Downtown Greenville continues to enjoy a local, regional and national buzz as a great place to work, live and play. A conversation about downtown real estate usually turns to the question, “Is there sufficient demand for all of the housing coming on the market?” Beyond that question is a bigger one: “Are we ready to provide all of the services needed for this growth?”
The answer is complicated, and demands that we first look at some rough boundaries to understand the sub market and the projects both under construction and planned.
Greenville CBD defined
A generally accepted definition of the Central Business District/Downtown would be from Academy Street to Stone Avenue to Church Street to University Ridge to Pendleton Street. The residential housing that is planned or under construction needs to be further broken down into two categories: Multifamily/Apartments and Condominium/Townhouse.
Multifamily/Apartments
No apartment buildings of any scale were available downtown until McBee Station opened in 2007. It leased out quickly and has remained full with increasing rents. As the credit markets favored the multifamily sector, even during the recession, multifamily became the product of choice for developers. Increasingly, the majority of our multifamily developers are from out of market and generally from out of state as they try to capitalize on Greenville’s robust market.
So far, so good. Two recently completed multifamily buildings, 400 Rhett and River’s Edge (approximately 300 units) are already 100 percent occupied. The depth of the market will be tested as the next wave of product approaches completion. You can expect stabilization in rents.
Currently, six projects are under construction in downtown, creating 1,442 multifamily units. Delivery will be from the fall of 2015 to summer of 2017. Another 727 units in five projects are at various stages of approvals and permitting. The timing of these projects should help absorb the inventory.
Condominium/Townhouse
Due to available credit for both the developer and the end user, new condominium product is just beginning to break ground. Some that pulled back their plans in 2008 are now the first to the market.
Eleven projects are planned to date, totaling 282 units. Six of those are under construction, which will create 124 new condo/townhouses over the next 12-18 months. Keep in mind that there has been no significant condominium construction downtown since 2007 and supply is tight. An example of current demand is 121 Rhett, which has just begun site work and 32 of 36 condominiums have already gone under contract with firm money, not just a reservation.
Condominium construction is back, although it will be with more caution than multifamily, as these developers are almost exclusively local with local financing. It also should be noted that some of the new apartment buildings have been built with the option to convert to condominiums at the appropriate time.
Greenville’s future
Downtown will continue to see unprecedented growth due to all of the amenities offered and people’s desire to move back to the urban core. This trend has been well documented on a local, as well as national, basis. There is great interest in our downtown, not only for residential opportunities, but also office, retail, restaurants and hotels.
The caveat for developers is that new residential housing in downtown needs to offer multiple price points, for many target markets and lifestyles. At this time, we have been building to essentially the same profile and we must diversify our price and product offerings. We need to be building for all segments of the market.
Prices are driven up as the cost of land, labor and materials continue to increase. The reality is that “affordable housing” downtown, in both the multifamily and condominium markets, will require greater collaboration between public and private interests. And of course, who is defining affordable?
If all of the planned construction takes place, the current population of downtown will double over the next two to three years. This will offer many challenges and opportunities. The city of Greenville has done a great job of planning over the years and many great things have been accomplished.
While our downtown is the envy of many areas, some tough questions remain ahead, and even tougher answers. We are working with a sewage system that is antiquated and has been overlooked for years. Lack of capacity is holding up some development. Parking has been addressed in some areas, but specifically the West End needs structured parking now. The existing trolley system is not adequate and the need for additional routes and equipment will continue to increase. This is a critical service as our downtown roads are not designed for all the vehicular traffic that another 2,000-plus residents will bring.
The need is strong for additional grocery stores, drugstores, movie theaters, self-storage, retail and hotels, to name a few. Managing the growth and insuring that we continue to plan will be a challenge in order to grow smart and maintain all of the good that is downtown Greenville.
However, to validate some of our accolades, just go to visitgreenvillesc.com for a listing of all the awards and reviews we have received over the past few years. Downtown Greenville is on a roll and it is just beginning, again.
