Interest percolating in downtown housing

JUST VISITING? A group tours Waterplace as part of The Providence Foundation’s Downtown Providence Living Tour. / COURTESY THE PROVIDENCE FOUNDATION
JUST VISITING? A group tours Waterplace as part of The Providence Foundation’s Downtown Providence Living Tour. / COURTESY THE PROVIDENCE FOUNDATION

Meghan Downing of North Providence describes living in one of downtown Providence’s premier apartment buildings as still more of a fantasy than reality because of their price.
But the executive assistant at G-Form LLC was intrigued enough by the idea to spend her 32nd birthday with 11 friends sampling roof decks and exposed brick at a half dozen downtown properties.
“There were so many different spaces I thought were brilliant. The views are spectacular, especially from some of the rooftop decks,” Downing said. “It’s still probably more of a fantasy for my group because of affordability, at least the ones we saw, which were the best of the best.”
Downing and her birthday party were among 450 people who took the Downtown Providence Living Tour, an event organized by The Providence Foundation to kindle interest in moving to the city center.
The late September tour was the third hosted by The Providence Foundation and first since 2010, when construction at the Regency Plaza Apartments and Avalon at Center Place prompted a two-year break.
It was also the largest tour yet with nine properties on view, including two new buildings still partially under construction, the Arcade and Providence G.
Together, the 48 microlofts at the Arcade and 56 luxury rentals at Providence G have added 104 new homes to downtown this year, but the feeling among observers and property managers is that there is demand for more.
“Most of these properties showed one model unit and in many cases – the Promenade, Westminster Lofts and Residences – that was the only open unit they had,” said Providence Foundation Program Manager Joelle Kanter. “There is so much excitement that people see this as an emerging neighborhood. The more people who live here the more vibrant the street activity. We need more residents to support the retail.”
Since the recession, people have wondered how there can be scarcity in the rental market with so many empty or underwater condominiums and vacant former commercial buildings on prime downtown streets. But a city-commissioned study of the former Industrial Trust Tower (Superman Building) by 4Ward Planning earlier this year put the Providence rental vacancy rate at 3 percent and predicted demand increasing.
While developers were building condominiums during the boom, the number of rental units remained flat and the downturn sent many who owned homes into the rentals.
Now that the Rhode Island condominium market has stabilized, and actually spiked in the last two months, some of those condo-built units that had been converted to rentals are being listed for sale again.
Nowhere is the turnaround more evident than at Waterplace, the 193-unit riverfront complex that opened to crisis in 2008 and turned condos to rentals when no one was buying.
By early fall 2011, with only 15 units in two towers sold, owner Intercontinental Real Estate Corp. abandoned the rental idea and went back to condominiums, albeit at deep discounts from the asking prices of 2008.
The decision didn’t look promising that October when an auction of 29 units was halted at 12 after they couldn’t get above the minimum bid.
But more recently, the towers have been filling up.
There are now 155 units under contract and another four being finalized, said Janice Dumont, partner at PrimeTime Communities, the Massachusetts firm marketing Waterplace.
Dumont said Waterplace has sold 70 units so far in 2013 and at the current pace could sell out the remaining 34 before the end of the year.
Although asking prices are down from what they were when the building opened, they still aren’t cheap. Intercontinental is asking $234,500 for one-bedrooms and $370,000 for two-bedroom townhomes.
For downtown in particular, off-street parking minimums raise the cost of new construction to a point where only luxury rents are economical.
The Providence G building fits into the luxury category, with studios starting at $1,600 per month, two-bedrooms between $2,000 and $2,400 and three-bedrooms around $2,700. Even though much of the complex is still under construction, 40 of the 43 apartments finished so far are occupied, said Brendan Moran, manager of Providence G. Another 13 units are scheduled to be completed by the end of November.
Providence G is owner Vincent Geoffroy’s first foray into the Providence market, but he has been encouraged enough that he’s in negotiations to buy the Lapham Building on Westminster Street with plans for a similar conversion into apartments.
The Lapham, a nine-story, 70,000-square-foot, former office building that wraps around the Tilden-Thurber Co. Building, has been vacant for years, but its redevelopment would help extend the bustling area around Grants Block, which includes the Westminster Lofts, west toward Empire Street.
The best evidence that demand on the less-expensive end of the market is strong is less than a block away from Providence G at the Arcade, where the country’s oldest indoor shopping mall is almost finished being remade with “micro-loft” apartments.
With the building still yet to open, the Arcade now has a waiting list of more than 1,000 people interested in microlofts, which range in size from 225-square-feet to 450-square-feet and have rents starting at $550 per month.
After a $7 million renovation that began in early 2012, the Arcade plans to open its first-floor shops before the apartments and is still reluctant to set a date for either.
Spokeswoman Robin Dionne said it should at least be before Christmas.
Interest in Providence from the Boston area, including north of the city, is strong, Waterplace’s Dumont said, with many residents seeing Rhode Island as a good alternative to the skyrocketing housing costs in Massachusetts.
“People from Boston are moving here for value,” Dumont said. “We have always seen southeastern Massachusetts, but one of the things that is exciting is Providence is now on people’s radar all the way to northern Mass.” •

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  1. Smart money some time ago sensed that there will be a coming boom in downtown living in Providence. This trend will become apparent to the masses when the demand for new housing units moves beyond renovation into “new construction”. More residents in downtown will drive added retailing and services along with cafes and restaurants. The fact that you can walk to so many attractions doubles the attractiveness of downtown.

    With the vibrancy of downtown Providence and the opportunity to meet new and exciting people, why would any up and coming, young person want to live in a boring suburb like Warwick???