brian0123

Camden McGowen Station + New Park (Midtown Superblock)

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Agree 100%.

 

I recall there was a project that was supposed to go up on gray near la branch (seems to have stalled, but I saw a backhoe in there the other day where it looked like they were updating the board on the northeast corner of the lot), they were going to put their workout facility and some other amenities on the ground floor so that they could easily swap these out with ground floor retail when the time was right.

 

It's a good way to have the option later on.

 

I think though, the question is still a good one, even if it's just two 3000sqft spaces facing the park, 6000sqft total, the equivalent of 4 or 5 apartments, would it break the model of this complex? I doubt it, but if they think it will break the model, then they won't even consider it.

 

Let's take a look at the numbers.  i think apartments in  these new developments are averaging about 800 square foot per apartment.  This building plans 300 square units; that gives us 240,000 rentable square feet.  6,000 square feet is 2 1/2% of your total.  You've just put that portion of your planned return into a very different risk pool and different rental market. (And that doesn't even address the difference in building and operating costs.)  I don't know, but It seems like that could indeed break the financial model.

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It actually IS a problem in Dallas. There is a Dallas Morning News article that I linked somewhere on this forum that described all of the empty groundfloor storefronts that had been required by Dallas, and some of the problems in filling them. What many people do is look at one building or one location where groundfloor retail works, and believe it will or is working everywhere, when that is not at all true. Their walkable fantasy will not allow them to consider that financial realities preclude groundfloor retail in many developments.

 

Oh ok. That makes sense.

 

I think i'm guilty of looking at one area and thinking its working everywhere. I thought i saw those areas with storefronts everywhere in Uptown Dallas

 

Thanks Red.

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Let's take a look at the numbers.  i think apartments in  these new developments are averaging about 800 square foot per apartment.  This building plans 300 square units; that gives us 240,000 rentable square feet.  6,000 square feet is 2 1/2% of your total.  You've just put that portion of your planned return into a very different risk pool and different rental market. (And that doesn't even address the difference in building and operating costs.)  I don't know, but It seems like that could indeed break the financial model.

 

Having done financial modeling for a living at one point in my life, I'll chime in briefly.

 

A developer's model backs into the highest dollar amount that they're willing to pay for the land.  If a developer decides to take a haircut on a development in order to provide a public good, then they won't be able to pay as much for the land.  They'd get outbid by a profit-maximizing developer.

 

Also, people that specialize in multifamily typically are hesitant to venture into retail.  Its a totally different business model with its own market dynamics and cost structure.  If the retail rents that can be achieved are sufficiently high, then the extra effort and uncertainty may be worth it.  The problem is that there are only a very few cases in Houston where the risk-adjusted retail rents exceed apartment rents.

 

Which brings me to my next point: It isn't enough to point out that restaurants at the Post development are busy or that Phoenicia is busy.  Many other stores are not busy; that consumers return over and over again to busy stores and witness other consumers doing exactly the same thing probably has a lot more to do with those stores' business models and good management than with their physical plant, but that's easy to forget if you don't go to the places that are suffering for business, which you aren't because otherwise they wouldn't be suffering for business...and besides which, don't tend to last very long anyway.  So consumers see other people at the places where consumers are at and figure that everywhere should and could be like that.  But the fact is that there are only so many retail prospects out there, and so many fewer still that have viable business models or good management.  When rents are being negotiated, landlords are price-takers.  They can't necessarily tell whether a store will be successful (although a place like Phoenicia is probably an exception, and in cases like that the TENANT typically holds the cards and the rent is much lower), but whether destined for success or not, the prospective tenant can go down the street and find a landlord that will undercut the other one.  Its a competitive market.  If the rents aren't obviously high enough or the demand isn't obviously there, then nine times out of ten a multifamily operator isn't going to make the effort to take the risk.  The multifamily operator has no doubt that there will be demand for their units, with or without a retail component, and they know that even if the market declines prior to delivery, they can give concessions and fill the units quickly to generate cash flow, cover the note, and make the investment marketable to a third-party buyer.  If that retail component sits empty for three or four years before finding an awesome tenant, that's a goddamn long time and there's no cash coming in.

One last thing.  Having retail at the ground floor can be disruptive to parking designs.  It depends a lot on the layout of the site and what the architect can do with it, but any option that requires more concrete to yield less net rentable area skews the model against that option.  Mixing uses still requires on-site segregation of those uses for resident convenience and security.

 

So yeah, if its a good model then the model won't break.  It'll just indicate a lower land price that can be paid as a maximum bid, and the mixed-use guy gets outbid.  There are exceptions, but not many in Houston.

