Condo projects keep sprouting downtown

Sunday, July 22, 2007

By KATHY JUMPER

Real Estate Editor

Tuscaloosa developer Steven Barr chose downtown Mobile a year ago for his 21-unit condominium at 308 St. Louis St., based on his belief that the city has a bright economic future.

"I felt Mobile was in for some good times," he said. "Mobile could be the capital of the Gulf Coast."

Like Barr, out-of-town and local developers are hitting the downtown pavement in search of buildings or land to construct more residences to meet the demand they say is there.

"The timing is right," said John Hunter of Mobile, who plans to develop 250 St. Francis Street, a 32-unit condo building on a parking lot site at St. Francis and North Joachim streets.

"We don't have to tear anything up," he said. "It's going to be a first-class project."

Hunter, who has developed several condo complexes on Dauphin Island, and John Peebles, a commercial broker, are partners in 250 St. Francis Street. Presales have just begun at prices starting at $239,900 for a one-bedroom unit and up to $375,000 for large, three-bedroom units. Six units are reserved, Peebles said.

"There's a pent-up demand for housing downtown, and the city's study confirms this," Peebles said.

Residents moving to downtown Mobile would fill more than 250 housing units a year for at least five years if developers could build them, according to a report done last November for the Downtown Mobile Alliance.

There's a potential market of 1,960 households each year that are looking to rent or buy apartments, lofts, condos or townhouses, according to the city's study by Zimmerman/Volk Associates of Clifton, N.J. Prices for the condo units and houses should range from $115,000 to $500,000, the report said.

The prices for current downtown projects range from $166,000 to $500,000, depending on the square footage and amenities. The complexes include historic warehouses to new construction. Some condo projects offer private, indoor or covered parking; others have secluded courtyards, and another offers balconies overlooking the Mardi Gras parades.

The buyers are a mix of young professionals working downtown, empty-nesters who have a second home on the bay or at the Gulf, and investors who plan to rent the units, according to developers.

Downtown's condo prices may be getting too high for folks to afford, according to contractor Tilmon Brown. "You need to match your pricing to the marketplace if you can," he said. "It's unrealistic to price condos at $400,000 to $500,000 downtown."

His downtown projects include the 24-unit Mattress Factory on Dauphin Street that he developed for seven out-of-town investors, which should be done this fall. There are two units available, a townhome listed for $325,000 and a loft at $199,000, according to Nichole Patrick of Dauphin Realty.

Brown just finished St. Emanuel Place, an 11-unit apartment complex he owns at 127 Dauphin St. The units rented so quickly that he plans to build 28 apartments in the Buick building or the former Turner Motor building on St. Louis Street.

But most developers are looking to build condo units to sell.

Brown has partnered with Todd Drummond, a commercial broker, and former state Sen. Ann Bedsole to renovate the O'Gwynn building at Conti and Conception streets into 10 condo units. The units will start at $191,000.

Another condo project under way, Carriage Works at 701 and 709 Dauphin St., is a joint project of Drummond and Bedsole. There will be seven condo units built in the existing building, priced from $229,000 to $390,000, and four new townhomes built next door, priced at $399,000, according to The Drummond Group.

Barr's St. Louis Lofts are priced from $166,000 to $255,000 and 12 of the 21 have sold, he said. He is renovating the former Mobile Fixture & Equipment warehouse.

"We're not disappointed with sales since lofts are still fairly new and people need to see what they look like," Barr said. "We think the momentum is about to pick up."

The newest residential project, 250 St. Francis Street, will be new construction built to look like old Mobile architectural style, according to Peebles.

"Our goal when it's finished is to have people drive down the street and say, 'Wow, what a fabulous old building, and we're so happy they saved it.'"

About The Drummond Group, Inc.
The Drummond Group is a full service corporate real estate advisory and property management/investment services firm based in Mobile, AL. The firm specializes in contract lease/sale negotiation, site selection, and investment transactions. The company manages a variety of office, industrial and hospitality properties in locations across the Gulf Coast. For more information, please visit www.drummondgrouponline.com.

The Drummond Group is the leading online Mobile commercial real estate broker network, connecting Mobile commercial real estate brokers to tenants, brokers and investors. The Drummond Group offers Mobile commercial real estate broker services catering to the national and local needs of the commercial real estate industry. The Drummond Group specializes in all Mobile commercial real estate broker types including Mobile office space brokers, Mobile commercial land brokers, Mobile industrial real estate brokers, Mobile retail space brokers, and Mobile businesses for sale brokers.