ConoverBond President Robert Brewster tells GlobeSt.com the company acquired 86,000 sf of existing buildings on 70,000 sf of land this spring for $2.075 million. Six of seven buildings will be renovated and remodeled to house 50 apartment units and some of the retail space. The remaining retail space and residential units will be housed in adjoining new construction.
Located on Brown Street between Riverside and Sprague avenues, Havermale Park is scheduled to be completed in phases over the next 12 to 24 months. Financing is being provided by American West Bank in the form of a construction-to-mini-perm loan that carries an interest rate of about 6%. The bank also purchased $700,000 in tax credits related to one of the historic buildings included in the project. The rest of the equity for the project is being provided by Brewster and one joint venture partner.
The property is within a few blocks of the branch college campuses of both Washington State University and Eastern Washington University and about a mile from Gonazga University. Triple-net retail lease rates are expected to be in the range of $12 to $18 per sf per year and tenants are expected to include boutique shops, unique restaurants and a grocery store. The apartments will include a mix of studio, one- and two-bedroom units, with rental rates expected to come in right around $1 per sf per month.
Brewster says he expects no problems in leasing up the retail space and expects to fill up the apartment units within three-to-five months of completion. His confidence is in part due to a recent housing market analysis by the Downtown Spokane Partnership, a private, nonprofit organization that serves as Spokane's central city advocate. "The DSP housing study shows that a range of people--from students to young families to empty nesters--want to live downtown," says Brewster. "Having data to demonstrate this demand makes a big difference with lenders."
Another important factor in the project's feasibility is a new ordinance that allows use of wood-frame construction in buildings as tall as 65 feet--15 feet higher than what was possible in the past. "The new ordinance makes building in downtown Spokane more appealing to developers," said DSP President Mike Edwards. "It is a direct recommendation of the Downtown Housing Market Analysis."
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