Real Estate Considered Great Investment by Developers

The year of 2005 has been filled with great potential and growth for developers, with all the grand openings, groundbreakings, and new projects. Values have reached hundreds of millions of dollars. In December, ground was broken on the $100 million Social Security Administration building in Birmingham, a project that's expected to heighten development in the sleeping civil rights district. Also in December, Tutwiler hotel changed hands, and plans to invest $5 million into its renovation were announced. Homewood welcomed its $55 million SoHo Square with a grand opening, and the newly opened Colonial Promenade Alabaster welcomed shoppers to its array of stores, with the promise of more retail space to come from Colonial Properties Trust. Further development in Homewood, like the Arlington Properties' $70 million mixed-use development on five acres that currently contains affordable apartment units, has some residents and business owners concerned that the ‘character’ of their community is being forever altered. SoHo developer Scott Bryant, of Cyprus Partners LLC, also announced plans this past spring to build with its partner Wayne Qualls, a $17 million development at the corner of Broadway Street and Greensprings Highway, replacing five apartment buildings dating from the 1920’s that are currently there. Earlier this month, developer Inkana Inc. announced plans to invest $40 million into the Montelena, replacing a restaurant with 60 condos at a key location on Hollywood Boulevard that overlookis Homewood. Ground was broken in January on Colonial Properties' $80 million Colonial Pinnacle Tutwiler Farms in Trussville. With Parisian, JC Penney, Belk and Best Buy, the center adds to a growing retail community that already includes a Target SuperCenter and several restaurants. "I think it will be as nice as anything in Birmingham. It has a style of its own, the hardscapes and landscapes will be of the highest quality and as you sit on top of the site, there's a phenomenal view looking out over the mountain ridge." said developer John Hughley, who is working on the project. There is also a lot of buzz about Phase II of Colonial's Promenade in Alabaster, located across Interstate 65 from the existing development. Hughey says the company is not ready to release details of who will be located in the new phase. However, he does confirm development of a phase II. Summit developer Bayer Properties Inc. announced its $25 million phase IV in August, for its $30 million mixed-use Cahaba Village west of The Summit on U.S. Highway 280, and announced plans for Summits in other markets as well. During the BBJ's CCIM real estate roundtable in October, Bill Dobbins of Arlington Properties said that when it comes to condo and mixed-use projects, it will be ‘survival of the fittest’, it's clear that some projects such as Bristol Southside and The Capri in Highland Park, are moving along quickly, while others, such as 2600 Highland, appear to be stalling. The Capri is a project of European investors, Euro American Advisors, and local developer Tom Hinton, who also announced plans this fall for a $50 million condo project that will transform a stretch of Clairmont Avenue between Highland Park and Forest Park. On the condo side, downtown was a big winner in 2005, Tom Carruthers III, president of Carruthers Real Estate Co. explained. In particular, City Federal and Park Place, the Hope VI project, appear to be enjoying success, Carruthers says. The fact that the Park Place rentals have been quickly snapped up bodes well for the units that will go for sale. The units at City Federal are more than 50 percent sold, reports Atlanta-based developer Synergy Realty Services Inc. As a symbol of the rebirth of the 1920’s downtown landmark, the neon sign atop the City Federal was re-lit earlier this month, and the developer says the vertical sign will soon be re-lit as well. On the western end of downtown, the Cabana hotel awaits resolution of a lawsuit over its sale to the Leers of California, before a plan to redevelop the 1929 building into condos can move forward. Developer David Leer assured the BBJ last month that he's confident the lawsuit will be resolved, and that he and his father will be able to find enough land for adequate parking. Many other smaller-scale downtown projects are coming, with projects like the Athens Building conversion into lofts announced this past summer and others, like the Gallery Lofts, preparing to open. According to data from Operation New Birmingham, the city has 1,600 residential units existing, under construction or firmly committed. Retail slowing should resurge, with the new developments, as well. In particular, industry watchers say a gourmet grocery could be a new addition to the downtown retail scene. Another change for downtown is the redevelopment of the Sears building. Jefferson County recently agreed to pitch in $2 million toward the redevelopment of the building, which could house up to70 businesses. Money from UAB and private investors would also go toward the effort. Bill Pradat of Eason, Graham & Sandner says that despite the fact that the downtown office market is not as strong as other areas such as midtown, downtown does have bright spots. For instance, Alabama Gas Corp. renewed its lease and expanded into 60,000 square feet in the Colonial Plaza. Vazda Studios announced plans to renovate the former Rogers Trading Co. Building, and Barry Real Estate of Atlanta is investing $22 million into renovation of the former SouthTrust Tower, which became the Wachovia Tower last month. Pradat notes that about 100,000 square feet of space went back on the downtown market, but Barry Real Estate is confident that the renovated building will attract tenants. One plus from the Wachovia-SouthTrust merger is on the industrial side, with the announcement in the spring that Wachovia would build a $400 million data center that will anchor Jefferson County's newest industrial park, the Jefferson Metropolitan Park at Lakeshore. Industrial powerhouse Graham & Co. announced plans to invest $15 million into two buildings in the Jefferson Metropolitan Park in McCalla. The debut of Renaissance Ross Bridge Resort & Spa is the top of everyone's list as a major real estate happening of 2005. The resort is owned and operated by PCH Hotels and Resorts, the hotel management company owned by Retirement Systems of Alabama, had its grand opening in August. Besides the golf course, the resort includes a town center and surrounding new area neighborhoods that are being developed by Daniel Corp. So far, that portion of the project has enjoyed great success: In late November, Ross Bridge found its first residents in what will be a 1,800 home development, with houses ranging from $220,000 to over $1 million. By Patricia Fuller Miami Real Estate - Aquablue Realty  Miami Real Estate - Aquablue Realty Sarasota Real Estate

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