Downtown loft developments uphold supply, demand

The tally of downtown residential lofts in Springfield has only flourished, but would-be townies still might be hard-pressed in finding a place to call their urban home.

From just 45 available units in 2002, the number of downtown lofts soared to nearly 800 in 2017, according to an urban housing study recently released by the Downtown Springfield Association.

Completed in fall 2017 by Southwest Valuation LLC, the analysis covers 15 years of loft-space development, reporting a 96 percent occupancy rate for the lofts and new detail on the boom in student housing.

“This study really verified that, yes, demand is keeping with that new supply, and we were really pleased with the loft occupancy remaining at 96 percent, staying right up there with the previous 97 percent,” said Rusty Worley, executive director of the Downtown Springfield Association.

From the world stage to Midwest America, Worley said, a trend toward urban living helped drive downtown Springfield’s growth, as the local market now shifts more toward downtown infill projects and additional office space. And don’t forget more student housing – to the tune of 2,400 beds over the last eight years, Worley said, concentrated between Missouri State University’s campus and downtown.

“Urban living is not for everyone,” he said, “but it is attractive to certain demographics, from college students to young professionals, empty-nesters, those who appreciate socializing, those who love sidewalk cafes, a walkable lifestyle [and] street festivals.”

The trend coincides with another. As more residents shift downtown, the city’s single-family homes are being freed for budding families, Worley said.

Back downtown, he said growth in loft space also lies with use of federal and state historic tax credits – offering combinable tax credits of 20 and 25 percent for eligible construction costs, respectively – and 10-year tax abatements for the often mixed-used redevelopments, where street-side commerce meets upper-level living quarters.

“Most of our projects do include the federal and state historic tax credits, and then often some tax abatement,” he said. “After 15 years, we are getting some of those projects that are rolling off tax abatement, and the new assessed value is coming online, and the taxing jurisdictions are benefiting from that.”

In just the Downtown Springfield Community Improvement District – an area roughly between Grant and Kimbrough avenues, and Chestnut Expressway and Elm Street – the total growth in assessed value increased to $60 million in 2016 from $8 million in 1999, according to the DSA.

Meanwhile, Craig Wagoner, owner of Brentwood Management Inc., said an occupancy rate running in the 90th percentile or greater remains unremarkable for the roughly 200 downtown lofts managed by the company.

“Oh, yeah, that’s pretty normal,” Wagoner said.

Olin Holland, community manager for Heer’s Luxury Living, said occupancy is full at the 138 Park Central Square historic building.

“We’ve been hovering around 97-98 percent since October,” Holland said, before recently hitting the 100 percent mark.

Heer’s opened with 80 apartment units in mid-2015 after a roughly $16 million redevelopment by The Dalmark Group of Leawood, Kansas.

What has been remarkable to Wagoner is the boom for students.

Major additions include the roughly $50 million Bear Village complex along South Kimbrough Avenue at Grand Street; the $40 million Aspen Springfield, 1028 E. St. Louis St., across from Hammons Field; and Vecino Group’s $38.5 million Park East development, with Sky Eleven, The Sterling, Cresco and The U, according to Springfield Business Journal reporting.

Up next, St. Louis developer Sam Chimento and a crew of partners plan to invest $23 million to erect a four-story, 344-bed housing complex set back from the corner of Walnut Street and Jefferson Avenue, at 430 E. Walnut St. It’s scheduled to be ready for students by August 2019.

Also, MSU officials and Bryan Properties continue to iron out plans for a new dorm with room to hold 400 students. The university’s Board of Governors plans to meet in May on the project, said MSU spokeswoman Emily Yeap.

Yeap said MSU is planning for a fall 2020 completion of the project at Holland Avenue and Madison Street, where older apartments have been torn down to make way.

Worley said occupancy for student housing currently hovers at 93 percent, a notably firm figure considering the relentless addition of student beds.

“Our development has been steady, and the trend lines have been very positive,” he said. “We have not seen the boom or bust cycle in student housing that many flagship college towns have.”

A market analysis on student housing came as a new addition to the ongoing urban housing studies, which are commissioned by the Springfield Finance and Development Corp. After the first study in 2002, a second was completed in 2007, with a third follow-up done in 2012.