Pearl Lofts Portland Oregon - · PDF filePEARL LOFTS PORTLAND, OREGON PROJECT TYPE A 27-unit,...

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VOLUME 26 NUMBER 6 APRIL-JUNE 1996 RESIDENTIAL PEARL LOFTS PORTLAND, OREGON PROJECT TYPE A 27-unit, new loft-style residential project located on the north edge of downtown Portland. This infill redevelopment project is the first phase of a 39-acre master-planned development on a former rail-yard site. Targeted to middle-income residents, Pearl Lofts features a broad selection of unit configurations and price ranges. SPECIAL FEATURES New construction, loft-style condominiums Broad price range, targeted to middle-income buyers Interior garden courtyard Selection of nine separate floor plans Secured off-street parking DEVELOPER Patrick R. Prendergast Urban Homes, Inc. Prendergast & Associates, Inc. 333 SW Fifth Avenue, Suite 200 Portland, Oregon 97204 503-223-6605 ARCHITECT Tim Merrill Church & Merrill Architects 30 NW First Avenue, Suite 201 Portland, Oregon 97209 503-295-0900 LANDSCAPE ARCHITECT Craig Kiest Huntington & Kiest 2892 NW Upshur Street Portland, Oregon 97210 503-223-3383 CONTRACTOR Walsh Construction Co. 3015 SW First Avenue

Transcript of Pearl Lofts Portland Oregon - · PDF filePEARL LOFTS PORTLAND, OREGON PROJECT TYPE A 27-unit,...

VOLUME 26 NUMBER 6APRIL-JUNE 1996

RESIDENTIAL

PEARL LOFTSPORTLAND, OREGON

PROJECT TYPE

A 27-unit, new loft-style residential projectlocated on the north edge of downtown Portland. This infill redevelopment project isthe first phase of a 39-acre master-planneddevelopment on a former rail-yard site. Targeted to middle-income residents, PearlLofts features a broad selection of unit configurations and price ranges.

SPECIAL FEATURES

New construction, loft-style condominiumsBroad price range, targeted tomiddle-income buyersInterior garden courtyardSelection of nine separate floor plansSecured off-street parking

DEVELOPER

Patrick R. Prendergast Urban Homes, Inc. Prendergast & Associates, Inc. 333 SW Fifth Avenue, Suite 200 Portland, Oregon 97204 503-223-6605

ARCHITECT

Tim Merrill Church & Merrill Architects 30 NW First Avenue, Suite 201 Portland, Oregon 97209 503-295-0900

LANDSCAPE ARCHITECT

Craig Kiest Huntington & Kiest 2892 NW Upshur Street Portland, Oregon 97210 503-223-3383

CONTRACTOR

Walsh Construction Co. 3015 SW First Avenue

Portland, Oregon 97201 503-222-4375

GENERAL DESCRIPTION

Pearl Lofts is a condominium complex designed and developed to offer residents loft-styleresidential living environments in a newly constructed 27-unit multifamily structure. Theproject's apartment units include features commonly associated with adaptive-use residentiallofts, including high ceilings and expansive windows, while simultaneously offering thevalue-added amenities and finishes of new construction.

Situated on a site formerly used by the Burlington Northern Railroad for freight storage, PearlLofts is located within Portland's Pearl District, a rapidly gentrifying urban neighborhood, onthe north edge of downtown. The Pearl District, formerly a warehouse and industrial district,now includes a combination of residential, retail, arts, and industrial uses and has become oneof the fastest-growing residential districts in the Portland market.

Pearl Lofts is the first phase of the 39-acre Hoyt Street Yards master-planned development.Current plans for Hoyt Street Yards include the development of 3,000 residential units andapproximately 200,000 square feet of retail space at buildout. Hoyt Street developer, PatPrendergast of Urban Homes, Inc., initiated development on the Pearl Lofts parcel because thesite abutted existing development that provided an urban context. By contrast, his holdingswithin the interior portion of the Hoyt Street Yards property are encircled by vast tracts ofempty rail yards. Infrastructure costs for the Pearl Lofts site were also less than those forinterior parcels, because the parcel was serviced with streets and a public driveway.

The project, with its numerous floor plan variations and reasonable sale prices, allowed thedeveloper to effectively evaluate and respond to an uncertain market while stimulating HoytStreet's residential development initiatives.

DEVELOPMENT PROCESS

The Hoyt Street parcel was first master planned by Glacier Park, the real estate subsidiary ofBurlington Northern. Prendergast, the site's current owner and developer, amended theoriginal 1980s plan, which called for a heavy dose of office development, to give it aresidential focus.

