New condo building planned for Midtown Mile
New condo building planned for Midtown Mile
Former Aaron’s Inc. CEO and now full-time real estate developer Robin Loudermilk is planning a new condo building on the Midtown Mile — the first in almost seven years.
Loudermilk is partnering on the eight-story building at 867 Peachtree St. with fellow developer Dwight Bell.
The site currently houses a popular intown Starbucks that will be temporarily relocated nearby. It will eventually form the street-level retail component of the new condo building.
The $20 million mixed-use project was originally going to offer new apartments, but recent condo sales and price appreciation trends in Midtown led Loudermilk and Bell to change their plans.
The project will be called “Seventh” and feature 21 condo units ranging from 1,700 square feet to 2,000 square feet.
Those units will start at $600,000.
The project will also include two 2,500-square-foot penthouses, starting at just under $1 million.
It’s being designed by the architects Lord, Aeck & Sargent.
Seventh will offer access to the amenities in the adjacent Viewpoint mixed-use project, including its condo tower and roughly 30,000 square feet of retail space.
Loudermilk and Bell said their new project doesn’t have a construction loan. They won’t break ground until a significant number of the units have been pre-sold.
Seventh reflects how condo development has quietly crept back into the real estate conversation, even as a wave of new luxury intown apartment projects continues to build. Seventh will test the market’s appetite for new, for-sale high-end units in the range of $350 to $400 a square foot.
“Maybe what we are planning will be the icebreaker,” Loudermilk said.
Several trends bode well for the project, analysts and developers say.
Intown condo inventory continues to dwindle, and some high-profile projects are nearly sold out.
Sales of units on the “Midtown Mile,” a stretch of Peachtree known for office and residential towers and street-level retail, have been brisk over the past year. At the 35-story 1010 Midtown developed by Selig Enterprises Inc. and Daniel Corp., 85 new sales were recorded in 2012, according to real estate consulting firm Haddow & Co.
“Assuming they maintain the sales pace they’ve experienced the last two years, it will be nearly sold out by the end of 2013,” Vice President Ladson Haddow said.
Resale prices are also increasing across intown Atlanta, rising 19 percent across intown Atlanta from 2011 to 2012.
That marked the first year-over-year gain since 2007.
“I believe in the Atlanta condo market and I believe Atlanta has accepted this style of living,” said Reid Freeman, president of developer Regent Partners LLC. “This is a bite-sized project they are proposing, so it’s digestible. You also have to look at the momentum of the [for-sale] residential market. It’s turned dramatically in the past 90 days.”
Location is another apparent advantage, Loudermilk and Bell said.
Atlanta’s young professionals, part of the broader demographic known as Generation Y, prefer intown living in walkable neighborhoods close to job centers and amenities such as restaurants, shopping and entertainment.
“And Midtown is Atlanta’s true urban residential market,” Bell said, citing the access to transit and amenities.
Whether Loudermilk and Bell can achieve $350 to $400 a foot remains to be seen.
Since the sales rebound began more than a year ago, most of the activity was at less than $300 a foot, according to market data.
But Loudermilk likes recent trends.
“We’re hearing some units at 1010 are approaching $400 a foot,” he said.
In Buckhead, The Ritz-Carlton Residences saw 48 new sales last year at an average of $383 a foot, according to Haddow & Co.
Seventh is part of an overall plan to redevelop a block along the Midtown Mile with the addition of new residential towers and retail. The effort includes developer Jim Borders, whose 100 6th Street apartment tower is directly behind Viewpoint.
The plans are another sign that developers are trying to get on the leading edge of the market’s resurgence.
“I’ve seen roughly eight recessions and recoveries in Atlanta in my time covering the market, and every time it’s the developers who are paying the closest attention to the demographic-and-supply trends that end up doing the best,” said Alan Wexler, founder of the real estate firm Databank Inc. “Those that limit their supply of units accordingly this time are going to succeed.”