Less than a week before the announcement that Cross Street Partners would redevelop the General Electric campus south of downtown, Jeff Ryan was showing off the gritty reality of rehabbing a former industrial building just a few blocks away.
Never let it be said that Ryan, vice president of RealAmerica Companies, the company turning the former Fort Wayne Paper Box Co. into Superior Lofts, is a man without vision.
Ryan leads a visitor to the center of the sprawling and debris-strewn second floor of the building at West Superior and Calhoun streets. This will be the hallway, he says.
And those big, round industrial pillars? They’ll become part of the design for the structure’s 72 loft-style apartments. "People love to have that," he said of the pillars, "because it shows the industrial use."
The prospect of even more downtown loft living from the plan to rehab GE buildings into residential space doesn’t shake his vision of the building’s future.
"Just that we’ve already got two times as many people as we’re going to produce (apartments) for tells me there’s enough of a market," Ryan said last week. "I also think there being a variety of units, and all types of units, downtown is good. It becomes a cycle of people buying downtown and bringing more people downtown."
Much about the residential component for GE’s mixed-use redevelopment along both sides of Broadway remains undisclosed. Last month’s announcement preliminarily promised 342,000 square feet – or about a third of the campus’ 1 million square feet in 17 buildings – would be devoted to residential use.
But the announcement from Baltimore-based Cross Street did not include how many or what type of residential units would be created or which buildings would be used. And, whether the development would include any new construction on substantial vacant areas of the 31-acre campus has yet to be determined.
In a brief interview after the announcement, Cross Street’s local partner, Kevan Biggs of Biggs Development, Decatur, indicated some new residential construction might be part of the mix. He could not be reached last week to elaborate.
The announcement also did not address how developers plan to attract the residents to make the project successful – apart from saying a mix of millennials and downsizing baby boomers are expected eventually to move in.
George Tikijian, owner of a multifamily housing investment-advising company, said in an interview last week that given the GE project’s square footage, about 250 to 300 apartment units could be expected.
That’s based on a typical apartment size of about 1,000 to 1,200 square feet, said Tikijian, of Tikijian Associates of Indianapolis. That many units would likely mean 500 to 800 new residents, depending on how many studio, one-bedroom, two-bedroom or larger units are built.
Tikijian’s company compiles annual reports on apartment housing statewide and in several metropolitan areas. Even with the 1,987 additional apartment units cited in the company’s 2016 report on Fort Wayne as being proposed, built or undergoing rehab in the city and Allen County as of June, the Fort Wayne market can likely support the proposed GE units, he said.
Of the new units, 364 are downtown. But that number rises to around 800 when the Centlivre project, just north of downtown and now being rehabbed, is included.
According to the study, the GE units would join more than 18,000 existing units in apartment developments of 40 or more units. That means the new units would represent only a modest increase, he said – around 15 percent.
However, Fort Wayne does not have a shortage of available apartments calling out a need for additional space, Tikijian said.
The 2016 market study found 4.8 percent of Fort Wayne apartments were unoccupied in the first 6 months of 2016 – slightly more than the 4.3 percent a year earlier, when the lowest vacancy rate in 10 years occurred. The 2016 vacancy rate was equal to the state’s and just 0.1 of a percentage point under the national rate.
Still, the fewest number of vacancies among Fort Wayne neighborhoods were downtown, where five properties reported a 1.8 percent vacancy rate, according to 2016’s report.
Statistics complied by the Indiana Business Research Center at Indiana University predict growth of 12,000 people in Allen County between 2015 and 2020.
Greater Fort Wayne Inc., however, has noted that while Allen County grew between 2010 and 2015, through births, deaths and international migration, 2,923 more people moved out than moved in.
Officials with Greater Fort Wayne, the local chamber alliance, want to reverse that trend, saying more downtown living is key to attracting people, especially younger people.
"To change our migration numbers, we need to better our community with projects like the GE campus redevelopment," Ellen Cutter, Greater Fort Wayne director of strategy and research, said in a statement.
Interviews with managers or developers of other downtown projects last week found The Harrison and Randall Lofts are all but full. Skyline Towers has a waiting list for a 124-unit project whose first 62 units are not expected to be complete until April 2018, said Dave Arnold of project developer Great Lakes Capital.
"Our units, we suspect, will be completely leased before any units from GE become available," he said. "The GE product will have a following and have appeal to people who want a different type of environment … and I would think a renovation of an existing building would be at a lower price point."
The experience of existing downtown complexes shows there is "a demand (for more units) from people who want to live downtown and near downtown in an urban environment," Tikijian said.
"The market is as strong in Fort Wayne as it’s been for a while. Fort Wayne is a big city, so (the hypothetical) 300 units – the impact overall isn’t that great."
That reinforces the conclusion of a 2014) Zimmerman-Volk Associates study, said Beth Wyatt, executive director of the Apartment Association of Fort Wayne.
The study, commissioned by the city’s Housing and Neighborhood Services office, found Fort Wayne in the next five to seven years could support 1,500 new rental and owned units downtown and the near north side.
The GE project, now tentatively called Fort Wayne Electric Works, and the Centlivre rehab would bring the total to about 75 percent of that figure, she pointed out. GE’s residential portion would be an average-sized complex for Fort Wayne, she added, but the construction and occupancy plans are crucial.
"If it’s staggered over a course of years, so a few (apartments) are brought online every year, that’s a good development strategy," Wyatt said. "It leads to healthy, stable growth, and that is key."
Otherwise, quick growth can lead to apartment oversupply. That can lead to downward pressure on rents and vacancies in both new and existing projects and threaten their profitability or even existence.
Another important factor, Wyatt stressed, is a mix of price points for downtown apartments.
"It’s important as a community that we continue to develop a very diverse group of options, so we can offer housing to a diverse community market – senior, affordable, market rate and the luxury market."
Tikijian agreed the GE development should be in phases. "If they do 300 units and don’t do it all at once, it can be absorbed," he said.
"There is a lot of (apartment) building going on (downtown and elsewhere in the county)," he added. "How they time it out, and build it out, and reasonable rents are all important. And there has to be a coolness factor there."