City of the Future is the Old Neighborhood

April 2007

The condo market is alive and well in the Cincinnati area, despite having cooled down on the national front. However, two distinct changes have taken place. There appears to be a switch from purely multi-family projects to more residential mixed-use projects that often include residential and office condominiums along with a retail/commercial/entertainment component. Another change is there has been a shift in regards to the demographics whom the developers are targeting as buyers.

The younger, “creative class” is the new target group that is willing to buy in the areas urban market, but very few units exist in these neighborhoods that are within their price range. Developers were mainly going after the higher-end homebuyers, the retired 50+ empty-nesters.  These units are priced around $400,000 to well above $1 million, but that is about to change. Over the next few months, over 250 market rate, yet affordable, units are coming on line in the Over-the-Rhine (OTR) and Central Business District (CBD) neighborhoods. The pricing for these units starts around $85,000. With interest rates still low and apartment rents starting to creep up, this price range is right for the first-time home buyer, recent grad, and young professionals, both single and couples.

This growing and desired market brings with it a new set of challenges and opportunities for the developer such as:

  • Redevelopment in urban infill at smaller scale always creates an "overhang" in cost versus market revenue.
  • Development in these conditions requires private/public partnerships to be feasible.
  • Creative financing tools to offset cost overhang must be analyzed and committed up front.
  • Requires a broader skill team to bring a project to the point of approval.
  • Lower buyer incomes are not the only distinction in the new market demographics.
  • Larger fraction of buyers are single, or without children, and will overlook the "school issue" as long as the employment center trends are strong.
  • New market buyers award a premium to short commute to work and near-by life-style amenities.

Although the Cincinnati area is just now starting to see the emergence of true mixed-use community developments, surrounding cities such as Lexington, Louisville, and Columbus have “driven” the creation of these neighborhoods, complete with residential and the retail, office, and entertainment components. In order to make these projects viable, our developer clients understand the proven necessity to provide components such as coffee shops, dry cleaners, restaurants, etc., which can benefit economically as a part of the collective neighborhood, while providing the needed and desired services for the new residents.

While GBBN has had great success on high profile projects such as Park Place at Lytle, Harbor Greene, The Ascent, and Soaring Eagle Lodge, we see the Urban Infill project as the next trend in residential and mixed-use development. Our involvement in this urban market is the best way for us to do our share in helping revitalize urban cores such as that of Cincinnati and Northern Kentucky.

Our Development and Mixed-Use team is made up of people who are passionate about being part of the urban renaissance and dedicated to making projects successful for our clients and for the communities themselves. We have a strong understanding of the different markets and demographic segments, historic areas, complex financing options, and city approval processes that can reduce the time it takes to bring a project out of the ground. We possess a development-based insight crucial to project viability, over and above our extensive product type architectural experience – this knowledge base differentiates us from our architectural competition.

We have taken to heart Andrew Cuomo’s quote ”The city of the future turns out to be the old neighborhood”