 

Niche, out.

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Joel Kotkin has described to me whole streets in LA with block after block of empty retail with absolutely packed apartments on top of them.

 

The Post restaurants seem to do quite well, but the non-restaurant retail seems to be struggling, and the retail space next to Christian's Tailgate has been perpetually empty.  I think these places would have more of a chance if there was diagonal street parking in front, which I sorta wish the Bagby St reconstruction had included instead of the somewhat overdone landscaping, IMHO.

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That article is a little old. I wonder if they're still having that problem up there?

 

Five years later, here's an update:

 

The project has 18,640 square feet of retail space, not the 42,000 square feet stated (or at least implied) by Steve Brown.

 

Brown said that in 2008 there was one small sandwich shop.  That shop has apparently closed.  They now have

 

1 Mexican restaurant

Highland Park 24-hour "emergency room" (that takes almost 1/2 of the total retail space)

Oscar Nails and Spa

Tread Fitness (a tiny storefront offering circuit training in a group setting)

Pride Staff

 

1,386 square feet remains available (perhaps the former sandwich shop)

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Go to Google street view and look up 1000 Ross Avenue in Dallas. It was mentioned in the article. Almost the entire block is empty. Only the corners have tenants.

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Joel Kotkin has described to me whole streets in LA with block after block of empty retail with absolutely packed apartments on top of them.

 

The Post restaurants seem to do quite well, but the non-restaurant retail seems to be struggling, and the retail space next to Christian's Tailgate has been perpetually empty.  I think these places would have more of a chance if there was diagonal street parking in front, which I sorta wish the Bagby St reconstruction had included instead of the somewhat overdone landscaping, IMHO.

Where in LA?

I go to LA multiple times a year and can't recall seeing a ton of vacant retail spaces much less entire blocks. I've been all over West Hollywood, Los Feliz, Wilshire, Brentwood, Adams District, Silver Lake, Eagle Rock, Downtown (the most empty space I've seen but downtown has only recently started to turn residential), Santa Monica, Hancock Park, Koreatown, and more.

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Joel Kotkin has described to me whole streets in LA with block after block of empty retail with absolutely packed apartments on top of them.

The Post restaurants seem to do quite well, but the non-restaurant retail seems to be struggling, and the retail space next to Christian's Tailgate has been perpetually empty. I think these places would have more of a chance if there was diagonal street parking in front, which I sorta wish the Bagby St reconstruction had included instead of the somewhat overdone landscaping, IMHO.

More parking and less landscaping? Typical houston mindset

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More parking and less landscaping? Typical houston mindset

 

Street sidewalk/retail vibrancy requires people which requires parking (apartments on top are never enough people to fully support the street retail).  Better to have vibrancy and parking than pretty but deserted landscaping.

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Street sidewalk/retail vibrancy requires people which requires parking (apartments on top are never enough people to fully support the street retail).  Better to have vibrancy and parking than pretty but deserted landscaping.

 

There is plenty of street parking on both sides of Bagby. The requirement of parking for most businesses is what makes this city an aesthetic disaster.

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Hey. How about a compromise? Retail front and center on signature streets and ample parking goes in the BACK where it BELONGS. So simple. Too simple. It's possible to put attractive store fronts up to the sidewalks AND have enough parking out back or up a few levels (out of the way) for the real world. I know. I've seen it with my own eyes. I forget where.  Spend the extra dollars and DO IT RIGHT the first time. Or in Houston's case, the second time will do. 

 

Even if the parking lots were not so 'glorified' as if our dependency on cars required constant reminders that Houston owes it's very soul to the automobile that parking lots must be the focal point of almost every landscape, Houston would be prettier. Prettier=better.

 

Midtown is such an asset to this city.  A perfectly laid out, half way developed grid in the middle of all major employment, residential and entertainment centers just begging for a modern re-do. Every night I say a silent prayer that it gets done right this time. The potential of Midtown is off the charts, crazy wonderful - in my mind. Some of these projects going up now are like a dream come true, others aren't so perfect but they are a huge step in the right direction.

 

Edited by Mister X
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Hey. How about a compromise? Retail front and center on signature streets and ample parking goes in the BACK where it BELONGS. So simple. Too simple. It's possible to put attractive store fronts up to the sidewalks AND have enough parking out back or up a few levels (out of the way) for the real world. I know. I've seen it with my own eyes. I forget where. Spend the extra dollars and DO IT RIGHT the first time. Or in Houston's case, the second time will do.

