The trickle of new Downtown residences that have opened in the past few years is turning into a stream, providing the first real test of the urban housing market.
Four buildings that opened between November and January are welcoming their first tenants. They will be followed by roughly one new building a month for the next two years.
This year alone, nine more apartment and condominium buildings are expected to open, adding almost 1,200 new residences to the city’s core.
“Nobody can predict exactly how many people will want to live in the urban core,” said Rob Vogt, managing partner of the Columbus-based apartment consulting firm Vogt Strategic Insights. “We’re seeing a real surge in projects, but the important thing is we’ve had consistent absorption so far.”
The newest Downtown apartment buildings — the Neilston, the United States Carriage Co. and two complexes known simply by their addresses, 223 E. Town and 303 (S. Front) — bring stylish urban views and funky loft vibes, along with rents ranging from $1,000 to $3,000 a month.
With more than two dozen additional projects on the drawing board featuring 2,000 apartments and about 100 condominiums — not including residences proposed in nearby areas such as the Short North and Franklinton — builders are eager to open and fill their buildings before the next shiny object comes along.
“The sooner you can have your product on the market, the better,” said Adam Trautner, vice president of Stonehenge, the developer of the George apartment complex on East Oak Street, which will include 94 units when it opens at the end of the year.
“When you start construction, the goal is to get it open as soon as possible.”
All four new buildings are offering deals to lure tenants before more competitors open their doors, but, in fact, Downtown apartment buildings so far have filled up quickly. About 5 percent of Downtown’s apartments are empty, which indicates normal transition more than permanent vacancies.
The new wave of residential construction vastly expands housing’s Downtown footprint.
Until now, most of Downtown’s new residential buildings have been clustered in a few areas such as Long and Gay streets and the Arena District.
Now, however, projects are underway in every corner of Downtown, including the traditionally underdeveloped eastern area known as the Discovery District.
“We see a lot of demand for the whole Downtown market,” said Joel Pizzuti, president of the Pizzuti Companies, a partner in two recently announced projects near the Columbus Metropolitan Library. “It’s not specific to one area.”
Pizzuti, like other builders, remains bullish on Downtown despite the abundance of competition.
One reason is the scale of the projects. Even though they might rise a dozen floors or more, Downtown apartment buildings are far smaller than suburban complexes.
“The thing about Downtown is, it’s difficult to add a lot of density,” said Brad DeHays, founder of Connect Realty, which is converting four old buildings at Long and Front streets into 37 apartments under the MicroLiving brand.
“We see all these cranes and projects, but it’s not like you see in the suburbs, where you can put a 200-, 300-, 400-unit apartment project up. What we see are projects with 50, 100, 150 units, so even though we have a significant amount of supply coming on in 2018 and 2019, I still think it may be difficult to keep up with demand.”
And, only about 18 percent of all apartments set to open in central Ohio this year are Downtown, according to YardMatrix, an apartment research firm.
“The total number of units Downtown just isn’t that great,” Pizzuti said. “It’s not like we’re delivering 5,000 units. We’re delivering a manageable number.”
Population and housing growth also help put the numbers in perspective. Since 2010, central Ohio has added more than 15,000 new households each year, many of them headed by young and single residents, the prime audience for Downtown living.
That audience, which is transient, also helps explain why almost all of the new Downtown residences are apartments. Of Downtown’s 31 new residential projects, only two are condominiums, a sharp contrast to the 2003-2008 wave of construction, which saw far more condominiums than apartments.
About 8,400 residents now live Downtown, a figure expected to reach 11,750 by 2020. But even with that growth, Downtown Columbus will still have far fewer residents than downtown Cincinnati or Cleveland, according to a report released last week by Capital Crossroads & Discovery Improvement Districts.
According to a study commissioned by the National Multifamily Housing Council and National Apartment Association, the Columbus area has a lot of apartment catching up to do. The area needs more than 33,000 new apartments by 2030 to match demand, and many will continue to rise in the center city.
“We think there’s a huge future Downtown,” said Mike Balakrishnan, president of Celmark Development Group, which helped develop the View on Grant apartment building about to open near Columbus State Community College.
Balakrishnan sees parallels between what’s happening now in Columbus and what happened a few years ago in Austin, Texas, where his firm also does work.
“I’ve seen what’s happened in downtown Austin, and it’s staggering,” he said. “If that’s any indication, I think Columbus is poised for a huge spurt in Downtown rental.”