On the cusp of a downtown apartment boom?

This article is the first of a two-part series on the resurgent downtown residential market.

It feels like spring has sprung in the middle of fall in downtown Grand Rapids. Along with some mighty spectacular fall weather (as of this writing I'm looking out the window at yet another 70-degree day), the downtown skyline seems to be blooming with more construction cranes and the streets are filling with scaffolding, a sight we haven't seen downtown in nearly four years.

Starting in 2006, Grand Rapidians became used to the sight of a sky full of massive t-shaped construction cranes, the likes of which most residents had never seen before. From billion-dollar medical facilities on Michigan Street Hill, to the state's tallest residential tower, River House, going up, to the country's first LEED-certified art museum, the GRAM, you couldn't go anywhere without stopping and staring in awe as crane operators seemed to be in a perfect dance with the construction crews on the ground.

Cranes filled the sky on Medical Mile in 2008















It was right about this time of year back in 2010 when the last of the ever-present construction cranes downtown was dismantled, marking the (temporary) end of an era. With the recession in full force and the housing market on hiatus, downtown Grand Rapids and downtowns everywhere seemed to be in a lull.

Now, the wind seems to have changed.

Following a trend that is happening nationally, new residential projects in downtown Grand Rapids and in the near downtown neighborhoods are at an all-time high, with growth primarily being fueled by apartment buildings. Residential projects thoughout the area are on the upswing as Grand Rapids continues to rebound from the recession and now leads the country in job growth. In case you hadn't heard, Grand Rapis was recently ranked #3 in job growth in the country by Forbes Magazine, averaging 3 - 4 percent growth year-over-year, and almost 10 percent since the end of the recession.

Job growth drives housing growth.

While there haven't been a lot of large-scale suburban apartment complexes built recently in the outlying areas (other than the explosion of new student housing near GVSU's campus in Allendale), the downtown and near downtown neighborhoods are about to go through quite a transformation as millennials, professionals, and empty nesters continue to seek walkable neighborhoods and compact living. And occupancy rates for market rate housing are hovering around 98 percent.

Without further ado, here is just a sampling of the projects creating the biggest buzz around town, either under construction or in the planning process:

Arena Place
100 market apartments
Part of a 376,000 mixed-use project
Investment: $45 million total
Status: Under Construction
Developer: Orion Construction
Architect: Concept Design Group

This project is going up as we speak and is one of the largest constuction sites downtown since the Christman complex on Medical Mile was finished in 2010. The apartment portion of the project will take up 10 stories at the southern end of the site.

Arena Place












20 Fulton East
Approximately 100 apartments
Mix of market rate/income-restricted
Investment: $42 million
Status: approval process
Developer: Brookstone Capital
Architect: ProgressiveAE

This long-awaited infill on the parking lot next to the old JA Building (as locals lovingly refer to Tower Pinkster's new office) will tower over this corner near Division and Fulton, a corner that has seen a complete makeover with the Kendall Building rehab and the new Monument Park. The 13-story tower will feature ground floor retail, which the city hopes will help "bookend" Monroe Center and draw retail traffic to the east on Fulton Street.
20 Fulton East















Venue Tower at The BOB
104 market rate apartments, 16 condominiums
Estimated investment: Undetermined
Status: Proposed
Developer: Orion Construction
Architect: Concept Design Group

This new 20-story tower is proposed to sit alongside a new four-story addition to The BOB entertainment complex. With a proposal some have compared to Epicentre in Charlotte, North Carolina, a new tower of this height would punctuate the hole in the skyline between Plaza Towers on the river and Gallery on Fulton. If you're interested, check out this flythrough video to get a better idea of the concept.

Venue Tower at The BOB
















Lake Michigan Drive and Lexington Avenue
63 market rate apartments
Estimated investment: $12 million
Status: approval process
Developer: Cherry Street Capital
Architect: Integrated Architecture

After years of starts and stops on this vacant weed-filled lot at the corner of Lake Michigan Drive and Lexington Avenue, the development company Cherry Street Capital has come forward with a plan that the city and the neighborhood just might get behind. This project will include underground parking, ground floor retail, and is a few steps from GVSU's downtown campus and The Rapid's Laker Line to Allendale.

Lake Michigan Drive and Lexington Project














820 Monroe
82 market rate apartment - loft conversion
Estimated investment: $21 million
Status: interior renovations and tenant relocation
Developer: 616 Development
Architect: Integrated Architecture

The old Sackner Products Plant has been home to a number of commercial and retail tenants over the years, but the inside has not seen much of the robust renovations that other neighboring buildings have seen. That is about to change soon as the building is planned to be gutted, restored, and turned into market-rate apartments and new ground floor retail, restaurant and office space. Look for more visible work to begin soon on this project, according to the developers.

