The West Slope Of First Hill
Long underutilized, but finally starting to see some more action. The above rendering shows the Landes Apartments, currently under construction at the corner of 8th and Marion. Designed by Baylis and NBBJ, developed by Harbor Properties, with 81 units, 3850 SF of retail, and 72 underground parking stalls. Just across the street on 8th Ave is the 17-story M-Street Apartments, with 220 units over a grocery store, which opened about a year ago.
But hold on, there’s something big missing in that Landes rendering, and that would be the building shown in the rendering below…
…namely, 7th and Madison, a 9-story, 200,000 SF office building developed by OPUS and designed by NBBJ, also currently under construction. Unlikely that anyone living in Landes will be seeing much of the WaMu Tower from their window.
It is curious how neither of these new projects maxes out the NC3-160 height limit. Perhaps OPUS didn’t want to block the views from M-Street, which it also owns. As for the Landes, Harbor may have opted not to build more than five stories above the concrete, since that would have precluded the use of wood frame construction.
Status as of early May is shown in the photo above. M-Street, visible to the far right, illustrates the available zoning envelope. It’s probably safe to assume that parking lot in the foreground will eventually sprout 160-foot tower(s), though nothing is planned yet as far as I know.
More action is in store two blocks east at 8th and Seneca: the 25-story, Seneca Towers (large pdf), rendered above, is scheduled to begin construction this summer. Designed by MulvannyG2, and developed by CA-based Laconia, the project will provide 285 condo units with 315 parking stalls.
And there’s more: a few blocks south, Skyline at First Hill, a full-block, 26-story “life care” project is currently under construction. More on this in a future post…
I’d imagine the constraint to maxing out the NC envelope for office uses is the FAR maximum, given the preferred large floorplates for office users….could possibility be parking-related as well, in terms of issues shoring adjacent to I-5 retaining walls
Parking is related to it. The main issue is the height is a difficult height to achieve necessary returns on. Switching to a concrete and steel frame construction is serious money, and once the fixed cost is incurred you generally need to go more 3 or more floors to pay off the cost expenditure/break even. An apartment doesn’t yet carry the rents to make that ratio work (as Landes originally was originally a condo) so it didn’t max out the height. Ditto for areas of SLU. Digging parking is the most expensive part of a project. Average below grade parking garage goes at about $30,000 at cost. When Olive 8 unloaded one at a reported $70k, I was barely surprised as majority of the spots were sold at a loss I’m guessing.
Im pretty sure that Opus sold M Street so view considerations were likely not the main reason for the limited height of 7th and Mad.
dorian gray -
Coming back to a common theme on this blog, do you have a sense what the rent per square foot would be for a woodframe apartment if we removed parking requirements? We keep hearing that parking is making new buildings expensive, but I don’t have a good sense of how expensive it’s making things…
Lets say an interested pension fund was willing to do a deal -say they require a 17% return and you convince them their asset is worth as much as neighbors without parking. If you do a 100 unit midrise (average parking ratio in city is 1.4 per unit) that would be 140 underground stalls needed to meet market average. Underground costs $30k/stall = $4.2m in potential savings. Now since you don’t have parking you cant go for top of the market rents like Harbor Steps or The Cobb (which is I’m guessing $2.70-3.00/sf per month). If a concrete base with wood frame goes for $140/sf to build, and the average unit is 750sf * 100 units = $10.5M. Add in non unit space of 17% (hallways amenity etc.) = $12.285m for construction costs alone + sales tax at 8.9%=$13,378,365). If you paid $600/sf for a 10,000sf site acq was $6m = $19,378,000. Add in soft costs for AIA, legal, civil mechanical+ construction loan fees (aia’s, geo tech, legal etc.) Construction loan fees ($2m), construction contingency (600k))we’re in for $27M (still no 3% developer fee though so youre doing this one for free)
With rents averaging $1.80sf return is between 8-10% Un leveraged/leveraged) -not good enough for investor.
With rents avg $2.43 return is between 13-25% -still not good enough but close.
At $2.64sf = 15% unlev/28+% leveraged -your golden. Now to get people to pay those rents without a parking spot, even with 2 years of rent growth it will be tough (remember Cobb and Harbor Step rents). Pray you don’t incur additional soft costs at DPD/DRB proceedings -those kill and cost 6 months in fees and delays.
Nobody wants you to build this thing as it will be ugly. They want they’re 401k to rock though and they despise sprawl. Good luck!
Sorry for the off-topic comment, but I couldn’t find a “contact” form on your site. I think your site has been hacked. I was reading your site on my BlackBerry, which doesn’t support style sheets, and I found a LARGE number of nasty-looking links at the bottom of the page. Look at the source for a block starting with u style=”display:none” and you’ll see what I mean.
I saw this on another Wordpress site as well. Looks like an exploit’s going around and you got hit.
Dorian Gray- I would propose a simpler way to get at Steve’s questions, which is to assume units costs of $30k per stall and $140 (hard cost) plus 50% for all soft costs for the above slab unit, and assume the ground floor reail can carry its own water, so to speak, for the podium at say $30-$35 per sf NNN rents. so that’s three high-level variables to play with to test sensitivity. The last is land, which costs at least $30k/unit anywhere worth building apartments. Lets assume $40k for sake of say, a mid-rise in non-downtown NC zones.
On a per unit basis, we have:
-Land =$40k
-Unit Cost (@750 sf 1 BD)=$158k
-Parking cost =$30k
=Total $228
So, garage cost, assuming 1:1 parking, is 13% of costs in a simple static analysis. IF you could remove all parking and still lease the building for the same rates, that would theoretically translate into similar rent savings, again, on a static analysis.
In reality, that “savings” could be eaten up by higher land costs, larger developer margins, depending on elasticities for land and rental products. Also, the likelihood on building no parking is slim, so even if you did not rent a stall, your rent would probably cross subsidize a portion of the cost of the stalls that are built
Thanks, flotown and dorian gray. This analysis makes a lot of sense — I really appreciate your time and willingness in spelling this out.
(Though the utopian in me is sad to see how hard it would be to build a new building with no parking.)
[…] Skyline is 26-story, full-block project at 9th and Columbia on the steep west slope of First Hill. Developed by Greystone Communities for Presbyterian Retirement Communities Northwest, and designed by Perkins Will, the 199-unit complex will offer residents independent living, as well as access to assisted living, skilled nursing, and memory support, if needed — a.k.a., “life care.” You pay an up-front fee to get in, and that gets you a discounted rate on any expensive care you may need in the future. Everything is taken care of. Isn’t it fun to think about such scenarios? […]