
   * Metro Lofts in OKC sees...

Most Popular Articles
in Business

   * If You Want More Sex ...
   * 10 things you should ...
   * Too Young to Rent a ...
   * Disney's Toontown ...
   * Smart investments for ...

More importantly, investors and developers are watching for validation of the financial rewards downtown housing has promised. In May 2004, the market was given its first glimpse of the high values housing was affording downtown when the Deep Deuce at Bricktown apartments sold for around $75,000 per unit, which at the time set a record. Earlier this month, downtown housing values were given another boost when The Garage Loft apartments sold for a near record $2.4 million.

While the 24-unit property did transact for $2.4 million, the actual price per unit was not approximately $100,000 as first surmised due to the fact that The Garage Loft contained 7,200 square feet of retail space that was included in the purchase price. As a result, the actual price-per-unit was probably closer to the $81,000- per-unit price paid for the Renaissance at Norman apartments in May 2005, which is currently listed as the highest price per unit ever paid for an apartment complex in the Oklahoma City metro area.

Let's see, the lofts in Tulsa start around $200,000, yet the highest priced loft in that article was $81,000? For those moaning and groaning about OKC surpassing Tulsa, here's your sign.

That's not an fair comparison- individuals aren't paying $81,000 per unit- that's the cost the buyer paid for the ENTIRE APARTMENT COMPLEX.  If those were split up as condos and sold, i assure you they would not be selling for $81,000 per unit, it would be substantially more.

I understand your desire for inexpensive housing.  The problem is, it can't be provided, at least not in the package people want.  Want a stylish condo?  It will cost a lot to build.  If they actually built those condos on Brookside to where they could be sold for $100,000 per unit, people would bemoan how cheaply built they were.  Either that, or the developer would make $0 profit.  The profit margins on projects like these is much tighter than you think, especially considering the work/risk involved.

[TheArtist]

Yes, apartments are very different from condos. There are "hard lofts" actual old buildings or warehouses converted to living, "soft lofts" new developments meant to somewhat emulate the hard loft look, "loft style homes" "loft style duplexes" "loft condos" and "loft apartments". "Loft" is generally used to mean a certain style, often a clean, sparse, open contemporary/industrial style.  I am assuming these lofts on Brookside and Cherry street will each be sold like condos or homes, not rented. Unless someone buys the loft then rents it out lol.

Someone buying an apartment complex needs to rent those apartments for more than they bought them for, aka the monthly mortgage of the complex divided by the number of units,,, plus property taxes, plus insurance, plus over all property upkeep and paying someone to work at the complex to rent the units, collect rents, etc. The price the buyer pays per apartment in an apartment complex will only reflect part of the cost they charge a renter in order to make a profit each month.

[spoonbill]

quote:Originally posted by pfox

I am not sure the developers are "missing" it.  I just think it is a combination of a few things: first, the cost of developing infill projects and making decent margins doing so, the market's general wariness of condos (here in Tulsa) as good investment property, and financing multifamily projects.  

These projects are tricky to finance.  Many lenders require you to have commitments for at least 50% of your units before they will release the loan.  Also, Tulsa had a burgeoning condo market in the 80's, but the real estate market went upside down, and no one could sell their condo. Locally, lenders, builders and buyers are still a little gunshy about it.  Should the market warm up to the condo, I think you will see it change.  You need to account for the fact that places like the Dallas Metro add nearly 50000 jobs a year to their market.  That is a huge boon for the housing industry.  We need more jobs if we want more young people and more growth.

All good points, but the job argument is only one facet.  Dallas sees a boom in the condo and "urban living" market because the 50K new jobs bring people into a market where you have to drive an hour to find an affordable neighborhood. Their sprawl has reached it's limit, and people are looking for other options.

In Tulsa the same $300,000 you would spend on a 1,800 sq.ft. "loft" or condo downtown 5 minutes from the office will buy you a very nice 3,000 sq.ft. home in South Tulsa, Jenks, or Broken Arrow with a big yard, neighborhood amenity package, great schools, and the promise of increased property value only 15 minutes from the office.  We have a healthy home inventory and developers willing to continue expansion.  

Fast forward 20 years, at the current growth level, when we reach our limit on drive-times.  At that time people will begin to recognize the value of urban offerings.  This will outweigh the cost of in-fill development and make it a less risky endeavor.  However, this is a double edge sword, most people with young families would choose the atmosphere of a South Tulsa "style" neighborhood over urban living.  For many, Tulsa becomes a less attractive city.  This is what we see happening in places like Dallas, where the commercial development in the surrounding cities is booming because companies are moving out of the city core to capture a work-force increasingly less willing to commute or relocate.

We ignore the fact that cities go through evolutionary cycles just like living organisms.  If one looks at the history and growth patterns of older communities and applies those patterns to Tulsa, the probability of success or failure of a development can be, for the most part, predicted.  

I don't understand why so many young cities like Tulsa ignore the lessons of the elder cities.  We spend so much time, energy and money trying to put a check on development outside of the city core.  We spend vast amounts of money funding projects designed to encourage people to move into the downtown area, and blocking those that move people out.  All of this money would be better spent fixing the crumbling infrastructure and plugging the holes that cause our city to be less attractive rather than trying to stop evolution.

[tulsa1603]

quote:Originally posted by spoonbill

quote:Originally posted by pfox

I am not sure the developers are "missing" it.  I just think it is a combination of a few things: first, the cost of developing infill projects and making decent margins doing so, the market's general wariness of condos (here in Tulsa) as good investment property, and financing multifamily projects.  

These projects are tricky to finance.  Many lenders require you to have commitments for at least 50% of your units before they will release the loan.  Also, Tulsa had a burgeoning condo market in the 80's, but the real estate market went upside down, and no one could sell their condo. Locally, lenders, builders and buyers are still a little gunshy about it.  Should the market warm up to the condo, I think you will see it change.  You need to account for the fact that places like the Dallas Metro add nearly 50000 jobs a year to their market.  That is a huge boon for the housing industry.  We need more jobs if we want more young people and more growth.

In Tulsa the same $300,000 you would spend on a 1,800 sq.ft. "loft" or condo downtown 5 minutes from the office will buy you a very nice 3,000 sq.ft. home in South Tulsa, Jenks, or Broken Arrow with a big yard, neighborhood amenity package, great schools, and the promise of increased property value only 15 minutes from the office.  We have a healthy home inventory and developers willing to continue expansion.  

The promise of increased property value in the burbs is a joke.  Go to Owasso, Jenks, or BA and ask people there what kind of increases they are seeing.  Why would anyone want to buy a 5 year old house there when there are a dozen new ones being built around the corner?  It's a stack 'em deep and sell 'em cheap mentality.

Cities like Dallas are not known as good examples of urban design.  They are getting better due to necessity, but the sprawl that they have created over the last 40 years is something they surely regret.