820 Monroe Renovation












740 Michigan Street (Michigan and Eastern)
54 market rate apartments
Estimated investment: $15 million
Status: under construction
Developer: 616 Development
Architect: Integrated Architecture

A new four-story building is rising from a previously quiet area on Michigan Street, just one mile east of the Medical Mile, that has seen a rebirth recently. The project will contain 18,500 square feet of retail space built out to the street, in an area that has been more known for parking lots, drive-thru restaurants and gas stations over the last 20 years. Time will tell if this project helps kickstart more walkable retail in the vicinity, but a city-led Michigan Street Corridor Plan is bullish on the area.

740 Michigan Street












555 and 601 Michigan Street
42 market rate apartments - 2 buildings
Estimated investment: $5.1 million
Status: approval process
Developer: Third Coast Development

Just up the street from 740 Michigan Street toward Medical Mile, plans are in place to tear down the vacant and slowly falling down "ugly yellow building" in front of Third Coast Development's Mid Towne Village project, and also build on a long-vacant lot next door. Combined with the new seven-story Hampton Inn going up in the northwest corner of the development, these two buildings on Michigan Street will help tie the whole project together. Planners also feel it will help fill in the gaps ("broken teeth," as urbanists call surface parking) between Urban Mill coffee shop to the east and College Avenue to the west.

601 Michigan Street













Gateway at Belknap (Coit and Hastings)
86 market rate apartments, mixed-use
Estimated investment:
Status: approved
Developer: Orion Construction
Architect: Concept Design Group

A lot of folks believed that the neighborhood closest to the new Medical Mile, Belknap Lookout, would become a hotbed for new residential infill. That prediction seems to be coming true, as Orion Construction received approval to start yet another large-scale, mixed-use project right at the "gateway" where Medical Mile ends and Belknap Lookout begins, just north of the I-196 overpass.

Gateway at Belknap











 


Lofts on Clancy (also in Belknap)
66 market rate apartments
Estimated investment: $8 million
Status: demolition of existing homes finished
Developer: RJM Holdings
Architect: Nederveld Associates

As with most of the new Belknap projects, this one required the demolition of 12 existing homes along Clancy Avenue. But after developing a new Area Specific Plan, Belknap Lookout residents felt that a new injection of brand new residential units in strategic locations would help stabilize the surrounding neighborhood. In addition to the Gateway project on Coit, this four-story, four-building project will drastically change the feel of Clancy Avenue.

Clancy Street Townhouses









Klingman Lofts
83 income-restricted apartments
Estimated investment: $21 million
Status: renovation underway
Developer: Mike Jacobson

This collection of buildings melded together dates back to as early as 1897, when the furniture industry in Grand Rapids was in the midst of a boom, and was added to the National Register of Historic Places in 2013. Developer Mike Jacobson plans to gut, renovate and "lift" the entire Klingman's Factory building (to help stabilize the building, over 600 helical piers are being sunk into the soils below the foundation). The 83 income-restricted apartments adds to the Baker Lofts project that Jacobson completed just down the street last year.
Klingman Furniture Factory












Morton House
100 market rate apartments
Estimated investment: $25 million
Status: renovation underway
Developer: Rockford Construction

The renovation of the historic Morton Hotel at the epicenter of downtown Grand Rapids at Monroe Center and Ionia Avenue has kicked off, with a new apartment model on the ground floor. Much of the ornate ground floor spaces had been walled off by the previous owners, who used it for a Section 8 housing program which expired a few years ago. Rockford Construction hopes to bring in a restaurant or flagship retail tenant to anchor the ground floor.


Morton House

























Add it all up

Using numbers obtained from Downtown Grand Rapids Inc. (DGRI) back in 2013, there were slightly over 1800 existing rental units within the DDA boundaries, with almost an even split between market-rate and income-restricted. Since that time, 616 Development has added several renovation projects to the mix, as well as Brookstone Capital's recent completion of 240 Ionia and two mixed-use projects at the corner of Cherry Street and South Division. By our calculations, that adds nearly 1000 more apartments to the mix in the downtown and near downtown area -- not to mention close to $200 million in construction activity.

Will all of these added projects be sustainable? Will the 98 percent occupancy rates that downtown currently enjoys remain steady? Do the terms "market-rate" and "income-restricted" carry a lot of baggage with them? Will new downtown condo projects start to take off again with all of this demand?

We plan to tackle these questions and more in the next part of this series in an upcoming issue. For now, we trust you'll join us in marveling at the cranes that dot the skyline of our city this fall.

Jeff Hill is publisher of Rapid Growth Media

Photos by Jeff Hill
Renderings courtesy of the developers/architects