Pearl Lofts, as the first phase of the 39-acre master-planned development, was a"testing-the-waters" project. Although several Pearl District warehouses had been convertedover the last five years to loft apartments, Pearl Lofts was the first new construction in thearea of a for-sale residential product. Therefore, the developer opted to build at relativelyconservative densities until the depth of market interest in new loft condominiums was betterknown. Density was ultimately determined by parking needs. The number of units, 27, wasderived from the number of cars that could be accommodated on site without buildingstructured parking. To minimize risk, the developer decided to build housing only, and torefrain from adding street-level retail shops; however, streetlevel units were designed to bereadily converted into retail use.

DESIGN AND CONSTRUCTION

As with many development efforts in urban settings, infrastructure construction for the PearlLofts was complicated. Old utilities that were documented with dated or defunct records madethe task of connecting water and sewer lines more involved than anticipated. Consequently,the costs for engineering and construction work were significantly higher than first projected.

Most of the Pearl District's early loft buildings were renovations of old, derelict, brickwarehouses. Loft design was generally spartan and industrial in character. Although PearlLofts is encased in the traditional red-brick industrial box, it is more of a hybrid design. Here,the voluminous spaces of traditional lofts are combined with such features as hardwood floors,spacious closets, and carpeting in the sleeping areas to create a softer, more residentialcharacter. In traditional lofts, the walls are typically raw concrete or exposed brick. Here thewalls are painted and textured. Likewise, the use of exterior detailing—pediments above thefront doors, brick framing around the entryways, canvas awnings, and wrought-iron window

boxes—further emphasizes the residential ambience.

In a city that is famous for its long, gray winter days, people crave natural light. Thus, a maindesign goal was to make the most of every last ray of light. To accomplish this, the first-floorunits feature plentiful, expansive windows that are accommodated by 12-foot-high ceilings. Inthe second-floor loft units, ceilings rise to 17 feet. The street-level units are actually flats, forthere is no variation in floor height. The goal, however, was to create a feeling ofspaciousness within a relatively small area.

Additional light comes from the landscaped interior courtyard. The four largest units havebalconies overlooking the courtyard.

A significant complication was the problem of sound transmission, which was a concern,because Pearl Lofts is a multifamily building. To minimize sound vibrations, specialconstruction techniques were applied to make the concrete floors more rigid, and they wereencased in rubber gasket membranes. Likewise, double-wall instead of single-wallconstruction was used to reduce sound.

The selection of different unit designs limited the opportunity to repeat unit configurations,making it difficult for the contractor to work out a sequencing schedule. These inefficienciesmade for higher contractor fees.

The ability to custom design individual units, however, was one of the strong selling points ofthe project. Prospective buyers could select from nine different floor plans, plus various wallpaints and carpeting, and were offered a selection of more than 15 different laminates. Theycould also upgrade such items as bathroom tiles and kitchen counters. Buyers could evendetermine the location of recessed light fixtures and outlets.

One parking space is allotted to each residence. Eight surface spaces on the west side of thebuilding are assigned to the smaller residential units; covered garages provide the remainingeighteen spaces. No parking is reserved for commercial tenants.

FINANCING

The financing strategy was largely determined by two self-imposed requirements: (1) keeppricing as low as possible to appeal to a broad market segment and (2) presell 50 percent ofthe units before construction started.

These requirements created a sequencing problem with respect to financing, for there was noway to gauge how long it would take to sell 50 new urban lofts in pioneer territory.Prendergast decided it would be easier to finance this first project privately and created alimited partnership of investors.

So that purchasers could qualify for financing from Fannie Mae, the developer agreed to limitcommercial uses to no more than 10 percent. Pearl Lofts houses a number of commercialtenants, including a real estate broker, engineering consultant, and talent agency. Anadditional Fannie Mae requirement was that 70 percent of the units had to be owner occupied.

MARKETING

The developer's original thought was that the lofts would appeal mostly to first-timehomeowners who were renting in the area. They discovered, however, that the market wasfar more extensive. Suburbanites from Beaverton and Lake Oswego were equally drawn to theproject. Single men and women—both young professionals and retirees—claimed more than athird of the units.

Because of the uncertainty of the market, the pricing strategy was set deliberately broad,spanning a range of $79,000 to $159,000. The initial goal had been to presell 50 percent ofthe units; in fact, nearly all the units sold before construction started.

Pearl Lofts was the first such project in the neighborhood, so prospective buyers made theirselections based only on construction drawings. Marketing was mainly through newspaperadds and site signage. An on-site marketing office operated seven days a week.

