Land along Park Road once considered for high-end condominiums is now the site of a future four-story boutique apartment complex catering to young professionals.
Named Park at Drexel and located near the corner of Park and Woodlawn roads, the project illustrates how smaller, infill apartment projects are on the upswing.
Much larger apartment complexes rising in Charlotte have garnered more attention lately. But developers say smaller complexes also are promising.
Its a key part of our business plan for at least the next two to three years, said Grey Poole, partner at Selwyn Property Group, which is developing Park at Drexel. Park at Drexel is the first multifamily project for Selwyn Property Group, and the firm plans more.
Selwyn Property closed on the Park Road land about two weeks ago and plans to build 42 residential units, 4,500 square feet of commercial space and 58 surface parking spots.
Developers are betting its location near popular restaurant row on Montford Drive and across the street from Park Road Shopping Center will attract younger professionals who like to walk to shopping and entertainment.
Across town, developers of the Edison, at Pecan and Commonwealth avenues, say interest is growing for their 53-unit project, which is still under construction.
Commercial real estate developers and investors have been flocking to build apartment complexes while other commercial development remains relatively flat. Demand for apartments is expected to grow, thanks to a growing number of younger residents and the weak housing market, which may have scared some from homeownership.
Most of the 4,000 units under construction in the Charlotte area have been part of large projects, complexes with hundreds of units, and 60 percent are near the Lynx light rail line in South End, according to CoStar Group research.
Infill projects have fewer units dozens of units versus hundreds and offer smaller living spaces; a loft at Park at Drexel will start at 450 square feet.
These projects also dont feature the same scale of amenities. Some large projects boast salt-water swimming pools and elaborate fitness centers.
Infill projects also tend to be developed by smaller, local entrepreneurs as opposed to national investors.
While different in location and size, the mega-projects and infill ones have one thing in common: They cater to people who like to walk and enjoy their neighborhood.
These infill boutique apartment projects are driven by Generation Ys desire to live where they play, Poole said. They come home from work, park the car and dont want to use it again. And they arent entertaining as much in their units. They want to meet friends and go out, so smaller units are OK.
Narrowing the neighborhood
Poole said he noticed the Park at Drexel property while driving around the area. Two of the four parcels his group bought had for-sale signs.
The land had been rezoned for luxury condominiums before the recession, but plans fell through and the land wasnt sold. Pooles group put the land under contract a year ago and tweaked the previous plans to include smaller, and cheaper, rental units.
The project will offer 15 lofts from 450 square feet to 650 square feet, about two dozen one- and two-bedroom units, and one three-bedroom unit of 1,700 square feet.
Projected monthly rents are less than $1,000 for the one-bedroom units and under $1,500 for the two-bedroom units.
Location is critical for infill apartment projects, because developers tout the neighborhood as a selling point for renters, Poole says.
The amenities in these projects are the neighborhood. Its what you are plugging into, Poole said.
Poole favored the Park Road site because it is across from Park Road Shopping Center, which was bought last year by a national shopping center developer and is getting a major facelift. The 1950s-era strip center, while outdated, is popular among the affluent residents nearby.
The new owner hasnt shared all the details for the makeover, but shopping center tenants and others familiar with the project say the owners are looking to expand the centers hours into the evening and attract a new restaurant.
The city of Charlottes Planning Department has been working on an area plan, asking residents what they would like to see. The plan is expected to call for more density and services within walking distance of neighbors.
In the greater Charlotte area, about 4,000 units are under construction, and developers have proposed another 11,000, according to Engle Addington with Real Data, which studies the local apartment market.
Park Road Shopping Center is in what Real Data considers the Southeast-1 submarket, where 1,600 units are under construction and about 2,200 units proposed. The average rent is $1,105 a month, compared to a monthly average of $839 for the entire market.
Already in demand
Elsewhere in town, demand is growing for one infill project already under construction.
Developer Lat Purser & Associates Inc. is building the Edison, which is about one-sixth the size of a traditional 300-unit apartment community. It will have a community garden and patio but no swimming pool or large TV room. Rooms will range from 505 square feet to 1,000 square feet. Rent will start around $825.
Construction is expected to be finished in late April.
Weve had a lot of inquiries, said Jack Levinson, vice president with Lat Purser.
Lat Purser also built two infill projects in the NoDa neighborhood, both of which are 100 percent leased, according to the company.
We are seeing good results getting apartments leased up, Levinson said.
Levinson said he expects demand for the Edison to build as the project nears completion. He said he thinks Charlotte, with its continuing influx of young professionals, remains healthy for apartment developers.
I think youll see both types (big and small projects) continue, he said.