Even if the parking lots were not so 'glorified' as if our dependency on cars required constant reminders that Houston owes it's very soul to the automobile that parking lots must be the focal point of almost every landscape, Houston would be prettier. Prettier=better.

Midtown is such an asset to this city. A perfectly laid out, half way developed grid in the middle of all major employment, residential and entertainment centers just begging for a modern re-do. Every night I say a silent prayer that it gets done right this time. The potential of Midtown is off the charts, crazy wonderful - in my mind. Some of these projects going up now are like a dream come true, others aren't so perfect but they are a huge step in the right direction.

AWESOME post!

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I agree with the parking in back, but think Houstonians need "teaser" parking in front, ideally diagonal street parking if the RoW is available.  Think about University Blvd in the Rice Village for something similar. Ed Wulfe talked about this once. If you have the teaser parking in front, people will drive to that store thinking they will get it, and once they're there but it's full, they'll drive around back.  When a place has no parking in front, or just one or two parallel spaces, people just pick a destination/competitor with easier parking.

Edited by ToryGattis
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Btw Mister X, I think the retail on washington that houses the Counter Burger has exactly the "up to the sidewalk storefront and mucho parking hidden in the back. Its a good model.

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I agree with the parking in back, but think Houstonians need "teaser" parking in front, ideally diagonal street parking if the RoW is available.  Think about University Blvd in the Rice Village for something similar. Ed Wulfe talked about this once. If you have the teaser parking in front, people will drive to that store thinking they will get it, and once they're there but it's full, they'll drive around back.  When a place has no parking in front, or just one or two parallel spaces, people just pick a destination/competitor with easier parking.

 

If you don't have parking and the store is good enough, people will still come. Diagonal parking only re-emphasizes the notion that car is God. Someone taking away that subliminal idea can do a lot.

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Still waiting on the answer to where you can find block after block of empty retail under apartments in LA...

 

 

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Street-side parking, whether parallel or diagonal, protects walkers especially if the adjacent road has a speed limit greater than 20mph. A good example of this phenomenon is on lower Westheimer where parallel parking is allowed.

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If you don't have parking and the store is good enough, people will still come. Diagonal parking only re-emphasizes the notion that car is God. Someone taking away that subliminal idea can do a lot.

You're right, but that's the problem: very few stores are unique enough that people will clearly pick them over a competitor with easier parking.  And even if a store does have a loyal customer base, it may still lose the marginal/less-loyal customer, which can make all the difference.

 

 

Still waiting on the answer to where you can find block after block of empty retail under apartments in LA...

He didn't say.

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Street-side parking, whether parallel or diagonal, protects walkers especially if the adjacent road has a speed limit greater than 20mph. A good example of this phenomenon is on lower Westheimer where parallel parking is allowed.

 

It also tends to slow the through traffic. 

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It also tends to slow the through traffic. 

 

A further corollary (of course I'm forgetting the article to cite) was a retail street that was shut down to vehicular traffic in Philadelphia, only to become a dangerous place after dark. Retailers complained about declining business due to the street closure and autos were then brought back to put "eyes on the street." 

 

Point is that mix-use is a neighborhood concept in Midtown, not necessarily a singular development or building strategy.

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If you don't have parking and the store is good enough, people will still come. Diagonal parking only re-emphasizes the notion that car is God. Someone taking away that subliminal idea can do a lot.

 

Perhaps you should brush up on your "walkable neighborhoods" knowledge. Urban planners promote parallel and diagonal parking as a  means to make traffic slower and to protect pedestrians. Bagby Street is being rebuilt in exactly this manner.

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Tory just showed up in my LinkedIn "People You May Know." I guess LinkedIn has been following me on HAIF.

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Perhaps you should brush up on your "walkable neighborhoods" knowledge. Urban planners promote parallel and diagonal parking as a means to make traffic slower and to protect pedestrians. Bagby Street is being rebuilt in exactly this manner.

I've been to plenty of pedestrian streets around the world and they're doing just fine. Istanbul, buenos aires, Panama City, London, Denver, San Francisco, Rome, the list goes on.

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I agree with the parking in back, but think Houstonians need "teaser" parking in front, ideally diagonal street parking if the RoW is available.  Think about University Blvd in the Rice Village for something similar. Ed Wulfe talked about this once. If you have the teaser parking in front, people will drive to that store thinking they will get it, and once they're there but it's full, they'll drive around back.  When a place has no parking in front, or just one or two parallel spaces, people just pick a destination/competitor with easier parking.

