Moving (even) more upscale: High-end projects changing the face of Birmingham
More than a half-dozen projects totaling well north of $250 million are either under construction or in the serious planning phases, working their way through the various city approval processes.
In all, they will bring a new luxury hotel, swank condominiums and apartments (“affordable for Birmingham,” one developer emphasized of the rentals), tens of thousands of square feet of office, trendy upscale retail and additional parking to one of the region’s most affluent communities.
Ron Boji, one of the developers on the project that also includes John Rakolta Jr., Victor Saroki and Paul Robertson, said a development agreement has not yet been signed but that public design meetings are tentatively slated for the spring. A term sheet is expected by January, he said. Multiple buildings are planned.
While the outcome of that project isn’t yet set in stone, one thing is certain.
“There is a greater demand for this kind of community, with a walkable feel,” said Sam Surnow, president of Birmingham-based real estate firm The Surnow Co., which is redeveloping the Church of Christ, Scientist property at 191 Chester St. into The Jeffrey, a 24,700-square-foot, $12.5 million office building named after his late father, well-known Birmingham developer Jeff Surnow, who died in 2015.
“People are veering away from malls, and it’s becoming more and more attractive to have this type of atmosphere. The market is hot and people are jumping on opportunities. People are paying crazy prices on things and are willing to take risks.”
Example A: The $7 million price tag for less than an acre of land in 2016 on which construction is now taking place on the luxury 126-room, 17-residence Daxton Hotel, a project led by Mark Mitchell of Birmingham-based Lorient Capital.
Matt Shiffman, whose Birmingham-based Alden Development Group LLC has more than $90 million in development projects nearing completion or in the pipeline, agreed with Surnow.
“Values seem to be a little bit high on raw land,” he said. “That said, you have a lot of land owners that, in a strong economy, are trying to maximize the biggest return that they can. But pricing on their land, to eager developers who want to do things at very high numbers, is challenging in order to make solid returns on investment.”
Mark Nickita, co-founder and president of Detroit-based architecture and planning firm Archive DS and a Birmingham City Commission member, said the activity in Birmingham is a continuation of an ongoing drift toward downtown urban cores.
Posted By: Crain’s Detroit Business on November 25, 2018. For more information, please click here to read the source article.
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