DEVELOPERS SEE BRIGHT FUTURE FOR DOWNTOWN LIVING IN SOUTH BEND
SOUTH BEND — Amidst the ongoing boom in housing options in or near the city’s downtown area, local developers expect more of the same heading into the future.
The success of new developments and the ongoing urban-focused preferences by prospective tenants has continued to buck trends of decades past that saw people moving out of cities for a suburban lifestyle.
“I still think there’s room to grow,” David Sieradzki, vice president of Century Builders, said of downtown housing development. “We’re reaching that point where downtown is not just a place to go work, but a place to live as well.”
The trend isn’t unique to South Bend.
Fort Wayne, Indianapolis and cities throughout the country are also experiencing an urban revitalization.
The move to the nation’s cities has been led by a combination of young professionals and empty nesters, but local developers think young couples and families are also beginning to come around when it comes to living near downtown.
In 2013, market research firm Zimmerman Volk Associates projected that over the ensuing five years, South Bend’s downtown housing market had the potential to absorb 322 new apartments units.
According to a study published by Bradley Company, the downtown market added 33 new apartments in 2016, 113 in 2017, and now over 230 units are getting ready to open or are under construction, with even more units in the planning stages.
Currently, market-rate rent prices among existing downtown units hovers between $800 and $1,200 a month for a one-bedroom apartment, and between $1,000 and $1,500 a month for a two-bedroom apartment.
The growth of available downtown units has included the construction of the Colfax @ Hill apartments on East Colfax Avenue and renovation of the old LaSalle hotel and JMS building. Soon completion of construction at the Ivy at Berlin Place and the renovation of the Hibberd building will bring new units to the south end of downtown.
“We see the pace picking up,” said Rudy Yakym III, Bradley Company senior vice president. “Past performance is no guarantee of future success, but it’s a pretty good indicator.”
And within the new apartment units downtown, Yakym said, vacancy rates are in the single-digit percentage points, a positive sign that the apartments are meeting consumers’ preferences.
Yakym said the 2013 Zimmerman Volk study helped provide developers, investors and bankers with a quantified look at demand, giving them confidence that new development could see success in the downtown. and since then, the entrance of new developers heralds a new phase of growth.
“What’s most exciting about downtown South Bend is we have real traction in development,” Yakym said. “It’s not all one or two developers anymore making a difference in downtown. We’re seeing multiple sources of investment.”
And Yakym doesn’t expect that to slow heading into the future, though he noted there is demand for another grocery store downtown and potentially a few more fine dining restaurants.
The Commerce Center mixed-use development that is planned in the East Bank neighborhood would solve the grocery issue, as plans include a Martin’s Super Market inside the structure, which is expected to break ground yet this fall.
James Mueller, director of the city’s department of Community Investment, said experts have noted the progress in the city, but said there’s still room for expansion in the city’s urban core.
“We’re really just about a third of the way there,” Mueller said. “We really want to continue increasing (downtown housing). Long term we want it to be two to four times the current amount.”
Mueller added that ideally the city should aim for 10 percent of its population to live in its urban core area near the downtown, to support a vibrant downtown and sustain retail and other businesses.
Overall, nearly $180 million will be spent building new residential units downtown, once all planned projects are completed.
The downtown trend isn’t limited to apartments. The initial wave of young professionals and empty nesters can set the stage for families to consider living near the city’s downtown, Sieradzki said.
Century Builders was part of a partnership that built the Colfax @ Hill apartment building, which was the first new apartment construction near downtown when it opened in 2016. Now the company has turned its sights toward building town houses and custom single-family homes on the south side of the East Bank as a part of the Village at Riverwalk development.
There, Century Builders has nine houses either finished or under construction out of 43 lots, and has built and sold 14 new town houses, with plans to build 28 more. Several of the homes and town houses are now occupied.
“You have the early adopters being the young professional and empty nesters,” Sieradzki said. “But we have seen, whether it’s Riverwalk, or around Notre Dame, that families more and more, especially families moving from out of the area don’t have the same preconceived notions of what downtown living is.”
Both Sieradzki and Yakym said the reason for the change in preferences is that consumers are looking for housing options that provide them an “authentic” experience, involving the combination of work, life and play.
“With everything that’s going on and changing in the city,” Sieradzki said, “the rebirth of the downtown and reinvestment in parks and downtown spaces, people are getting excited about that.”
Read Full Article HERE.