 

I agree completely.  Diagonal street parking encourages retail, reduces the need for parking lots, and can help slow down through traffic, thereby improving the attractiveness for foot traffic.  Rice Village is a great example of how it can be done. 

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Tory just showed up in my LinkedIn "People You May Know." I guess LinkedIn has been following me on HAIF.

 

No dude, it's my fault.  You and he are both connections of mine, so there are only two degrees of separation.

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No dude, it's my fault. You and he are both connections of mine, so there are only two degrees of separation.

Are you linked with Kevin Bacon also?

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Are you linked with Kevin Bacon also?

 

I'm not kidding.  That's how it worked out, and none of the three of us are totally irredeemable 'Connection' whores.  Small world.

Edited by TheNiche

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I'm not kidding. That's how it worked out, and none of the three of us are totally irredeemable 'Connection' whores. Small world.

Hmmmm. I was trying to make a joke, did you catch the whole Kevin Bacon/degrees of seperation thing? Maybe you think my attempt at humor sucks?

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Hmmmm. I was trying to make a joke, did you catch the whole Kevin Bacon/degrees of seperation thing? Maybe you think my attempt at humor sucks?

 

Over my head, to be honest.  I'm only vaguely aware that Kevin Bacon is a celebrity, and I'm pretty sure that he's an actor, but all I ever can think of when I see his name is bacon.  His name is very distracting from anything of relevance that might involve him.

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Over my head, to be honest. I'm only vaguely aware that Kevin Bacon is a celebrity, and I'm pretty sure that he's an actor, but all I ever can think of when I see his name is bacon. His name is very distracting from anything of relevance that might involve him.

Lol, that's hilarious!

http://en.wikipedia.org/wiki/Six_Degrees_of_Kevin_Bacon

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I was joking about LinkedIn peeking at my HAIF posts :P I figured it was the common connection. It was just amusing to me as I saw it immediately after checking this thread.

Edited by woolie

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Yeah, and by the description, it seems like it was their own personal cheerleading project of what they can do and hopefully to encourage developers of what is possible.

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There was some legitimate talk a few years back of building a new central library and building it in midtown was one of the possibilities discussed.  They decided to completely remodel the existing building instead.

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http://www.khou.com/...-144475275.html

Nothing new but here is the latest article...

"That’s precisely what the Midtown Redevelopment Authority and Camden Development Inc. plan for about half of the 3.5 acre site. Also on the drawing board are sites for two restaurants and a residential development, as well as an underground parking garage for about 140 vehicles."

"Construction is expected to begin next spring, Thibodeaux said, and the park should be open in 2014."

 

Has anyone seen or heard anything about construction?

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From what I've heard, Thien An is working on a new restaurant just blocks away. Sounds like it will be a bigger, badder version of what it is currently.

 

Saw a Coming Soon sign for Thien An on 2611 San Jacinto (near McGowen).

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Per a recent HBJ aritcle:

 

http://www.bizjournals.com/houston/news/2013/05/09/midtown-development-slideshow.html?s=image_gallery

 

"Superblock in Midtown

Developer: Houston-based Camden Property Trust

 

Location: The development sits on a six-acre property divided almost evenly between Midtown Development Authority and Houston-based Camden. The Midtown Superblock is bound by Main, Anita, McGowen and Travis streets.

 

Expected start date: The project's start date has been extended to break ground in mid-2014 rather than next quarter, as previously planned.

 

The skinny: It will eventually include a seven-story multifamily development with close to 300 units overlooking a park that will include about 8,000 square feet of retail."

Edited by DrLan34
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Expected start date: The project's start date has been extended to break ground in mid-2014 rather than next quarter, as previously planned.

 

The skinny: It will eventually include a seven-story multifamily development with close to 300 units overlooking a park that will include about 8,000 square feet of retail."

 

I wonder what the reason is for the delay. A whole year?  Good grief!!!

Edited by scarface
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I wonder what the reason is for the delay. A whole year?  Good grief!!!

 

The reasons are almost always money.  I'm sure funding is an issue.

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I wouldn't imagine Camden is having an money problems right now.  Do you think they're waiting for the go ahead from the Midtown TIRZ before starting construction? 

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They might be taking a bit of pause to make sure they (and other apartment builders) aren't getting too far ahead of the market.

 

It's completely opposite the case in the Houston market. I was a little concerned about the apartment boom going on but based upon all of the articles I've read, we're actually in a housing shortage and a worker labor shortage right now. Surprisingly, developers can't keep up with the demand!

 

To be honest, I dont know why there's a delay but at the moment building residential units is the big money maker.

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