EXPERIENCE GAINED

In the case of a large-scale development where the depth of market interest is relativelyunknown, it is prudent to start out with small projects and build incrementally over time.Thus, the density of Pearl Lofts was deliberately conservative.

The offering of nine different unit types and 15 different laminate selections, whichessentially allowed purchasers to custom design their units, undoubtedly boosted earlysales. However, the developer cautions that too many choices tend to confusecustomers. In addition, this approach made it difficult to sequence the contractingschedule, thus driving up construction costs.

In retrospect, balconies would have been a better investment than 17 foot-high ceilings.The advantages of high ceilings are many—the ability to construct taller windows tocreate more light, spaciousness, etc. However, there is a certain threshold beyond whichthe higher ceilings fail to support commensurably higher sales prices. Balconies, on theother hand, do command higher prices per square foot.

PROJECT DATA

LAND USE INFORMATION

Site Area: 0.5 acre Total Dwelling Units: 26 Total Retail Units: 1 Gross Density: 54 units per acre Off-Street Parking Spaces: 26 (18 in garages; 8 in off-street alley; retail unit has noparking)

LAND USE PLAN

Square Feet

Percent of Site

Building footprint 18,719 76

Roads/paved areas

2,081 8

Common open space

3,895 16

Total 24,695 100%

RESIDENTIAL UNIT INFORMATION

Unit Type

Unit Size (Square

Feet)

Number of Units

Range of Initial Sales Prices

A 893 4 $98,500-102,500

B 893 2 98,500-102,500

C 1,241 3 139,000

D 887 4 97,500-109,000

E 1,422 4 149,500-159,000

F 1,551 4 155,000-159,000

G 774 1 95,000

H 687 2 79,000

I 1,079 2 119,500

Retail 1,713 1 158,500

Summary of Residential Unit Types:

10 first-floor flats with 12-foot ceilings—size range: 687-1,079 square feet; 16 second-floorlofts with 17-foot ceilings, plus loft master bedroom and bath size range: 1,241-1,551 squarefeet.

DEVELOPMENT COST INFORMATION

Site Acquisition Cost: $149,418 Site Improvement Costs:

Demolition/excavation/grading 16,540

Sewer/water/drainage 28,766

Paving/curbs/sidewalks 54,860

Landscaping/irrigation 7,995

Lighting/power 78,945

Phone 985

Fees/general conditions/insurance

11,050

(Minus reimbursement from djacent project for half of costs or alley/gates/utilities)

(-98,033)

Total $101,108

Construction Costs:

Sitework $154,585

Concrete 107,770

Masonry 133,560

Metals 79,564

Carpentry 359,558

Thermal and moisture protection 50,202

Doors and windows 95,383

Finishes 477,072

Specialties 18,619

Equipment 32,448

Furnishings 58,743

Mechanical 176,027

Electrical 116,920

Fees/general conditions/insurance

214,549

Total 2,075,000

Soft Costs

Architecture $50,000

Marketing 15,000

Legal/accounting 25,000

Appraisal 5,000

Environmental 5,000

Soils structure 2,000

Survey 10,000

Permits 50,000

Title fees 5,000

Construction interest and fees 93,628

Overhead 35,000

Miscellaneous 5,000

Total 320,628

Total Development Cost: 2,646,154 Total Development Cost Per Unit: $98,006 Construction Cost Per Square Foot: $68.44 (excluding site improvement costs)

DEVELOPMENT SCHEDULE

Site Purchased: December 1993 Planning Started: October 1992 Construction Started: September 1993 Construction Completed: August 1994 Sales Started: January 1993; 81 percent sold as of July 1993; 93 percent as of September1993 Sales Completed: August 1994

DIRECTIONS

From Airport: Take I-205 south to I-84 west. Proceed about five miles to I-5 north, then takeI-405 across the Fremont Bridge. Take the Everett Street exit; turn left on Davis Street, thenleft on 10th Avenue. Go four blocks to Hoyt Street. Pearl Lofts is located at the intersection ofNW 10th Avenue and Hoyt Street on the northwest corner.

Driving Time: 20 minutes in non-peak-hour traffic.

The Project Reference File is intended as a resource tool for use by the subscribers in improving the quality offuture projects. Data contained herein were made available by the Development team and constitute a reporton, not an endorsement of, the project by ULI - The Urban Land Institute.

Copyright 1996, 1997, by ULI - the Urban Land Institute1025 Thomas Jefferson Street, N. W. Ste. 500w, Washington, D. C. 20007-5201

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