Supplying the Demand

Loft condominium developments like the Tichelis’ are pre-selling well before construction begins. People are shelling out $5,000 to $10,000 to reserve loft units in the 27 projects currently underway on either side of the City’s major railroad lines that divide the Central Business District from the area called Midtown.

Sales prices for loft condos start as low as $95,000 for those less than 1,000 square feet and go as high as $900,000 for larger penthouses.

The $900,000 penthouse is one of 23 condos planned for the five-story former Jefferson Home Furniture building. The penthouse unit includes a metal garden terrace that wraps around the entire floor and a private elevator, among other upscale amenities.

“The funny thing is, the penthouse was the first one to go. And there is a backup (reservation) on it,” says Don Acton.

Acton and fellow RealtySouth agent, Pete Graphos, are also marketing the New Williams Lofts on Third Avenue North. The $2 million-plus redevelopment of the former women’s clothing store and beauty school will have ground-floor parking, four floors of high-end lofts ranging from $199,000 to $299,000, and a rooftop deck. One loft has two levels of living space.

Acton and Graphos predict all 23 units in the Jefferson Lofts and all 15 in the New Williams Lofts will be bought and occupied shortly after they’re finished in about a year, before other conversion projects are finished.

Those buying for investment purposes stand to make huge returns because of the hot Downtown condo market, Acton and Graphos say. One of their clients made a nice profit when they recently sold a loft condo the client bought just last year.

Acton and Graphos have been actively selling in Downtown for three years and they are enthusiastic about the “tremendous” changes they are seeing already.

“It’s gone from having buildings you couldn’t give away three years ago and paying $50 dollars a year for property taxes on them to paying thousands of dollars in taxes on them. That can’t be anything but a shot in the arm to the City of Birmingham. And at a time when Birmingham is losing population, it is gaining new property taxes. So this is great for them,” Graphos says.

“This is one of the most exciting things we have ever been involved in.”

New Construction

Downtown Birmingham’s new condominiums are not limited to conversions of historic buildings. Several of the bigger loft projects are being built from the ground up.

The first and largest under construction is Bristol Southside, a new mid-rise development in Midtown with 156 condominiums.

Ashlyn Hines, a principal of Nashville-based Bristol Development Group, and David Hanchrow, Bristol’s vice president of development, say they happened to be driving through the City on other business last year when they saw the old Tom Williams location near 20th Street and Fourth Avenue South. Immediately, they called their broker to find out more about the site.

“It was such an obvious location, and there is no residential development around it – something that has amenities, swimming pools, courtyards, a really nice fitness center – all the things people use that can contribute to an urban lifestyle.”

Bristol Southside features those amenities and others, including high-end kitchens, high-ceilings, cable with high-speed internet connections, and secured parking. Condo prices in the $16 million development range from $98,900 to $424,900.

“We build high-end urban communities that don’t exist in markets like Birmingham, residences with great amenities and walkable locations,” Hines says “We look at a location and put in the coolest thing that makes economic sense.”

The Bristol developers believed they found just the right spot at the right time, based on the urban living resurgence they saw in other cities and on what they saw happening in Birmingham.

Hanchrow says pop culture television shows such as Friends and Sex in the City have attuned people’s eyes to seeing city living as cool and glamorized the idea of walking to coffee shops and hanging out at neighborhood bars and restaurants.

He says Birmingham’s local economy is relatively stable and its urban market, especially its condo market, is particularly strong in a time of low-interest mortgage rates, when people can build equity as loft owners rather than renters.

Plus, in a time of soaring gas prices, urban living allows people to be closer to work and leisure, making them less car dependent and giving them more time. “All you have to do is sit in one good traffic jam on (U.S.) 280 to know why people want to live in town,” Hanchrow says.

A local development group is building new too, the ambitious Railroad Reservation Lofts.

The $40 million, 11-story, new construction project on First Avenue South will include 147 condominium units in its first phase, half of them apartment rentals and the other half condos for sale, says Robert Simon of Corporate Realty Development, the lofts’ developer.

Its ground floors are targeted for retail businesses such as restaurants and a European market that are expected to serve its residents and workers from the nearby UAB’s medical complex. The development will sit across from what may likely be another ambitious project.

“The City is adopting a (Downtown) master plan with one very important amenity – the Railroad Reservation Park,” Simon says “It’s very important that the City spends money on parks and that people are encouraged to use them. That’s what this is about – quality of life.”

Simon says new construction projects allow developers to control costs better than a renovation project, where unexpected surprises can be expensive. But it also allows them to create a loft dwelling with upgraded amenities, yet maintain an urban look and feel.

“We define urban as great lighting, good use of space, high ceilings, big windows, brick and exposed steel,” Simon says. “You’ll see rooftop decks with swimming pools, (hi-tech) media room and fitness center on the property. . . It will be all of that. We’re very focused on amenities in our developments.”

The growing number of mixed-use residential, retail and cultural developments will begin to spur the 24-7 activity that will shape the fabric of urban living in Birmingham, Simon says

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