Whenever Mark Wood strolls along N. High Street in the Short North, past restaurants, coffee shops and construction cranes, he can't help thinking about the future of this booming section of Columbus.
Whenever Mark Wood strolls along N. High Street in the Short North, past restaurants, coffee shops and construction cranes, he can’t help thinking about the future of this booming section of Columbus.
“This has the potential to be the best location in the Midwest as far as any district or strip of a city,” said the president of Columbus-based developer Wood Cos.
Wood Cos. just completed a $6 million upgrade to its property on the southwest corner of N. High and W. 2nd Avenue, adding 24 upscale apartments and a parking garage above the Northstar Cafe.
And Wood Cos. has several other Short North projects in the works.
“There aren’t many areas that have this type of character and vibrancy,” Wood said.
Just south of W. 2nd, the $25 million Hubbard project is nearing completion. It will include ground-floor retail space, 72 apartments and a 250-space parking garage.
A few blocks farther south, construction has started on the $65 million Pizzuti Cos. project. It includes a boutique hotel on the east side of N. High and an office building with retail space and 313-space parking garage on the west side of High. There’s no question that development in the Short North is on the upswing. The reasons are many. “It’s a confluence of factors,” said Joel Pizzuti, president of Pizzuti Cos.
“The demand from the end users is matching up well with the developers’ desire to build, and lenders are willing to lend.”
The availability of loans and low interest rates are a change from a few years ago, when “very few were lending on new construction that they considered speculative,” Wood said. Even residential projects that were not pre-leased fit this tough-sell mold.
“Lenders are now willing to lend on developments that are well-located, in markets that have a good ... history, and with experienced developers,” he said.
The trend of these new projects in the Short North is taller, mixed-use buildings with higher lease rates. There is also more new construction to the east, west and north of the N. High spine of the Short North.
“The idea that our Downtown will be connected to the Ohio State campus is becoming a reality,” Pizzuti said.
Much of the demand is driven by young professionals who want to live in walkable, bike-friendly urban settings filled with amenities.
“Today’s younger generation is looking at three to four job moves by the time they hit 40, so they can’t be caught with assets they have to liquidate, and so they’re thinking rentals,” said Mark Wagenbrenner, president of Wagenbrenner Development.
The company joined forces with Elford Development on the Hubbard project.
Wagenbrenner is the developer of Jeffrey Place, a mixed-use project that eventually could include as many as 1,500 residential units along N. 4th Street on land that was once an industrial site.
“The recession changed everything,” Wagenbrenner said. “It moved everyone off of condos, and now everyone is rental-oriented, and I see it staying this way for a while.”
He also has seen a loosening in lending.
“It’s still not without its challenges,” Wagenbrenner said. “But the multi-family sector is a good one to be involved in. Things are rosy in that sector, but they never last forever, and rarely do they last long. Hopefully, this one’s longer than most.”
Years ago, as the Short North began its comeback, buildings were renovated; new construction was rare. Now, some of these buildings are being replaced by taller buildings.
“Going vertical means more density, and that helps make the numbers work,” Pizzuti said.
These taller projects are expensive but have been able to generate the higher commercial and apartment lease rates necessary for financial success.
“You need these higher lease rates to support new construction, and we weren’t getting it before,” said Mike Simpson of NAI Ohio Equities.
The rental rate for Short North apartments in new buildings is about $1.80 per square foot per month, Wagenbrenner said. “They’re about $1.15 to $1.20 in the suburbs,” he said. “We’ve found people moving back into town will spend more of their disposable income on housing.”
The lease rate for commercial space in new buildings ranges from $25 to $40 per square foot per year, said Wagenbrenner and Pizzuti.
Simpson called these among the highest rates in central Ohio. The rates eventually could force some businesses out of the Short North.
“We’re worried we could be priced out of the neighborhood,” said Emily Monning, who owns the Paradise Garage bike shop at 921 N. High with her husband, Dan. The building was recently bought by the Wood Cos.
“Mark (Wood) said he plans to develop it, but he doesn’t know when,” Emily Monning said. When he does, Paradise Garage might need to find a new home. “I hope we can find another spot in the neighborhood,” she said.
Pizzuti recently announced that it had landed Anthropologie as the anchor tenant for its new Short North project.
“That signals a big change, that a national-brand fashion retailer is coming to the Short North,” Simpson said. “It does homogenize it a bit, but I don’t anticipate a bunch of national brands rushing to the Short North.”
All these new projects are a sign that the local economy and outlook are improving, and the well-placed Short North is benefiting.
“There’s obviously an element of pent-up demand as we come out of the recession, and you’ll see it concentrated in your hottest markets,” said Steven Schoeny, director of the city’s Department of Development.
While there is still plenty of room for growth, parking — and the lack of it — could determine how much more the Short North grows.
“The ability to get people in and out of the Short North, and, if they have a car, what to do with their car, is the key,” Schoeny said. “And the other concern people have is making sure the Short North remains an authentic experience and doesn’t become chain after chain.”
The height issue is a concern for the Victorian Village and Italian Village commissions, which approve renovations and new projects in the area known as the Short North.
“These are designated historic districts,” said Marc Conte, chairman of the Victorian Village Commission. “And while there’s pressure to go up in height, it may or may not be appropriate.
“We will uphold the historic nature of the area.”
©2013 The Columbus Dispatch (Columbus, Ohio)
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